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Action Ukraine Report

"THE ACTION UKRAINE REPORT - AUR"
An International Newsletter
The Latest, Up-To-Date
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 531
Mr. E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, THURSDAY, July 28, 2005

------INDEX OF ARTICLES------
"Major International News Headlines and Articles"

1. NO MARGIN FOR ERROR
Ukraine does not have as much time as Poland or Romania did
INTERVIEW: with Bruce Jackson
By Serhiy Solodky, The Day
The Day Weekly Digest in English, #25
Kyiv, Ukraine, Tuesday, 26 July 2005

2. SWEDEN'S SEB BANK LOOKS TO EASTERN EUROPE FOR GROWTH
Purchased Agio Bank in Ukraine in 2004
By Rupini Bergström in Stockholm
Financial Times, London, UK, Tue, July 26 2005

3. POLISH INVESTORS IN UKRAINE HARMED BY RECENT LEGISLATION
Polish News Bulletin, Warsaw, Poland, Wed, Jul 26, 2005

4. HOME CREDIT TO LAUNCH ACTIVITIES IN UKRAINE, KAZAKHSTAN
PDM staff with CTK, Prague, Czech Republic, Wed, 27 July, 2005

5. IRAN AND UKRAINE OFFER ARMENIA PARTICIPATION IN A FIVE-PARTY
COMMITTEE STUDYING GAS PIPELINE FROM IRAN TO UKRAINE
Mediamax news agency, Yerevan, in Russian, 26 Jul 05
BBC Monitoring Service, UK, in English, Wed, Jul 26, 2005

6. UKRAINE TO SEND POLAND GAS FROM IRAN?
Polish News Bulletin, Warsaw, Poland, Wed, Jul 27, 2005

7. GERMANY'S CDU/CSU SEEKS GOOD TIES WITH EASTERN
NEIGHBORS AND RUSSIA
Will not pursue a policy towards Moscow that ignores Poland
ddp news agency, Berlin, in German 0342 gmt 27 Jul 05
BBC Monitoring Service, UK, in English, Wed, Jul 27, 2005

8. ECONOMIC REFORM LAGS IN UKRAINE
By Judy Dempsey, International Herald Tribune (IHT)
Paris, France, Thursday, July 28, 2005

9. DEMOCRACY REQUIRES AN ACTIVE OPPOSITION
By John Herbst, Ambassador Extraordinary and
Plenipotentiary of the United States to Ukraine
The Day Weekly Digest in English, #25
Kyiv, Ukraine, Tuesday, July 26, 2005

10. UKRAINIAN PRESIDENT DEFENDS HIS SON, ACCUSES JOURNALISTS
"Viktor Yushchenko on scandal over his son 'Put this receipt
in front of that journalist's mug, and then get to court!'"
Ukrayinska Pravda web site, Kiev, in Ukrainian 25 Jul 05
BBC Monitoring Service, UK, in English, Wed, Jul 27, 2005

11. CHILDREN OF THE ORANGE REVOLUTION'S EXTRAVAGANT WAYS
Andrew Osborn in Moscow, The Independent
London, United Kingdom, Wed, Jul 27, 2005

12. YUSHCHENKO LOOSES HIS ORANGE REVOLUTION COOL
Telling reflection on Ukraine's troubled Orange Revolution
OPINION: By Peter Lavelle
RIA Novosti political commentator
RIA Novosti, Moscow, Russia, Wed, July 27, 2005

13. NEW UKRAINIAN LEADERSHIP EMBRACES SOVIET-STYLE
CONSPIRACY THEORIES
Yushchenko lashes out at Ukrayinska pravda
By Taras Kuzio, Eurasia Daily Monitor
Volume 2, Issue 145, The Jamestown Foundation
Washington, D.C., Wednesday, July 27, 2005

14. DEVELOPING RANGE OF UNMANNED INTELLIGENCE AIRCRAFT
"Ukrainian unpiloted craft: small forms with big content"
ANALYSIS: By Petro Chornykh
Defense-Express web site, Kiev, in Russian 22 Jul 05
BBC Monitoring Service, UK, in English, Wed, Jul 27, 2005

15. UKRAINE'S FIRST LADY GREETS NASTYA OVCHAR
Press office of the President of Ukraine Victor Yushchenko
Kyiv, Ukraine, Thursday, July 21, 2005

16. GLOBAL FUND ALLOCATES $67 MILLION FOR UKRAINE
HIV/AIDS PREVENTION
Interfax-Ukraine, Kyiv, Ukraine, Thu, July 21, 2005

17. NO END TO THE SCHISM?
Holy See concedes to wishes of the Ukrainian Greek Catholic Church
OP-ED: By Andrei Zolotov Jr., Moscow Times
Moscow, Russia, Wednesday, July 27, 2005

18. WHY DO THESE MASS-MURDERING COMMIES
GET SUCH A GOOD PRESS?
Remind me: who was the greater mass murderer, Stalin or Hitler?
By Boris Johnson, Telegraph, London, UK, June 30, 2005

19. CELEBRATING 14TH ANNIVERSARY OF UKRAINE'S INDEPENDENCE
Wednesday, August 24, 2005
Ukrinform, Kyiv, Ukraine, Wed, July 27, 2005
=============================================================
1. NO MARGIN FOR ERROR
Ukraine does not have as much time as Poland or Romania did

Interview with Bruce Jackson
By Serhiy Solodky, The Day
The Day Weekly Digest in English, #25
Kyiv, Ukraine, Tuesday, 26 July 2005

The well-known US expert Bruce Jackson is quite a frequent guest in Kyiv.
For example, when Kyiv agreed to send troops to Iraq, Mr. Jackson said that
Ukraine stood a good chance to develop relations with Western democracies.

However, he made it perfectly clear on the eve of last year's NATO summit in
Istanbul that Ukraine should not hope for any enhanced format of cooperation
with the Alliance (it was the time of the thwarted Our Ukraine bloc congress
in Donetsk).

What aroused Mr. Jackson's burning indignation was the inhospitable attitude
that Kyiv displayed during the international conference "Ukraine in Europe
and the World" in February 2004, when, according to some sources,
conference participants were under surveillance by the Ukrainian secret
service.

Naturally, he could not help rejoicing over the "orange changes" in Ukraine.
Yet, the impression is that the revolution has not quite come up to his
expectations. He believes that Ukraine has only three years to effect
changes. Then it will be too late because the European Union will probably
have completed the process of its formation.

Mr. Jackson also suggests that Kyiv be sort of a magnet to attract
democratic ideas from other countries and play the role of a "new Prague"
in the region. He thinks that regional transformations might be discussed at
meetings of the so-called Club of New European Democracies (which the
president of Ukraine mentioned a little while ago).

FIVE WARNINGS TO "THE ORANGE"

[The Day] "What is the purpose of your current visit? What do you think
about the latest changes in Ukraine after the Orange Revolution?"

[Jackson] "There are two things we deal with: those outside and inside. In
Europe and the United States they have finally come up with a calendar of
how they intend to go forward. We all know about the crisis caused by the
Dutch and French referendums. As a result, the European political leaders
decided that they needed two years as a period of reflection. It looks like
this period can take up to three years.

In this period much can be done so that the US and Europe could make
important decisions at a summit in 2008. Speaking about the 'inside'
reason, that means several things. ONE, that's very good news for Ukraine
and Georgia, because they have a good chance to improve their situation
in these three years. SECONDLY, in the first six months of democratic
changes nobody pays any attention to these problems of certain confusion.

It's very hard to get people's attention. This is like in a marriage: when
the honeymoon is over, you talk about real issues. The honeymoon is over;
now it's time to talk about serious work."

[The Day] "What problems do you mean exactly?"

[Jackson] "I think there are FIVE major concerns. One is an overall concern
that occurs in all new democracies. There is a tendency to fake it and not
really do it. Romania is a good example. For six years they said that there
is a reform going on but there was no reform. It was just a bare statement.
However, it's fairly normal for the first years of transformation.

"ONE concern is the problem of economic policy. Some of the first steps
of this government in the field of economic policy reveal their significant
ignorance of modern economics. Take, for example, their price control
notion. This is early Marxism at best. Any of the twenty-thirst century's
economic theories explains that it simply is not going to work. President
Yushchenko is right to step in and say, "That is not going to happen." That
was a great concern for the United States.

"SECOND concern was this nationalization issue. In the view of most
Americans it doesn't matter who owns the property in the country - if the
state owns it, it is going to be worse. So the whole idea of
re-privatization was something Americans and Europeans advised
against. The model that was suggested for Ukraine was a model of
Britain.

After they had the privatization in Britain, some people made big money on
it. It looked like they had an unfair advantage and so they were physically
called and said, "You have to pay a one-time tax." And this is how
everything was forgiven. That's the same thing that Georgia did.

There are other countries that come to terms with this problem of ownership.
They use taxation, other kinds of appropriate policies, but nationalization
is not one of them.

"The THIRD thing is criminalization. Once again, we think about Poland, that
went through a period of martial law in the 1980s, there were many crimes
then. But when you ask how many people went to jail after the fall of the
Wall in 1989-1990, the answer is zero. Because they went to a round table;
they decided not to criminalize their past - they tried to understand it.

They did not criminalize their political differences - they tried to bring
them together. So, there is huge concern that there exists a tendency to
make political differences into criminal affairs. Let's say, if they played
by the rules of criminalization, president Kwasniewski of Poland would be
in jail today, because he was a Communist.

Does anybody think that the world would be better off with President
Kwasniewski in jail? This is a joke, of course. I'm not talking about the
people who murdered Gongadze or those who tried to kill Yushchenko.

Those people really have committed serious crimes that have to be punished.
The other people you have to discuss at the round table and work out an
attitude as they did in Poland, talking about how you can forgive them.
Coming to terms with nations is not only about remembering but also about
forgetting.

"The FOURTH problem is the problem of populism. There seems to be a
profound misunderstanding of what democracy is. About four or five
politicians I talked to made the same statement: "But the people want
justice!" As if people were to decide every day by referendum what they
wanted to happen.

99% of Americans thought that O.J. Simpson and Michael Jackson were
guilty. But it's not their business; it's the business of the courts. The
President of the United States doesn't say, "Oh, the people want justice."
In a representative democracy you have a chance to elect your officials once
every four or two years, and then you have NGOs, press and other people
who monitor their activities; you have justice department to investigate
crime; in a word, you have all checks and balances. But you don't have a
right every day, whatever the mood or enthusiasm is, to press on them.

"The FIFTH point is that Ukrainians like politics too much. After the
election is over they still want to continue the fight. This kind of open
warfare between the parties is really profoundly unhealthy. The Ukrainians
ended this summer with a fistfight in Parliament on the national television
about relatively trivial issues, not the most important thing in the world.

That's quite unsettling for the friends of Ukraine. There got to be a period
of relative political peace between parties. You can be an opposition but
you have to be a loyal opposition; loyal to your country. It seems to
observers, including myself, that these people were fighting because they
got used to fighting, or because they enjoyed fighting.

None of them told themselves, "Are we doing the right thing for the children
of Ukraine, for the future of Ukraine, for the people and the country?"
There has to be a political tradition of coming to consent."

"POPULARITY IS A DANGEROUS THING"

[The Day] "Does this mean that the new leadership may lose popularity as
fast as it gained it?"

{Jackson] "This is a good point. I'm trying to be fair and also tell you the
truth. I wouldn't say that people are frustrated by the first six months in
Ukraine. Some of what happened is Ukraine's fault and some the fault of
the West. Expectations for Ukraine were so high in January that even
Jesus Christ would have been a disappointment.

After 500 years of occupation by various dictators it could hardly be
expected that overnight Athens was going to appear in Kyiv with all the
liberalism of Britain, the understanding of the French Enlightenment and
architecture of Rome.

That's never going to happen. We are actually talking about a man who got
out of at least three, possibly four murder attempts, got out of his
hospital bed, and ended up one of the most famous persons in the world.

Being a celebrity is a very dangerous thing to hit you without preparation.
Probably getting used to giving interviews alone would take at least the
first six months. So all that was hugely unfair to a young government trying
to build one of the most powerful nations in Europe, trying to build a new
country.

"It's being said that friends of Ukraine are confused, frustrated and
disappointed. Most of them intellectually understand this is no different
than what we had in Poland six months after the change or in Romania for
six years after the change. Poles did not actually come to Washington to
begin the European integration campaign until the end of 1993. They didn't
get it going until the end of 1996.

So in historical terms Ukraine is probably more advanced than other
countries making the transmission. . I think the reason people are very
anxious about this is that there's not as much time left as it was for the
changes in 1991. Everybody understood that there was ten, or fifteen, or
even twenty years in which to work it out, so it didn't matter if Romania
failed three times. It probably doesn't matter if the Balkans stall almost
all the time.

It does matter for Ukraine, which is in a pressure situation where it has
got to get it right the first time, just because the history is moving
rather rapidly. They now set off a three-year schedule to make a decision,
and it's hard to believe that historical circumstances will ever be this
favorable for having a large nation into Europe.

And also we have Russia that is getting increasingly negative about
democracy and that's part of our worries. There was no major political force
opposing Poland or any of the new members. There is a very significant
European player in Moscow that is on the record as being opposed to
democracy in Ukraine. So for all those reasons Americans and Europeans
want this government to do better.

"It is sometimes our impression that the last six months the government has
been running a primary amongst its cabinet. They are not functioning like a
single team."

[The Day] "But disputes also occur within the US government. Recall the
press's comments on the differences between Colin Powell and Donald
Rumsfeld on various issues."

[Jackson] "There is a natural competition in any democratic government.
But Powell and Rumsfeld would deny till the end of their days that there was
ever a real competition. The White House is absolutely ruthless in this
respect. I think the president of Ukraine has done a very good job here
saying that this is unacceptable to him, and I think he has to continue to
do this.

"The question is why they could get this far that he had to make decisions.
They should have known what the president wants and shouldn't come
forward with the policies that he doesn't agree and has to correct.

It is hugely unfair to president Yushchenko under the given circumstances
that he has to fix economic policy, nationalization, etc. The ministers of
the Cabinet should be informed by the Prime Minister about the vision of
the administration, and they should execute that vision.

"Again, I'm getting slightly unfair to expect that this will happen in six
months. This usually takes five to ten years; Poland is still fighting like
this. Still, everybody has set high hopes for Ukraine, because Ukraine is
such an important phenomenon for itself and for Europe and also has a
huge effect as a model for all the other states of the former Soviet Union.
So it bears a historical responsibility of a huge size."

UKRAINE IS A "TEENAGE DEMOCRACY." IT IS TIME TO GROW UP

[The Day] "The US seems to be far more cautious now. It is taking a more
responsible approach to what is going on in Ukraine. We remember how the
US's excitement when Leonid Kuchma came to power in 1994 gradually
gave way to disappointment, if not complete rejection. The impression is
that this time the White House is trying to avoid old mistakes and has been
pointing out the new leadership's drawbacks (in spite of extremely great
sympathy) since the very first days."

[Jackson] "Let's go back to the famous "chicken Kyiv speech." We made
almost every possible mistake with regard to Ukraine over all periods of
history. There is a wonderful saying about American policies, that Americans
will always be glad to do the right thing after they tried everything else.
And this is yet another example.

There have been dangers and errors in American European policy for not
caring enough about Ukraine. Now we may get into a period where the danger
is that we care too much. The best thing we could have done for Ukraine is
after the democratic revolution to leave them alone for five years, like
Poland or Romania, until they had time to come to terms with their history,
with building a nation.

What is most important about the next three years, what Zbigniew Brzesinski
actually wrote about, is that what is happening now is the completion of
Europe. Europe changed its membership, its political soul, and its
constituency, and there is great concern that Turkey or Ukraine or Georgia
or the Balkans may be left out of that completion and that community of
democratic states.

That would be a tragedy for many of the mentioned. So there is a huge
pressure now not only on Ukraine but also on Turkey, Serbia, Bosnia, Kosovo,
and Georgia and in another way - on Belarus, to make changes that would
finally reunite them with the center of European civilization of which they
are a part. This is why there is this push brought on this country.

Kyrgyzstan, for instance, doesn't get this kind of attention. Either we in
the West, Washington and Brussels, didn't speak clearly during the Kuchma
period or Kuchma didn't understand what we were saying. Nobody wants to
repeat those kinds of mistakes."

{The Day] "Will Viktor Yushchenko understand what Washington is saying this
time?"

[Jackson] "We have a nickname for the new democracies before they become
a member of NATO or EU: we call them "the teenage democracies." And, like
with teenagers, you are never really sure if they are listening to you. They
are preoccupied with growing up, with all these social challenges. So you
have to repeat things time and again, and you're never really sure if they
got it. This is quite typical.

When you have thousands of publications outside your door every morning,
and invitations to the Academy Awards Ceremony, Davos, etc., there are so
many distractions. So it is Ambassador Herbst's job to keep repeating what
the values of the United States are or what his instructions from President
Bush are.

Broadly, in the United States president Yushchenko and all his government
remain among the most admired people. Frankly, of all the countries I've
never seen this much support for the country this early at the highest
levels of Europe and the United States.

"I don't think that anybody understood or really appreciated how devastated
and indeed raped Ukraine was by the Soviet system. They had to build the
modern state from really nothing. I think there has to be at least some
understanding of how much Ukraine had to do, and this returns me to the
problem of expectations. If Georgia is not bankrupt today, it's a democratic
miracle.

If Ukraine fails to get WTO legislation, it's a catastrophe. That is so
unfair! The reason that Ukraine has so much higher standards is that
everybody understands how important Ukraine is for Europe. This is like
with good pupils who get more homework, because you know that they
have a capacity, and so they get pushed a little harder. It is sort of
unfair, but that's the way it is with Ukraine.

Economically Ukraine in twenty years will be as significant as the West
German Miracle after WW II and politically as important as Poland was
throughout the 1990s. Also, Ukraine is the key to the understanding of
post-Soviet states. Frankly, it is a bridge to finally getting Russia
reconciled with Europe."

[The Day] "What role do you think non-governmental organizations should
play in Ukraine? Should they intensify their activities? For example, word
has it that NGOs in Georgia are now in crisis because most experts have
been invited to occupy governmental posts. Is your visit connected in any
way with cooperation in this sphere or perhaps with the creation of a new
non-governmental organization?"

[Jackson] "As Ukraine has organized its government and is ready to
organize its relations with the other democracies and its democratic
foreign policies, what usually happens at that time is NGOs and civil
society basically try to develop their agenda.

Many people from Europe have observed that there are many ideas in
Ukraine about supporting democracy, getting NGOs together to set
European democracy.

I was meeting with many of the NGO leaders in Kyiv, and this is not
something we are going to establish - this is something Ukrainian NGOs
are trying to establish, and we are going to support them.

The overall idea is that Kyiv is becoming of the same significance that
Warsaw and Prague were ten or fifteen years ago, that this is the center of
political thinking, that it is a magnet where people will want to come from
Tbilisi, Minsk, Almaty, Baku, etc., and this is where they will work
together and exchange ideas.

So the question is how you make that easier. We are hopeful that we can
bring all the people working on this together and set up a due form, a
common space where people can be engaged in public debates. There
is a vibrant civil society to accompany what the government is doing.
Hopefully, we'll have this going by September." -30-
---------------------------------------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/145706
=============================================================
2. SWEDEN'S SEB BANK LOOKS TO EASTERN EUROPE FOR GROWTH
Purchased Agio Bank in Ukraine in 2004

By Rupini Bergström in Stockholm
Financial Times, London, UK, Tue, July 26 2005

SEB, the bank founded and run by Sweden's powerful Wallenberg family, on
Tuesday said it aims to continue expanding its distribution in eastern
Europe as strong revenues and profits from businesses outside Sweden
helped it report its best ever second quarter results.

The Nordic region's fifth biggest bank said operating profit grew by 26 per
cent to SKr3bn in the three months to June 30, outpacing market expectations
of SK2.6bn, on revenues that grew 9 per cent to SKr8.5bn.

Chief-executive Lars Thunell said: "The second quarter 2005 was indeed the
best operating profit ever, supported by a stronger economic development
even though competition remained fierce".

SEB said its Merchant banking and Nordic retail and private banking
businesses increased sales activities to reflect the strong equities market
and a continued high demand for loans, but that it was largely operations
outside its home markets that were responsible for the record strong
quarter.

SEB has made a number of small acquisitions in the past year, bulking up
on eastern European assets after a long period of poor performance in
Germany, where its retail banking business continues to hold back overall
profits despite strong advances in merchant banking there.

Having taken a dominant position in the Baltic region in recent years, SEB
was the first Nordic bank to move into the Ukraine, through its purchase
last year of Agio Bank.

It hasn't rested since then. Last quarter it acquired Latvian insurer Balta
Life from Denmark's Codan and entered the Norwegian retail banking market
through the acquisition of Privatbanken moves that have brought 45 new
branch offices and a 100 sales agents.

Eastern European banking now accounts for SKr1.49bn of SEB's six-month
revenues totaling SKr16.4m. That's still much lower than the SKr2.39bn
brought in by German Retail and Mortgage Banking, but the eastern European
operations have been generating a return on equity of 23 per cent, against 4
per cent for the German retail operation.

A high growth potential and low political risk has attracted international
presence to eastern Europe. Swedbank, also of Sweden, and SEB dominate
the banking scene in the Baltic region and are making inroads into Russia.

SEB said it now aims to hire 100 insurance sales agents and open 40 more
branches next year, mainly in Eastern Europe, but also in the Nordic region.

Nordic banks in general are expected to have benefited this quarter from
stock exchange advances, a better corporate lending environment and higher
household borrowing in mortgages, although these factors are being offset
partly by low interest rates and tough competition. -30-
=============================================================
3. POLISH INVESTORS IN UKRAINE HARMED BY RECENT LEGISLATION

Polish News Bulletin, Warsaw, Poland, Wed, Jul 26, 2005

WARSAW - The situation of Polish companies conducting their business
in Ukraine's special economic zones can only deteriorate, believes the
Polish embassy in Kiev, which recommends that Polish investors claim
compensation for the recent decisions of the Ukrainian government.

On 30 March, a bill was passed that did away with all tax allowances for
those investing in special economic zones, imposing 20-percent VAT.

The 942 companies with Polish capital which are present on the
Ukrainian market, say the government's decision was illegal.

They have so far invested a total of $200m. In a letter sent to Polish
entrepreneurs in Ukraine, embassy officials said that the Ukrainian
authorities are not unanimous in their stance on the liquidation of the
special zones.

President Victor Yuschenko recently promised compensation for Polish
companies and called the bill a mistake, but Prime Minister Julia
Tymoshenko has accused the companies of not fulfilling their investment
obligations. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
4. HOME CREDIT TO LAUNCH ACTIVITIES IN UKRAINE, KAZAKHSTAN

PDM staff with CTK, Prague, Czech Republic, Wed, 27 July, 2005

PRAGUE - Home Credit, a Czech consumer loan company, plans to launch
activities in Ukraine and Kazakhstan, Romana Tomasova, spokeswoman for
its owner PPF, told CTK yesterday.

"We are also contemplating an expansion into other countries in Eastern and
Southern Europe," said PPF board member Ladislav Chvatal.

PPF, a Czech financial group, said in early June it wanted to operate in
China, Kazakhstan, Romania, Serbia and Montenegro, Ukraine and Vietnam,
in addition to the key Russian market.

The group wants to offer financial services to individual clients in these
markets.

Home Credit financed purchases worth CZK 20 billion in the Czech Republic,
Slovakia and Russia in the first half of the year. This was a 113 percent
growth over the first half of 2004.

Home Credit had almost 23,700 outlets in the three countries, a growth of
nearly 20 percent on the year. In Russia, it raised its network to 12,700
retail outlets.

In the Czech Republic, Home Credit financed purchases of goods worth
CZK 3.19 billion, up 38 percent year-on-year.

"Consumer loans made up a significant portion of the growth as their pace
has been the fastest," said chief executive Milos Stibor. Home Credit
Slovakia saw a decline in the volume of hire-purchasing to SKK 1.17 billion
from SKK 1.19 billion a year ago. -30-
=============================================================
5. IRAN AND UKRAINE OFFER ARMENIA PARTICIPATION IN A FIVE-PARTY
COMMITTEE STUDYING GAS PIPELINE FROM IRAN TO UKRAINE

Mediamax news agency, Yerevan, in Russian, 26 Jul 05
BBC Monitoring Service, UK, in English, Wed, Jul 26, 2005

YEREVAN - Tehran and Kiev offered Armenia to take part in the work of a
five-party committee studying the design and construction of a gas pipeline
from Iran to Ukraine.

This is said in a memorandum signed by officials from Iran and Ukraine in
Tehran on 25 July, Mediamax reports quoting Iranian media.
Commenting on the document, Iran's Deputy Oil Minister Mohammad Hadi
Nezhad-Hoseynian announced that Ukraine wants to import 20 to 30bn cubic
metres of natural gas from Iran annually for domestic use.

Apart from this, the minister noted that Ukraine has also agreed to allow
Iran to use its infrastructures for the transit of 20bn cubic meters of gas
to Europe.

"Both sides have also decided to suggest that Armenia, Georgia and Russia
establish a five-party committee to study design and construction of the gas
pipeline from Iran to Ukraine," Iran's deputy oil minister said. -30-
=============================================================
6. UKRAINE TO SEND POLAND GAS FROM IRAN?

Polish News Bulletin, Warsaw, Poland, Wed, Jul 27, 2005

WARSAW - Ukraine's Fuel and Energy Ministry and Iran's Petroleum
Ministry have signed a letter of intent concerning the construction of a gas
pipeline that would transport gas from Iran to Western Europe through
Armenia and Georgia, circumventing Russia by going under the Black
Sea.

Iran's gas deposits are the world's second largest after Russia's, although
extraction of the resource is low. Nonetheless, Iran plans to raise its gas
output to 290 billion cubic tons. Ukraine and Iran want to form a group of
experts that will work on the project's realisation by September.

According to Siergiej Titenka, Ukraine's fuel and energy minister, the
pipeline would have a flow capacity of 60 billion cubic tons annually, one
quarter of which would go to Ukraine. These plans met with much
displeasure from Russian gas giant Gazprom, according to which the
projects need Moscow's approval. -30-
=============================================================
7. GERMANY'S CDU/CSU SEEKS GOOD TIES WITH EASTERN
NEIGHBORS AND RUSSIA
Will not pursue a policy towards Moscow that ignores Poland

ddp news agency, Berlin, in German 0342 gmt 27 Jul 05
BBC Monitoring Service, UK, in English, Wed, Jul 27, 2005

BERLIN- If it wins the elections, the Christian Democratic Union/Christian
Social Union (CDU/CSU) plans to design relations with neighbouring countries
Poland and the Czech Republic in a way that prevents old anxieties from
breaking out again. "We want to have a strategic partnership with Russia.

However, the CDU/CSU will not pursue a policy towards Moscow that ignores
Poland. We must not even permit any remote impression of this happening,"
CDU foreign policy expert Friedbert Pflueger told [the daily] Berliner
Zeitung according to a preliminary report in its Wednesday [ 27 Jul]
edition.

Pflueger explained that the policy of entertaining special relations with
Moscow pursued by Chancellor Gerhard Schroeder (Social Democratic
Party) had caused serious worry that historic patterns could see a
recurrence.

He understands such concerns, because throughout its history Poland had
often been at the mercy of German and Russian politics. The CDU/CSU rather
plans to intensify consultations with its neighbours.

In this connection, Pflueger mentioned Polish objections to a German-Russian
gas pipeline that is planned to run through the Baltic Sea, bypassing
Poland. The project, which Schroeder and Russian President Putin had agreed
at the recent Hanover Trade Fair, has met with criticism in Poland.

"I think this project is correct, because it makes economic sense," Pflueger
said. "Yet it was definitely not correct to present it as a surprise to
Poland, Lithuania, and Ukraine. This issue should have been discussed with
them, because their interests are directly affected." -30-
=============================================================
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=============================================================
8. ECONOMIC REFORM LAGS IN UKRAINE

By Judy Dempsey, International Herald Tribune (IHT)
Paris, France, Thursday, July 28, 2005

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

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

Now with presidential powers due to be curbed in September under new
constitutional amendments - and fresh parliamentary elections scheduled for
next March - the fear among those hoping for a European-style free market in
Ukraine is that Yushchenko has very little time left to exert his influence.

"We are a little behind from where we were a half a year ago," said Vladimir
Litvin, the influential speaker of the Parliament. "Our actions are often
convulsive," he said Saturday at a conference organized by the Yalta Europe
Strategy, a group that support's Ukraine's eventual membership in the
European Union. "We are not pro-active concerning the challenges. We don't
have the concepts or programs for Ukraine's development over the next 10
years."

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

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

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

Yushchenko, who wants to integrate Ukraine into the world economy as soon
as possible, defeated Viktor Yanukovich, his conservative archrival, amid
huge protests demanding free and fair elections. After taking office,
Yushchenko said he would not pursue a witch hunt against those who bought
enterprises under dubious circumstances from the former government.

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

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

Pinchuk, a member of Parliament and chairman of the giant Interpipe,
declined to comment on the recent renationalization. "I don't want to make
a political issue out of it," he said.

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

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

This month, a plan to privatize Ukrtelecom was halted amid concerns it was
not ready. Timoshenko then announced last week that only 42 percent would
be sold, leaving a controlling stake in state hands, according to the
Prime-Tass news agency.

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

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

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

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

"We must not forget that 44 percent voted against Yushchenko in the
presidential elections," said Alexander Rahr, director of Research at the
German Council on Foreign Relations and who works closely with Ukrainian
reformers. -30- [The Action Ukraine Report Monitoring Service]
---------------------------------------------------------------------------------------------------------
NOTE: The International Herald Tribune is owned by The New York Times.
LINK: http://www.iht.com/articles/2005/07/27/business/ukrecon.php.
=============================================================
9. DEMOCRACY REQUIRES AN ACTIVE OPPOSITION

By John Herbst, Ambassador Extraordinary and
Plenipotentiary of the United States to Ukraine
The Day Weekly Digest in English, #25
Kyiv, Ukraine, Tuesday, July 26, 2005

In an interview with The Day that was published July 5, 2005, the questioner
asked if I agreed with the observation that there was no opposition in
Ukraine. When I responded that there was an opposition, as evidenced by
both poll data and the troubles the current government was experiencing with
its legislation in the Rada, some commentators expressed surprise and
searched for political motivation to my comments.

I might add that on occasions when I have hosted members of the current
opposition some observers have likewise considered it something out of
the ordinary.

I believe that this "surprise" regarding official American contact with the
opposition comes from a lingering misunderstanding of the American role
here last year, and from a still incomplete understanding of how a
democratic culture operates.

As for the lingering misunderstanding, during last year's Presidential
elections, the United States had only one interest, ensuring a free and fair
election so that the people of Ukraine could choose their own President.

We had no preferred candidate in the race and dealt closely and equally
with Mr. Yushchenko and Mr. Yanukovych. Of course, there were serious
irregularities in the elections, and we pointed that out. We did not do that
because we had a favorite candidate. We did it because we thought that it
was in our interests for Ukraine to develop as a democracy.

For people who believed, out of partisanship or ignorance, that the United
States had a favored candidate in last year's election, it is perhaps
surprising to see us in touch with the current opposition. But it should not
be so for anyone else.

As any close student of democracy understands, opposing interests and
parties are an inevitable, necessary part of an open society. The great
founders of the American republic realized that people are not angels. All
make mistakes at one time or another and many operate under
misconceptions.

Some have less than honorable objectives or motivations. Taking this into
account, American statesmen designed our constitution as a system of
checks and balances that distributed power broadly. We are not advocating
the adoption of the specifically American forms of democracy.

But any democracy requires mechanisms that make it impossible for any
one man or party or faction to monopolize power. An effective opposition is
the key to preventing that monopoly.

It is to Ukraine's great credit that it had such an opposition in the past
several years, even when the country seemed to be turning away from the
path of democratic development. The strength of the previous opposition,
and the insistence by the Ukrainian people that their choice in last year's
election be honored, prevented a stolen election.

The turn towards democracy in Ukraine over the past eight months has led to
much closer U.S.-Ukrainian relations. We welcome President Yushchenko's
policies of promoting a free market (though we have not been shy about
expressing concerns with specific measures that seem to contradict this) and
seeking integration into the international and EuroAtlantic institutions.

But all governments, even the most skillful and best- intentioned ones, make
mistakes. A government that faces no opposition, a government that controls
the media and civil society, has no one to tell it when it is in error. The
Yushchenko government has done an excellent job consolidating the media
freedoms won during the political crisis last year.

But even when the media are free, democratic societies require an active
opposition to call the government to account and to offer citizens an
alternative set of policies.

Some observers recognize the need for an opposition, but claim that the
current parties are somehow not worthy. Charges of corruption or worse are
leveled in their direction. We of course offer no justification for criminal
behavior - nor do we claim to have evidence permitting us to reach any
conclusions.

That said, countries, like people, must address the circumstances in which
they find themselves. The current opposition parties enjoy significant
support from the electorate. New opposition parties, offering alternative
programs and ideas, will certainly emerge. There must be a place of respect
for them in Ukrainian society. As President Yushchenko pointed out in
Donbas on July 15, opposition has an important role to play in Ukraine's
democracy.

When the opposition is respected, politics loses some of its dangerous edge.
People in power understand that if they lose an election, their political
life and their commercial prospects are not over. So they have less reason
to falsify election results because they see a decent future for themselves
outside of the government.

I know senior Ukrainian figures, who, once removed from office under the
previous government, had trouble finding a decent job. Even people who
might have wanted to hire them were afraid to do so because they were
not sure how the authorities would react. Our hope is that this old pattern
will remain where it belongs - in the past.

The leadership of a democracy also learns that when it is able to work with
the opposition, it is easier to move its agenda through parliament. We may
have seen a bit of this during the passage of some WTO-related legislation
earlier this month. It will be a wonderful day for Ukraine when it can be
taken for granted that senior politicians can cross partisan lines to do the
business of the country. -30-
=============================================================
10. UKRAINIAN PRESIDENT DEFENDS HIS SON, ACCUSES JOURNALISTS
"Viktor Yushchenko on scandal over his son 'Put this receipt
in front of that journalist's mug, and then get to court!'"

Ukrayinska Pravda web site, Kiev, in Ukrainian 25 Jul 05
BBC Monitoring Service, UK, in English, Wed, Jul 27, 2005

KIEV - Ukrainian President Viktor Yushchenko has defended his son Andriy
after the Ukrayinska Pravda web site published reports last week about his
allegedly expensive lifestyle by saying his family was well off and so could
support him.

Speaking at a news conference on 25 July, Yushchenko accused journalists
of deliberate interference in his family's private life and spoke of his
conversations with Andriy in which he advised him to learn to protect
himself.

The following is a report on the news conference given by Yushchenko on 25
July, entitled "Viktor Yushchenko on scandal over his son: 'Put this receipt
in front of that journalist's mug, and then get to court!'" posted on the
Ukrayinska Pravda web site on 25 July; subheadings have been inserted
editorially:

The president of Ukraine, Viktor Yushchenko, made comments on the scandal
over the BMW M6 car and other luxurious items used by his son Andriy during
a news conference on Monday [25 July]. Ukrayinska Pravda quotes a transcript
of the answer given by the head of state.

We can add on our own behalf that this is the worst comment that might have
been made in this situation.

President "never had problems with the law"

[Ukrayinska Pravda journalist] Mr Yushchenko, this question is not related
to the theme of today's news conference... [ellipsis as published]

[Yushchenko] I wonder, why?

[Ukrayinska Pravda journalist] As it is a good occasion to ask... [ellipsis
as published] The question relates to the theme which is now much discussed:
the president's son who uses a quite expensive car and other technical
means... [ellipsis as published] The question concerns morality: is it moral
to use such things in this country?

[Yushchenko] Clear.

[Ukrayinska Pravda journalist] There is one more question... [ellipsis as
published]

[Yushchenko] Thank you! Thank you! One question! You have put it the way
that I shall need half-an-hour to answer it... [ellipsis as published]

You know, the road in life which I have travelled began with the themes
where people used to be [involved] for not more than half-a-year, and then
they found themselves in a prison. As a rule, they stole... [ellipsis as
published] I lived my professional life in a system where many of my
colleagues either passed away or who have not returned from prison yet.

I have never had problems with the law. I am well aware that the thing I
should convey to my son is not a pillow or a prepared career, but the
feeling that he is the one to make his career on his own.

BODYGUARDS NEEDED FOR ANDRIY
I regret that you are not a father, and it is difficult for you to assess my
sentiments, but I shall try to illustrate them. The election campaign was
under way [in 2004]... [ellipsis as published] My son was knocked down [in
a traffic accident]. He spent two months in a hospital.

When he left the hospital, his face was not like mine [after poisoning], but
his friends did not recognize him for six months... [ellipsis as published]
I got is as the first warning. Of course, this warning was addressed to me,
as Andriy was not related to it.

The first car supplied on credit has been smashed and is being kept at a
garage. I am also aware that my family and he will never get any money back
from anyone. Then it happened... [ellipsis as published] I tell him: "Son,
this is no joke." I got what I got eight months later, as these were not
jokes... [ellipsis as published]

It was my family which had paid for the things we call a step towards
freedom and emotions of independence. I told him: "It would be good for
you to have bodyguards; not state ones, but private ones... [ellipsis as
published] to have a human being beside you: if you are knocked down,
there will be at least a witness who committed it."

My son has dealings. I mean business dealings... [ellipsis as published]
This business enables him to pay for his security: he has a job at a
consultancy company, and he is also in charge of some themes there.
Frankly speaking, I have been prompting him to this for a long time:

"Son, step barefoot on snow and earn." He is doing this. The sums are not
large, but they are sufficient to pay for the car hire and for services to a
freelance non-government bodyguard.

Thanks to the media, we are now aware that he is unarmed... [ellipsis as
published] It is just his colleague who goes beside him... [ellipsis as
published]

(Addressing the journalist) I do not know, what there is to analyse here, of
what I can repent to you, to... [ellipsis as published]

PRESIDENTIAL FAMILY'S WEALTH
[Ukrayinska Pravda journalist] Tell us the truth: is it his car or did he
just take it to drive?... [ellipsis as published]

[Yushchenko] It does not belong to him! I tell you that he pays for the
leasing! Please, listen to the things I said a minute ago. He has enough
money to pay the rent for the car. Write it down, write it down for the
third time... [ellipsis as published]

[Ukrayinska Pravda journalist] I shall write it down. But where does he
work?

[Yushchenko] Wait! Wait! Behave as a decent journalist, but not as a hired
killer. To pay for his security and to pay the rent for the car - he
declares all his income. The financial assets of my family are some million
hryvnyas. You know it, they are recorded in tax declarations. My family is
able to pay not only for my transactions, but also for some services to our
children.

Coming to some mentioned circumstances, you see that I do not wear a
watch, though I have some 12 or 15 of them. I shall not wear them while I am
the president.

I do not need primitive themes, this primitive analysis, I do not want this!
I shall wear just a neat suit with a trident badge [Ukrainian national
emblem]. Friends, I need nothing more! And also this Cossack ring which is
350 years old.

The telephone was presented to my son by his friend whom you know, but I do
not want to announce his name... [ellipsis as published] He is a well-known,
young and successful man.

Fortunately or unfortunately, they are friends. I told my son: "Son, what do
you need this watch for, what do you need this telephone for? Throw it away
to the devil! For not [having] it in your hands... [ellipsis as published]
Your hand should never touch it."

I know that he will do it. But I know what 17 or almost 20 years of age
mean... [ellipsis as published] I know what happens at this age.
Thus, friends, I would like to ascertain the only thing: I do not live on
stolen money. I do not live like this, though my salary is several thousand
hryvnyas. You are well aware of it.

JOURNALISTS ACCUSED OF LIES,
REQUESTED NOT TO TRACE ANDRIY
I shall never permit my son to take the path which enables him to ignore
traffic rules. It is a lie! Paying in a restaurant in the Hero City of
Odessa the way it is written there (in Ukrayinska Pravda article): with a
banknote, with a batch... [ellipsis as published] It is a lie! Excuse me,
there is a lot... [ellipsis as published]

He (Andriy Yushchenko) has one girlfriend. Those who know my son will
confirm that this boy is well-bred, he is moral, spiritual and a true
religious believer... [ellipsis as published] Every day begins with the
following: "Dad, he heard somewhere [as received: meaning "I heard" in
direct speech] about government members lobbying certain issues; attention
should be paid, there is something... [ellipsis as published]" These are my
contacts with my son... [ellipsis as published]

This is why I request you not to pervert a young soul: he has taken the true
way. I give you my word of honour: nobody will blush due to the behaviour of
my children. Nobody!

But if every day begins with a camera placed beside this boy, if the police
are called, if the camera is placed till night - they are not journalists. I
want to say as a father: these people are destined to experience the same
in their lives or the generation of their children is destined to.

ANDRIY ADVISED TO LEARN TO PROTECT HIMSELF
Things are not done in this filthy way. This is why I told my son: "Son, I
can ease your soul with only piece of advice: learn to protect yourself!
Learn to protect yourself! The bill? Take this bill from the restaurant. How
many people were sitting there, what did you eat, what did you drink? Put
this bill before that journalist's mug, and then get to court! Learn to
protect yourself!"

Second, such form of communication will never get my respect. This
journalist, who was likely not to have worked a single minute of his life
for press freedom, is now a killer. Friends, I shall survive this. These are
my principles, I overcome even other barriers.

I want facts of persecution not to be traditional in our society any more.
If three men with bags originating from the SBU [Security Service of
Ukraine] agree that we shall be in relation to four people from entourage,
then trash will flake off... [ellipsis as published] Journalists who do not
care about what the money smells of are now getting involved. They will
begin their days and nights with this persecution.

PRESIDENT DEFENDS HIS FAMILY'S PRIVACY
I shall tell you, friends, that such things humiliate honest journalists.
Let us keep in mind that Andriy is the same citizen as you are. He wants
to have a private life. Then you disclose your private life. He is not a
public politician. Friends, if you want to beat, then beat me. I told [top
officials from former President Leonid Kuchma's entourage: Viktor]
Medvedchuk, [Hryhoriy] Surkis and [Viktor] Yanukovych; "Beat me!"
Do not trouble women and children. Be above this."

Before this issue gained momentum, I sent the information which I had at
my disposal to some addresses: on the objectives, tasks and persons
who will be carrying out this operation... [ellipsis as published]

I passed it to colleagues in written form, and I think they received my
letters. By the way, I received this information not from the Security
Service of Ukraine!

I tell you frankly: it is humiliating for me to make explanations of this
kind. I think that it can be justified only by one thing: I do not want this
to be ever repeated with anyone, either with [parliamentary speaker
Volodymyr] Lytvyn, or with [Prime Minister Yuliya] Tymoshenko, nor with
you.

With nobody! I do not want this. One should not trouble children. If we are
honest fighters, let us speak about each other. It seems to me I have said
everything with regard to this. -30-
=============================================================
11. CHILDREN OF THE ORANGE REVOLUTION'S EXTRAVAGANT WAYS

Andrew Osborn in Moscow, The Independent
London, United Kingdom, Wed, Jul 27, 2005

Six months after he swept to power promising to stamp out cronyism,
corruption and inequality, Ukrainian President Viktor Yushchenko has been
forced on the defensive by the extravagant behaviour of his son.

Andrey Yushchenko, 19, has caused a stir and considerable resentment in
Kiev by ostentatiously driving a rare BMW car around the city and generally
conducting a playboy lifestyle. His excesses have enraged Ukrainians, many
of whom earn less than pounds 100 per month.

Mr Yushchenko has rejected all accusations of impropriety concerning his
family and has attacked the media for picking on 'children'. But his son, a
student of international relations in Kiev, is now sarcastically referred to
in sections of the press as the 'Son of God'.

So embarrassing has the scandal become that Andrey has released a
written statement justifying his behaviour.

His brand new BMW M6, which has a starting price in the region of pounds
90,000, has come under particular fire. The car in question is apparently
the only one of its kind in Kiev. The newspaper Ukrainskaya Pravda has
quoted witnesses who declare that Andrey should have been stripped of his
driving licence long ago for accelerating down the narrow street where his
girlfriend lives at 60 miles per hour.

The paper also wondered aloud how Andrey, a student in one of Europe's
poorer countries, could possibly afford such an expensive car, noting that
even his famous father " with an annual salary of about pounds 34,000 "
would be hard pressed to buy it.

Attention has also been drawn to Andrey's Vertu mobile phone, which is
also the preferred handset of oligarchs across the former Soviet Union. His
personal model is said to be the top of the range one, with a platinum body,
that costs about pounds 25,000.

As the optimism of the Orange Revolution becomes more muted, many
Ukrainians are beginning to believe that power in the country may have
simply shifted from the pro-Soviet oligarchy of former president Leonid
Kuchma to a new elite. The president's son is being treated as a case in
point.

Andrey, it is reported, always travels in the company of at least one of his
two private bodyguards, who are said to be former bouncers from one of
Kiev's nightclubs. The media has also discovered that Andrey's girlfriend,
Anna, owns a brand new Mercedes CLS 500, worth more than pounds
50,000, and that he is a regular at Kiev's most exclusive restaurants and
clubs.

The outcry comes soon after a similar backlash against Evgenia
Tymoshenko, the London School of Economics educated daughter of
Ukraine's Prime Minister, Yulia Tymoshenko.

Miss Tymoshenko, 25, is planning to wed Sean Carr, a rock singer from
Leeds. Mr Carr has closed his market stall, left his heavy metal band,
Death Valley Screamers, and moved to Ukraine, taking his Harley-
Davidson motorcycle and 11-stone rottweiler, Salem, with him.

Mr Yushchenko's defence of his son has been robust. He claims his son
rents the BMW, had received the Vertu mobile phone as a gift from a wealthy
friend and that he earned enough money from a part-time consulting job to
pay for bodyguards.

'Don't go after women and children. Be bigger than that,' he told a press
conference. 'Go after me.' However, he seemed to admit that Andrey was at
the very least guilty of poor judgement. 'I said to my son why do you need
such watches and phones. Get rid of them so that your hands don't touch
them.' -30- [The Action Ukraine Report Monitoring Service]
=============================================================
12. YUSHCHENKO LOOSES HIS ORANGE REVOLUTION COOL
Telling reflection on Ukraine's troubled Orange Revolution

OPINION: By Peter Lavelle
RIA Novosti political commentator
RIA Novosti, Moscow, Russia, Wed, July 27, 2005

MOSCOW - Ukrainian President Viktor Yushchenko's acrimonious
exchange with a journalist this week is a very telling reflection of
Ukraine's troubled Orange Revolution. When challenged on his son's
spending habits and lifestyle, Yushchenko launched into a diatribe that
was defiant, at times confused, and directionless.

We may never really know what Yushchenko was thinking when a journalist
from Ukrainska Pravda said he wanted to ask a question that "has to do with
a much-talked-about issue these days. It's about the president's son - what
car he is driving, and other quite expensive items [is he using]? The
question has to do with morality - is it moral to use such things in such a
country?"

Yushchenko could have and probably should have politely declined to answer,
citing family privacy. Instead, his aggressive reply touched upon more than
the defense of his son - it spoke volumes about the state of the Orange
Revolution.

Yushchenko was once the darling of Ukraine's free media. Those days
appear to be over. When asked a hard or awkward question, Yushchenko
instructed the journalist to "act as an honest journalist and not as a
contract killer" and said "let me tell you, friends, such...[questions]
should be humiliating for an honest journalist."

Some of his strongest supporters during last year's protracted presidential
election were in media, particularly journalists at Ukrainska Pravda.
Yushchenko now likens some journalists to retired thugs from the security
forces.

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

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

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

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

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

Yushchenko's outburst released an enormous sense of frustration, the same
frustration many Ukrainians feel demanding justice for murdered journalist
Georgy Gongadze. At the World Economic Forum in Davos, Switzerland in
January, Yushchenko promised that the Gongadze case would go to court
by May.

This has not happened yet and is very unlikely to happen any time soon
given the collective resistance within the security forces to move on the
case. The failure to finally close the Gongadze case will seriously damage
the legitimacy of those who came to power through the Orange Revolution.

Maybe Yushchenko simply was having a bad day and being forced to
defend his son in public sent him reeling. Nonetheless, he revealed in the
most vivid way what frustrates him and what has become of the once
glorious Orange Revolution. -30-
------------------------------------------------------------------------------------------------------
NOTE: The opinions expressed in this article are those of the author
and may not necessarily represent the opinions of the editorial board.
-----------------------------------------------------------------------------------------------------
By Peter Lavelle, plavelle@untimely-thoughts.com
Untimely Thoughts, Vol 3, no 126 (349), July 27, 2005
LINK: http://www.untimely-thoughts.com/?art=1842
=============================================================
Send in a letter-to-the-editor today. Let us hear from you.
=============================================================
13. NEW UKRAINIAN LEADERSHIP EMBRACES SOVIET-STYLE
CONSPIRACY THEORIES
Yushchenko lashes out at Ukrayinska pravda

By Taras Kuzio, Eurasia Daily Monitor
Volume 2, Issue 145, The Jamestown Foundation
Washington, D.C., Wednesday, July 27, 2005

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

Yushchenko was referring to a two-part article in Ukrayinska pravda (July 19
and 22) provocatively entitled "Andriy Yushchenko: Son of God?" The article
investigated Andriy's personal characteristics, portraying him as a spoiled
brat. The author particularly wanted to know how a 19-year old could afford
to drive around in an expensive BMW M6 (base price: 133,000 euro).

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

Since coming to power in January, the Yushchenko administration has
frequently blamed conspiracies for its problems. Parliamentary Speaker
Volodymyr Lytvyn claims the government regularly hurls "insinuations,
accusations, intrigue, and lies" (Ukrayinska pravda, July 13).

The oil crisis, caused by the government price ceiling, was blamed on
Russia. The meat crisis was blamed on "speculators," while the sugar
shortage and the failure to fully adopt legislation required by the WTO were
blamed on parliament and Lytvyn personally.

Within the government, Minister of Justice Roman Zvarych has excelled at
blaming conspiracies when unpleasant facts arise surrounding his alleged
doctorate from Columbia University (see EDM, May 4). Zvarych recently
claimed that the attack on his credentials was staged by an organized
conspiracy of persons he refused to reveal who had illegally hacked into the
Columbia University database (Ukrayinska pravda, July 18).

His penchant for conspiracy theories has ready-made supporters within the
Yushchenko administration. National Security and Defense Council Petro
Poroshenko blamed a conspiracy by former Kuchma loyalists when
discrepancies first arose about Zvarych's credentials. Poroshenko claimed
that public discussion about Zvarych's qualifications was planted by forces
seeking to divide the Yushchenko camp (razom.org.ua, May 27).

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

The Ukrainian opposition and its Russian allies also trade in conspiracy
theories. Opposition leader Viktor Yanukovych and his Russian allies believe
that the West, specifically the United States, orchestrated Yushchenko's
victory in the 2004 presidential election.

Regarding the Orange Revolution, Yanukovych's website (ya2006.com.ua,
May 18) asks, "Where did the large sums of cash come from to finance the
transportation of tens or more likely hundreds of thousands of people from
Western Ukraine to Kyiv and their accommodation in tents, the printing of
leaflets, preparation of large numbers of symbols, ensuring support, and a
lot more?" The Yanukovych camp believes that these funds came from
abroad.

Yanukovych voters take a similar view: 43% of them believe that "outside
forces" organized the Orange Revolution. Only 14% of Yushchenko's voters
agree (Public Opinion in Ukraine After the Orange Revolution, International
Foundation Electoral Systems, April 2005).

As a result of these conspiracy theories, neither Russia nor Yanukovych
accept Yushchenko as the legitimately elected president of Ukraine.
Yanukovych refuses to acknowledge the massive evidence of election fraud
on his behalf.

Instead, Yanukovych claims, "We prepared for elections -- they [prepared] to
grab power" (Tovarysh, March 11-14). Yanukovych believes Yushchenko
staged a coup d'etat with U.S. help. "This is not a revolution," he claims,
"but political technology with the involvement of special services" (AP,
December 6, 2004).

The Yanukovych conspiracy theory goes further still, claiming that Kuchma,
former presidential administration head Viktor Medvedchuk, and Yanukovych's
own campaign chief, Serhiy Tyhipko, conspired against Yanukovych. Political
analyst Volodymyr Kornilov claimed, "From the very beginning [Yanukovych]
was not supposed to win" (glavred.info, April 5).

Yanukovych's election press secretary, Anna Herman, blamed Tyhipko for
"executing somebody's will" (for-ua.com, February 19). Yanukovych's main
problem, she claimed, was not Yushchenko, but a "third person who did not
abandon hopes of being the rescuer of the nation." Presumably she means
Kuchma, as the Constitutional Court had ruled that Kuchma could stand in the
2004 election, as he had only served on full term since the 1996
constitution came into effect.

These views feed into the broader, Soviet-style revival of Western-backed
conspiracies that is becoming popular in Russia. Western NGOs are accused
of subverting Moscow, and the FSB is reviving KGB-style tactics and rhetoric
to defeat this "conspiracy" (Christian Science Monitor, June 1).

FSB head Nikolai Patrushev, for example, linked U.S.-backed conspiracies
to the democratic revolutions in the CIS. He warned the State Duma, "Our
opponents are steadily and persistently trying to weaken Russian influence
in the CIS and the international arena as a whole. The latest events in
Georgia, Ukraine, and Kyrgyzstan unambiguously confirm this" (Financial
Times, May 31).

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

The Yushchenko administration unquestionably supports reform and
Ukraine's Euro-Atlantic integration. It is therefore strange that they, like
their opponents, draw on neo-Soviet political culture by frequently using
conspiracy theories to explain their difficulties. -30-
---------------------------------------------------------------------------------------------------------
NOTE: Taras Kuzio PhD is a Visiting Professor at the Institute for
European Russian and Eurasian Studies, Elliott School of International
Affairs, George Washington University, Washington, DC.
tkuzio@gwu.edu; www.ieres.org; www.taraskuzio.net
=============================================================
14. DEVELOPING RANGE OF UNMANNED INTELLIGENCE AIRCRAFT
"Ukrainian unpiloted craft: small forms with big content"

ANALYSIS: By Petro Chornykh
Defense-Express web site, Kiev, in Russian 22 Jul 05
BBC Monitoring Service, UK, in English, Wed, Jul 27, 2005

Ukrainian design bureaus are developing a variety of unpiloted flying
devices, a specialist defence web site has said. The eastern city of Kharkiv
is the heartland of these developments, it said, giving precise details of
various such devices designed for economic and military intelligence
gathering.

The following is the text of the article by Petro Chornykh entitled
"Ukrainian unpiloted craft: small forms with big content" posted on the
Ukrainian web site Defense Express on 22 July; subheadings have been
inserted editorially:

Scientific research organizations and enterprises of the aerospace industry
of a number of states are developing and manufacturing over 250 models of
unmanned craft, interest in which has considerably grown after the
successful application of UFD [unpiloted flying devices] in a number of
armed conflicts in recent years. At present the armed forces of 41 states
are using about 80 types of UFD.

Ukraine is also interested in these devices; its army is equipped with about
25 UFDs of the second (Soviet) generation of the Tu-141 (the VR-2 "Strizh")
manufactured in the period 1979-1989 at the Kharkiv aviation plant. At the
same time, there are a number of organizations and companies operating in
Ukraine that have experience of the development, manufacture and testing of
unpiloted flying devices.

Kharkiv - the Ukrainian UFD centre -----

Kharkiv was the centre for creating UFDs in Ukraine. The scientific research
institute for problems of physical modeling of aircraft flight (SRIPPM) that
has been operating at the Zhukovskyy National Aerospace University has been
creating free-flying dynamic aircraft-like models for more than one decade.
Since 1973 the institute has been conducting flying tests on new models of
Soviet and Russian military aircraft including Mig-29, Su-27, Su-35 and
others.

In recent years SRIPPM specialists created a whole series of multi-purpose
UFD complexes, including devices capable of carrying out tasks both in
autonomous regime along a preprogrammed route and long range controlled
flying devices (LRCFD). Work on creating the Berkut intelligence unpiloted
aviation complex (UAC) can be considered one of the institute's most
promising projects.

With a maximum flying weight of 250 kg, the Berkut-1UFD can carry a 60 kg
payload with a maximum speed of 210 kph. It is planned that its practical
ceiling will achieve 5,000 m with a range of 200 km and more. The Berkut
UAC was developed to address a wide range of military and civilian tasks
connected with 24-hour all-weather aerial observation.

The most famous SRIPPM unpiloted device is undoubtedly the KhAI-112,
whose prototype appeared back at the end of the 80s. This device is one of
the Sapsan multi-purpose unpiloted aviation complexes designed for 24-hour
aerial observation in real time.

The KhAI-112 complex is capable of carrying out the following tasks: border
patrols, coastline security and monitoring territorial waters; carrying out
search and rescue operations; monitoring the state of oil and gas pipelines
and electricity supply lines; aerial intelligence and electronic warfare in
the interests of the armed forces and so on.

The control system of the KhAI-112 uses a satellite system navigation
receiver. Automatic control of the UFD flight is carried out by programming
up to 50 points of the route that can be changed in flight. At any point the
operator can switch to long-range flight control. With a take-off mass of 60
kg, its range is 120 km with a payload of 15 kg, a practical ceiling of
4,000 m and a maximum flight speed of 180 kph.

The KhAI-112 glider was designed according to the scheme of high gliding
with a propeller drive. It was manufactured from composite materials, and
has low visual acoustic, thermal and radar visibility. It is equipped with a
12 hp two-stroke two-cylinder piston engine.

The Sapsan complex also includes the Poisk-2 UFD, optimized for flight in
turbulent layer of the earth's atmosphere. The aerodynamic design of this
device has enhanced dynamic stability, while its remaining technical
characteristics coincide with the KhAI-112.

The SRIPPM has also developed the Bekas light UFD weighing 20 kg with a
range of 60 km, the Aist mini-UFD weighing only 2 kg and the Fazan UFD,
which is part of the eponymous target complex designed for combat training
of crews of short-range anti-aircraft rocket complexes.

Vzlet design bureau's developments -----

Another unpiloted craft designer from Kharkiv is the Vzlet design bureau, a
structural sub-department of the Scientific-Industrial Systems company.
Vzlet specialists have created the Remez-3 portable aerial observation
complex, designed to carry out televisual observation of terrain in real
time. All elements of the complex are packed into three containers weighing
less than 15 kg each for transportation purposes.

The dimensions of the containers are 1 x 0.4 x 0.4 m. The small dimensions
of the device are provided by original assemblage. Remez-3 is designed
according to the "utka [duck]" scheme with short fuselage in the form of an
elliptical body of rotation and an air propeller established in a ring. Such
an aerodynamic scheme, and also the power source based on a 2.5 hp D-23
piston engine, provide the device with a wide speed range of 58 to 105 kph.

The length of the device is 0.78 m, its wingspan - 2 m and its weight only
10 kg. It can carry a payload of 3 kg with a range of 5 km and a maximum
flying time of one hour. Take-off can be made both from an aircraft and with
the help of a mechanical catapult of original design, landing being made by
parachute.

The next Vzlet development was Albatross-4, a mobile aerial observation
complex. A classic aerodynamic scheme of a free-flying monoplane with a
propeller was chosen for Albatross-4K. The big-length wing ensures high
aerodynamic quality and sufficient characteristics of stability of the
aircraft both with a working and with a stopped engine. The Albatross-4K
can be launched either from an aircraft or by catapult and landing is by
parachute with compulsory ejection of the cupola.

The flight is carried out at the command of the operator, with the current
location and parameters of the device's trajectory being determined by a
GPS-35 receiver of the NAVSTAR satellite navigation system and
transmitted to a PC monitor that is part of the ground control complex.

The video camera for observation of the locality is fitted on a swinging
platform capable of deviating on two planes at the operator's command.
This makes it possible to examine objects not directly on the flight
trajectory without changing course and also to accompany the chosen
target within the limits of visibility.

Use of the experimental series of the Albatross-4K has confirmed the
device's high reparability and the possibility of installing new equipment
on it. On the whole, the device is capable of carrying out the entire range
of tasks characteristic of unpiloted devices of the operational tactical
class.

The Vzlet design bureau recently developed Ukraine's first unpiloted device
with a jet engine. The A-11 Strizh UFD was created as a low-speed target for
developing combat shooting by Ukrainian air defence troops, although it can
also be used to carry out televisual observation of the locality. The
calculated flight speed of the A-11 Strizh should reach 360 kph.

It is planned to achieve such speed characteristics, extremely significant
for light UFDs (the in-flight weight of the A-11 Strizh is 30.1 kg), by
installing a pulsating air jet engine developed at the Kharkiv aviation
institute. The device can be equipped with passive or active means of
deflecting radar signals (in the thermal range, the radiation capacity can
reach 11 kW) and it is possible to install a small millimetre-range radar
system. The device is launched by catapult and lands by parachute.

Kiev-based Veles company's developments

The Ukrainian Veles aviation company is engaged in the development and
manufacture of unpiloted devices in Kiev. It collaborates closely in the
area of creating and world-wide marketing of Ukrainian UFDs with Ukrinmash,
an affiliate enterprise of the state company Ukrspetseksport. The Veles
design bureau has developed three types of UFD - Vel-100, Vel-400 and
Vel-600, designed for information monitoring or economic work in
complicated conditions, and also an unpiloted prototype of a small
2-7-seater vertical take-off plane (easily modernized into a UFD).

Veles has practical experience of using Vel-100 devices in agriculture: they
have been used to spray ecologically clean substances in the fight against
insects. At present an experimental series of eight UFDs of this type has
been built. A modification of the Vel-100 with a 14 hp two-cylinder engine
is capable of developing a speed of up to 380-400 kph.

Its maximum height can reach 6,000 m, allowing the device to be used as
a low-speed target for working through air defence firing (including with
infra-red guidance ammunition). The take-off weight of the Vel-100 in its
basic design amounts to 14 kg with a payload of 5 kg. These indicators,
depending on the capacity of the engine installed, may increase to 32 and
10 kg respectively.

The speed characteristics of different versions of the Vel-100 vary from 55
to 400 kph and their flight length from two to five hours. The Vel-100
glider was created on the principle of a "flying wing". A maritime version
of the Vel-100, the Velmarina-100, was designed to be sea-based on patrol
boats of coastal protection, border troops and ecological patrols. Moreover,
the device can take off and land on a boat in motion.

The other Veles developments - the Vel-400 and Vel-600 UFD series - use
a more traditional glider design consisting of a high glider with a
propeller drive located behind the wing. Devices with identical design and
similar technical characteristics differ only in their dimensions.

The wing span of the Vel-400 and Vel-600, depending on the weight of their
payload can be from three to five metres for the former model and from five
to seven metres for the latter; maximum speed - up to 180 kph; maximum
take-off weight - 75-125 kg; payload - up to 25-65 kg; practical ceiling
height - 4,000 m; length of flight - five to nine hours.

There is a modification of the Vel-400 with an increased flight length of up
to 12 hours. The possibility of fitting special equipment on the Vel-600
allows it, apart from carrying out the usual UFD functions, to discover
ultra-small radiation sources and compile a map of polluted areas. The
Vel-600 can also be equipped with three on-board video terminals.

Vel UFDs of the 100, 400 and 600 series were designed for patrolling
borders, coastal protection and monitoring territorial waters; carrying out
search and rescue operations; monitoring the state of oil and gas pipelines
and electricity transmission lines; aerial intelligence and electronic
warfare in the interests of the armed forces. -30-
=============================================================
Send in names and e-mail addresses for the AUR distribution list.
=============================================================
15. UKRAINE'S FIRST LADY GREETS NASTYA OVCHAR

Press office of the President of Ukraine Victor Yushchenko
Kyiv, Ukraine, Thursday, July 21, 2005

KYIV - Kateryna Yushchenko congratulated Nastya Ovchar on her birthday.
On July 21, the girl turned six. Mrs. Yushchenko wished Nastya to recover
and return to Ukraine. The First Lady also wished the girl and her family to
live happily and gave her a St. Anastasia's Icon.

Olga Ovchar, Nastya's mother, thanked Mrs. Yushchenko for the present.
She said Nastya felt quite good and her wounds had skinned over well.
The girl is now learning to walk again because she could not do it after
many surgeries.

Olga said her daughter was courageously undergoing treatment to recover
faster. They plan to return to Ukraine in a few months.

Serhiy Pogoreltsev, Ukraine's Consul to New York, will deliver the presented
icon to Nastya's mother in a couple of hours. -30-
=============================================================
16. GLOBAL FUND ALLOCATES $67 MILLION FOR UKRAINE
HIV/AIDS PREVENTION

Interfax-Ukraine, Kyiv, Ukraine, Thu, July 21, 2005

KYIV - The Global Fund to Fight AIDS, Tuberculosis and Malaria has
allocated $67 million to Ukraine for designing measures to fight against
HIV/AIDS in the next three years.

"The Global Fund has fully met the Ukrainian request and allocated $67
million," Deputy Heath Minister and Deputy Chairman of the Ukrainian
National Council for HIV/AIDS Prevention Viktor Rybchuk told a Thursday
press conference.

Rybchuk said the funds would be available from October 1, 2005, through
October 1, 2008.

Ukraine is offering treatment to 2,000 of its 3,500 AIDS patients, Director
of the Ukrainian Center of HIV/AIDS Prevention and Treatment Alla
Sherbynskaya told the press conference. -30-
=============================================================
17. NO END TO THE SCHISM?
Holy See concedes to wishes of the Ukrainian Greek Catholic Church

According to high-level sources in the Moscow Patriarchate, the gist of the
cardinal's message was that the Holy See had decided to concede to the
wishes of the Ukrainian Greek Catholic Church -- a church that uses the
Eastern liturgy but is in full communion with the Vatican -- and grant its
head, Cardinal Lubomir Husar, the title of metropolitan of Kiev and
Galicia.

OP-ED: By Andrei Zolotov Jr., Moscow Times
Moscow, Russia, Wednesday, July 27, 2005

There was optimism in the Russian Orthodox Church that a new Roman
Catholic pontiff would bring a warming in relations between the two
churches, but, although the message from Rome might be clearer than in
the past, it still holds little hope for a swift rapprochement.

In late June, the Vatican's chief ecumenical official, Cardinal Walter
Kasper, came to Moscow for the first visit here since the election of Pope
Benedict XVI -- an event that was accompanied by an unprecedented series
of optimistic statements from the leadership of the Moscow Patriarchate.

Russian Orthodox Church officials praised Pope Benedict as an outstanding
theologian, intellectual luminary and guardian of traditional Christianity
in what the two churches largely see as a relativistic world undermining
Christianity's religious and moral foundations. The former Cardinal Joseph
Ratzinger's orthodoxy appeals to many Orthodox Russians and fits well into
the international agenda that the Moscow Patriarchate had begun to build
over the past several years: to consolidate traditional Christians against
secularism and moral relativism.

Patriarch Alexy II resisted Pope John Paul II's desire to visit Russia for
10 years, citing two issues: the expansion of the Ukrainian Greek Catholic
Church, which has caused many Orthodox Christians in western Ukraine to
feel their rights have been violated, and the expansion of the Roman
Catholic Church in Russia, which is perceived by the Russian Orthodox
Church as proselytizing.

Yet the patriarch addressed Benedict XVI in a completely different tone. "I
sincerely hope that Your Holiness' pontificate will be marked by the
development of good relations between our churches and a fruitful
Orthodox-Catholic dialogue," he wrote in his congratulatory message to the
newly elected pope. "Our authoritative and influential churches must join
their efforts in preaching Christian values to modern humankind."

The atmosphere in Moscow church circles was such that it would have been
enough for the Vatican to have made a couple of friendly gestures toward
the Russian church for the Moscow Patriarchate to have dropped its
objections and invited the new pope for just such a first historical visit.
The question that remained on people's minds was whether such gestures
would follow.

Against this background, Cardinal Kasper's visit was to reveal the
Vatican's new policy. And what did we see?

According to high-level sources in the Moscow Patriarchate, the gist of the
cardinal's message was that the Holy See had decided to concede to the
wishes of the Ukrainian Greek Catholic Church -- a church that uses the
Eastern liturgy but is in full communion with the Vatican -- and grant its
head, Cardinal Lubomir Husar, the title of metropolitan of Kiev and
Galicia.

It would also bless his move from Lviv, in the once Polish-dominated
Western, traditionally Greek Catholic part of Ukraine, to Kiev. This title
has historically belonged to the Orthodox bishops of Ukraine, and many
Russians, as well as Orthodox Ukrainians, see Kiev as the cradle of their
Christian tradition.

Thus, the Vatican's decision could be seen as endorsing the claims of Greek
Catholics, who make up about 10 percent of Ukrainians, to be a national
church. This may feel like another slap in the face for the Orthodox, who
are weakened today in Ukraine by an internal political schism. Furthermore,
the strong pro-Western stance of the current Ukrainian administration and
the desire among some in the Ukrainian government to form a united Church
of Ukraine, which Ukrainian nation-builders see as a missing foundation of
an independent Ukraine, could serve to aggravate the negative reaction of
the Ukrainian and Russian Orthodox.

Ukrainian Catholics have been asking the Vatican for more than the changes
Kasper discussed on his visit. They have been requesting the title of
patriarch for the head of their church, and some church officials are
already using this title internally. The Vatican has so far resisted going
any further. But granting the title of metropolitan of Kiev would
inevitably generate a new shouting match between Moscow and the
Vatican.

Despite expressing their strong displeasure in private conversations and
saying in an official statement that mentioning Kiev in the Greek Catholic
cardinal's title and moving the see is "unacceptable" to the Orthodox
Church and would "create obstacles" in the relationship between Moscow
and the Vatican, Russian Orthodox officials continue to follow a positive
tack.

Speaking on Russian television after Kasper's visit, Metropolitan Kirill
repeated praise for the pope and said there were plans for a large-scale
conference in Vienna, which would present "our joint witness on Christian
values in Europe and globally."

The current situation reveals a fundamental contradiction in Orthodox-
Catholic politics. The friends of the Orthodox Church within the Roman
Catholic Church tend largely to be the ecumenists and liberals who bank
on the "spirit of Vatican II" and do not share the Orthodox conservative
stance on the secular world.

At the same time, those orthodox Catholics who are closest to the Orthodox
Church in their desire to keep strictly to Christian tradition tend to view
the Orthodox Church in a traditional Roman Catholic way, or in other words
as schismatics who need to be proselytized or reunited with the Holy See.

Will Pope Benedict fall into the second category? Contrary to many early
optimistic expectations from Moscow, he might. He may also be a lot less
interested in Russia than his predecessor was.

But while the major objection from the Russian Orthodox toward the previous
papacy was that it used a lot of reconciliatory rhetoric while pursuing de
facto aggressive policies in the East, at least that contradiction may be a
thing of the past.

With Pope Benedict's past history of insisting that Rome cannot be a
"sister" but only the "mother church" to all other Christian bodies, his
deeds may be more in line with his words. In that sense, harsh truths are
certainly more productive than illusions. -30-
-----------------------------------------------------------------------------------------------------------
Andrei Zolotov Jr. is editor of Russia Profile magazine and a former
Moscow Times Staff Writer. The views expressed here are his own.
He contributed this comment to The Moscow Times.
=============================================================
18. WHY DO THESE MASS-MURDERING COMMIES
GET SUCH A GOOD PRESS?
Remind me: who was the greater mass murderer, Stalin or Hitler?

By Boris Johnson, Telegraph, London, UK, June 30, 2005

It is not given to us to know whither the Almighty has dispatched the soul
of Melita Norwood, who died quietly last week in Bexleyheath at 93. Whether
she is reading her obits from above or below, I reckon she will be pretty
pleased. There she is, sniffing a rose, or smiling with hair-clipped
innocence, like some author of wholesome books for children.

Her deeds are reported in the affectionate tones that obituarists reserve
for the practitioners of some romantic but moribund faith. She might be the
last speaker of old Cornish, or the last person to have consecrated her life
to proving that Stonehenge was built by spacemen as an observatory for the
study of worms.

As it happens, she was "the most important British female spy ever recruited
by the KGB". From the 1930s she used her position as a secretary at the
British Non-Ferrous Metals Research Association to pass ever more vital
atom secrets to Stalin's Soviet Union.

In other words, she was a tool for one of the most murderous regimes ever
seen, and continued blissfully betraying this country throughout the Cold
War, and, as she later admitted, in full knowledge of Stalin's slaughter.
File after file she shovelled to her KGB handlers, to the point where she is
credited by some with accelerating Russia's acquisition of nuclear weapons
by two years.

She was only unmasked in 1999, thanks to the testimony of a Soviet defector;
and after a brief hubbub it was decided by the then home secretary, Jack
Straw (himself a former Trot), that at 87 she was too old to prosecute. I do
not quarrel with that decision, but there is something in the eirenic tone
of her valedictions that reminds me of the amazing indulgence we show - now
that communism is meant to be dead - to commies, socialists and Lefty
tyrants of all kinds.

Cycling through London, I check out the words on people's T-shirts, and I
was amused the other day to see the letters CCCP on someone's chest.
Yup, folks, that's what the fashion-conscious British youth is wearing, a
celebration of the great doomed Soviet experiment of 1917-90.

Remind me: who was the greater mass murderer, Stalin or Hitler? Well, Stalin
is thought to have been responsible for about 50 million deaths, and Hitler
for a mere 25 million. What Hitler did in his concentration camps was
equalled if not exceeded in foulness by the Soviet gulags, forced starvation
and pogroms.

What makes the achievements of communist Russia so special and different,
that you can simper around in a CCCP T-shirt, while anyone demented enough
to wear anything commemorating the Third Reich would be speedily banged
away under the 1986 Public Order Act?

Just to prove my theory that commie tyranny was still chic, I sent a
Spectator assistant to Camden Lock market, and she returned shining-eyed,
with tales of hammer and sickle T-shirts, and laden with badges of the
foremost commie creeps of history. There was a badge of Lenin - good old
Vladimir Ilyich Ulyanov.

He was responsible for killing about five million people, but a Lenin badge
is obviously cool, as cool as hanging out and showing your midriff in the
new chain of vodka bars called "Soviet". She had a badge of Castro.
Charismatic old Fidel. Yours to pin to your nipple for only £1.99.

Now will someone explain the moral difference between enthusiasm for Fidel
Castro and enthusiasm for Augusto Pinochet? Both are appalling Latin
American dictators. Both have bad human rights records. Both have had their
misdeeds winked at, one way or another, by Uncle Sam. Tell me, O ye coolers
and groovers, why is it OK to wear a badge with Fidel on it, but very much
not OK to wear a badge showing Pinochet?

There is only one man in Britain who might even consider wearing a Pinochet
badge on his lapel, and that is Norman Lamont, and much as I admire Norman I
would not describe him as cool. Even more extraordinary than badges of Lenin
for sale in London, I read that Lefty tyrant chic is to be found in the
territories once tyrannised by Russia.

How is it possible that in Lithuania there is now a Stalin theme park,
complete with 13 giant effigies of Lenin (remember: he killed five million)?
Why is it somehow post-modern and ironic and slick to commemorate these
thugs, while any theme park in honour of the Nazis would be rightly
denounced as mad and in the height of bad taste?

Why is it so obvious to everyone that Melita should be left to a quiet old
age in Bexleyheath - with not even a whiff of a prosecution - when we
continue to chivvy out every last collaborator with the Nazis, now matter
how decrepit, and herd them into the courts?

Remember the case of that nonagenarian Italian who was finally arraigned
last year, at vast expense and with extreme evidential difficulty. On the
first day of the trial the prisoner was asked to identify himself by the
judge, and promptly expired.

I do not say that we are wrong in hounding these relics of fascism; my point
is that we are curiously indifferent to the behaviour of their extreme
Left-wing counterparts, and that in general the Left is able to get away
with things that would otherwise be viewed as nauseating and shameful.

Why, to put it bluntly, is Labour allowed to get away with all this? Imagine
the howls of hate, if a Conservative government had spent the past few weeks
eroding the right to trial by jury, abolishing habeas corpus, curtailing
free speech, and then slapped on the plastic poll tax - the ID card. Lefties
are somehow assumed to be doing things for idealistic reasons, and for the
collective good, and their high motives excuse their appalling solutions.

That is why the servants of communist tyranny get sympathetic obits, and
modern British girls wear CCCP T-shirts, and that is why a Labour Government
can enact a series of authoritarian measures that a Conservative government
could not contemplate. I cannot explain this injustice: I merely point it
out. -30- [The Action Ukraine Report Monitoring Service]
-----------------------------------------------------------------------------------------------------------------
Boris Johnson is MP for Henley and editor of 'The Spectator'
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2005/06/30/do3001.xml
================================================================
19. CELEBRATING 14TH ANNIVERSARY OF UKRAINE'S INDEPENDENCE
Wednesday, August 24, 2005

Ukrinform, Kyiv, Ukraine, Wed, July 27, 2005

KYIV - President Viktor Yushchenko has signed a direction on marking the
14th anniversary of Ukraine's independence [after the break-up of the Soviet
Union] according to the presidential press service.

Prime Minister Yuliya Tymoshenko has been appointed Chairperson of the
Organizing Committee for Independence Day celebrations on August 24. -30-
================================================================
UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
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SigmaBleyzer/Bleyzer 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
UKRAINE WILL SUCCEED
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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"
An Agent Of Change
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
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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. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
3. ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
4. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili,
President; Kiev and Washington, general@rulg.com, www.rulg.com.
5. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
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. 9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Susanne Lotarski, President; E. Morgan Williams, SigmaBleyzer,
Chairman, Executive Committee, Board of Directors; John
Stephens, Cape Point Capital, 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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"THE ACTION UKRAINE REPORT - AUR" is an in-depth, private, non-
profit news and analysis international newsletter, produced as a free
public service by the non-profit www.ArtUkraine.com Information Service
(ARTUIS) and The Action Ukraine Report Monitoring Service The
report is distributed in the public's interesting around the world FREE
of charge using the e-mail address: ArtUkraine.com@starpower.net.
Additional readers are always welcome.

The text and spelling found in the articles is that which was distributed by
the various news services. The AUR does not change the wording, the
English or the spelling found in the original articles and none of the
translations are by the AUR unless specifically marked as such. The
AUR does change the format of some of the articles to fit the format used
in this publication, cuts very long paragraphs into two to four paragraphs
to allow much easier and quicker reading and changes the headlines we
find that are not clear and accurate, which is quite often.

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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)
Chairman, Executive Committee, Ukraine-U.S. Business Council
Publisher, Ukraine Information Website, www.ArtUkraine.com
& www.ArtUkraine Information Service (ARTUIS)
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Power Corrupts and Absolute Power Corrupts Absolutely.
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