"THE ACTION UKRAINE REPORT - AUR"
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 - AUR" - Number 502
E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, WEDNESDAY, June 15, 2005
------INDEX OF ARTICLES------
"Major International News Headlines and Articles"
1. "THE GOVERNMENT IS MOVING IN THE WRONG DIRECTION"
Interview with Dr. James Sherr, Fellow of the Conflict
Studies Research Centre, UK Defence Academy
Interviewed by Serhiy Solodky, The Day
The Day Weekly Digest in English #20
Kyiv, Ukraine, Tuesday, June 14, 2005
2. UKRAINE'S POLITICAL CHANGE UNNERVES INVESTORS
By Tom Warner and Stefan Wagsty
Financial Times, London, UK, Tue, June 14, 2005
3. UKRAINIAN PRESIDENT, PARLIAMENT SPEAKER AGREE TO
PROMOTE FOREIGN INVESTMENT
UNIAN news agency, Kiev, in Ukrainian, 13 Jun 05
BBC Monitoring Service, in English, Mon, June 13, 2005
4. UKRAINIAN PRESIDENT URGES "AMICABLE" SETTLEMENT
OF PRIVATIZATION DISPUTES
ICTV television, Kiev, in Ukrainian 1545 gmt 14 Jun 05
BBC Monitoring Service, UK, in English, Tue, June 14, 2005
5. UKRAINIAN PRIME MINISTER SAYS FRENCH COMPANY ARCELOR
READY TO PARTICIPATE IN NEW TENDER FOR STEEL MILL
Ukrayinska Pravda website, Kiev, in Ukrainian 14 Jun 05
BBC Monitoring Service, UK, in English, Tue, June 14, 2005
6. WHAT ARE THE PROS AND CONS OF UKRAINE'S BUSINESS FIELD?
Six Interviews by Natalia Huzenko, The Day
The Day Weekly Digest in English, #20
Kyiv, Ukraine, Tuesday, June 14, 2005
7. UKRAINE ON THE PEAK OF REAL ESTATE BOOM--IS IT DANGEROUS?
Roman Bryl, Ukraine Analyst
IntelliNews - Ukraine This Week
Kyiv, Ukraine, Monday, June 13, 2005
8. UKRAINIAN CABINET CANCELS INSTRUCTION COORDINATING
CONDITIONS OF PRIVATIZATION OF NIKOPOL FERROALLOY PLANT
Ukrainian News Agency, Kyiv, Ukraine, Mon, June 13, 2005
9. PROS AND CONS OF HITCHHIKING..ALONG THE ROAD TO THE WTO
By Yevhen Fadeyev, Kyiv Weekly, Issue #22 (162)
Business and Socio-Political Weekly
Kyiv, Ukraine, Friday, Jun 10-17, 2005
10. UKRAINIAN CABINET FORMS WTO QUERY PROCESSING CENTER
Ukraine has 17 more WTO country protocols to finish
Yurii Yeriomin, Ukrainian News Agency, Kyiv, Ukraine, Thu, June 2, 2005
11. RUSSIAN PRESIDENTIAL OFFICIAL BLAMES UKRAINIAN POLITICIANS
FOR SPOILING RELATIONS BETWEEN RUSSIA AND UKRAINE
Interview with Modest Kolerov by Yevhen Ikhelzon
Segodnya, Kiev, Ukraine, in Russian 13 Jun 05
BBC Monitoring Service, UK, in English, Mon, June 13, 2005
12. UKRAINE'S NEW FLEDGLING POLITICAL PARTY MIMICS GOP
Kostyantyn Gryshchenko wearing another hat: politician
By David R. Sands, The Washington Times
Washington, D.C., Sat, June 11, 2005
13. "UKRAINIAN MEMBERSHIP IN THE EUROPEAN UNION"
Remarks by Ambassador of Lithuania to the US, Mr. Vygaudas Ušackas
US-Ukraine Policy Dialogue Exchange Project (PDEP) Working Session
Washington, D.C., Tuesday, June 7, 2005
Published by The Action Ukraine Report (AUR)
Washington, D.C., Wednesday, June 15, 2005
14. OSCE PARLIAMENTARIANS TO HONOUR UKRAINE TELEVISION
CHANNEL FIVE WITH JOURNALISM PRIZE
Jan R. M. Jooren, OSCE PA International Secretariat
Organization for Security and Co-operation in Europe (OSCE)
Copenhagen, Denmark, Monday, June 13, 2005
15. UKRAINE: POLICE SEIZE 1,500 DOCUMENTS STOLEN FROM
LVIV STATE HISTORICAL ARCHIVES
Correspondence of Metropolitan Andrii Sheptytskyi
Ukrainian News Agency, Kyiv, Ukraine, Mon, June 13, 2005
16. "FROM RED TO YELLOW AND BLUE + ORANGE"
The first album and catalogue of Ukrainian fine art of the twentieth century
LETTER TO THE EDITOR -
From: Kathrin Singer" kathrinsinger@yahoo.co.uk
Kyiv, Ukraine, Thursday, June 8, 2005
Published by The Action Ukraine Report (AUR)
Washington, D.C., Wednesday, June 15, 2005
17. UKRAINE: UPDATE ON ENTREPRENEURS COUNCIL MEETING
Call for proposals re: cancellation of regulatory acts
LETTER TO THE EDITOR -
From: "Andrew Kinsel" akinsel@pml.kiev.ua
Kyiv, Ukraine, Tuesday, June 07, 2005
Published by The Action Ukraine Report (AUR)
Washington, D. C. , Wednesday, June 15, 2005
18. AMERICAN UKRAINIAN MEDICAL PROJECT (AUMP)
LETTER TO THE EDITOR -
From: Russ Ayers, AUMedicalProject@aol.com
Branson, MO, Thursday, June 02, 2005
Published by The Action Ukraine Report (AUR)
Washington, D.C., Wednesday, June 15, 2005
===============================================================
1. "THE GOVERNMENT IS MOVING IN THE WRONG DIRECTION"
Interview with Dr. James Sherr, Fellow of the Conflict
Studies Research Centre, UK Defence Academy
Interviewed by Serhiy Solodky, The Day
The Day Weekly Digest in English #20
Kyiv, Ukraine, Tuesday, June 14, 2005
Next week Ukraine is going to see two significant events: a session of the
Ukraine-EU Cooperation Council sum up the first results of cooperation
between this "postrevolutionary" country and Brussels, and the so-called
"mini-Davos," an unscheduled roundtable under the auspices of the World
Economic Forum, to be held on June 16-17.
Ukraine is pinning great hopes on the latter event: its results will reveal
the true intentions of foreign investors with respect to Ukraine. As Vice-
Premier Oleh Rybachuk announced earlier, the forum will be attended by 200
to 300 delegates. Besides, four presidents - of Poland, Georgia, Lithuania,
and Estonia - were invited to participate. (Last Thursday the Embassy of
Poland denied rumors that Aleksander Kwasniewski would not show up.)
Will Ukrainian officials manage to convince foreign businessmen that the
Ukrainian economy is attractive? Have the government's latest actions
tarnished Ukraine's "economic reputation?"
This is the subject of the interview granted by Dr. James SHERR, Fellow of
the Conflict Studies Research Centre, UK Defence Academy. In his answers,
he expresses his own views, not those of the UK Ministry of Defense. This
perhaps adds more value to his comments because he speaks frankly and
uses no veiled words.
(Q) What do you think about the possibilities of investments into Ukrainian
economy after the Orange Revolution?
(A) A few months ago, they were extremely bright. Now they are looking
grim. There are three reasons for this.
FIRST, the Kuchma regime was a system of power. In its cynical and deeply
unsatisfactory way, it was predictable. President Yushchenko has not yet
created a system of power - or, in democratic language, a system of
authority underpinned by a coherent set of policies. The state leadership
and government now comprise divergent forces with divergent ideological
premises, and they are pulling in divergent directions.
On top of this, personal agendas and power struggles seem, once again, to
be taking precedence over compelling and urgent national interests. More
puzzling still, the President has not used his authority to bring these
forces to heal and put a like-minded team of reformers in place. He has
been an inspiration, but I am not sure that he has been a leader.
Inspiration is a remote and otherworldly quality.
Leadership is a direct and practical quality, and it has not been in
evidence. So, the considerable number of potential investors - not to say
political decision makers and analysts like myself - who hoped that
Yushchenko's first 100 days would be like the first 100 days in Poland in
1989 have become disappointed, worried and disorientated. People do
not invest when they are disorientated.
SECOND, the dominant tendency of economic policy is socialist, often
crudely socialist - not necessarily in its intent, but in its content and
consequences. If the President confuses leadership with inspiration, it is
becoming more and more plain that the Prime Minister confuses leadership
with control.
And the appetite for control is visible not only in the macro economy, it is
extending to the micro economy, with controls on prices of oil, electricity,
meat and (to judge by the cumbersome and punitive tax regime) the way
people decide to spend their money.
If there is to be private (i.e. voluntary) investment in Ukraine, there have
to be market incentives, along with the stable framework that makes these
incentives meaningful. That means, first and foremost, respect for contracts
and property rights, a predictable and impartial legal system and a uniform
and enlightened tax code. With regard to every one of these essentials, the
government is moving in exactly the wrong direction.
THIRD, politics - especially the March 2006 parliamentary elections - is
trumping sound economics. It encourages populist measures, such as price
controls and financially disastrous increases in social spending. These
measures are counterproductive even in the short term, because it takes
little time for ordinary citizens to discover that the consequence of 'just'
prices is shortages (not to say black markets and corruption), and well
before March 2006, they will also see that their higher pensions and wages
are being eaten up by inflation.
Politics also inhibits the President from intervening, because he fears that
he needs Tymoshenko as an ally before these elections and possibly after
them. Hence, some speculate that he is deliberately staying aloof so that
she can fail - and so that she, rather than he, will be blamed.
I hope these speculations are wrong, because this would be a cynical, not
to say risky strategy, and it would not surprise me if the Party of Regions,
rather than People's Union Nasha Ukraina ended up being the beneficiary
of it. And why has this happened?
After the Orange Revolution, President Yushchenko had the authority to do
exactly what he thought was right. Why has he not used it? However this
question is answered, the message to investors appears to be: nothing will
be decided before March 2006, so don't invest now. Can the country really
afford this?
(Q) Don't you think that the largest world companies were disappointed
because of the last steps of Ukrainian government (the state regulatory of
the oil- prices, the unclear process of re- privatization, the measures in
the social sphere which are not connected to the market economy and so
on)?
(A) Of course, and I have tried to explain why. But let me mention two
additional factors. FIRST, this eclecticism and regression have a far
harsher effect on small entrepreneurs than on large corporate entities.
Ukraine is rich in entrepreneurial talent, but it has been starved of
entrepreneurship. The explanation for this paradox is simple:
entrepreneurs have been given no decent incentive to go into business.
Big companies have big friends. They can budget for uncertainty and,
indeed, reverses. Small entrepreneurs have to get things right the first
time or they risk losing everything they have. Yet they are the real
foundation of a liberal market economy and the general prosperity of
ordinary people.
They are also one of the foundation stones of civil society and the
accountability of the state. If small business is weak, society is weak, and
defences against irresponsible power are weak.
SECOND, how will these policies advance Ukraine's integration into Europe?
Several months ago, most of us were hopeful that Ukraine would be granted
market economy status by the EU in June. But Rybachuk now admits that this
is unlikely to happen. Instead, the Luxembourg meeting of the EU- Ukraine
Cooperation Council is likely to be dominated by the issue of price controls
in Ukraine.
Who can now be optimistic that Ukraine will be admitted into the WTO in
November, as we so strongly hoped? Dare one ask the most worrying
question of all - what lies behind all of this?
Does someone believe that market economy status and WTO membership
are moral entitlements for Ukraine, irrespective of what sort of economy
Ukraine actually has? Or is someone trying to turn Ukraine away from EU
integration towards a different direction?
(Q) The US Ambassador in Kyiv Mr. Herbst said that there is corruption in
the new government. What is your evaluation of the efforts of new
authorities in fighting corruption?
(A) The authorities are dealing with the symptoms of corruption rather than
its causes, and they are dealing with these symptoms very, very selectively.
Why so selectively? The more respectable reason is that some of them know
that corruption is a bottle without a bottom, and if they let the genie out,
there will be no end to fear, recrimination and paranoia in the country.
The threat to investigate 3,000 privatizations is a classic example of what
should not be done. The less respectable reason is that the authorities are
afraid of discredition materials that could be used against them, so they
pick their targets very carefully. So once again, there is no clear strategy
and no consistency between one action and the next.
Is it easy to have a clear strategy? No. Is it possible to have a clear
strategy? Yes. But that is a subject for another interview. -30-
------------------------------------------------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/138816
-----------------------------------------------------------------------------------------------------------------
FOOTNOTE: Dr. James Sherr has been very active and directly involved
regarding the political, economic and military scene in Ukraine for many
years. He is a highly respected analyst and commentator. He has written
extensively on a variety of topics and is much sought after as a speaker
for Ukrainian related meetings and seminars. [EDITOR]
===============================================================
2. UKRAINE'S POLITICAL CHANGE UNNERVES INVESTORS
By Tom Warner and Stefan Wagsty
Financial Times, London, UK, Tue, June 14, 2005
An apparent divergence of economic thinking at the heart of government
has unsettled the private sector and foreign businesses. The leaders of
Ukraine's Orange Revolution hoped that the country's political change
would stimulate a wave of inward investment, especially from the west.
But so far it has not happened. Many business people are coming to Kiev to
investigate the potential, but few have put down much hard cash. "It is
slower than we hoped," says Oleksander Zinchenko, the state secretary and
one of President Viktor Yushchenko's key political allies. "Of course we are
a bit dissatisfied."
Mr Yushchenko intends to make a fresh appeal to international business this
week at a meeting in Kiev of the Swiss-based World Economic Forum, which
is bringing in more than 100 executives. Mr Yushchenko and his officials
will emphasise their promises to open Ukraine to business especially western
business that felt excluded under his authoritarian predecessor, Leonid
Kuchma.
But he will have to clear up doubts about government policy, notably the
confusion surrounding plans to review some of Mr Kuchma's privatisations.
He said yesterday he would wind down the privatisation review but did not
say how. He promised to launch new privatisations including Ukrtelecom,
the national fixed-line phone operator.
Mr Yushchenko will also face questions about his relations with Yulia
Tymoshenko, the tough prime minister, who seems to be promoting a larger
role for the state in the economy than the more market-oriented Mr
Yushchenko. As Mr Zinchenko says: "The majority of investors don't like the
political situation too much."
Jorge Zukoski, president of Kiev's American Chamber of Commerce, said
that in spite of Mr Yushchenko's strong statements on foreign investment,
his government had made many contradictory decisions that had caught his
group's members by surprise and left them confused about what the
administration's direction would be.
A big mis-step was a budget law adopted in March that broadened the
application of value-added tax and applied the changes retroactively, he
said. "What we'd really like to hear is a reaffirmation that the government
will have an organised and consistent dialogue with the private sector," Mr
Zukoski said.
Business people accept that the country's economic growth is unlikely to
match last year's record level of 12.1 per cent, which was partly fuelled by
high world prices for steel, Ukraine's main export commodity. They say this
year's forecast figure of 5 per cent is reasonable, given the upheaval of
the revolution. However, they fear that investment policies may remain
unsettled, at least until after next spring's parliamentary elections.
Ukraine has one of the lowest rates of foreign investment in eastern Europe,
with $8.8bn (7.5bn, 5bn) of accumulated foreign direct investment (FDI), or
$187 per capita, as of the end of March. New FDI in January-March, at
$444m, rose 54 per cent over the same period last year but the figure
largely represents reinvestment by established companies.
Some new investors are starting to spend money, notably Ikea, which
announced plans last year to invest $300m. But other well-publicised deals
have yet to go ahead, for example the Austrian bank Raiffeisen's plans to
buy a second local bank for up to $600m.
Russia's business groups, the biggest investors in Ukraine, were initially
enthusiastic about the new government but they too are having second
thoughts. Russian oil companies TNK-BP, Lukoil and Alliance Group, which
own large refineries in Ukraine, were hit with temporary price caps on
petrol in April-May and have since had to compete with imported oil products
after the government lifted import duties.
Lukoil, tyre maker Amtel and aluminium companies Rusal and Sual are also
being threatened with revision of the privatisation deals through which they
acquired some of their assets in Ukraine. Russia's National Reserve Bank,
a private commercial bank, announced last week that it was freezing its
investments in Ukraine after two of its projects a joint venture with Kiev's
Hotel Ukraina and a waterfront resort in Crimea fell under investigation.
Ms Tymoshenko is hoping to announce at the conference that Ukraine's
largest steel mill, Kryvorizhstal, will be reauctioned. The mill was sold
last year for $800m to Viktor Pinchuk, Mr Kuchma's son-in-law and two
other Ukrainian businessmen, in a tender the new government says was
manipulated. -30-
===============================================================
3. UKRAINIAN PRESIDENT, PARLIAMENT SPEAKER AGREE TO
PROMOTE FOREIGN INVESTMENT
UNIAN news agency, Kiev, in Ukrainian, 13 Jun 05
BBC Monitoring Service, in English, Mon, June 13, 2005
KIEV - Ukrainian President Viktor Yushchenko and parliament speaker
Volodymyr Lytvyn have agreed to work out a "road map" of joint actions to
improve the investment climate in Ukraine. Lytvyn said this at a news
conference in Kiev today.
He said he had a meeting with Yushchenko, which was planned beforehand.
"It was an exchange of opinions as to how to synchronize our actions - the
actions of the president, parliament and the government on all the issues
that should be settled today and tomorrow," he said.
The primary problem today is ownership in Ukraine, Lytvyn said, including
privatization, reprivatization and protection of private property. In this
context the two officials discussed a draft law on the protection of the
rights of property owners. Lytvyn emphasized that Western investors are
expecting clear privatization plans. Western investors are waiting for clear
signals from the authorities on privatization.
Lytvyn recalled that an economic forum, a kind of mini Davos, will take
place in Ukraine soon, and a clear analysis of what is happening in
privatization should be ready by then. Reprivatization should be carried out
using economic levers only, proceeding from Ukraine's national interests,
so that no-one has grounds to say that there is politics behind this, Lytvyn
said.
Lytvyn said he made a conclusion from his meeting with the president today
that "there will be no 'emergency' in Ukraine".
The speaker said it was an interesting conversation, during which completely
opposing ideas and approaches were expressed, Lytvyn said. This "will make
it possible to find a compromise between the state and property owners", he
added. It is necessary to calm foreign investors and present Ukraine as an
attractive state for foreign investments.
Commenting on the situation around the Kryvorizhstal steelworks, Lytvyn
said: "I have lost track. Mutually exclusive statements are being made." He
expressed hope that the authorities would make a decision and the process
will be transparent and legal. -30-
===============================================================
4. UKRAINIAN PRESIDENT URGES "AMICABLE" SETTLEMENT
OF PRIVATIZATION DISPUTES
ICTV television, Kiev, in Ukrainian 1545 gmt 14 Jun 05
BBC Monitoring Service, UK, in English, Tue, June 14, 2005
KYIV - [Presenter] Now back to how attractive Ukraine is to investors. Let
us recall that President [Viktor] Yushchenko has suggested that a memorandum
guaranteeing property rights should be signed to calm down prospective
investors scared by privatization reviews in Ukraine.
Yushchenko wants the cabinet and parliament to sign the document. He
made this sensational announcement at a meeting with Czech President
Vaclav Klaus.
[Correspondent] The memorandum is supposed to assuage prospective
investors' fears. Under the document, the state respects the rights to
honestly acquired property. If a court proves that laws were violated during
privatization, owners have the right to conclude an amicable agreement with
the state.
[Yushchenko] The second point is that the cabinet will initiate the forming
of peacekeeping procedures through legal procedures. These amicable
accords should resolve conflicts which may emerge during the consideration
of these cases.
[Correspondent] The memorandum is no law. It is a way in which current
politicians can pledge to protect private property. The document, which has
not been revealed to the press yet, was drafted by the president, his
advisers, the head of the National Security and Defence Council [presumably
council secretary Petro Poroshenko is meant; the council is formally headed
by the president] and several cabinet members. Prime Minister Yuliya
Tymoshenko will familiarize herself with the document only after returning
from France.
Experts from the presidential administration say it is absolutely possible
to sign the memorandum by the end of this week.
[Mykola Poludyonnyy, captioned as presidential adviser] The state has to
meet these owners halfway and also to step up or encourage amicable
accords to be concluded to replace privatization agreements signed
previously. For instance, we can talk about changing the price stated in
the accord, or something else.
[Passage omitted: Yushchenko lists major Ukrainian companies which
will be offered for privatization - see TV 5 Kanal, Kiev, in Ukrainian
1200 gmt 14 Jun 05.] -30- [Action Ukraine Report Monitoring Service]
===============================================================
5. UKRAINIAN PRIME MINISTER SAYS FRENCH COMPANY ARCELOR
READY TO PARTICIPATE IN NEW TENDER FOR STEEL MILL
Ukrayinska Pravda website, Kiev, in Ukrainian 14 Jun 05
BBC Monitoring Service, UK, in English, Tue, June 14, 2005
KYIV - Ukrainian Prime Minister Yuliya Tymoshenko has said that a French
company, Arcelor, is ready to participate in a new tender to privatize the
Kryvorizhstal steel plant. "Arcelor is ready to come to Ukraine and take
part in the new tender," Tymoshenko told Ukrayinska Pravda after talks with
the chairman of the Arselor management board, Guy Dolle.
Tymoshenko did not want to predict the price that could be paid for
Kryvorizhstal. "It will be a decent price for Kryvorizhstal, not the dumping
price the plant was sold at under the previous authorities," she said.
Ukrayinska Pravda sources said that Guy Dolle had hinted during the meeting
that Arcelor was ready to offer 3bn euros for Kryvorizhstal.
Tymoshenko also told Ukrayinska Pravda that a protocol of intent had been
signed with French company AREVA, which opens opportunities for cooperation
with it. "This is the beginning of colossal cooperation in the nuclear
energy sector," Tymoshenko said. [Passage omitted: the protocol was signed
at a restaurant] Sources say that the protocol envisages joint prospecting
of uranium deposits on Ukrainian territory, the construction of new nuclear
reactors, maintenance of the existing ones reactors and so on.
===============================================================
6. WHAT ARE THE PROS AND CONS OF UKRAINE'S BUSINESS FIELD?
Six Interviews by Natalia Huzenko, The Day
The Day Weekly Digest in English, #20
Kyiv, Ukraine, Tuesday, June 14, 2005
[1] Yuriy PLOSKY, deputy general director of WICOM Technologies Ltd:
"The major downside to Ukraine's business field is the gap between
declared support for investors and the realities faced by businessmen who
start to work here. The rift between declarations and reality is staggering.
They promise investors a great deal but are in no hurry to make good on
even half of their promises. This applies to almost everything.
The government and ranking officials haven't stopped lobbying for their own
interests and assisting those businessmen whom they consider necessary or
who can reciprocate. As a result, they thwart even active investors who
specifically intend on doing business in Ukraine. Therefore, we will be able
to talk about the importance of investment to the country only when some
real efforts are undertaken along these lines.
"Tax legislation is a separate topic. There's no denying that the Tax Code
is perfect, and everything in it is correct. However, the existence of
parallel bylaws that nullify many norms contained in the Tax Code
overshadows all its positive aspects.
"The only advantage of the Ukrainian business field is the fact that most
markets are unstructured and have plenty of niches that can be successfully
occupied by Western companies. In this respect Ukraine is a businessman's
dream. What else could you want? We have a free market with little
competition. But the re is a drawback: government interference takes all the
appeal out of the market. There would have been far fewer problems without
it."
[2] Serhiy LYTVYNOV, general director of Minolta Ukraine:
"There is no place in the world where you can make as much as a company
working in Ukraine. The earnings of companies in the West are no longer
measured in percentage points but fractions of a percentage point, and the
competition for these market shares is intense. This is our main advantage.
Where, for example, can you find a deposit rate of 10%? Our life is dynamic,
and it is possible to earn money, build a business, and create yourself.
This is what's attractive about Ukraine.
"As for the downsides, the hardest thing is explaining the specifics of the
country to foreigners. This applies to all spheres of life. Ukraine is not
what they imagine it to be. Notably, almost everyone has these
misconceptions. Western businessmen are not accustomed to our rules;
they have to reform and adapt to our conditions.
"It's hard to name specific things that make us very different from the
West. We are used to thinking that we have high taxes and brutal pressure
from the authorities, but my business partners say that in many countries
the situation is far more difficult. Foreigners are quite unperturbed by
this. They are only amazed at how things are done. Our business sphere,
with its corruption and foot-dragging, is the only potentially shocking
experience, but it seems to me that it's an open secret anyway."
[3] Serhiy LOKTIONOV, director of Kyiv operations of the Ukrainian-British
JV Poltava Gas and Oil Company:
"I attribute the failure of most investment projects to the fact that
investors were welcomed in the airport by the so-called 'Ivan Susanins.'
Investors were viewed exclusively as a source of easy money. For this
reason only a few of the numerous investment projects that were launched
in the country have reached their goals. Investors are not aware of what
they should know about our country.
"People who used to make decisions about the future of business did not
care about the prospects and further growth of businesses. Almost nothing
has changed. The reason is that our laws do not correspond to the usual
European rules of doing business. All business regulations are contained in
EU directives, and since we are headed that way, we have to bring our laws
in line with them. Meanwhile, we are constantly inventing new things that no
one needs. This incompatibility is our main problem.
"I believe that what drives foreign businessmen here is that we have no
money but lots of unoccupied territory for doing business. They are in the
opposite situation."
[4] Vadym BODAYEV, director of Kyiv operations of Sigma Bleyzer:
"Among the positive aspects I can single out the growing economy, which
enables companies to work effectively. Rising GDP and expanding production
are making it possible to significantly expand markets, and are proof of the
potential growth of the population's purchasing capacity. These are all
signals for major investors: they see that it makes sense to invest capital
here.
"The workforce is skilled and cheap enough, which makes it possible to
open new plants here and relocate production to Ukraine. The third
important aspect is that a transition economy can generate high profits,
which no company can earn while working in the EU or in other stable
economies. But this entails risks. All of this attracts attention to
Ukraine. The new political situation is also attracting the attention of
investors who have decided to start exploring Ukraine.
"There is a downside, though. Ukraine's main problem is its unstable
legislation, which enables the government to manually control the economy
and intervene in market relations. The government's handling of the meat
and petroleum markets has alerted those who intend to open enterprises
here. Tomorrow everything might change, causing the loss of capital.
"Another major problem is the talk of reprivatization. I can assure you that
the privatization controversy that has been stirred up in parliament and the
print media has caused some of our partners who were intending to start
working here to mark time and see how it ends. Finally, political risks make
it impossible for many companies or banks to invest in our economy. Our
risks eclipse the customary risks they face in their home countries."
[5] Valeriy LANOVENKO, director of Microsoft Ukraine:
"After working for many years in various countries, I can say with certainty
that complaints about the disadvantages of our business field and taxes
are greatly exaggerated. There is a wealth of positive aspects that other
countries lack. Proof of this is the intense interest of Western
entrepreneurs in Ukraine. There are many such pluses, beginning with
separate tax aspects, which are criticized most of all.
"Perhaps it is in the nature of businessmen always to want lower taxes. The
13% income tax is a plus. Of course, Ukraine's social taxes are somewhat
higher than those in other countries. But the positive aspects of the tax
legislation certainly outweigh the negative ones.
"As for legal issues, the laws are somewhat behind the standards and
realities of the present-day market and processes underway in the country.
But this is a problem in most countries, where legislators cannot keep pace
with the changing market. There is room for improvement and progress.
"A case in point is the copyright and intellectual property laws. They are
way behind the demands of the market. Therefore, when a Western company
enters our market, it should bear in mind such specifics of our legislation.
The laws will catch up with the market, but in their own time."
[6] Serhiy CHERNYSHOV, president of LEMMA Insurance Company:
"The advantage of the Ukrainian insurance field for market operators is the
current simplified taxation system, which provides for a 3% flat income tax.
Companies that come to do business here must know that the Ukrainian
insurance market has a surplus supply of traditional insurance services.
They can succeed only by dumping prices or offering complex integrated
and multifaceted products combined with investments.
"Speaking of the Ukrainian business field as a whole, its advantages are
due to the fact that it has not been divided among individual players, which
means there are many new opportunities. A major problem is the
considerable pressure from law enforcement services and inspection
authorities." -30- [The Action Ukraine Report Monitoring Service]
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LINK: http://www.day.kiev.ua/138818
===============================================================
7. UKRAINE ON THE PEAK OF REAL ESTATE BOOM--IS IT DANGEROUS?
Roman Bryl, Ukraine Analyst
IntelliNews - Ukraine This Week
Kyiv, Ukraine, Monday, June 13, 2005
Real estate prices rise every week by several percent in Ukraine -----
Everyone who intends to take up residence or purchase office space in Kyiv
and other major cities in Ukraine should hurry up. The price of individual
and commercial apartments rises significantly almost every day. Only during
Jun 1-8 residential apartment prices in Kyiv rose by 3% or by USD 40-300
per m2 depending on the type of premises. Commercial apartments are
experiencing even more rapid price growth. The average price of Kyiv office
space surged 16% m/m in May.
Every large Ukrainian city involved in realty boom -----
Property prices rise in other large Ukrainian cities as quickly as in the
capital. For instance, the cost of residential apartments reached USD 1,000
in Lviv, USD 1,100 in Donetsk, and USD 2,000 in Odessa in May. The price
of commercial real estate in these cities closely approached Kyiv levels.
The minimum price of 1 m2 in Odessa in the lowest class C office buildings
is USD 500 (the same as in Kyiv).
In a class A office it is USD 5,000. Accordingly, the rent is also drawing
near Kyiv levels – USD 5-10 m2 per in a class C office. In Kharkov and
Odessa rent even exceeds rates in the capital (USD 55 and USD 65 per
m2 respectively). Such exaggeration is caused by a deficit of high quality
property.
Some small, medium-sized towns surpass
Eastern European capitals in cost of real estate -----
Not only large, but also medium-sized cities and small towns’ property
prices are growing at a rapid pace. Though the price is much lower than
in major cities, it rises 1-1.5-fold per annum. During the last 3 years an
average residential apartment with up to 30 m2 floor space became 4-fold
more expensive in towns with up to 80thsd inhabitants. This is especially
characteristic for towns located near big cities, in particular next to
Kyiv. The price difference of a similar apartment in Kyiv and its
satellite-towns reaches USD 50thsd.
A decent passenger transport communication system allows reaching the
center of Kyiv even more quickly from satellite-towns than from several
outskirts of Kyiv. That is one of the reasons why many people prefer to
settle in satellite-towns rather than in cities. Also, mortgage lending
costs are much lower there and are accessible for a person with income
of less than USD 1000 per month. Interest rates are from 11.5-12% any-
where in the country.
The typical Ukrainian region capital Chernigiv (about 200thsd inhabitants,
100 km from Kyiv) has already exceeded Hungarian capital Budapest in the
cost of a 2-room residential department. Thus, the price of such apartments
in Chernigiv amounts to USD 15-18thsd and in Budapest to USD 12-14thsd.
Russian companies are the main investors in Ukrainian resort property -----
Other territories experiencing a real estate boom are summer resorts in the
Southern part of Ukraine, especially in the Odessa and Crimea peninsula
southern coast line. Yalta is the leading Crimean resort regarding property
price growth. The cost of a new-built apartment ranges from USD 600 to
USD 2,000.
Yalta’s secondary realty market prices do not differ much from those of
new-built apartments. The lowest price level equals to USD 800 per m2; the
highest – USD 1,500 per m2. The highest prices on the secondary market in
the Southern part of Ukraine are in Odessa. Used accommodations cost USD
1,000-2,000 per m2.
There is one characteristic peculiarity in real estate demand in Ukrainian
resort territories. More than 55% of property deals are concluded with
Russian companies or individuals since the beginning of 2005, real estate
agency Multidom (Sevastopol) informs. By the way, Russian companies intend
to become the main foreign investor on the Ukrainian property market.
In Jul-Aug, for instance, Russian Investment group (RIG) plans to make an
acquisition of Ukrainian Real Estate Solutions company. The total volume of
RIG’s planned investments in Ukrainian property amounts to USD 30-50mn
a year. The company is focused on commercial, trade and storage property.
Real estate price surge caused by deficit of available property of all
kinds --
The current real estate price hikes are caused by one but very many-sided
problem - deficit of available property of any kind, starting with
individual accommodations, end ending with storage capacities. In its turn,
the deficit is provoked by several factors. First of all, it is not
sufficient to simply increase construction growth rates. According to
experts’ estimates, only in Kyiv the deficit of residential and commercial
real estate makes up 700thsd m2 and 850thsd m2 a year respectively.
The annual volume of new building areas realized in Kyiv made up 1.1mn
m2 of residential and about 350thsd m2 of commercial property in 2004.
Currently construction companies are boosting production capacities, but
are still far from satisfying demand. As we will elaborate below, it is
legislative restrictions that do not allow them to do this.
Also, builders are not too eager to satisfy such high demand all at once, as
preserving the current demand/supply imbalance allows further raising
prices.
For example, largest Ukrainian construction holding Kyivmiskbud, which holds
11% of the Ukrainian market, increased its construction volumes by 10.8% y/y
in May to USD 157.5mn. In Jan-Apr Kyivmiskbud construction volumes rose
12.3% y/y, after 11.9% y/y growth to USD 355mn in full-2004. The total
amount of combined areas built and approved by regulators rose by 5% y/y to
713.5thsd m2.
Realty stays the main investment medium for Ukrainians -----
Also, property is regarded in Ukraine as the main investment medium,
especially by individual purchasers. This is another reason for the realty
deficit. Since 2000-2001, when the Ukrainian government headed by PM
Victor Yuschenko blocked major illegal foreign currency outflow loopholes,
real estate became a key decent area for domestic investments.
After a series of bank collapse scandals in Ukraine in the end of the 1990s,
the local banking sector was trusted too little to attract cash from the
population. That period was the beginning of demand rise on the real estate
market. The demand accelerates in line with overall economic growth in the
country.
Growing demand makes major construction companies concentrate their
activity predominantly on the so-called elite property segment. On one hand,
this allowed to increase profit margins of the companies. On the other, the
entities mostly ignored the “social segment” i.e. building cheap dwellings
for inhabitants with a country average income level. The ignorance caused a
sharp price rise of residential property even despite very low quality all
over Ukraine.
Real estate boom will continue the next 3-5 years -----
According to Blagovest, one of the leading real estate agencies in Ukraine,
the property boom will continue in the next 3-5 years. The reasons are as
follows. FIRST, strict restrictions on land use in big cities that makes it
impossible for companies to increase quickly their building capacities. It
is supposed that only in 2008 current land laws will be changed.
The main expected amendment is permission of land privatization. That allows
construction companies to broaden their investment activities. Still, nobody
can guarantee today that the new Land Code will be passed in the planned
iteration and with currently known content.
SECOND, there is the slow pace of mortgage lending development. Almost
every large Ukrainian bank offers mortgage credits but with rather high
interest rate (average of 12%). According to Gitanas Nauseda, CEO adviser
of Vilniaus Bankas, owner of Ukrainian Agio Bank, a decrease in mortgage
rates cannot be expected in Ukraine in the next 3 years.
We tend to agree with this statement, as inflation stays extremely high at
around 13% y/y. Torrid increase of wages is not expected, even though some
election-related obligations have been taken on this year by the government.
Thus, purchasing ability would not grow as quickly as prices.
Government makes attempts to slow down realty price hikes -----
The government from its side makes attempts to slow the real estate price
raise. In May 2005 it presented the mortgage program “Territory of quality
life”, which aims to substitute old housing in Ukrainian cities and towns.
The program also targets to present a new mortgage lending concept.
Nevertheless, many builders do not support the program, because it requires
taking out their building capacities to engage in the low-profit segment.
Thus, so far there are no prerequisites for a sharp slowdown of price growth
in the real estate market. But the excessive price growth creates
preconditions for a possible collapse. A probable factor is strong UAH
appreciation.
Now 70% of real estate is bought using foreign currency. If UAH strengthens
quickly, as government intends to allow, banks and construction companies
can see their real estate profit margins contract.
Construction companies betting on further rapid price increases might one
day be caught off guard by the population’s buying power becoming exhausted.
If that coincides with a banking crisis, payments for real estate purchases
and rent might be undermined. A similar disturbance took place last year in
Russia, notably slowing or even halting price growth in major real estate
markets like Moscow. -30-
===============================================================
8. UKRAINIAN CABINET CANCELS INSTRUCTION COORDINATING
CONDITIONS OF PRIVATIZATION OF NIKOPOL FERROALLOY PLANT
Ukrainian News Agency, Kyiv, Ukraine, Mon, June 13, 2005
KYIV - The Cabinet of Ministers has canceled governmental instruction "On
coordination of conditions of competition selling stake in Nikopol
ferroalloy plant OJSC (Dnipropetrovsk region), approved on February 24,
2003, which was the basis the plant's privatization.
This was disclosed in the statement of the Cabinet dated June 9 "On
invalidating several acts of the Cabinet of Ministers," the text of which
Ukrainian News obtained.
Resolution "On coordinating conditions of holding of competition for sale of
stake in Nikopol Ferroalloy Plant OJSC" approved by the Cabinet of Viktor
Yanukovych stipulated conditions of sale via competition of 25% shares of
the Nikopol ferroalloy plant giving the buyer management over 25%+1 of the
plant's shares in the state property and prior right to buy this stake if it
is put on sale.
According to conditions of the competition, a company conducting efficient
management for more than three years of a controlling stake in enterprise
with production similar to that of Nikopol ferroalloy plant (production of
no less than 350,000 tons of electric ferroalloys) could buy 25%+1 shares in
the plant.
The Cabinet also canceled a resolution approved by Anatolii Kinakh's
government on October 23, 2002 "Some issues of increasing investment
attractiveness of privatization facilities" which permitted setting out
qualification requirements to buyers in sales of stakes in strategic or
monopoly enterprises, 25% or 50% stakes in which belong to the state. State
privatization program permits setting qualification conditions only in sales
of controlling stakes in group G (?) facilities.
As Ukrainian News earlier reported, the State Property Fund sold 25% of the
shares in Nikopol ferroalloy plant to the Prydniprovia consortium in May
2003 for UAH 205 million, and it sold another 25%+1 share in the plant to
the consortium for UAH 205.5 million in August 2003.
Meanwhile, Pryvatbank, the Stakhanov and Zaporizhia ferroalloy plants, as
well as the Prominmet company (Dnipropetrovsk) and the Ordzhonikidze ore
mining and enrichment plant were not allowed to participate in the tender
for sale of 25% shares in the NPF.
The Interpipe corporation founded by businessman MP Viktor Pinchuk controls
Prydniprovia. Presently Interpipe controls about 73% shares in Nikopol
ferroalloy plant, and Pryvatbank controls nearly 27% stake. -30-
===============================================================
9. PROS AND CONS OF HITCHHIKING..ALONG THE ROAD TO THE WTO
By the end of the summer the Ukrainian government intends to complete
preparation for its accession to the World Trade Organization. Lobbyist
groups have very little time to gain privileges in their specific sectors of
the economy allowed within the framework of the WTO
By Yevhen Fadeyev, Kyiv Weekly, Issue #22 (162)
Business and Socio-Political Weekly
Kyiv, Ukraine, Friday, Jun 10-17, 2005
According to Economy Minister Serhiy Teryokhin, accession to the WTO will
ensure the continued growth of Ukraine’s GDP by 2% per annum, growth of
commodity export volumes by US $2 bn, an increase in the profits of
enterprises by almost Hr 8 bn and an increase in foreign direct investments
(FDI) by US $2 bn. In the next several weeks, the government must prepare
20 bills aimed at bringing the Ukrainian legislation in compliance with WTO
standards, while Ukraine’s parliament will have to urgently review the bill.
As Teryokhin pointed out, the following issues remain unregulated: changing
the system of taxation for agricultural enterprises, abolition of mandatory
export from Ukraine of sugar produced from imported raw sugar, revision of
import duties on scrap metal and ferrous metal waste, and curtailing the
list of commodities subject to mandatory certification. In the event the
parliament adopts the related laws, the Ukrainian enterprises in a number of
industries will face serious competition from foreign companies on the
domestic market.
The WTO considers such sectors in the Ukrainian economy as agriculture,
machine engineering, the defense-industrial complex, pharmaceuticals and
chemicals to be the most vulnerable. Enterprises in these industries still
operate in the so-called “greenhouse” conditions. To be sure, the Ukrainian
government sheltered them from foreign competitors by imposing duties and
other protectionist measures, like “elements of economic force majeure”.
According to WTO membership requirements, these measures will have to
be canceled. Therefore, the country will end up having to pay for the
benefits for the economy on the whole from WTO accession through curtailing
production volumes in several domestic industries.
Meanwhile, opening the Ukrainian market of sugar cane would undermine
the operation of Ukrainian sugar mills. In fact, the rate of closure of
sugar mills has been quite high in recent years. Indeed, according to a
number of experts, Ukraine’s accession to the WTO will lead to the closure
of at least 20 sugar mills. The same could be said about the agricultural
machine engineering industry, which might seize to exist altogether without
government support.
However, a compromise can still be found between the strict protocol
requirements of the WTO and the interests of Ukraine’s economy, if so
desired. For example, though official Kyiv is trying to speed up the process
of WTO accession, the Ukrainian government managed to agree with the
WTO on preserving US $140 mn privileges for the country’s agrarian sector
and Ukraine hopes to preserve another US $1.14 bn in subsidies that will
be gradually be curtailed. There is every reason to believe that Kyiv will
firmly maintain its line on this issue so as not to risk the trust of
farmers before the parliamentary elections next spring.
On the other hand, confectioners will be tempted to switch to cheaper sugar
cane and break the link with national producers. Most likely, the sugar
business and other enterprises involved in agricultural products processing
hope for support of the Socialists. Indeed, SPU leader Oleksandr Moroz has
repeatedly pointed out that Ukraine is not ready to join the WTO and spoke
about the dangers for the domestic food processing industry of the country’s
integration into the international organization.
In addition, Viktor Pinchuk, whose Interpipe Corp. holds certain assets in
the country’s agricultural sector, might have supported the machine-
engineering sector had the old government remained in power. Today,
however, his initiatives are unlikely to find support in the parliament.
Meanwhile, Ukraine’s carmakers also have no ability to influence government
decisions these days. At the start of the year, the industry was stripped
off its privileges and even the lobby in the parliament could not restore
them.
Industry experts believe that there is no sense in fighting for the
remaining industries or delaying WTO accession at their expense. An expert
of the CASE Ukraine center Volodymyr Dubrovskiy asked, “If the market
situation is such that sugar cane is cheaper, is it worth protecting the
manufacturers of sugar beet? The state has to protect producers from unfair
competition and monopolies, not from the open market.
Besides, there is a lot of talk about protectionism in those industries that
had good prospects 50 years ago. We are unlikely to surpass China in
industry. We do not have such a large, cheap and hardworking labor force
as China does. In order for Ukraine to become a developed post-industrial
country, it must develop information technologies and protect copyright and
content laws. For that we must be more open and gain accession to the
WTO.”
Besides cutting subsidies and revising import duties, Kyiv must toughen
accountability for violations of intellectual property rights. The VR
already passed in the first reading a corresponding bill. However, the bill
does not fully protect the WTO principles of fair competition and threatens
Ukrainian producers and sellers of compact discs.
“The law stipulates surprise raids of companies,” says Director of the
INTELS International Network Ukraine law firm Yulia Prokhoda. “Such raids
inspections practically do not require any justification. Any entity can
file a statement about the possible violation of copyright and then
participate in inspections, thereby fully controlling the production process
of their competitor.”
If the deputies failed to catch such “traps” in legislation that they had
time to consider, such tricks are inevitable in the aforementioned 20 bills
slated for quick approval. -30-
-------------------------------------------------------------------------------------------------
LINK: http://www.kyivweekly.com/english/article/?727
===============================================================
10. UKRAINIAN CABINET FORMS WTO QUERY PROCESSING CENTER
Ukraine has 17 more WTO country protocols to finish
Yurii Yeriomin, Ukrainian News Agency, Kyiv, Ukraine, Thu, June 2, 2005
KIEV - The Cabinet of Ministers has set up within the Economy Ministry a
center for processing inquiries of member-countries of the World Trade
Organization and the WTO itself, and responding them. This was disclosed
in the Cabinet of Ministers' resolution of May 31 to this effect. In keeping
with the resolution, the center is a government agency subordinate to the
Economy Ministry.
The main objectives of the center are to establish cooperation, exchange
information with the WTO and its members, receive questions and answer
them.
As Ukrainian News reported, President Viktor Yuschenko criticized the
Cabinet of Ministers on May 20, saying that Ukraine's progress in
negotiations aimed at concluding bilateral protocols on mutual access to
the markets of goods and services was too slow.
Ukraine has signed protocols on entry in the World Trade Organization with
its 31 member-countries.
Ukraine is continuing talks with 17 member-countries of the WTO: the United
States, Australia, China, Japan, Armenia, Moldova, Kyrgyzstan, Indonesia,
Croatia, Peru, Panama, Norway, Ecuador, Colombia, Egypt, Iceland and
Taiwan.
According to the Foreign Affairs Ministry, the negotiations with China,
Japan, Norway, Peru, Colombia and Iceland are in their final stages.
Ukraine is hoping to join the WTO before the end of 2005. -30-
===============================================================
11. RUSSIAN PRESIDENTIAL OFFICIAL BLAMES UKRAINIAN POLITICIANS
FOR SPOILING RELATIONS BETWEEN RUSSIA AND UKRAINE
Interview with Modest Kolerov by Yevhen Ikhelzon
Segodnya, Kiev, Ukraine, in Russian 13 Jun 05
BBC Monitoring Service, UK, in English, Mon, June 13, 2005
Ukrainian politicians who want to use conflict with Russia to advance their
careers are to blame for worsening relations between the two countries, the
Russian official said to be responsible for combating "coloured revolutions"
in the CIS has told a popular Ukrainian tabloid.
Modest Kolerov, who heads the Russian presidential administration's
department for interregional humanitarian links with foreign countries, says
that Ukraine does not treat Russia with respect and continues to view it as
a milch cow.
The following is the text of Kolerov's interview with Yevhen Ikhelzon
published in the Segodnya newspaper on 13 June:
The head of the Russian presidential administration's department for
interregional humanitarian links with foreign countries, Modest Kolerov, has
been described as the chief-of-staff for "counter-revolution" in the CIS.
They say he draws up plans for preventing "coloured revolutions" and is
working actively in Ukraine to ensure the results of the 2006 parliamentary
elections are favourable for Russia.
A couple of days ago, Kolerov answered Segodnya's questions on
Russian-Ukrainian cooperation now and in the future. He did not say much and
what he said was not very specific. But two conclusions may be drawn: FIRST,
Russia intends to follow a hard economic line with our country; SECOND, the
Kremlin is waiting for Ukraine to become a parliamentary republic.
[Ikhelzon] There has been the impression recently that tension is growing in
Russian-Ukrainian relations. There are statements about gas prices tripling,
articles about the poisoning of [President Viktor] Yushchenko that were
clearly ordered by someone [various Russian media have in recent weeks
carried reports suggesting that Yushchenko's illness was the result of an
unsuccessful rejuvenation operation]. Is this the case?
[Kolerov] Of course, I believe that from an objective point of view there
are a lot of points of friction. But if you look at things even more
objectively, this is not the fault of Russia, but of the Ukrainian
politicians who are acting according to a paradigm of conflict with Russia.
Ukrainian politicians are making anti-Russian statements every day.
[Ikhelzon] Like what?
[Kolerov] "The Russians have eaten all the food, and they're not giving us
food" - this is no joke. Conflict benefits those who want to build political
capital from conflict with Russia and occupy a better political position. As
for economic conflict, if Ukraine has begun to talk about its energy
security, and that's quite right, then why shouldn't Russia talk about the
same thing? You can't treat Russia as a milch cow.
[Ikhelzon] Is Ukraine treating Russia as a donor?
[Kolerov] Yes, that attitude has continued. There are demands for discount
rates, discount prices for fuel, demands for favourable conditions for
Ukrainian goods, and all sorts of other benefits. They do not treat Russia
with respect. I think that's bad. It's a failure to understand the
situation.
[Ikhelzon] What are the main problems in Russian-Ukrainian relations?
[Kolerov] Definitely, they are economic. The protection of our Russian
market, the transition to European fuel prices. A new problem is Ukraine's
NATO accession. I clearly distinguish NATO and EU accession. After the
latest developments with the European constitution, the issue of Ukraine
joining the EU is off the agenda. But the very fact that Ukraine's
aspiration to join the EU proved illusory may speed up its NATO accession.
[Ikhelzon] What are the goals of Russian policy in Ukraine?
[Kolerov] The most interesting thing is political reform [shifting powers
from the presidency to the parliament and government]. It has been announced
that all its provisions will come into force in September. We are simply
observing this.
[Ikhelzon] Who in Russia and Ukraine are responsible for bilateral
relations? Previously it was at the level of presidential administration
heads - [former Ukrainian presidential administration head Viktor]
Medvedchuk, [former Russian presidential administration head Aleksandr]
Voloshin and [current Russian presidential administration head Dmitriy]
Medvedev. Who represents the sides now?
[Kolerov] I'm not very concerned about this issue. It is enough to analyse
the diplomatic chronicle and see who your National Security and Defence
Council Secretary Petro Poroshenko met in Moscow.
[Ikhelzon] It is believed that you are responsible for organizing various
scandals involving Ukraine in the Russian media.
[Kolerov] I don't want to talk about that.
[Ikhelzon] In that case, who is it that is waging the information war
against the Ukrainian authorities in the Russian press?
[Kolerov] I've heard that it is Ukrainian politicians themselves who are
using the Russian media for their own purposes, for settling scores. But I
would like to say that articles in our press do not represent the position
of the Russian leadership. Most Russian newspapers support the opposition
and naturally do not reflect the state line.
[Ikhelzon] Is Russia monitoring the forthcoming parliamentary elections? Do
you maintain relations with the Ukrainian opposition?
[Kolerov] I do not maintain relations with anyone from the new opposition,
nor was I acquainted with the old opposition. The March 2006 elections are a
long way off. There are still interim results to be drawn up, political
reforms, economic results for the year. We're interested in what happens
ahead of the election. -30-
===============================================================
12. UKRAINE'S NEW FLEDGLING POLITICAL PARTY MIMICS GOP
Kostyantyn Gryshchenko wearing another hat: politician
By David R. Sands, The Washington Times
Washington, D.C., Sat, June 11, 2005
WASHINGTON -- Kostyantyn Gryshchenko began his career in the Soviet
diplomatic corps, served as Ukraine's ambassador in Washington, and rose
to be his country's foreign minister during the tumultuous days of
December's Orange Revolution.
But in Washington yesterday for meetings with senior State Department
officials, Mr. Gryshchenko was wearing yet another hat: politician.
"For Ukrainian diplomats, our frustration was always that what we tried to
achieve abroad was being held back by the realities of our own country," Mr.
Gryshchenko said in an interview. "Forming a political party was the way I
saw to change that."
Mr. Gryshchenko said his fledgling Republican Party of Ukraine is named
after and patterned on its American counterpart: a pro-business, low-tax,
small-government party that favors individual initiative, community values
and decentralized political power. "We took the basic core idea from the
ideas of the U.S. Republican party," he said.
The Orange Revolution, in which massive, peaceful protests overturned a
questionable election and led to a victory for pro-Western President Viktor
Yushchenko, electrified the world.
But Mr. Gryshchenko, who stepped down as foreign minister Feb. 4, argued
the revolution had been far from complete. U.S. and European support and
pressure, he said, were still needed to keep the new government on the path
to needed reforms.
"In many ways there has been no visible break with the way the country was
governed before," he said. "The outward declarations and statements of the
government are much more positive, but the power structures -- dealing with
the media, with local governments, with the economy -- have seen no real
change."
The Orange Revolution "opened a window of opportunity that should be
exploited to the maximum for reform, but that is not happening now," he
added.
President Yushchenko and Prime Minister Yulia Tymoshenko have clashed
over energy policy and other issues, reminiscent of the paralyzing fights
that occurred throughout the two terms of former President Leonid Kuchma.
Most local officials are appointed by the central government in Kiev, and
business "oligarchs" continue to dominate many of the main industrial and
media properties.
Mr. Gryshchenko said many of the bureaucrats and ministers from Mr.
Kuchma's time remain in place, and government officials still have trouble
accepting the need for a critical and independent press.
He said his new party hopes to meet the 3 percent vote threshold to qualify
for seats in parliament in next spring's vote, seeking support in both
Ukraine's European-oriented west and its Russian-speaking eastern regions.
He acknowledged the vast change between his former life of international
conferences and high-level diplomacy to a politician's lot shaking hands,
slapping backs, striking deals and trolling for votes. "I have gotten to
see a lot more of my own country than I did before," he said.
"But cutting deals is something I have had to do for a long time. Any
negotiation is a delicate balance between what is achievable and what is
in the best interests of everybody in the room." -30-
===============================================================
13. "UKRAINIAN MEMBERSHIP IN THE EUROPEAN UNION"
Remarks by Ambassador of Lithuania to the US, Mr. Vygaudas Ušackas
US-Ukraine Policy Dialogue Exchange Project (PDEP) Working Session
Washington, D.C., Tuesday, June 7, 2005
Published by The Action Ukraine Report (AUR)
Washington, D.C., Wednesday, June 15, 2005
Ladies and Gentlemen,
I appreciate the organizers of the US-Ukrainian Policy Dialogue Exchange
program for inviting me to speak at the conference and to share Lithuania's
EU experience for Ukraine's choices.
I know that many of you are concerned about the implications of "NO"
referendums in France and the Netherlands and are legitimately asking the
questions on the course of the future developments within the EU and its
outward looking.
I. FOCUS ON REFORMS AND DELIVERABLES, NOT ON "WHAT WILL
HAPPEN IF."/ UNCERTAINTY - THE FORCE FOR PROGRESS)
In that context, the very first lesson I wish to share with Ukrainian
friends, that however significant may be the internal developments and "the
ups" and "downs" of the European Union, it's by and large your own efforts
at home that will define the success of your strategic objective to obtain
membership in the EU.
Looking from the Lithuanian perspective and answering the question of what
was the secret of our success (democracy, free market, EU and NATO
memberships) achieved during the 14 years of independence, I would argue
that to a large extent our strategic vulnerability (which was rightly or
wrongly perceived by the West as proximity to Russia as well as weak
economic performance in the beginning of 1990ies) has served as a major
motivation for rigid, comprehensive and consistent reforms.
However close to the defined goals we felt, we have never taken things for
granted and never accepted complacency as the way to move forward.
On the contrary, a sense of unpredictability on how broader international
relations may impact our cause to be free, independent and integral part of
the West, strong consensus within the society and among leadership about
the historical "window of opportunity" and cordial enthusiasm of young
bureaucracy to embrace the wind of change were among key factors which
influenced our successful historical journey to be an institutional part of
Europe whole and free.
I believe that today similar challenges are being faced by our Ukrainian
friends. I wish they translate that uncertainty into a forceful incentive
for the necessary reforms and progress at home.
For sure, the future of the European Union is now under review. And the
first conclusions will come out of the European Council in Brussels on
16-17th of June.
However, I don't think you can influence that debate in any other way then
by positioning Ukraine as a most dedicated candidate for future EU
membership, which conducts rigid, comprehensive and consistent reforms
in preparation for membership in the EU, irrespectively whatever happens
with the internal debate in the EU.
After the votes in France and the Netherlands, the European Union did not
collapse. It will continue to function on the basis of the existing
treaties, while the future direction of the EU is being assessed.
It is even more important that at this critical stage of debate we remind
the EU citizens and their elected leaders that we need a united and strong
Europe which is capable to address the challenges of the XXI century. Among
them is the task to promote freedom and democracy toward the countries such
as Ukraine by embracing them into the mainstream of the European
development.
This can only be achieved if you-Ukrainians challenge the EU with the real
progress you make in having bureaucracy free of corruption, advancing
approximation of laws with the EU legislation in general (and in particular
in intellectual property rights, company law, competition rules,
environmental and consumer protection), demonstrating sustained commitment
to effective implementation of legislation; tightening of bankruptcy rules,
eliminating of state interference in pricing and improving VAT
administration.
In the short term perspective, this would certainly contribute toward review
of the market economy status, ongoing negotiations on membership in the
WTO and would show to the EU leaders Ukraine's serious commitment towards
the aspired goal of membership even in the times of uncertainty and
unpredictability of the EU's future course.
II. CLOSER EU-UKRAINE RELATIONSHIP/ and AWARENESS BUILDING
As the consequence of the Orange Revolution progress has been made in the
EU-Ukrainian relations. The most notable of them have been the following:
- The EU approval of "Ten Points for Closer Co-operation" in support of a
democratic and reform oriented Ukraine;
- The adoption of the EU-Ukrainian Action Plan under the Union's European
Neighborhood Policy in February this year.
- And expected invitation, a week from now, by the EU to Ukraine to align,
if it chooses to, with the EU's CFSP common positions and declarations.
I would also add to this, that the post Orange Revolution period was very
well used by the new Ukrainian leadership to register its strong interest
for EU membership. This in turn introduced a new topic within discussions of
the EU leaders about possible future membership of Ukraine. As you very
well know, we are not there yet and there is no agreement on the Ukraine's
prospect for membership. And as a representative of the government of
Lithuania I am as anxious as you are to see the decision of the EU on what
lies beyond the horizon of currently established relationship.
You can be assured that your passionate friends within the EU- and I would
dare to say outside the EU (meaning the US)- will do everything to promote
that prospect. However, they will be much better equipped by the consistent
and visible "deliveries" of economic and political reforms coming from
Ukraine
III. MEASURES ON ACTION PLAN/THE ROAD MAP/COMMISSION
In the meantime, the new Ukrainian government was also working hard to
prepare the "Measures to implement the EU Ukraine action plan in 2005". In
the middle of May European Commission provided the feedback to the
Ukrainian government on this document.
Again, based upon our experience I can tell you that European Commission is
the best friend of your and any other country aspiring for membership. Some
times you will not like Commission's position, sometimes they will say what
you would not like to hear, but always they will be to the point,
comprehensive and cooperative to help to address your concerns.
Thus to establish cooperation based on trust and confidence with the
Commission representatives is one of the key prerequisites for successful
implementation of the Action Plan and future agreements with the EU.
Therefore, I hope the Ukrainian Government will incorporate Commission's
recommendations into the implementation program and would use it as the
Road Map for the work ahead.
In the beginning of next year, the implementation of the Action Plan will be
evaluated and the document will be reviewed. By that time, Ukraine needs to
show practical results of Action Plan implementation and remain consistent
with its implementation. This in turn will contribute toward definition of
next stage of the EU-Ukrainian relationship, when the Partnership and
Cooperation agreement expires in 2008.
Therefore, take a very close look to the Comments of the Commission and
focus on key priority issues such as:
- legal approximation and implementation,
- Strengthening administrative capacity and administrative measures,
such as: training of customs officials and computerization of the customs
administration, adoption and implementation of a system of impact
assessment of regulatory measures, consultation of stakeholders, and prior
notification of regulatory changes to economic operators to insure
transparency.
- Developing comprehensive energy policy,
- Insuring effective overall coordination which will be of paramount
importance to make Action Plan implementation a success, and
- Defining attainable goals and sticking to the commitments and
deadlines.
IV. WORK WITH INTEREST GROUPS
In pursuit of your goal to join the EU, rally widest political support
possible at home. EU integration is a hell of a job, which involves and
affects everyone from agricultural sector to mining industry. Political
parties, interest groups, shareholders, trade unions and mass media should
be engaged in transparent and continuous discussion of "pros" and "cons" of
European integration, what will be required and how long it would take to
implement a particular EU directive. Preparations for membership in the EU
will create new realities and new economic and political culture in your
country.
In this context, a quarterly dialogue between government and business
community on how to improve investment and business climate, which was
started on May 25th at the Economic forum in Kyiv's Ukrainian House, is a
positive beginning. You may also consider adding into these elaborations
the questions related to the implementation of the Action Plan.
V: FACILITATION OF VISA REGIME
We are glad that a positive experience of more flexible visa regimes between
Poland and Lithuania, on the one hand, and Ukraine, on the other, is now
being considered by the entire EU and Ukraine. This will lead toward easier
and greater exchanges between citizens of Ukraine and EU. In this
connection, progress in the ongoing negotiations on the Readmission Treaty
remains essential.
In the longer term perspective, Ukraine will need to work with the EU to
ensure the prompt control and management of its Eastern borders, which one
day in the future may become external borders of the EU. From our experience
we can tell, that this is going to be a complex issue, which will involve
Russia interests as well. Hence, we will need to develop a strategy, which
will deal with the concerns of both Ukraine and its important neighbor-
Russia.
VI. UKRAINE'S FOREIGN POLICY OUTLOOK
- The reinvigorated Ukrainian-EU relationship will also increase
Ukraine's profile in the Common Foreign and Security Policy domain. As a
neighbor and a significant regional power, Ukraine has already assumed an
important role in solving such long-standing issues as the Transnistrian
conflict and strengthening civic society in Belarus.
- Ukrainian reforms and actions will be closely watched not only by
the leaders in Russia, but more importantly by the citizens of this country.
There is no other country or nation in the world which can influence
ordinary Russians more than Ukraine and the Ukrainian people.
Therefore, Ukraine's success on the path to a full fledged democracy and
rule of law will have an inevitable resonance in Russian society at large.
Stronger support by the West for Ukraine's chosen path of reforms is
probably one of the West's best investments right now, not only for the sake
of Ukraine's success but also for the future of democracy and the rule of
law in Russia.
- Equally, success of reforms in Ukraine will have a powerful impact
to other peoples in the areas of the former Soviet Union. Success in
affirming democracy, implementing economic and social reforms and making
political regimes free of corruption will provide an example for other
countries in the region. Ultimately people in the neighboring countries will
take notice and recognize the differences between an authoritarian regime
such as that of Lukashenko and a democratic pro-Western governance, such
as that of Jushchenko and will draw appropriate conclusions.
- As you move with the reforms at home and outreaches abroad always
remember that however large and important country Ukraine is, you will be
much more appreciated and supported if you work with other countries, which
share the same aspirations, as a team. This was the lesson of Visheghrad and
Vilnius-10 countries.
Thus work with the core group of East European countries that have
demonstrated their commitment and adherence to democratic values. By
coordinating your efforts and promoting regional cooperation you will be
better equipped to influence European debate and provide valuable asset for
Europe at large.
VII. CONCLUSIONS
We in Lithuania fully understand what a profound reforms of not only
economic and political but by and large a societal magnitude you in Ukraine
have undertaken. The stakes and expectation are very high.
You are changing the entire set of rules and regulations for the citizens of
your country. As I used to compare the process of preparations for the EU
membership back in Lithuania: with the EU approximation of laws we
maintain the same players but the ordinary platform of ballet shifts into
the ice skating ring which will take a while to learn walking on it.
We also know that these reforms are impossible to make overnight. In
particular, when on the horizon many already see the parliamentary elections
next spring. The endeavors to transform Ukraine into successful free market
economy and democracy may be long and difficult. This has to be
acknowledged by both: the Ukrainian leadership and its supporters in the
West.
Hence, it is very important in the months ahead to focus on concrete
deliverables, which, on the one hand, would meet practical expectations of
the Ukrainian people and, on the other, would build the credible legal and
administrative foundation for the long term perspective of possible EU
membership.
It will also require maintaining a very close and trustworthy relationship
between Kyiv, on the one hand, and Brussels, other capitals of the EU and
Washington D.C., on the other. This is important in order to make full use
of the Western support and assistance available as well as to manage their
expectations on what is feasible to achieve in the country of 48 mil.,
within the first year after the Orange Revolution. -30-
--------------------------------------------------------------------------------------------------------
NOTE: We thank Zana Tarasevic, 2nd Secretary, Embassy of Lithuania,
Washington, D.C. for sending us this outstanding presentation.
Tel: (202) 234 5860, ext 116, E-mail: zana@ltembassyus.org
Web: www.ltembassyus.org
--------------------------------------------------------------------------------------------------------
FOOTNOTE: The U.S.-Ukraine Policy Dialogue Exchange Project
(PDEP) is organized and implemented by the U.S-Ukraine Foundation
(USUF) with financial support from the U.S. State Department's Bureau
of Educational and Cultural Affairs.
The project will host four week-long working sessions, two in Washington
and two in Kyiv, during 2005-2006, at which visiting policy makers and
issue experts will meet one-on-one with their counterpart policy makers
and experts to discuss the principal issues defined by the participants.
The first working session was held in Washington, D.C. from June 6-9,
2005.
The participants are divided according to their expertise into four
"Task Forces," (1) Foreign Policy & Security; (2) Governance & Politics;
(3) Economics and Business; (4) Media & Information.
In addition to the over all project organizer, the U.S.-Ukraine Foundation
(USUF), the partners for the project in Ukraine are: (1) Europe XXI
Foundation; (2) International Center for Policy Studies; and the (3)
Razumkov Center for Economic & Political Studies. The partners in the
U.S. are: (1) The Atlantic Council; (2) Elliott School of International
Affairs at the George Washington University; (3) Kennan Institute and
(4) SigmaBleyzer Private Equity Investment Group.
Your editor is a U.S. member of the Economics and Business Task Force.
My attendance at the week-long working session last week was the reason
The Action Ukraine Report (AUR) was not able to be published as often as
usual during the week. [EDITOR]
===============================================================
14. OSCE PARLIAMENTARIANS TO HONOUR UKRAINE TELEVISION
CHANNEL FIVE WITH JOURNALISM PRIZE
Organization for Security and Co-operation in Europe (OSCE)
Copenhagen, Denmark, Monday, June 13, 2005
COPENHAGEN The President of the OSCE Parliamentary Assembly,
US Congressman Alcee L. Hastings, announced today that Ukraine
Television Channel 5 will be awarded the tenth Annual OSCE Prize for
Journalism and Democracy.
In announcing the winner, President Hastings said that the Assembly was
"honouring the professionalism that Channel 5 has displayed by reporting
important information even under difficult circumstances". The Assembly
will present Channel 5 with the Prize in a special ceremony on 1 July in
conjunction with the Assembly's 14th Annual Session in Washington,
DC.
Channel 5 played a crucial role in the events of October-December 2004 in
which Ukraine peacefully transitioned to a more democratically-oriented and
legitimately-elected system of government. With great courage, the Channel
reported independently at a time when the government was placing strict
controls on media coverage, ignoring widespread popular discontent, and
working to manipulate electoral processes.
"It is precisely such credible reporting, so courageously displayed by
Channel 5, which the Assembly hoped to encourage in establishing this prize
10 years ago", said President Hastings. The OSCE Prize for Journalism and
Democracy was established by the Parliamentary Assembly in 1996 to award
journalists or organizations who, through their work, have promoted OSCE
principles of human rights and democracy.
The Prize is awarded annually to one or more winners, decided upon by the
Assembly Bureau based on a recommendation of the Assembly's Prize
Committee, and amounts to US $20,000 which is raised primarily through
private donations from publishing companies in OSCE States.
The previous recipients of the Prize are Adam Michnik (1996); Reporters sans
frontières (1997); Timothy Garton Ash (1998); Christiane Amanpour (1999);
Andrei Babitsky (2000); Georgiy Gongadze and José Luis López de Lacalle
(2001 posthumously); Friedrich Orter and Pavel Sheremet (2002); Anna
Politkovskaya (2003); and the Committee to Protect Journalists (2004).
--------------------------------------------------------------------------------------------------------------
For further information, representatives of the media are kindly requested
to contact Press Counsellor Jan R.M. Jooren, (e-mail: jan@oscepa.dk,
Mobile: + 45 40 41 16 41) or Press Officer Andreas Baker, (e-mail
andreasb@oscepa.dk, mail to:andreas@oscepa.dk) at the OSCE PA
International Secretariat in Copenhagen at, Tel +45 33 37 80 40, Fax
+45 33 37 80 30.
The Parliamentary Assembly of the OSCE, created by the CSCE Summit in
Paris in 1990, is the parliamentary dimension of the 55-nation Organization
for Security and Co-operation in Europe. The primary task of the 317 member
Assembly is to facilitate inter-parliamentary dialogue, an important aspect
of the overall effort to meet the challenges of democracy throughout the
OSCE area. -30- [The Action Ukraine Report Monitoring Service]
===============================================================
15. UKRAINE: POLICE SEIZE 1,500 DOCUMENTS STOLEN FROM
LVIV STATE HISTORICAL ARCHIVES
Correspondence of Metropolitan Andrii Sheptytskyi
Ukrainian News Agency, Kyiv, Ukraine, Mon, June 13, 2005
KYIV - Police officers seized 1,500 documents that were stolen from the
Lviv state historical archives from a 60-year old resident of Lviv on June
10. Bohdan Shkarada, the head of the Department of the Ministry of
Internal Affairs in the Lviv region, disclosed this at a press conference.
"[We] seized the stolen documents," he said.
He said that the Lviv resident was apprehended and in total 2,117
documents were taken from him. 617 documents are presently being
checked. Shkarada said that among the documents that we uncovered is
the correspondence of Metropolitan Andrii Sheptytskyi. The detainee is
presently being held in remand and a court will take a decision on Monday
to arrest him.
Shkarada said that it was established that the materials were stolen from
the archives during the last 5-7 years. The police also identified the
circle of persons that might be involved in the stealing of the documents.
"This theft would not have been possible without the employees of the
archives," he said.
Shkarada also added that the police carried out more than 100 searches
and interrogations regarding this case. In particular, police workers
interrogated Anatolii Tolstoukhov, the first deputy chairman of People's
Democratic Party and ex-Deputy Premier Dmytro Tabachnyk.
The Lviv regional police department also plans to interrogate ex-Prime
Minister Viktor Yanukovych and leader of the Party of Regions regarding this
case. The archives employees had previously stated that the cost of the
stolen documents is several million euros.
Shkarada added that the criminal case relating to the theft in the archives
was opened on December 24, 2004 after 2 collectors arrived in Lviv with
documents that were stolen from the archives and approached the archives
together with them to assess their value.
The archives employees had previously said that part of the documents were
gifted out during the election campaign of Viktor Yanukovych to one of the
museums, which triggered the start of stock-taking inventory in the
archives. Shkarada said that during the inventory the police established new
cases of theft from the archives. The Department of Internal Affairs in the
Lviv region is conducting the investigation. -30-
===============================================================
16. "FROM RED TO YELLOW AND BLUE + ORANGE"
The first album and catalogue of Ukrainian fine art of the twentieth century
LETTER TO THE EDITOR
From: Kathrin Singer" kathrinsinger@yahoo.co.uk
Kyiv, Ukraine, Thursday, June 8, 2005
Published by The Action Ukraine Report (AUR)
Washington, D.C., Wednesday, June 15, 2005
Dear Mr. Williams:
I am a regular reader of "THE ACTION UKRAINE REPORT". Today I
would like to ask you to inform your readers about an event our Kiev
based foundation "Eidos" organised last week in Kiev. On Tuesday
31st May we presented to the public the "First catalogue of Ukrainian
fine art of the 20th century".
Please find below some more information about the book and the
event which was very well received. I am sure that your reader -
especially abroad - will be very interested in this subject.
Many thanks for your assistance.
Kathrin Singer-Zahariev
Vice-President of "Eidos"Foundation
Tel: 00380 44 425 38 64; Mobil: 00380 50 90 37 011
E-mail: kathrinsinger@yahoo.co.uk
----------------------------------------------------------------------------------------------------------------
"FROM RED TO YELLOW AND BLUE + ORANGE"
The first album and catalogue of Ukrainian fine art of the twentieth century
This catalogue represents the only private collection in Ukraine of pictures
of the Soviet era, namely of the Socialist Realist and marginal schools,
which co-existed at the same time, and were created only by Ukrainian
painters.
The Ukrainian painting of the era is characterised by the predominance of
colouring - as opposed to the predominance of the subject matter in the
Russian tradition.
One of the most interesting parts of the collection shows propaganda
posters, and tapestries, as well as naïve folk painting. The latter is
represented by the works of the amazing painter Maria Prymachenko.
Unexpectedly, the works of the art-group "RES" ("Revolutionary
Experimental Space") were added to the collection, created on Kiev's
Independence Square during the orange revolution.
The aims of publishing the catalogue are:
- Analyse differences between Ukrainian and Russian traditions of
Socialist Realism
- The establishment of parallel process in the arts of Ukraine and
the West
- An attempt to periodise and classify Soviet artifacts
- An art critic's analysis of creative processes
Anatoliy Melnik, director of the National Art Museum of Ukraine:
The publishing of the catalogue crowns the creation of one of the most
representative collections of Ukrainian fine art of the socialist period.
This collection is the first to define and present artifacts, which took
place in the Ukrainian cultural sphere. paintings unknown to the typical
onlooker, because they were painted 'for the soul', kept in ateliers and
were not presented at large exhibitions.
Prof. Yuriy Bogutsky, of the Ukrainian Academy of Art:
This collection sheds light on and explains many components of our
common national heritage, as a cultural treasure which we have every
reason to be proud of. From now on we can appreciate the whole spectrum
of the Ukrainian fine arts of the past fifty years.sometimes very
unexpectedly, considering that the painters did not have the possibility to
exhibit their art during their own times.
Further information:
The project brought together art critics, theoreticians and collectors - the
most renowned specialists in the field of the fine arts. It was conceived
and managed by Dr. Lyudmila Bereznitska, art critic and lecturer at the
school of Theory and History of Art at the Ukrainian National Academy of
Fine Arts and Architecture.
This collection is unique in its field, since many works of this period have
been taken abroad and reside in private collections, or are lost in
painters' ateliers and museum storage areas.
Socialist Realism, as an artistic method which dominated one sixth of the
world for sixty years, left an enormous heritage. «Socialist Realism, the
period that strove to achieve one of the main social programmes of the
twentieth century, as well as an ideological utopia, ended and became
history not long ago.
When turning to its art, we cannot avoid being deeply touched. the treasures
of Socialist Realism could not have conquered such a high place in history,
had their artistic content not contained ideas born of the cynical myth of
the common good - quote from the book 'From Red to Yellow and Blue +
Orange'.
The Soviet era brought the opportunity or even the duty into the life of the
artists to deeply understand the societal and historical foundations of the
life of society and the relations within it. The viewer was required to
learn by looking at these paintings. During that period, Socialist Realism
was to some degree the only truth and the only real and common realism,
the realism of the new era, a conveyor of the Great Utopia.
In front of us, the art of the Soviet period has become one of the dominant
ones on the art market. No other kind of art has simultaneously fuelled so
many debates and arguments, or inspired so much hatred and admiration
as Socialist Realism has.
It is exactly this controversial relationship that keeps the works of the
Socialist Realists at the top of the intellectual fashion. In any corner of
the earth exhibitions of Socialist Realism inspire great interest.
The project was made possible through the generous support of a new
generation of Ukrainian patrons, including Lyubov Mihailova, Vasily
Rogovoy, Vasily Kisil and others.
Amongst the attendees at the presentation were:
Respected artists and critics included Olexandr Brey, Olexandr Solovyov,
Igor Dichenko, Olexandr Roiburd, Victor Sidorenko and others.
Several ambassadors, including Mr. Dietmar Studemann (Germany), Robert
Brinkley (United Kingdom), as well as Olena Makarina (representative of the
Russian Embassy), representatives of the British Council, the Institut
Franais and others.
Furthermore, the Directors of the Ukrainian offices of the World Bank (Mr.
Dusan Vuiovic) and the European Bank for Reconstruction and Development
(Mr. Kamen Zahariev) were present, together with representatives of
Raiffeisenbank, First International Bank, Citibank, ING Bank and the
National Bank of Ukraine, as well as representatives of the Ukrainian
Foreign Office, respected lawyers, public and political figures.
Yours faithfully, Curator and Author of the project
Lyudmila Bereznitska
Should you have any further queries, please do not hesitate to contact the
L-Art Gallery at the following address: L-Art Gallery, Andriivski Uzviz, 2B,
Kyiv 04070, Ukraine, Tel./Fax: (+38044) 425-03-20,
E-mail: lart@lartgallery.com
----------------------------------------------------------------------------------------------------------
NOTE: If you would like to receive information about how to purchase this
new publication please send an e-mail to ArtUkraine.com@starpower.net.
===============================================================
17. UPDATE ON ENTREPRENEURS COUNCIL MEETING
Call for proposals re: cancellation of regulatory acts
LETTER TO THE EDITOR
From: "Andrew Kinsel" akinsel@pml.kiev.ua
Kyiv, Ukraine, Tuesday, June 07, 2005
Published by The Action Ukraine Report (AUR)
Washington, D. C. , Wednesday, June 15, 2005
Morgan, Woah! Something rational! Andrew
---------------------------------------------------------------------------------------------------
From: EBA office [mailto:office@eba.com.ua]
Sent: Tuesday, June 07, 2005 1:45 PM
Subject: Update on Entrepreneurs Council meeting - call for proposals
re cancellation of regulatory acts
Dear EBA members,
As a result of the yesterday Entrepreneurs Council meeting held at the
Cabinet of Ministers with participation of the Prime-Minister of
Ukraine, Mrs.Tymoshenko, the decision was made to start each next
meeting of Entrepreneurs Council from cancellation of unnecessary,
useless regulatory acts cancellation of which will not create gaps in the
legislation but improve investment climate in Ukraine. Thus we would
like to ask your proposals re:
1. Reference Number and name of the Regulatory Act suggested for
abolishment
2. List of connected documents to be changed / amended / cancelled
3. Short description of the Regulatory Act (its core)
4. Reasons for abolishment
Please, note that only those proposals which are done on the basis of the
above-mentioned scheme, will be considered by the EBA office.
More details on the yesterday meeting are available on the link below:
http://www.eba.com.ua/files/Tax_minutes/Entrepreneurs_Council_Report_060605.pdf
We`ll keep you posted on further developments. Looking forward to your
constructive proposals.
Sincerely yours, EBA office (European Business Association)
Tel.: +380 44 496 0601; Fax: +380 44 496 0602
E-mail: office@eba.com.ua; www.eba.com.ua
===============================================================
18. AMERICAN UKRAINIAN MEDICAL PROJECT (AUMP)
LETTER TO THE EDITOR -
From: Russ Ayers, AUMedicalProject@aol.com
Branson, MO, Thursday, June 02, 2005
Published by The Action Ukraine Report (AUR)
Washington, D.C., Wednesday, June 15, 2005
Dear Mr. Williams:
A recent item in your fine email news bulletin caught my idea. It concerned
the ongoing success of the Corvallis, Oregon - Uzhorod Sister City
relationship. As the former chairman of the Kent, WA - Kherson Sister City
Committee I used their success as a model to try to build our won
relationship with Kherson. We did not have the funding or community-wide
support the Corvallis group had, but we did what we could.
As a co-founder of American Ukrainian Medical Project (AUMP) which was
then based in nearby Bellevue, WA we thought there was an opportunity for
collaboration with the Sister Cities movement. We were right - today AUMP
works with the Kherson Oblast Oncodispensary and other hospitals there
and the Kent - Kherson relationship continues to grow.
I am writing today to update you with information about AUMP. We have
been working in Ukraine since 1999 and officially incorporated since 2001.
We currently work with hospitals in Kyiv, Chernihiv, Lviv and Kherson. We
are establishing additional relationships in Donetsk, Rivne and Kharkiv,
too.
To date AUMP has delivered over $950,000 in medical and technical
assistance to our Ukrainian colleagues and we have plans to deliver much,
much more. Like any charity we are limited only by funding and to a lesser
degree technical resources (such as American doctors and hospitals willing
to allow us to conduct training here in the US).
Our primary focus is pathology and histology (sciences used to identify
disease in tissue). We import a newer technique, along with surplused
equipment and supplies from US donors, to raise the diagnostic precision of
pathology laboratories from 50% or less to over 90%. Improved diagnostic
precision leads to more appropriate therapies and therefore better patient
outcomes and utilization of scarce medical resources.
A copy of our most recent newsletter is copied below for your information.
Feel free to use it in whole or in part in your own news service. We have
enjoyed broad moral and some financial support from the Ukrainian Diaspora
in the US and we would appreciate any help you might be able to offer to
help us reach still more.
To date AUMP has achieved all of its work with less than $10,000 in cash
contributions so you can see we are very efficient. Our great fear is that
additional funding may not be forthcoming and would thereby restrict our
programs and their continued growth.
Much more information is available on our newly rebuilt website
(www.aump.org). I invite you to take a look and learn a bit more about us.
If you should have any comments or questions please feel free to drop me
a line. Thank you very much for your time and attention.
Sincerely, Russ Ayers, President
American Ukrainian Medical Project (www.aump.org)
------------------------------------------------------------------------------------------------------
May - June 2005 News from American Ukrainian Medical Project (AUMP)
(1) Equipment Shipment Ready to Disburse -------------
Just today we received word that at last our shipment of medical donations
has cleared Ukrainian Customs. It was delayed for a number of weeks for
reasons we can only speculate about. Since the shipment was complex in
terms of content and distribution it is easy to conclude it was not routine.
I recall very well the numerous communications with Washington, DC, Kyiv
and elsewhere concerning particular items and equipment!
We are very grateful to everyone who helped, from the donors, volunteer
loaders and sponsors here in America to the staff at Counterpart
International, the government of Ukraine and last, but hardly least, our
consignee in Chernihiv who took time from her already busy schedule to
work on the release of our shipment.
The final phases of our equipment shipment are about to begin. Our
participating hospitals and organizations across Ukraine are coming to
Chernihiv or making arrangements for their allocations. Once the items
arrive and are unpacked the work of our volunteer translators will come into
play, helping the new owners of the equipment to set up and begin using the
machines. It's quite a list - the final printing ran to 60 pages! Of
course, nearly 800 items valued at over $230,000 should fill a few pages.
A major resupply goal is also attained with this shipment and its
distribution. AUMP had great success collecting and processing in-kind
contributions for our work. Now at last the supplies are where they are
needed most. They will improve things for our participating hospitals and
others who join with us for years to come. The good news doesn't stop
there, though. Another major project has recently come to completion.
(2) Website Restoration ---------
It is with great pleasure that I announce the restoration of our website,
www.aump.org It has been rebuilt from the host up and is now easier to use,
more reliable and faster-loading than ever before! All of us at AUMP owe a
great debt of gratitude to our volunteer webmaster, Philip, who put in many
long hours of work, thought and talent for us. Bravo, Philip!
His work is further proof that you get the most extraordinary efforts from a
volunteer who connects with a cause. Please take a few minutes to visit his
work and see how easy it is to navigate and how much more information has
been made available. It is also much easier to update, edit and expand.
We remain committed to a trilingual website to maximize its utility for our
colleagues in Ukraine. Most of the revised Ukrainian and Russian language
pages have been translated and uploaded. Anyone who is interested in
critiquing this work is encouraged to take a look and drop us a line at
info@aump.org Our newsletter archive has been expanded and refor-
matted to Adobe pdf files.
Our translated histology section has also been reformatted to this file type
and now each stain is a separate file. Translated versions are also
formatted to print on Ukrainian standard paper. They are alphabetized
according to their English names for consistent reference. Still more is
coming as we continue to translate and format items to better support
immunohistochemistry.
We have also made our Photo Gallery more accessible and we've improved
the captioning. We're still working out a way to make more order out of the
photos but in the meantime our work in Ukraine is easily accessed, along
with a few pictures from laboratories in North America as contrasts. And of
course we've included a few pictures of Ukraine's many historical sites
along with some common places of uncommon beauty. Each page of
www.aump.org has been redone with new text, images and our simplified
format. We think you will agree it is a great piece of work and should help
AUMP in many ways. Thank you, Philip!
Subscriptions and Contact Information ------
Our newsletter is delivered to you in English free of charge. Ukrainian and
Russian versions are available from our volunteer translators at
"Newsletters" on our website. To continue your subscription you need do
nothing to stay on our mailing list. If you wish to cancel your
subscription, though, press "Reply" and enter "Unsubscribe" and your name
in the message box. Anytime you wish to resubscribe contact us through
www.aump.org If you know anyone else who may be interested in helping
us to make a difference, please contact us. Here is our mailing address:
American Ukrainian Medical Project
Post Office Box 761; Branson, MO 65615, USA
Telephone: 1-417-336-0315
===============================================================
UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
===============================================================
"THE ACTION UKRAINE REPORT - AUR"
A Free, Non-Profit, Public Service Newsletter
ARTICLES ARE FOR PERSONAL AND ACADEMIC USE ONLY
Articles are Distributed For Information, Research, Education
Discussion and Personal Purposes Only
===============================================================
----- SigmaBleyzer/SigmaBleyzer Foundation Economic Reports -----
The SigmaBleyzer Private Equity Investment Group offers a comprehensive
collection of documents, reports and presentations presented by its business
units and organizations. All downloads are grouped by categories:
Marketing; Economic Country Reports; Presentations; Ukrainian Equity Guide;
Monthly Macroeconomic Situation Reports (Romania, Bulgaria, Ukraine).
LINK: http://www.sigmableyzer.com/index.php?action=downloads
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"THE ACTION UKRAINE REPORT- AUR" - SPONSORS
"Working to Secure & Enhance Ukraine's Democratic Future"
1. THE BLEYZER FOUNDATION, Dr. Edilberto Segura, Chairman;
Victor Gekker, Executive Director, Kyiv, Ukraine; Washington, D.C.,
http://www.bleyzerfoundation.com.
2. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili,
President; Kiev and Washington, general@rulg.com, www.rulg.com.
3. ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
4. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
5. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
6. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX 77024; bill.hunter@volia-software.com.
7. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
8. UKRAINIAN FEDERATION OF AMERICA (UFA),
Zenia Chernyk, Chairperson; Vera M. Andryczyk, President;
Huntingdon Valley, Pennsylvania
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C., Van
Yeutter, Cargill Inc., Interim President; Jack Reed, ADM, Interim
Vice President; Morgan Williams, SigmaBleyzer, Interim Secretary-
Treasurer
10. UKRAINIAN AMERICAN COORDINATING COUNCIL,
(UACC), Ihor Gawdiak, President, Washington, D.C., New York, NY
11. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO, Washington,
D.C.; Markian Bilynskyj, VP/Director of Field Operations; Kyiv,
Ukraine. Web: http://www.USUkraine.org
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"WELCOME TO UKRAINE" & "NARODNE MYSTETSTVO" MAGAZINES
UKRAINIAN MAGAZINES: For information on how to subscribe to the
"Welcome to Ukraine" magazine in English, published four times a year
and/or to the Ukrainian Folk Art magazine "Narodne Mystetstvo" in
Ukrainian, published two times a year, please send an e-mail to:
ArtUkraine.com@starpower.net.
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"THE ACTION UKRAINE REPORT - AUR" is an in-depth, private, non-
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(ARTUIS) and The Action Ukraine Report Monitoring Service The
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Additional readers are always welcome.
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PUBLISHER AND EDITOR - AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
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Director, 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
& www.ArtUkraine Information Service (ARTUIS)
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