"THE ACTION UKRAINE REPORT - AUR"
An International Newsletter
The Latest, Up-To-Date
In-Depth Ukrainian News, Analysis, and Commentary
"Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World"
"THE ACTION UKRAINE REPORT - AUR" - Number 566
Mr. E. Morgan Williams, Publisher and Editor
Washington, D.C., Kyiv, Ukraine, WEDNESDAY, September 21, 2005
--------INDEX OF ARTICLES--------
"Major International News Headlines and Articles"
1. BOTH GEORGIA AND UKRAINE ON THE MIND AND THE ROCKS
Both revolutions have left supporters disillusioned and
bitterly disappointed. The Ukraine and Georgian governments
need substantial training in how to run a democracy.
COMMENTARY: By Tsotne Bakuria
Former member of Parliament in Georgia. Visiting scholar at
the Graduate School of Education and Human Development
at George Washington University, Washington, D.C.
Washington Times, Washington, D.C., Tue, September 20, 2005
2. GEORGIA CALLS ON EUROPE FOR COHERENT POLICY TO HELP
SUSTAIN YOUNG DEMOCRATIC GOVERNMENTS
"If Ukraine fails, it would be a total disaster for Georgia, for region."
By Guy Dinmore in New York, Financial Times
London, UK, Tuesday, September 20 2005
3. UKRAINE PLUNGES DEEPER INTO POLITICAL TURMOIL
By Steven Lee Myers, Moscow, The New York Times,
New York, NY, Tuesday, September 20, 2005
4. WORLD NEWS: UKRAINE WOES PERSIST
The Wall Street Journal, New York, NY, Wed, Sep 21, 2005; Page A10
5. UKRAINE: CRISIS DEEPENS AS PRES YUSHCHENKO'S NOMINEE
FOR PRIME MINISTER SUFFERS DEFEAT IN PARLIAMENT
By Tom Warner in Kiev, Financial Times
Kyiv, Ukraine, Wednesday, September 21 2005
6. COMPROMISE, STAGNATION OR A "THIRD OPTION"
ANALYSIS: By Walter Prochorenko, PhD.
The Action Ukraine Report (AUR), Number 566, Article 6
Washington, D.C. , Wednesday, September 21, 2005
7. PRIME MINISTER RESIGNS IN UKRAINE'S CRIMEA
Interfax-Ukraine news agency, Kiev, in Russian 1245 gmt 20 Sep 05
BBC Monitoring Service,UK, in English, Tue, Sep 20, 2005
8. REPRESENTATIVE OF PRESIDENT YUSHCHENKO IN THE PARLIAMENT
DID NOT VOTE FOR THE PRES NOMINEE FOR PRIME MINISTER
Sobolev predicts Yekhanurov will be nominated again
Ukrainian News Agency, Kyiv, Ukraine, Tue, September 20, 2005
9. UKRAINE PROSECUTOR OPENS CRIMINAL CASES VS TOP OFFICIALS
Associated Press, Kyiv, Ukraine, Tue, September 20, 2005
10. UKRAINE PRESIDENT URGES PARLIAMENT TO BACK HIS
NOMINEE FOR PRIME MINISTER
SPEECH: By Ukraine President Victor Yushchenko
UT1, Kiev, in Ukrainian 0843 gmt 20 Sep 05
BBC Monitoring Service, UK, in English, September 20, 2005
11. ACTING PRIME MINISTER YEKHANUROV PROMISES TO RESTORE
ECONOMIC STABILITY IF APPOINTED
SPEECH: By Acting Prime Ministry Yuriy Yekhanurov
TV 5 Kanal, Kiev, in Ukrainian 0900 gmt 20 Sep 05
BBC Monitoring Service, UK, in English, Tue, Sep 20, 2005
12. UKRAINIAN STATE SECRETARY SAYS POST OF PRESIDENT'S FIRST
AIDE WILL BE ABOLISHED IN REFORM OF SECRETARIAT
Deputy Ivan Vasyunyk will stay, the rest will go
Interfax-Ukraine news agency, Kiev, in Russian, 20 Sep 05
BBC Monitoring Service, UK, in English, Tue Sep 20, 2005
13. MEETING WITH AMERICAN BUSINESS BORYS TARASYUK OUTLINES
PROSPECTS FOR INVESTMENTS IN UKRAINE
Ukrinform, Kyiv, Ukraine, Tue, September 20, 2005.
14. IFC TO FINANCE HOTEL IN KIEV, UKRAINE
To be operated by Hyatt International
International Finance Corporation (IFC)
Kyiv, Ukraine, August 25, 2005
15. FAREWELL TO "SOCIAL BREAD"
Regions no longer authorized to regulate bread prices
By Natalia HUZENKO, The Day
The Day Weekly Digest in English, #28
Kyiv, Ukraine, Tuesday, September 20, 2005
16. UNITED KINGDOM OIL COMPANY COMPLAINS OF QUESTIONABLE
ACTIVITIES OF THE PROSECUTOR-GENERAL'S' OFFICE
Asks President Yushchenko to improve the investment climate
Interfax-Ukraine news agency, Kiev, in Russian 1211 gmt 20 Sep 05
BBC Monitoring Service, UK, in English, Tue, Sep 20, 2005
17. COMPAGNIE DE SAINT-GOBAIN BUYS MAJORITY STAKES IN
UKRAINE, RUSSIAN GLASS PACKAGING COMPANIES
Ukraine-based Skio Zorya
AFX Europe (Focus), London, UK, Tuesday, Sep 20, 2005
18. UNITED NATIONS: URGED TO RECOGNIZE 1932-1933 HOLODOMOR AS
AN ACT OF GENOCIDE AGAINST THE UKRAINIAN PEOPLE AND
COMMEMORATE 20TH ANNIVERSARY OF CHORNOBYL TRAGEDY IN 2006
By Serhiy SOLODKY, The Day
The Day Weekly Digest in English, #28
Kyiv, Ukraine, Tuesday, 20 September 2005
19. YULIYA TYMOSHENKO'S PARTY DECLARES INDEPENDENT COURSE
INTERVIEW: with Oleh Bilorus, Leader
Yuliya Tymoshenko Bloc's parliamentary faction
Den, Kiev, Ukraine, in Ukrainian 17 Sep 05; p 4
BBC Monitoring Service, UK, in English, Tue, Sep 20, 2005
20. FORMER UKRAINIAN PRIME MINISTER IN RUSSIAN TV INTERVIEW
INTERVIEW: with Yuliya Tymoshenko
NTV Mir, Moscow, in Russian 1800 gmt 18 Sep 05
BBC Monitoring Service, UK, in English, Mon, Sep 19, 2005
21. CONCENTRATION CAMP SURVIVOR: PURSUIT OF JUSTICE
Simon Wiesenthal spoke for all 11m victims of Hitler's murder machine.
He was born in Buczacz, Galicia, now part of western Ukraine.
By Christian Tyler, Financial Times
London, UK, Wed, September 21 2005
=============================================================
1. BOTH GEORGIA AND UKRAINE ON THE MIND AND THE ROCKS
Both revolutions have left supporters disillusioned and bitterly
disappointed. The Ukraine and Georgian governments need
substantial training in how to run a democracy.
COMMENTARY: By Tsotne Bakuria
Former member of Parliament in Georgia. Visiting scholar at
the Graduate School of Education and Human Development
at George Washington University, Washington, D.C.
Washington Times, Washington, D.C., Tue, September 20, 2005
Ukraine's "Orange Revolution," which swept Viktor Yushchenko to power,
came barely a year after a similar uprising in the former Soviet Republic of
Georgia saw U.S.-trained lawyer Michael Saakashvilli overthrow Eduard
Shevardnadze in what has been called the Rose Revolution.
I was a there the day Mr. Shevardnadze escaped through a back tunnel from
the Parliament building in the capital city of Tbilisi.
In both cases, the public was buoyed by the promise of new, young leadership
and government cleansed of post-Soviet corruption. It seems both
revolutions, while public relations dreams, left those who wore orange
T-shirts in Kiev and waved roses in Tbilisi disillusioned and bitterly
disappointed.
Earlier this month, Mr. Yushchenko fired his government and dismissed the
colleagues responsible for his election.
In Tbilisi, President Saakashvilli has struggled with claims of incompetence
and corruption. This while he travels the world, proclaiming his leadership
and while workers have just completed a lavish McMansion on the outskirts
of Tbilisi at a cost of $27 million to the state. This "President's Palace"
sits atop a mountain, perfect for looking down on the little people.
At the same time, pensions for retired citizens accounted for $17 million,
which works out to $7 monthly per recipient.
Electricity is provided sporadically. There is no health insurance, though
the new president promised it in his campaign. Taxes have been raised,
not lowered.
Sixty-five percent of Georgians are unemployed, which may account for the
exodus of smart and talented professionals who simply cannot make a living
in Georgia. More than 1 million Georgians have abandoned their home country.
There are now little more than 4 million people, most below the poverty
line.
American aid to Georgia -- a high priority for the current administration
which backed Mr. Saakashvilli -- is $300 million a year. This prompts the
question: Where does all the money go?
But it was not America that failed. The blame lies squarely on the
inexperienced Georgian government, which is grappling with serious
problems unlike ever before. No amount of money can compensate for
corruption and scandal, and no orange shirts or long-stemmed roses can
prevent a governmental implosion.
Both revolutions had a "honeymoon" period. Now the marriages both
seem to be on the rocks. According to statistics just released by
www.geoforum.ge, a Web site devoted to current affairs in Georgia, Mr.
Saakashvilli's popularity has plummeted.
A month after his 2004 election, his popularity stood at an astounding 88
percent, numbers anyone in political life -- aside from Laura Bush -- can
only dream of. This week, his popularity is barely 43 percent.
Ninety percent of Georgians who once expressed hope and belief in the
Rose Revolution. Those same people now only number 28 percent, which
certainly indicates the new government is floundering.
The value of Georgian products has also declined in economic terms, the
gross national product in 2001 was 48 percent. Today that number has fallen
to 12 percent.
U.S. AID and State Department officials have a daunting task. Monetary aid
is not enough. The Ukraine and Georgian governments need substantial
training in how to run a democracy. Otherwise, U.S. tax dollars are simply
going down the drain and we all know better uses for it, including relief
for the victims of Hurricane Katrina.
The State Department must act. The people of Georgia and Ukraine are
looking to America for answers. Otherwise, both countries will dissolve into
chaos, not unlike that of Belarus, where communist dictator Alexander
Lukashenko's regime resembles the Middle Ages.
Opposition leaders have either fled Belarus or sit in rat-infested jails as
political prisoners. Old Soviet flags still fly and there are no media other
than Mr. Lukashenko's private television station.
Polls in Ukraine and Georgia both show the U.S. government is respected
and people are devoted to the values and freedoms America represents.
They dream of free elections, freedom of speech, a free media and
uncorrupt officials.
They are starved for strong leadership and interactive checks and balances.
The people of Kiev and Tbilisi are looking for answers. They are looking to
America for support and advice. They loathe any prospect of returning to the
days under Soviet control.
Both young presidents must recognize that without this effort to form honest
partnerships with the United States, democracy will remain only a public
relations dream. -30- [The Action Ukraine Report Monitoring Service]
---------------------------------------------------------------------------------------------------------
Tsotne Bakuria is a former member of Parliament in Georgia. He is a
visiting scholar at the Graduate School of Education and Human
Development at George Washington University.
http://washingtontimes.com/commentary/20050919-085408-2674r.htm
===============================================================
2. GEORGIA CALLS ON EUROPE FOR COHERENT POLICY TO HELP
SUSTAIN YOUNG DEMOCRATIC GOVERNMENTS
"If Ukraine fails, it would be a total disaster for Georgia, for region."
By Guy Dinmore in New York, Financial Times
London, UK, Tuesday, September 20 2005
Europe must get its act together and work out a coherent policy to help
sustain the young democratic governments on its fringes, according to
Mikheil Saakashvili, the president of Georgia whose "rose revolution" nearly
two years ago inspired similar movements.
In an interview with the Financial Times while attending the UN summit, the
38-year-old lawyer expressed particular concern over Ukraine where President
Viktor Yushchenko sacked his government last week and faces parliamentary
elections next spring.
"If Ukraine fails, it would be a total disaster for Georgia, for the wider
region. It is in everyone's interest to help them," commented Mr
Saakashvili.
He said Mr Yushchenko was "very able" and had a "good chance of surviving",
but that the reform process was moving more slowly than "we" had hoped for.
But he criticized the European Union, which he described as being in the
process of redefining itself, as lacking a clear policy towards Ukraine, and
urged it to make a strong pledge by March.
"Ukraine must have a realistic promise of something," he said, noting that
whereas all Georgians wanted Nato and European membership, it was not
so clear cut in Ukraine.
USA MILLENNIUM CHALLENGE HAS $300 MILLION FOR GEORGIA
Mr Saakashvili's own government has been touted as a model of reform by
the US which assigned a further $300m in aid for infrastructure projects
from the Millennium Challenge account last week based on Georgia's record
of good governance. "It sends a strong message. It's a reward for the whole
process," the president said.
Georgia is one of the largest per capita recipients of US aid and has sent
troops to Iraq. Large crowds welcomed President George W. Bush in Tbilisi
in May.
Georgia had received lots of promises from the EU, but little had
materialized, Mr Saakashvili said.
Speaking in his hotel suite overlooking Central Park, Mr Saakashvili, who
practiced law in New York, said Georgia was joining an initiative by
Jordan's King Abdullah to bring together lower and middle-income
countries.
He urged the Group of Eight industrialized nations not to ignore this
category while "pouring money into the black hole of under-development and
poverty".
Turning to Russia, Mr Saakashvili commended President Vladimir Putin for
having the "political courage" to go against the prevailing mood of "19th
century thinking" and agree to withdraw Russian forces from bases in
Georgia by 2008.
But the breakaway coastal region of Abkhazia, which Mr Saakashvili described
as being run and bought up increasingly by the Russian elite and mafia while
supported by Moscow, remained "a bleeding wound for us", becoming a centre
for trafficking of all kinds and counterfeiting of US dollars.
He said Russia was refusing to discuss Georgian proposals on restoring its
sovereignty while ceding a high degree of autonomy.
Nonetheless he saw a pro-western pragmatism in Mr Putin. "I'm confident that
Putin wants to be on good terms with the west, to belong to this club. He's
delighted when Bush calls him his friend. Russia cannot afford to lose the
confidence of the west." -30- [Action Ukraine Report Monitoring]
===============================================================
3. UKRAINE PLUNGES DEEPER INTO POLITICAL TURMOIL
By Steven Lee Myers, Moscow, The New York Times,
New York, NY, Tuesday, September 20, 2005
MOSCOW - Ukraine plunged deeper into political turmoil today when
the Parliament rejected President Viktor A. Yushchenko's choice to be prime
minister and the country's top prosecutor announced the opening of criminal
investigations into allegations of corruption among the president's aides.
Twelve days after dismissing Prime Minister Yulia V. Tymoshenko amid
internal divisions and competing accusations, Mr. Yushchenko failed to
muster enough votes to win approval of her replacement, Yuri I. Yekhanurov.
The defeat - although narrow - dealt a new blow to Mr. Yushchenko only
months after he swept to power on a wave of public protests against
electoral fraud last fall.
Mr. Yushchenko nominated Mr. Yekhanurov, a regional governor and former
aide, in an effort to contain a mounting scandal over corruption, one that
threatened his popular image as an untainted reformer determined to break
with the darkest aspects of the country's post-Soviet history.
That effort, however, appeared to founder further as the prosecutor general,
Svyatoslav M. Piskun, gave credence to the corruption scandal by announcing
that at least five investigations of official misconduct had begun in the
wake of accusations made by Mr. Yushchenko's former chief of staff.
Although he cleared some Yushchenko advisers of suspicion, Mr. Piskun said
the investigations included questions about judicial interference by Mr.
Yushchenko's National Security and Defense Council and about the business
activities of the council's former chairman, Petro A. Poroshenko. The
judicial interference involved a legal challenge to an investment in a
chemical factory called Severodonetsk Azot by the subsidiary of an American
company, IBE Trade.
Mr. Poroshenko, a wealthy businessman and one of Mr. Yushchenko's closest
allies, said in a telephone interview that the accusations were
unsubstantiated and politically motivated. He said he met with investigators
on Monday and was shown no evidence incriminating him.
"This case has absolutely zero prospect in court," he said, accusing Mr.
Piskun and his deputies of bias.
Mr. Poroshenko and Ms. Tymoshenko were among Mr. Yushchenko's most
influential and powerful supporters during last year's uprising against a
fraudulent presidential election orchestrated by the former president,
Leonid D. Kuchma.
Now only eight months since he took the oath as Ukraine's third president,
Mr. Yushchenko's coalition has imploded under the weight of political and
personal disputes that have harmed the economy and slowed the reforms that
he had promised to thousands who massed on Kiev's Independence Square.
Before today's vote, Mr. Yushchenko pleaded for support, saying the
stability of Ukraine was at stake. "I am urging you to put aside intrigues
and wars," he said in televised remarks at the Parliament, or Supreme Rada,
as translated by the British Broadcasting Service. "Let us not tear the
country apart."
He added that he faced "a cynical plan of ruining this administration,"
making a thinly veiled reference to Ms. Tymoshenko and other political
opponents who opposed Mr. Yekhanurov.
The tensions surrounding Mr. Yushchenko's erstwhile partners simmered for
months but emerged with astonishing bitterness after his chief of staff,
Oleksandr O. Zinchenko, resigned on Sept. 2 and publicly accused him of
failing to halt corruption around him.
The president and his aides tried to shift the focus to Ms. Tymoshenko,
whose short term as prime minister proved divisive politically and
disruptive economically, by accusing her of abuse of office.
But the vote today underscored the political costs of breaking with Ms.
Tymoshenko, who was second only to Mr. Yushchenko in public prominence
during last fall's protests. Her party joined parties from across the
political spectrum in rejecting Mr. Yekhanurov's nomination.
Ms. Tymoshenko, by contrast, won confirmation as prime minister in February
with 376 votes, compared to 223 for Mr. Yekhanurov.
"It is a sign of the weakness of the president," one of Ms. Tymoshenko's
advisers, Hryhory M. Nemyrya, said in a telephone interview.
Mr. Yushchenko failed to rally political support around a new, centrist
government. Among those he reached out to was Viktor F. Yanukovich, the
former prime minister under President Kuchma whose initial "victory" in last
November's presidential election Mr. Yushchenko succeeded in overturning.
Mr. Yekhanurov, who is expected to remain as acting prime minister ahead of
a new vote or a new nominee, was seen as a capable leader and an
uncontroversial choice. But Mr. Yushchenko's meeting with Mr. Yanukovich
deepened a sense of betrayal among Ms. Tymoshenko and other critics of Mr.
Kuchma's presidency.
So did an encounter between Mr. Yekhanurov and Mr. Kuchma eight days ago.
The two men appeared at a public ceremony in Dnipropetrovsk, where Mr.
Yekhanurov served as governor, and kissed each other in a traditional
greeting, provoking days of political speculation and ridicule.
"It was the kiss of the past," Mr. Nemyrya said.
Although Mr. Yushchenko and many others in his government once served under
Mr. Kuchma, the former president remains a deeply unpopular figure whose
tenure was marred by corruption and criminality. The past resurfaced again
today, even as Mr. Yushchenko's political crisis reached a peak.
A parliamentary commission investigating the kidnapping and murder of the
journalist Georgy Gongadze in 2000 - one of the most notorious crimes of Mr.
Kuchma's presidency - issued its long-delayed report and implicated not only
Mr. Kuchma, but also Parliament's speaker, Volodymyr M. Lytvyn, once Mr.
Kuchma's chief of staff. Both have previously denied involvement.
Mr. Yushchenko, as a candidate, regularly criticized the failure to solve
the case, but the investigation has stalled since March, when the former
interior minister, Yuri F. Kravchenko, was found dead in mysterious
circumstances that officials called a suicide.
A senior western diplomat, in an interview last week in Ukraine, said there
was reason to believe he might have been murdered, citing two gunshot
wounds to Mr. Kravchenko's head.
The parliamentary commission's chairman, Hryhory O. Omelchenko, identified
Mr. Kuchma and Mr. Kravchenko as "the organizers" of Mr. Gongadze's
kidnapping, according to news reports from Kiev. He said the commission
concluded that Mr. Lytvyn was involved in ordering Mr. Gongadze to be
followed.
The Parliament then referred the commission's report to Mr. Piskun's office
for investigation and prosecution. -30-
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FOOTNOTE: There was considerable discussion in Washington yesterday
about the 'unusual 'political strategy of the Yushchenko team. The
president had only been back in Ukraine for one working day before the
vote on his prime minister candidate, after being in the United States for
four days.
If there were not enough votes to confirm the acting PM why not find a way
to delay the vote and give the President and his team more time to get the
situation under control. What was the rush to send the President to the
parliament to make an impassioned speech, to have a vote the President
and his team ended up losing?
Did the President's team count the votes or leave this to chance? As they
say in Washington no vote is better than a 'no' vote. The strategy of the
Yushchenko team to run quickly and full-speed ahead into a major defeat
did not make much sense to political experts in Washington. EDITOR
=============================================================
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==============================================================
4. WORLD NEWS: UKRAINE WOES PERSIST
The Wall Street Journal, New York, NY, Wed, Sep 21, 2005; Page A10
KIEV, Ukraine -- Ukraine's Parliament yesterday rejected the candidacy of
Acting Prime Minister Yuri Yekhanurov, handing a major defeat to President
Viktor Yushchenko as he sought to contain a political crisis that has split
the alliance behind his country's Orange Revolution.
Mr. Yekhanurov won only 223 votes, three less than necessary to be named to
the job. He will remain caretaker prime minister while negotiations continue
on bringing his name up for a second vote or finding an alternate candidate.
Mr. Yushchenko had tapped Mr. Yekhanurov to replace his Orange Revolution
ally, former Prime Minister Yulia Tymoshenko, whom he fired on Sept. 8 amid
mounting allegations of corruption.
Mr. Yushchenko had called on political leaders to put the infighting that
had paralyzed the government in recent months behind them. But the close
contest in parliament showed how much Mr. Yushchenko's hand has weakened
after losing some of his Orange Revolution allies, who sided with Ms.
Tymoshenko. Now in the opposition, she has vowed to regain her old job with
expanded powers in parliamentary elections set for March.
Meanwhile, Ukraine's top prosecutor said investigators had opened five
criminal cases against top officials, but said that Ms. Tymoshenko was "not
the subject of an investigation."
The protracted political crisis comes as Ukraine's economy is stalling,
threatening to further undermine support for Mr. Yushchenko's party in the
March elections. After Ms. Tymoshenko's government threatened to reverse
thousands of privatization deals early this year, economic growth slowed
sharply.
The government expects growth around 4% this year, down from 12% in 2004.
An official warned yesterday that the country's trade balance could swing
into deficit soon amid surging demand for imports and sagging exports of
steel and chemicals.
Mr. Yekhanurov, formerly a governor in central Ukraine, fell short after
four key groups abstained in the vote -- including Ms. Tymoshenko's allies,
the Communist Party and two parties that fought against the president in
last year's election campaign. A stopgap candidate to fill the job until the
elections, Mr. Yekhanurov pledged to depoliticize the government.
Mr. Yushchenko had urged members to "abandon intrigues and battles" and
approve his nominee. He also denounced a "cynical plot to destroy" his
eight-month-old liberal administration. Backed by Ms. Tymoshenko, he came
to power after falsified election results triggered mass demonstrations in
Kiev.
He vowed to turn Ukraine westward, setting his sights on membership in the
North Atlantic Treaty Organization and the European Union.
Tensions showed no sign of abating yesterday, as Prosecutor General
Svyatoslav Piskun said that investigators had charged unidentified officials
with abuse of power and interfering in the work of courts. The announcement
followed a 10-day investigation into corruption allegations against some of
Mr. Yushchenko's top aides.
The president ordered the creation of an investigative commission after his
former chief of staff, Oleksandr Zinchenko, resigned two weeks ago and
accused former Security Council chief Petro Poroshenko and other top
aides of corruption.
Mr. Piskun didn't specify whether investigators had opened proceedings
against Mr. Poroshenko himself, but added that he "appears to be linked with
some cases" against other officials. Mr. Poroshenko resigned from his job
on Sept. 8, the same day Ms. Tymoshenko's government was removed.
==============================================================
5. UKRAINE: CRISIS DEEPENS AS PRES YUSHCHENKO'S NOMINEE
FOR PRIME MINISTER SUFFERS DEFEAT IN PARLIAMENT
By Tom Warner in Kiev, Financial Times
Kyiv, Ukraine, Wednesday, September 21 2005
KIEV - Ukraine plunged deeper into political crisis yesterday after Viktor
Yushchenko, president, failed to win parliamentary backing for his nominee
for prime minister.
Despite an impassioned speech to parliament, Mr Yushchenko came up three
votes short of the majority needed to confirm Yuri Yekhanurov, a regional
governor.
The vote also emboldened Yulia Tymoshenko, the former prime minister who
has been waging an intense propaganda war with Mr Yushchenko since he
sacked her and her cabinet two weeks ago.
Ms Tymoshenko's supporters also won two other votes that weakened the
president's position.
Parliament voted to set up investigative commissions to probe allegations
of corruption in Mr Yushchenko's administration and to look at claims that
Boris Berezovsky, the exiled Russian tycoon, financed much of the
president's election campaign.
The votes left Mr Yushchenko with a weak cabinet of acting ministers and
forced him to restart talks that could drag on for weeks or months.
Ms Tymoshenko also proposed to bring forward the implementation of
planned political reforms, so that parliament, instead of Mr Yushchenko,
would form the cabinet that would rule for the next seven months, until
parliamentary elections in March.
Hryhory Nemyria, an adviser to Ms Tymoshenko, said she was seeking a
meeting with Mr Yushchenko to discuss a "strategic compromise" that would
resolve the dispute between the two main leaders of the Orange Revolution
and the two main pro-European, pro-reform political groups in the country.
However, Mr Yushchenko's allies said he was likely to again put forward Mr
Yekhanurov. In his speech in parliament, Mr Yushchenko painted Ms
Tymoshenko's seven-month term as an economic failure and accused her
of "a cynical plan to ruin this administration".
Mr Nemyria said Mr Yekhanurov was well-liked in parliament, but deputies
rejected him because they were worried by Mr Yushchenko's recent alliance
with friends of the former president, Leonid Kuchma, including his
businessman son-in-law, Viktor Pinchuk.
Mr Nemyria said Mr Yekhanurov made a mistake when he kissed Mr Kuchma
on the cheek in a meeting last week, an act that was shown widely on
Ukrainian television. "That was the kiss of failure," Mr Nemyria said.
Shares quoted on the Kiev stock market fell only slightly on news of the
continued political stalemate.
Tomas Fiala, managing director of Dragon Capital, a local brokerage, said
there was "no panic" but investors were worried about the impact for
business if the crisis dragged on until the March elections.
Foreign investors, who had high hopes for Mr Yushchenko and Ms Tymoshenko
after they swept Mr Kuchma out of power, have been disappointed by the slow
pace of reforms and have largely remained on the sidelines. -30-
==============================================================
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==============================================================
6. COMPROMISE, STAGNATION OR A "THIRD OPTION"
ANALYSIS: By Walter Prochorenko, PhD.
The Action Ukraine Report (AUR), Number 566, Article 6
Washington, D.C. , Wednesday, September 21, 2005
The current Ukrainian government "crisis" has precipitated worldwide
commentary ranging from the death of a democratic dream and government
implosion by the venerable "The Economist" of London to "a healthy sign of
democratic accountability" in an analysis by Zoltán Dujisin of InterPress in
Budapest.
As usual, reality will fall somewhere in between. Baring any new
revolutions, the government of Ukraine will continue to function, albeit in
a less effective capacity and unfortunately the people of Ukraine will
probably be the losers in the resulting chaos.
Many of the former government ministers and functionaries will almost
certainly reappear in similar posts and - and without meaning to be overly
cynical - will continue to look out for their own interests. Corruption
like Lerna's Hydra will continue to rear its ugly multiple heads and it will
take more than a Heracles-like Yushchenko to kill it. Already, we see
Ukraine's oligarchs and old "nomenklatura" jockeying for position in the
new administration.
I have always been a proponent of compromise since it is one of the most
effective ways to defuse a crisis in just about any situation. However, in
today's climate within Ukraine's political machine, compromise may cause
more harm than good. With whom can Yushchenko effectively compromise?
Yanukovich - the opponent who by some reports was linked to the person or
persons who poisoned him?
Kuchma's team - the cause of most of Ukraine's present day problems?
Lytvyn - who is looking after his own agenda to become prime minister after
the 2006 elections? Is it not Lytvyn's agenda to usurp Yushchenko's power
to which the President had reluctantly agreed as a compromise to settle last
year's election crisis peacefully?
Akhmetov's group - who claims to be persecuted by the Yushchenko
administration? Viktor Pinchuk - who is regarded as the beneficiary of much
of Ukraine's wealth distribution under Kuchma and with whom any deal will
look like a sell out to the people of Ukraine? Yulia Tymoshenko - recently
fired and definitely not in a mood for compromise at the present time?
Unfortunately Yushchenko cannot even look to Parliament for meaningful
assistance in his quest to form a new government or to continue the reforms
which he promised after the Orange Revolution. As usual, Parliament is
itself in disarray and cannot agree on any type of effective economic or
political reform. One great tragedy of the current turmoil will be
Ukraine's aspirations to joint the WTO.
It is very unlikely that the current problems will allow the President to
coral enough votes to push through the WTO agenda while trying to form the
new government. Just getting Yekhanurov approved as the new interim Prime
Minister will use up many of the votes and favors owed to Yushchenko within
Parliament.
So what are the alternatives? Just last week a well respected colleague
mentioned that a possible "benevolent dictatorship" might be the best
solution for Ukraine. Lest some critic (with retro-visions of Stalin)
demand my head for even hinting at such a proposal, let me point out that if
deeply analyzed, such systems already exist in various countries under the
guise of emergency powers or "for national security" purposes.
This however could be a "third option" and one that would not necessarily
have to conflict with the hard won democratic ideals of the Orange
Revolution. After all the Cossacks did it and the form of "Hetmanate"
governments which were considered in their time the most progressive in
the world.
This is certainly an intriguing scenario. Looking at all the possibilities
many would agree that if one had to live under a dictatorship, Yushchenko's
would not be the worst option. Also if it would be made clear in advance
that such a dictatorship would be temporary - say until the Parliamentary
elections - people may even accept it.
Yushchenko could then quickly and effectively push though his reform agendas
without obstructive and destructive opposition. China has basically been
doing this since the death of Mao, so why not Ukraine. Corruption could
then be reduced or cured by decree.
Ukraine could then reform itself just enough so that after the Parliamentary
elections, and once democracy was reestablished, it would be ready to join
the European community with a clean slate. Certainly a fairy tale setting
worthy of the best of Hollywood but is it realistic?
Unfortunately once a country is committed to democratic ideals, it is not
only hard but almost impossible to vacillate between various forms of
government without tempting the wrath of the populace.
Yet for some ungovernable countries (in which group Ukraine has often been
placed - including by my favorite by Hans von Zon in "The Political Economy
of Independent Ukraine"), it has often been proposed that governance should
be comprised of alternative periods of democracy and dictatorship at 5 to 10
year intervals. An intriguing suggestion, but the problems with dictators is
that they don't know when they've overstayed their welcome.
However some parts of this scenario may warrant serious consideration.
Would Ukraine be better off without the meddling and interference of
Parliament in the reform process? Perhaps temporarily? After all, how many
Parliamentarians can anyone name who are fully committed to democratic
and market reform in Ukraine?
I don't know that many Parliamentarians but of the 100 or so with whom I
have had contact, I can safely name two. Yes - only 2. This translates to
only 2% of the lawmaking body of Ukraine. Not a very happy thought. But
even if I'm 500% wrong, this still makes only 10% of the entire Parliament.
The one bright side - the current political crisis may cause Ukraine to wind
up with 3 strong and effective political parties (or rather coalitions).
This would be closer to the British and German political systems that many
claim are more "democratic" than the 2 party system of the US. Some say
that Ukraine's political crisis is the normal transition process of
political reform, but how about a period when things actually get
accomplished? -30- [The Action Ukraine Report Monitoring Service]
-------------------------------------------------------------------------------------------------------
NOTE: Walter Prochorenko, Paramus, New Jersey (prowalt@yahoo.com)
==============================================================
7. PRIME MINISTER RESIGNS IN UKRAINE'S CRIMEA
Interfax-Ukraine news agency, Kiev, in Russian 1245 gmt 20 Sep 05
BBC Monitoring Service,UK, in English, Tue, Sep 20, 2005
KIEV - Crimean Prime Minister Anatoliy Matviyenko has handed in his
resignation to Ukrainian President Viktor Yushchenko, Interfax-Ukraine
reported on 20 September, citing the Crimean government's press service.
In his resignation notice Matviyenko said that he had decided to resign
after the Sobor party he heads (part of the Yuliya Tymoshenko Bloc) did not
back Yuriy Yekhanurov's candidacy for Ukrainian prime minister in the
country's parliament on 20 September.
On 19 September Matviyenko said that a "corrupt coup" was being planned
against him and called for Yushchenko to react to the situation in Crimea.
The presidium of the Crimean parliament responded by calling for local
residents and regional branches of political branches not to respond to such
provocation, the report said. Matviyenko was appointed prime minister of
Crimea on 20 April. -30- [The Action Ukraine Report Monitoring Service]
==============================================================
8. REPRESENTATIVE OF PRESIDENT YUSHCHENKO IN THE PARLIAMENT
DID NOT VOTE FOR THE PRES NOMINEE FOR PRIME MINISTER
Serhii Sobolev predicts Yekhanurov will be nominated again
Ukrainian News Agency, Kyiv, Ukraine, Tue, September 20, 2005
The permanent representative of the president in the Verkhovna Rada, Serhii
Sobolev, predicts that President Viktor Yuschenko will again nominate acting
Prime Minister Yurii Yekhanurov for the post of prime minister in
anticipation of parliament's approval. Sobolev made this statement to
Ukrainian News.
"I think he is likely to be nominated again. The constitution does not
forbid this," he said. Sobolev added that parliament turned down Yekhanurov
because former allies of the president could not come to terms.
"Because there was no agreement among all those who were standing in
Maidan while one and then another party began to seek agreement with
Yanukovych, with social democrats, with anyone, and then it happened,"
he commented.
Sobolev attributed the failed vote on Yekhanurov's candidacy to the fight
inside the presidential team.
"The key thing that happened is that they managed to set to a quarrel the
united team that won the election, and then everyone who lost the election
began to played up to it.
Accordingly, when one and the other party of the fighting team attempted to
use force to solve these issues, and no negotiations, agreements are the
only problem," Sobolev said. He added that he did not vote for Yekhanurov.
As Ukrainian News earlier reported, the Verkhovna Rada rejected
Yekhanurov's candidacy for the post of prime minister on September 20 by
only 223 placets in view of the 226 votes required.
Sobolev belongs to the Reforms and Order faction, 6 deputies of which
supported Yekhanurov in the prime minister vote. The faction numbers 15
members in total. -30- [The Action Ukraine Report Monitoring Service]
==============================================================
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9. UKRAINE PROSECUTOR OPENS CRIMINAL CASES VS TOP OFFICIALS
Associated Press, Kyiv, Ukraine, Tue, September 20, 2005
KIEV - Ukraine's leading prosecutor announced Tuesday that investigators
have opened five criminal cases against officials from the country's top
security body. "The criminal cases are open, the investigation continues,"
said Prosecutor General Svyatoslav Piskun.
The announcement followed a 10-day investigation into corruption allegations
against some of President Viktor Yushchenko's most senior aides.
Yushchenko ordered the commission to be created after his former
chief-of-staff, Oleksandr Zinchenko, resigned two weeks ago and accused
former Security Council chief Petro Poroshenko and other top aides of
corruption.
Piskun didn't specify whether investigators had opened proceedings against
Poroshenko himself. But he noted that Yushchenko's two other key aides,
Oleksandr Tretyakov and Mykola Martinenko, who had also been accused of
corruption, "were not implicated in any wrongdoing."
"They are clean before the law," he said.
The allegations triggered the breakup of the Orange Revolution coalition.
Poroshenko was questioned by prosecutors and gave evidence on Monday,
his spokeswoman Irina Friz told The Associated Press Tuesday.
She had said no charges were filed against him, denying reports in the
Ukrainian media that he had been charged with impeding the work of the
judicial system.
Poroshenko resigned his job on Sept. 8, saying he didn't want to be accused
of influencing the investigation. On the same day, Yushchenko sacked the
government of his other Orange Revolution ally, former Prime Minister Yulia
Tymoshenko. Piskun said that Tymoshenko was "not the subject of an
investigation."
Tymoshenko and Poroshenko had long sparred over government policy, and
after being dismissed, Tymoshenko also leveled corruption allegations
against Poroshenko. Yushchenko, meanwhile, said that he believed the
allegations against his close friend, Poroshenko - one of the main financial
backers of the Orange Revolution - were groundless.
The president, meanwhile, accused Tymoshenko of abuse of office. The
commission was made up of senior investigators from the Interior Ministry,
prosecutors and officials from the Security Service.
Poroshenko complained, however, that it was headed by an official who had
once acted as lawyer for United Energy Systems, the now-defunct energy
monopoly headed by Tymoshenko in the 1990s, Ukrainian media reported.
==============================================================
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10. UKRAINE PRESIDENT URGES PARLIAMENT TO BACK HIS
NOMINEE FOR PRIME MINISTER
SPEECH: By Ukraine President Victor Yushchenko
UT1, Kiev, in Ukrainian 0843 gmt 20 Sep 05
BBC Monitoring Service, UK, in English, September 20, 2005
Ukrainian President Viktor Yushchenko has accused his opponents of trying to
destabilize the situation in the country, and made a dig at the former prime
minister, Yuliya Tymoshenko. He said some of the people who stood by him on
Independence Square, the focus of the Orange Revolution, were now working
against him.
In his address to parliament before the vote on his nominee for the prime
minister's post, Yuriy Yekhanurov, Yushchenko accused the previous cabinet
of populism, saying it made promises it could not carry out and allowed the
country's GDP growth to slump. Yushchenko told MPs that Yekhanurov's
approval was part of his stabilization plan aimed at reversing economic
slowdown, and promised that the new cabinet would be made up of
professionals.
He also pledged that he would not try to derail the political reform that
will transfer some of his powers to the prime minister on 1 January 2006.
The following is an excerpt from Yushchenko's speech carried live by the
Ukrainian state-owned television UT1 on 20 September:
Dear friends, representatives of the media! I am convinced that every
country experiences such times and moments when it faces challenges,
which require effective reaction from the national and political elite.
What is happening in Ukraine today is, in my opinion, such a moment when
the political elite of our nation must come together, guided by higher
national interests, and answer the challenges that we are facing. I am
convinced that no-one can do this job except for the people sitting in this
chamber today.
Today I am urging you to put aside intrigues and wars. Let us not tear the
country apart. Let us not wage war. Do not think about job placements of a
few individuals, but talk honestly about the interests of the nation and the
state. I am convinced that this is the only basis for us all to win, for the
sake of our national interests. All the rest is just steps which sooner or
later will undermine those political forces who take them. [Passage omitted:
cites examples in history]
I would like to explain my view of the current processes and my assessment.
I am convinced that today it is not Yekhanurov's fate that is at stake. Not
Yekhanurov's fate, whether or not he will be prime minister, but the fate of
parliament and the president, their ability to effectively and adequately
react and to ensure stability in the country. This is a test that parliament
must pass.
Believe me, I know how last night was spent, in which forest and in what
struggle. Unfortunately, I do not want the money to be working again.
Friends, I am asking you to be guided only by morals today. Friends, I am
asking that the state and moral values be put to work today.
OPPONENTS CARRYING OUT "CYNICAL PLAN"
Now I would like to explain what is happening. I am convinced that a cynical
plan of ruining this administration is being carried out in Ukraine. A
cynical plan. Moreover, some of those who were on Independence Square, as
well as those who were opposed to them, are now united in carrying out this
plan. Such a surprising alliance. And we are moving towards ruin, my dear
friends.
The authority and the image that we had is diminishing today. This is a test
for all of us. I would like to explain some steps that I have taken as
president, including those towards the cabinet. The previous cabinet allowed
itself to be dragged into an ignoble game and some parts of this scenario.
I would like to start from the very beginning. we began this financial,
political and economic year with drafting an economic programme, a budget,
aimed at directing our resources towards salaries, pensions, maternity and
children's programmes. These were our four clear priorities.
Salaries, in accordance with the budget, were raised by 57 per cent.
Pensions were brought in line with the subsistence level for the first time
since independence. Funding for children's programmes was boosted by three
to four times. Maternity support programmes were boosted by five to eleven
times.
EXPLAINS DECISION TO SACK CABINET
Under the pretext of this course, some people began dividing non-existent
resources and promising to give what the country did not have. The economy
reacted to this policy. Since you asked why I dismissed the previous
cabinet, I would like to give you some numbers.
In the first eight months of 2005, economic growth slowed by 2.32 times. If
at the beginning of the year the GDP grew at 6.5 per cent, today it is minus
1.6 per cent. We are seeing negative dynamics on last year. Overall, GDP
growth slowed by more than five times.
This is the basis of our budget and our social programmes. Second,
industrial output slowed down by 2.4 times, and agriculture by 1.7 times. If
we look at other indicators, such as trade, exports and imports, in the
first seven months the trade balance has fallen from 2.6bn hryvnyas [over
500m dollars] to almost zero.
We have only two weeks' reserve of positive balance. This is 118m dollars. I
am sure this is the result of flawed policy of revised customs tariffs,
which was implemented a few months ago. [Applause]
Going further, businessmen still pay much of their taxes in advance. In the
first six months, they prepaid 6bn hryvnyas, or 29.3 per cent, I repeat 29.3
per cent of revenues that the tax administration collected in the first six
months. These are complains about business.
As of 1 September, we have 2.6bn hryvnyas of outstanding VAT refunds. These
are the things that I promised in my speeches in Independence Square and in
parliament, that we will stop this practice.
I will not go in detail about other economic indicators, such as inflation
and consumer basket, where we all know there are serious problems, brought
about by the growth of prices on various goods. Wage arrears have increased
by 15.9 per cent. I am talking about the first eight months. Imports have
grown by 24 per cent, while exports have grown by 7.6 per cent. These are
complains about business.
In conclusion, I would like to say that against the background of these
negative processes, especially beginning with the second quarter of this
year, some negative moments appeared within the administration team in
Ukraine. These conflicts resulted from several behind-the-scenes,
untransparent and unclear decisions which led to public conflicts from time
to time.
The last drop was the conflict around the privatization of the Nikopol
ferroalloys plant. You know that a uniquely fair court ruling was made, but
because of behind-the-scenes play by the cabinet, thousands of people took
to the streets. The Interior Ministry's units were deployed there to install
a new director, whom no-one allowed to enter the plant. We were standing one
step away from bloodshed. This was anti-Maydan [reference to Orange
Revolution protests].
This is not my policy. I do not want business conflicts to be settled by
court rulings on this basis. This discredits Ukraine. That is why we have a
decrease in investment and colossal mistrust of businesses to the
authorities. You are witnessing this. The administration team was full of
behind-the-scenes plays, slander, groundless - or maybe not - mutual
accusations.
The system of intrigues became the norm. I attempted to spend the last eight
to ten days, late into the night, finding understanding within the team.
Within the cabinet, between the cabinet and other institutions. At some
moment, I felt that this understanding was close. But, as usual, it was
betrayed in one night. Again, as a result of behind-the-scenes
consultations.
My friends, I would like to say the following. I supported the cabinet, and
other institutions, the National Security and Defence Council and the
presidential secretariat. I valued the efforts of my colleagues for the
benefit of the nation. But I could not stick my head in the sand and watch
the image and reputation of our country being eroded by destructive
processes within the government.
When we failed to reach understanding, I made the decision to dismisses all
the sides that could not resolve this conflict. I stress that the essence of
the conflict was not in relations between Yushchenko and Tymoshenko, or
Yushchenko and Poroshenko, or Yushchenko and Zinchenko. The
misunderstanding was in a different plane.
But I had been dragged into resolving this conflict with my actions. And
this resulted in lack of understanding from many sides. But I am telling you
that I took this step for the sake of Ukraine, not for the sake of anyone on
the government team. Please understand that this was the key element of
my motivation.
URGES YEKHANOROV'S APPROVAL
My plan of stabilizing the situation, that I would like to discuss with you
today and to approve, is the following. First, if we want to stabilize the
situation as soon as possible, we need to approve my formal nomination of
Yuriy Yekhanurov to the post of prime minister. We all need to make an
effort to make this cabinet free of politics and party lines. We understand
that we need to spend the next seven months doing pragmatic work.
We have two choices - to survive the next seven months, to live in
stagnation, or to achieve progress. We can achieve progress if we form a
cabinet and give it all the opportunities to work effectively. I am
convinced that only a cabinet made up of pragmatists can work actively for
the benefit of Ukraine for the next seven months. That is why, I am asking
for your support of this scenario.
Second, stabilization of the economy, stabilization of trade, stabilization
of investment climate and other basic elements in 2006 will be derived from
our professional, objective and timely approval of the 2006 budget. I am
convinced that timely approval of the budget will give a good signal to the
market, the economy and investors, both domestic and foreign, to step up
their activities in our economy.
We must understand that scandals and crises will not replace pensions,
salaries and stable prices for our electorate. These two elements are a
direct political duty of our elite, regardless of the colour of their
banner.
PROMISES FAIR PARLIAMENTARY ELECTION
Third, there is much discussion of the 2006 election. I am giving you my
word that there will be no administrative pressure. I am giving you my word
that not a single state-owned channel will not be using the money from
Naftohaz [state energy company], or the Transport Ministry, or
communications. No budget funds will be used in campaigning. I am giving
you my word that the election will be honest, transparent and open.
In my talks with the Organization for Security and Cooperation in Europe, I
assumed a position that would provide for continued monitoring of democratic
processes in Ukraine in the run-up to the 2006 parliamentary election. Our
behaviour must be absolutely open, let any institutions who wish to do so
check the fairness of our election next year.
As president, I will do everything to prevent destabilization. Today
parliament can stand beside me in overcoming this crisis, or it can assume
a different position and widen it further. I am convinced that a wise and
brave decision would be to take the position of stabilizing the situation in
Ukraine.
We have signed a declaration and demonstrated that we realize what
responsibility with have to our country. I would like to note a few points
that some people are worried about. As president, I guarantee that will not
tolerate political persecution. [Noise in the audience]
This irony means that in this chamber very rarely could different teams
reach understanding, and the main events happened behind the scenes,
through adventurism. I am saying that this is not my policy, my friends. I
am sure that all the sides who signed [the declaration] will keep their
word.
If today there is a question of filling this declaration with content, I
would ask everyone to sit down and fill it with specific content, including
thesises on inadmissibility of political persecution. I am prepared to
assume this responsibility.
Next, as for the mechanism of forming the cabinet, it will be open. It will
be done through open political consultations with factions. I stress that
the cabinet will be free of people involved in business or those who have
discredited themselves, or people who are out of the context of our
political agreements.
As for the political reform, my friends, I, as president, give you a
guarantee that I will not commit any destructive acts to block the reform. I
will not. What was confirmed on paper, I will be the side who implements
this plan. [Applause]
Now, dear friends, I am asking you to vote on the candidacy of Yuriy
Yekhanurov to the post of prime minister, and I am asking you to support
him. Thank you. [Applause] -30-
==============================================================
11. ACTING PRIME MINISTER YEKHANUROV PROMISES TO RESTORE
ECONOMIC STABILITY IF APPOINTED
SPEECH: By Acting Prime Ministry Yuriy Yekhanurov
TV 5 Kanal, Kiev, in Ukrainian 0900 gmt 20 Sep 05
BBC Monitoring Service, UK, in English, Tue, Sep 20, 2005
KIEV - Acting Prime Minister Yuriy Yekhanurov has said that his cabinet will
work to stabilize the economy and ensure steady growth and blamed the
populism of previous governments for the deteriorating economy.
Addressing parliament before it voted on approving his candidacy as prime
minister, Yekhanurov pledged to respect property rights and restore investor
confidence.
He said that he would cooperate with parliamentarians in adopting the 2006
state budget and drafting important economic laws. He also highlighted the
importance of maintaining Ukraine's course towards European integration and
developing cooperation with Russia. Yekhanurov subsequently received the
votes of 223 MPs, three short of the majority needed.
The following is an excerpt from Yekhanurov's address broadcast live by
Ukrainian television TV 5 Kanal on 20 September:
Esteemed Mr Yushchenko, esteemed Mr Lytvyn, esteemed diplomats,
journalists and guests.
Lately there has been speculation about a crisis of power in Ukraine. I
believe that this has primarily been due to emotional factors. Cabinet
resignations have not been news over the past 15 years.
The president elected by the people and the Ukrainian Supreme Council
[parliament] are quite capable of forming an effective new cabinet and
building an effective executive. The events of the past weeks have been
aimed at consolidating the efforts of the whole of the Ukrainian public. At
the same time, we cannot underestimate economic tendencies that have
become obvious.
The Ukrainian economy has begun to lose momentum. Populist measures
linked to permanent election campaigns that have been going on for the past
three years have resulted in the accumulation of negative factors.
In the first place, we should note the abnormal ratio of capital investments
and consumption, the declining competitiveness of the economy, and the
decreasing foreign trade surplus. You can see this from the report by the
head of the State Statistics Committee and statistical handouts that you
have received. In this situation, the main objective of the new cabinet is
stabilizing the economy and creating conditions to ensure steady
development.
We will not give up on an active social policy. My cabinet will work to make
sure that high social standards are achieved as a result of dynamic economic
growth, while themselves acting as an effective stimuli for this
development. Our strategy is about linking macroeconomic policy with basic
principles of social and infrastructure policy needed to ensure stable
economic growth.
BUDGET, REGIONAL POLICY
Among the priority objectives of the cabinet is implementation of the 2005
budget. Ten days after its formation, the cabinet will report on actual
progress in implementing the privatization programme and offer a set of
measures aimed at stabilizing the situation with the implementation of this
year's budget.
Paraphrasing a well-known expression I will say: the budget will be
implemented in spite of any unfavourable conditions. I would like you to
consider the new draft budget submitted to parliament. We will debate this
budget in this hall tomorrow. You know its main figures, for this reason I
will not comment on them. I just want to highlight two points.
FIRST, we have the time and opportunities for constructive work.
SECOND, the head of the cabinet will need no intermediaries in this work
with parliamentarians. If we work together, we have every reason to adopt a
socially balanced budget of development this year.
I would like to make a separate appeal to regional authorities. The State
Tax Administration will help you form local budgets. In addition, I
guarantee that the cabinet will pay special attention to tackling regional
development issues. We will work together to develop efficient regional
models.
They will be not so much of a compensatory, as a stimulatory nature. Jointly
we will lay the foundations for real competition among the regions, a
struggle for investment and skilled personnel.
The new cabinet of ministers will have a deputy prime minister for regional
policy, and the heads of regional state administrations will be able not
just to report but raise issues at the central level. We will hear the voice
of the regions. At the same time, we will take into consideration the
opinion of parliamentarians on the professionalism of some regional
administrations. The rule of separating business from the executive will
also apply to them.
PLEDGES TO WORK TRANSPARENTLY, RESPECT PROPERTY RIGHTS
The actions of the cabinet will be in line with the policy of the president
and will be based on legal provisions defined by the Supreme Council. So
do not expect from the new cabinet sensations and daily news conferences.
There will be hard daily work.
The ministers will comment on their activities within their remit. Reports
after cabinet meetings will be made by an authorised member of the cabinet
or, in some cases, by the prime minister.
Esteemed parliamentarians, the cabinet's work will be competent and
transparent, its actions will be logical and predictable. For this reason,
we will reinstate cabinet committees that will meet to consider and hold
preliminary debates on major issues.
Meetings of cabinet committees will involve MPs and representatives of the
public. The involvement of the public in their job will ensure that cabinet
decisions are transparent to the public.
Therefore, the transparency of the new cabinet will become routine. The
practical importance of this transparency is to increase the level of
responsibility for the decisions that are made. The cabinet will introduce
modern mechanisms for influencing economic processes instead of
controlling them manually. There will be no more experiments on the state.
The first month in the work of the new cabinet will be a period of
rehabilitation in relations between the authorities. Rules of the game that
are clear, responsible and equal for all will be based on strict respect for
property rights. There will be rule of law in the state, and the cabinet
will introduce modern mechanisms for influencing economic processes.
Cases of unlawful privatization will be proved in the courts. Disputes will
be settled in talks and out-of-court settlements. The state will receive a
real price for undervalued companies. To create conditions for efficient
protection of property rights I would like to ask parliament to speed up
debate on the draft law on joint stock companies, while small businesses
should receive a law on simplified taxation procedures.
Reliable protection of property, adherence to the principles of market
competition will help Ukraine regain its attractive investment image. The
cabinet will help to make sure that increasing investments contribute to a
rise in industry's investment component and will help to create the links
needed to set up closed production cycles.
In general, the management of innovation processes will become a priority
direction of the cabinet's work. At the same time, as a stable domestic
consumer market is formed, the cabinet will provide serious assistance to
domestic exporters. We will not separate industries into donors and
recipients. Each will receive the amount of state support needed for its
work, taking into account the stable functioning of the national economy.
FUEL AND ENERGY, AGRICULTURE, INTERNATIONAL COOPERATION
At present, the most difficult situation is in the fuel and energy sector.
Emergency steps to improve the state of affairs will be taken. We will save
on interpreters in talks with our main partners.
We shall pay priority attention to agriculture. The issue of food security
will be tackled by means of supporting domestic producers rather than
increasing food imports. Humanitarian infrastructure in the country will be
at the focus of the cabinet's daily work.
Bearing in mind the protection of Ukraine's interests on foreign markets,
the cabinet will work within the framework of implementing the strategic
European integration course.
We will look for new forms for integrating markets and capital within the
Single Economic Space [involving Russia, Ukraine, Belarus and Kazakhstan].
Everything will be decided by pragmatic calculations and mutual interests.
We will pay special attention to developing cooperation with our closest
neighbours - Russian Federation and Poland. We will continue the
programmes for using Ukraine's geopolitical position to develop transport
corridors to maximize budget revenues.
With a view to the importance of the integration of the Ukrainian economy
with the global economy, I make a special appeal to parliamentarians: let us
forget all wrongs dealing with the adoption of the draft laws needed for WTO
entry. All documents will be finalized.
The protection of national interests should and must become the platform for
a search for common ground. I hope for support in joining the WTO and
introducing new labour regulations on the part of employers and trade
unions.
PLANS TO INCREASE WAGES, DEVELOP SCIENCE AND CULTURE
The cabinet's strategic objective is a significant increase in wages in the
real economy. The experience of Dnipropetrovsk Region will be used in all
regions of Ukraine. High legal wages should become the richest sources of
supplying funds to the pension fund and local budgets.
The new cabinet will support a balanced currency and credit policy with the
National Bank of Ukraine. The currency exchange rate will help protect the
well-being of the public and the interests of producers. I am confident that
the National Bank of Ukraine and the cabinet will do their best to make sure
that budget figures do not change.
There will be more specific projects in the humanitarian area. The new
cabinet will do everything possible to make sure that Ukrainian science
makes a significant step to become the basis for developing high
technologies, while Ukrainian culture comes closer to taking an appropriate
place in the European and global cultural process.
Speeded up adaptation of world standards in the Ukrainian education system
will become priority in the cabinet's humanitarian policy. [Passage omitted:
more on humanitarian policy and health care]
PLEDGES TO SEPARATE BUSINESS FROM POWER
The new cabinet will have to work in a difficult situation, which will
become more complicated as the election campaign gains momentum. But
I am confident that the cabinet which is being formed is up to the task of
ensuring stability and calm in Ukraine. A new cabinet will take over after
the election and we will pass the country on in a normal condition.
I want to thank the president of Ukraine for his confidence in me, and the
parliament speaker and parliamentarians for their constructive stand during
my meetings with them. I want to say one thing: I keep my promises.
Implementing the demands of factions on separating the authorities from
business will begin from the formation of the cabinet of ministers. In the
near future everyone will see that professionalism and good reputation will
become the main factor in forming the new cabinet. I want to thank everyone
for support, criticism and proposals.
It is a great privilege to me to head the Ukrainian cabinet. We will be
persistent in gradually removing everything marginal but supporting
everything efficient and useful. In general, the new Cabinet of Ministers
will tackle issues in a timely, consistent and efficient fashion.
Thank you for your attention. -30-
==============================================================
12. UKRAINIAN STATE SECRETARY SAYS POST OF PRESIDENT'S FIRST
AIDE WILL BE ABOLISHED IN REFORM OF SECRETARIAT
Deputy Ivan Vasyunyk will stay, the rest will go
Interfax-Ukraine news agency, Kiev, in Russian, 20 Sep 05
BBC Monitoring Service, UK, in English, Tue Sep 20, 2005
Kiev, 20 September: Ukrainian State Secretary Oleh Rybachuk has said
that the post of the president's first aide will be abolished as part of the
reform of the presidential secretariat.
"There will be no staff aides, there won't be two centres of influence,"
Rybachuk told journalists today. "I do not want [former President Leonid
Kuchma's first aide] Lyovochkin's system to return," Rybachuk said. "Lawyers
are working to implement these changes in the secretariat," Rybachuk added.
He also said that among his deputies only the first deputy state secretary,
Ivan Vasyunyk, would stay. "The rest will go," Rybachuk said. He added that
Vasyunyk was the only one to submit a letter of resignation at his request.
[Passage omitted: background] -30-
==============================================================
13. MEETING WITH AMERICAN BUSINESS BORYS TARASYUK OUTLINES
PROSPECTS FOR INVESTMENTS IN UKRAINE
Ukrinform, Kyiv, Ukraine, Tue, September 20, 2005.
KYIV - Ukraine's acting Foreign Minister Borys Tarasyuk, on a visit to the
USA, met with members of the Ukrainian-American Business Council
[Ukraine-U.S. Business Council] in Washington, DC.
As the Ukrainian Foreign Ministry's official spokesman Vasyl Filipcuk told
Ukrinform, Borys Tarasyuk briefed the American business representatives
about the modern internal political situation in Ukraine, the process of
economic reforms and Ukraine's investment capability.
He summed up Ukraine's recent moves to eliminate administrative
obstacles for founding and fulfilling business activity and bringing foreign
investments in Ukraine.
As Borys Tarasyuk stressed, a new Government's priority will remain
construction of effective market economy and establishment of favorable
investment climate. The Ukrainian acting Foreign Minister outlined
opportunities for investments in engineering, aerospace sphere, financial
sector, information technologies and agriculture.
He stressed on a series of challenging issues in the bilateral Ukrainian -
American trade - economic relations, which significantly impede the
relations' further development.
He, particularly, meant giving Ukraine the market economy nation status and
the need to soonest possible sign a protocol on accession to markets of
goods and services with the USA within the negotiating process of Ukraine's
joining the World Trade Organization.
UKRINFORM NOTE: The Ukrainian-American Business Council
[Ukraine-U.S. Business Council] is an NGO, which was has been established
for promotion of interests of American companies in Ukraine and is aimed at
ensuring favorable business climate in bipartite trade - investment
relations. [The Action Ukraine Report (AUR) Monitoring Service]
==============================================================
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==============================================================
14. IFC TO FINANCE HOTEL IN KIEV, UKRAINE
To be operated by Hyatt International
International Finance Corporation (IFC)
Kyiv, Ukraine, August 25, 2005
KYIV - The International Finance Corporation, the private sector arm of
the World Bank Group, will provide a senior loan of up to $29.5 million
to CJSC Sofia Kyiv. The financing, which includes a B-loan of up to
$13 million, will be used to complete the construction of a high-quality
hotel in Kiev's city center.
The project's investor is Industrial Union of Donbass, a large Ukrainian
industrial group whose main activity is in the production and trading of
steel. The hotel will be operated by Hyatt International under the Hyatt
Regency brand name.
The project will have a positive effect on the Ukrainian tourism sector by
transferring Hyatt's first-class hotel management methods and environmental
best practice standards. As there is a strong demand for well-managed
business hotels in Kyiv, customers will benefit from the hotel's promotion
of high quality standards.
The mission of IFC (www.ifc.org) is to promote sustainable private sector
investment in developing and transition economies, helping to reduce poverty
and improve people's lives. IFC finances private sector investments in the
emerging markets, mobilizes capital in the international financial markets,
helps clients improve social and environmental sustainability, and provides
technical assistance and advice to governments and businesses.
>From its founding in 1956 through FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 countries. IFC's worldwide committed portfolio as of FY04
was $17.9 billion for its own account and $5.5 billion held for participants
in loan syndications.
Ukraine became a member of IFC in 1993. To date, IFC has invested $335
million in 18 projects. IFC expanded its investment program in Ukraine
significantly in 2003-2004, committing $72 million in the agribusiness,
financial, and general manufacturing sectors. IFC has also been conducting
an extensive advisory program since 1992, which initially focused on the
privatization of small businesses, idle construction sites and land.
Current donor-funded programs offer advice on corporate governance, leasing,
and agribusiness. They also seek to improve the business environment and
promote the growth of small and medium enterprises. - 30 -
==============================================================
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==============================================================
15. FAREWELL TO "SOCIAL BREAD"
Regions no longer authorized to regulate bread prices
By Natalia HUZENKO, The Day
The Day Weekly Digest in English, #28
Kyiv, Ukraine, Tuesday, September 20, 2005
Shortly before its dismissal, the Ukrainian cabinet decided to deny the
regional authorities an opportunity to build up their image in the eyes of
the electorate. Now they can no longer play a favorite trump card before the
elections by lowering bread prices.
A cabinet resolution of August 31 canceled Cabinet Resolution #1150 (July
24, 2003) "On Shortcomings in the Work of Certain Executive Authorities in
Securing Food Supplies and Measures to Stabilize the Basic Foods Market."
This document allowed local authorities to regulate bread and bakery prices.
As of August 31, this has become the sole prerogative of the cabinet. Only
the government has the right to intervene in basic food price-setting
policy, which is vitally important to many Ukrainians.
But one can only wonder if the government will actually deal with this
issue, now that its own capacity rather than the population's well-being is
at stake.
Needless to say, bread suppliers have welcomed the news. Considering the
increase in the cost of many services, fuel, and transport over the past
several months, the price of bread cannot remain the same. Price reins were
maintained only by the firm hand of local authorities, at times at the
expense of losses for local bakeries.
Volodymyr Pavlovsky, president of the All-Ukrainian Bakers' Association
(AUBA), commented on the cabinet resolution: "Until recently local
authorities could place bakers on the verge of bankruptcy with a stroke of
the pen.
With the cancellation of Resolution #1150 we have guarantees that the future
of this strategically important industry will not be in the hands of
bureaucrats abiding by local rather than national interests."
According to AUBA First Vice President Yevhen Leng, in the past, bakeries
largely depended on the biased price-setting approaches of local state
administrations. Local authorities could determine bread prices without
allowing for the industry's status and then revise them without coordinating
with bakers.
It is likely that the AUBA leadership believes that bakeries' effective
business performance should be regarded as a national priority, rather
than the possibility that poor citizens can buy bread. After all, this
practically tallies with the principles of developing a business, says the
president of Ukraine.
Oleksandra Kuzhel, president of the Akademiya Analytical Center, told The
Day that there should be no state regulation of prices on the bread market:
"Neither the cabinet nor the regional authorities have the right to dictate
prices on the bread market. They can create a market and take part in
price-setting only when they give subsidies or soft loans to producers.
The state can dictate prices only if it provided subsidies to the producer,
or cheap or free credit lines. If there is a monopoly conspiracy on the
market, the Antimonopoly Committee, which isn't doing anything at the
moment, should step in. In other cases, people must have the chance to
somehow earn enough for their work and cover their expenses."
This is correct, but will prices not soar as a result of the race for
profitability on the part of various businesses? The AUBA people are still
confident that this will not happen, assuring everyone that bakeries are not
planning any bread price increases after the cancellation of state
regulation on this market. However, experts believe that this will permit a
substantial increase in wages in the industry.
For example, Ukrzernoprom bakeries have increased wages by 30% as of
September 1. AUBA statistics show that a number of other bakeries are
intending to follow suit.
One can only feel glad for people who will be working at such profitable
enterprises and receiving better wages. As for the notion "social bread,"
meaning cheap bread for those who really need it, it will most likely be
forgotten. Local authorities will not be able to afford this kind of
commodity, not even during the race for popularity during pre-election
campaigns.
Oleksandra Kuzhel, nevertheless, proposes a solution to the problem: let the
state provide free sanitary and epidemiological services, the cost of which
has risen eight times in one year, to UAH 32,000-36,000. Then bakers will
not add this expense to the value of bread and it will be considerably
cheaper.
The issue is for the people on the political Olympus to remember the needs
of the average Ukrainian. -30-
==============================================================
16. UNITED KINGDOM OIL COMPANY COMPLAINS OF QUESTIONABLE
ACTIVITIES OF THE PROSECUTOR-GENERAL'S' OFFICE
Asks President Yushchenko to improve the investment climate
Interfax-Ukraine news agency, Kiev, in Russian 1211 gmt 20 Sep 05
BBC Monitoring Service, UK, in English, Tue, Sep 20, 2005
KIEV - Regal Petroleum plc (UK) has appealed to Ukrainian President Viktor
Yushchenko to help improve the investment climate in the country.
"Regal Petroleum Corporation Ltd, which is a subsidiary of Regal Petroleum
plc and works in the Ukrainian hydrocarbon market, has come under pressure
from the Ukrainian authorities," says a letter sent by Regal Petroleum plc
Chief Executive Officer Rex Gaisford to Yushchenko. Interfax-Ukraine has
obtained a copy of the letter.
The document notes that the press service of the Ukrainian
Prosecutor-General's Office circulated a statement on 8 September saying
that Regal Petroleum Corporation Ltd is conducting illegal activities in
Ukraine and has caused the state losses amounting to millions.
"This statement was spread by the media, which had a negative effect on
Regal Petroleum plc's share price and shareholders' profits," the letter
says.
Gaisford also says in the letter that the management of Regal Petroleum
Corporation Ltd's Ukrainian office immediately asked the
Prosecutor-General's Office for an explanation but has still not received a
reply.
"What is more, this information is still on the Ukrainian
Prosecutor-General's Office's official website," the letter says.
Gaisford also draws attention to the fact that in recent months the
Prosecutor-General's Office has not carried out any investigations into
Regal Petroleum Corporation Ltd's operations.
Quite the opposite, on 25 May the company's Ukrainian office received
notification from the Prosecutor-General's Office that a case into illegal
extraction of natural resources launched against Regal Petroleum
Corporation Ltd on the initiative of Chernihivnaftohazheolohiya had
been closed.
"In these conditions the statement by the press service of the
Prosecutor-General's Office can be seen simply as an attempt to pressure
Regal Petroleum plc and the Appeal Court, which is currently hearing a case
on the division of joint property belonging to Regal Petroleum Corporation
Ltd and Chernihivnaftohazheolohiya," Gaisford says.
Gaisford also says that Regal Petroleum plc is currently working in Ukraine,
Greece, Romania and Egypt. "It is our company's policy to completely adhere
to the law in countries where we work. Unfortunately, we only see this kind
of attitude to foreign investors in Ukraine," he says in the letter.
"Despite these facts, Regal Petroleum Corporation Ltd has serious intentions
to continue operating in Ukraine in the future and increase the volume of
its investment in the Ukrainian economy. However, our company and other
foreign investors would like an appropriate and controlled investment
climate to exist in Ukraine for this," he concludes. [Passage omitted:
history of Regal Petroleum's work in Ukraine] -30-
==============================================================
17. COMPAGNIE DE SAINT-GOBAIN BUYS MAJORITY STAKES IN
UKRAINE, RUSSIAN GLASS PACKAGING COMPANIES
Ukraine-based Skio Zorya
AFX Europe (Focus), London, UK, Tuesday, Sep 20, 2005
LONDON - Compagnie de Saint-Gobain said its packaging division has
recently acquired majority stakes in Ukraine-based Sklo Zorya and Russian
companies Sitall and Kavminsteklo for an undisclosed sum. Saint Gobain
said the glass packaging companies had combined sales of 69 mln eur in
2004.
It said it has acquired the companies in collaboration with the European
Bank for Reconstruction and Development (EBRD) under an established
partnership and the EBRD will have a minority stake in each company.
- 30 - (newsdesk@afxnews.com)
==============================================================
18. UNITED NATIONS: URGED TO RECOGNIZE 1932-1933 HOLODOMOR AS
AN ACT OF GENOCIDE AGAINST THE UKRAINIAN PEOPLE AND
COMMEMORATE 20TH ANNIVERSARY OF CHORNOBYL TRAGEDY IN 2006
By Serhiy SOLODKY, The Day
The Day Weekly Digest in English, #28
Kyiv, Ukraine, Tuesday, 20 September 2005
President Viktor Yushchenko was hardly in a festive mood when he arrived in
New York for the UN's 60th anniversary celebrations. The domestic political
situation on the eve of his visit was far less favorable than just a few
months before. As recently as in April, Ukrainian diplomacy was trumpeting
the president's triumphal visit to the US.
Now that the new leadership is beset with a host of problems (from
reciprocal accusations of malfeasance to the economic slump), what has
remained of the previous delight is increased scrutiny, and not necessarily
positive.
Yet, it would be wrong to say that everything has gone awry. In any case,
Ukraine attached considerable importance to the president's appearance at
the UN General Assembly session, and by all accounts his speech met the
expectations of numerous experts.
Apart from making a perfunctory declaration concerning Kyiv's intention to
defend democracy all over the world, President Yushchenko emphasized two
pivotal points.
FIRST, he urged the international community to recognize the 1932-1933
Holodomor as an act of genocide against the Ukrainian people.
SECOND, while speaking to UN Secretary General Kofi Annan, Yushchenko
raised the question of holding a special UN-sponsored conference next year
to commemorate the 20th anniversary of the Chornobyl tragedy.
There will be few serious problems connected with the Chornobyl question.
Still, some obstacles may crop up in the wake of a recent report by the
members of the Chernobyl Forum, high-profile representatives of the UN, WHO,
and IAEA, who played down the magnitude of the 1986 disaster. Such
developments will only harm the UN.
Recognizing the Holodomor as genocide has been mooted at the UN before. In
the fall of 2003 Ukrainian embassies throughout the world organized mourning
ceremonies timed to the 70th anniversary of the tragedy. Ukrainian diplomats
did their best to call for a UN vote on a special motion to recognize the
Holodomor as genocide.
Their efforts resulted only in a joint declaration to which several dozen
countries affixed their signatures. Predictably, this document did not
contain the word "genocide." Ukrainian diplomats said this was the result
of pressure from the American, British, and Russian representatives.
Those countries may have changed their attitude (except, of course, the
USSR's legal successor Russia, which is afraid of being held responsible
for the Soviet regime's policies), but it will still take a Herculean effort
by our diplomats to make their foreign counterparts aware of the importance
and sensitivity of this issue for Ukraine.
Incidentally, Ukraine's Permanent Representative at the UN Valeriy Kuchynsky
has said that the question of recognizing the Holodomor as an act of
genocide may be raised at the UN in 2007 (the tragedy's 75th anniversary).
During his visit to the UN, the president of Ukraine held four bilateral
meetings with foreign leaders - the prime minister of Belgium and the
presidents of Brazil, Iran, and Nigeria. President Yushchenko also conferred
with US Secretary of State Condoleezza Rice (on photo).
The presidential press service reports that they discussed "the current
political situation in Ukraine." The president noted in particular that his
decision to fire the cabinet and the National Security and Defense Council
secretary "was aimed at stabilizing the situation in the country and
pressing forward with reforms." -30-
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19. YULIYA TYMOSHENKO'S PARTY DECLARES INDEPENDENT COURSE
INTERVIEW: with Oleh Bilorus, Leader
Yuliya Tymoshenko Bloc's parliamentary faction
Den, Kiev, Ukraine, in Ukrainian 17 Sep 05; p 4
BBC Monitoring Service, UK, in English, Tue, Sep 20, 2005
The party of Yuliya Tymoshenko, who has been forced out of the government,
plans to win the 2006 parliamentary elections, the leader of the Yuliya
Tymoshenko Bloc's parliamentary faction Oleh Bilorus has said. Interviewed
by a major daily, Bilorus said the bloc has very strong positions in
parliament.
He defended former Prime Minister Yuliya Tymoshenko's social budget, saying
the poor must be taken case of in the first place. While the bloc is now
considering support of political reform which would cut the president's
power, Bilorus warned a parliament with power can also be authoritarian.
The following is the text of the interview with Bilorus by Volodymyr Sonyuk,
entitled "Oleh Bilorus: We are moving to our own position", published in the
Ukrainian newspaper Den on 17 September; subheadings have been inserted
editorially:
What is the essence of the strategy and tactics of the Bloc of Yuliya
Tymoshenko [BYT]? This is what the interview with BYT [parliamentary]
faction leader Oleh Bilorus is about.
[Sonyuk] Very recently your political force was unequivocally associated
with the authorities. And BYT measured up to this by all formal and informal
signs. Where are you now?
[Bilorus] In parliament our faction is in power. The legislative is the
highest branch of power by status, the one which has the function of control
over the other branches. We really left, or more exactly, were pushed out of
the government. But having left the executive, we remain in power in
Ukraine.
[Sonyuk] By that logic, you were in power under [former President of Ukraine
Leonid] Kuchma.
[Bilorus] Yes, we were in power during the times of Kuchma, too. But then we
were in the parliamentary opposition - strong and sure. Today we are not
going into the opposition, but into a condition of our own position, which
will be dictated by the ideals and values of the Orange Revolution, and also
by the political programme of the Fatherland party.
ONE-SIDED CONFLICT
[Sonyuk] How should one understand the current position of BYT to the
president?
[Bilorus] It is characterized by a conflict, which has a one-sided nature.
We did not want this conflict, did not provoke it and did not bring it on.
Yuliya Tymoshenko consistently stated that she was with President Viktor
Yushchenko despite all the hardships.
Although the president formed the cabinet and not Tymoshenko, she did
everything she could to cooperate.
But apparently, the position of the other side was opposite from the very
beginning. A few gentlemen were too afraid of competition from Yuliya
Volodymyrivna Tymoshenko's side and these fears led to their undertaking to
derail the activity of the government.
At first they gave six months for the government to work and then decided to
dismiss it with one goal - to push Tymoshenko out of the executive branch.
But I do not think that the current position is fated to last. The sides
split Japanese-style, there is one bed, but the dreams are different. During
the election campaign we will approach the Ukrainian people, and let them
evaluate our activity - political, economic, social and humanitarian. Let
the people, and not the president's entourage decide the question of the
further place and role of our political force.
If BYT, as political scientists tell us, gets a "big ticket" from voters in
2006, we and the president's party will unite in parliament and nominate a
prime minister. Who, without a doubt, will be Yuliya Volodymyrivna
Tymoshenko.
[Sonyuk] Judging from everything we've seen, you refused to sign the
memorandum on stability, is there no trust in the president's side?
[Bilorus] It is broken. Only the president can re-establish trust, by
negotiating with his closest comrade - Yuliya Tymoshenko.
[Sonyuk] Yuliya Tymoshenko stated that your bloc and Yushchenko's party
would go into the elections on parallel roads. What does that mean? That you
will have the same slogans and voters, but different people in your party
lists?
[Bilorus] We will not only have different people. Both their union and ours
will separately approach Ukrainian citizens, offering them our programmes,
ideologies and strategies. President Viktor Yushchenko cannot head the list,
because as head of state, he has neither the constitutional nor the moral
right.
But Yuliya Tymoshenko can head her own list, and will have direct contact
with citizens. There is a big difference in this, but that is the
organizational side. The principal difference is in the approaches to social
issues.
Today the president's entourage has begun to accuse Yuliya Tymoshenko - who
has closed a black hole of 30bn hryvnyas in the budget, increased wages,
pensions and stipends - of "hitting the budget". Well, that's their
position.
We see it this way: social development is the highest form of developing
society. If we have hungry people and 80 per cent of the population is
living below the poverty line, then these problems have to be solved first.
SOCIAL DEVELOPMENT IS KEY
[Sonyuk] But growth in wages and pensions that is too fast puts a heavy
weight on business, which gets suffocated by taxes. An disproportionately
high social side in the budget is what gave reason to speak of populism in
the government's actions.
[Bilorus] Without wages there is no production. Business only blossoms from
growth in wages, because that increases the purchasing power of the
population.
That there was no populism in raising wages and pensions, as carried out by
the Tymoshenko government, is confirmed by the fact that in one day the
cabinet headed by acting Prime Minister Yuriy Yekhanurov adopted the budget
that was approved earlier. Here is one fact from the achievements of the
Tymoshenko government - for the first time since independence, pensions in
Ukraine are higher than in Russia.
If we do not lower the pace in the future, and tomorrow we have wages higher
than in Russia, that will aid the smoothing of balanced, brotherly relations
between our countries. Because the magnet will change its strength. Labour
will not stream to western Siberia, but will remain here to work for
Ukraine.
[Sonyuk] Whom does BYT see as a potential partner in the elections?
[Bilorus] The Fatherland party sees foremost three bloc-parties as its
partners. Besides, we will closely work with the Reform and Order Party, and
cooperation is forming with United Ukraine. There will also be those who are
now represented in parliament. By the time of the elections, BYT will either
widen, or will form a coalition of democratic forces.
[Sonyuk] In principle is it possible for there to be a bloc with the Party
of Regions or with the United Social Democratic Party of Ukraine?
[Bilorus] I am not a big optimist on that point. It seems to me that is
still an issue for ideologues and theoreticians. It would be rushing it to
say that we are already getting into any kind of cooperation, let alone a
bloc.
[Sonyuk] In the last elections, both parliamentary and presidential, your
voters were mostly from western Ukraine. And now?
[Bilorus] Now they will be from all over Ukraine. Viktor Yushchenko and his
political partners cannot go east, north or south. We, with the strength of
our ideology, can work everywhere and hope that in any case 30 per cent of
voters will give the advantage to the Bloc of Yuliya Tymoshenko.
BEWARE OF AUTHORITARIANISM
[Sonyuk] From the very beginning, Yuliya Tymoshenko was against carrying out
political reform. And right after being dismissed she said that she
supported it. What provoked that change in position?
[Bilorus] Today one has to choose between increasing the role of parliament
and authoritarianism. And we see threats in that. We are not closing our
eyes to the fact that instead of authoritarianism in the hands of one
person, we could see a situation arise of authoritarianism by parliament.
When a group of leaders of factions, taking supreme power to themselves,
begin to dictate who will be prime minister and who speaker and who
president. And we recognize that that it is possible we will have to seek
new mechanisms, new balances and new checks and new forms of control - by
parties, society and the public.
In clauses at the end of the bill No 4180 [on political reform], which was
passed last year on 8 December, it reads that the document takes effect on 1
September 2005 if a law on local self-administration is passed by that time,
and if not, then when such a law is passed, but no later than 1 January
2006.
Just a few days ago, the Constitutional Court passed a verdict ruling that
bill No 3207-1 on local self-administration meets the constitution of
Ukraine. That means it can be voted on next week. If that happens, then the
situation in the state will change at its core.
Political reform including both laws No 4180 and No 3207-1 will immediately
take effect. And immediately the authority of the president will change, and
so will that of parliament and the government, that is, they will become
bigger. And then formation of the Yekhanurov government will have to stop.
Parliament can propose another candidate for prime minister and present it
to the president.
And within 15 days the president will have to present that nomination to
parliament. If he does not do that, then the parliamentary majority will
present the nominee itself.
[Sonyuk] Who do you think that could be?
[Bilorus] It will surely be the nomination of a leading political leader.
[Sonyuk] Five years has passed since the disappearance of [journalist]
Heorhiy Gongadze. Hope the case would be solved soon has not been
justified. Why do you think this happened?
[Bilorus] Because some very influential forces know how that could end for
them. And they are doing everything they can to put the brakes on the
investigation.
[Sonyuk] Forces in power?
[Bilorus] Forces who were in power are trying to unite with forces which are
now in power. If there was political will on the part of the new
authorities, that issue is sufficiently investigated to review it in a just
court. Should the Ukrainian courts avoid reviewing this case, then it can be
heard at the request of the Gongadze family in an international court. But
that will be one huge shame for Ukraine...[ellipsis as published]
==============================================================
20. FORMER UKRAINIAN PRIME MINISTER IN RUSSIAN TV INTERVIEW
INTERVIEW: with Yuliya Tymoshenko
NTV Mir, Moscow, in Russian 1800 gmt 18 Sep 05
BBC Monitoring Service, UK, in English, Mon, Sep 19, 2005
Former Ukrainian prime minister Yuliya Tymoshenko has said she was ousted
by old political clans uniting with business interests, and to distract
attention from corruption scandals. Tymoshenko said that she was hurt by
President Yushchenko's comments about her but did not want to get involved
in a slanging match.
She said she advocated honest and pragmatic relations with Russia and
dismissed allegations of corruption against her.
The following are excerpts from the weekly news analysis programme "Sunday
evening with Vladimir Solovyev" broadcast on Russian external TV service NTV
Mir on 18 September; subheadings have been added editorially:
[Presenter] What has happened? Why has the Joan of Arc of the Orange
Revolution found herself not needed by her king? We shall find this out from
the horse's mouth - we have a live linkup with [former Ukrainian Prime
Minister] Yuliya Volodymyrivna Tymoshenko in Kiev. Good evening, Yuliya
Volodymyrivna.
[Tymoshenko] Good evening.
[Presenter] Could you please tell us what happened. Why has the powerful,
beautiful and democratic tandem [of Yuliya Tymoshenko and Ukrainian
President Viktor Yushchenko] broken up so tragically?
Tymoshenko gives reasons for her resignation
[Tymoshenko] In actual fact, it is a rather banal story. The thing is that
like all Ukrainian people, I very honestly believed that the new authorities
were going in real earnest to separate business from politics and oligarchs
from ruling the country. By taking it seriously, naturally I based my policy
on that understanding.
Unfortunately things turned out to be more complicated than I expected. And
in the few months that followed after I became prime minister old clans very
quickly and very successfully united with new businessmen-politicians and
together all these strong and rich men tried to erase me from the country's
political arena. This is probably the main reason.
The second reason is no less interesting - it is the timing when the prime
minister was removed. It was not the government, it was the prime minister
who was removed. That happened at a time when one of the biggest corruption
scandals involving the presidential entourage broke out.
They needed something to deflect attention from the big scandal which spread
to the whole world, so they decided to do this by providing a new story -
the government's resignation. "I was honestly doing my job"
[Presenter] However for the time being it is you who is facing corruption
charges and it is even being said that you well nigh will be soon arrested.
They are saying you tried to write off the debts of companies that for some
reason are close to you. And as usually happens, everyone is accusing
everyone of everything by shouting they themselves were naive and pure.
[Tymoshenko] A few weeks before the government's resignation, on Ukraine's
Independence Day, the president praised the government for the fact that we
indeed have changed a lot of things in the country. On the other hand, on
the day of my resignation I was awarded the title the person of the year of
Central and Eastern Europe for economic achievements.
I can firmly say that in our country people are very politicized and they
know very well who is who among politicians. Therefore I am not going to
waste even a minute of my time trying to convince you and your wonderful
audience that I was honestly doing my job.
Most people in my country know that. I feel totally calm inside and
determined to take part in the parliamentary elections.
RUSSIAN TYCOONS NOT INVOLVED
[Presenter] I think not just parliamentary but presidential elections as
well - mind you, this is for you to decide. Yuliya Volodymyrivna, could you
please say what role Russian oligarchs played in your resignation?
[Tymoshenko] To be honest with you, I don't think they played any role. In
actual fact, it was our own Ukrainian [oligarchs] who were trying to remove
me. But most importantly one should realize that they did not succeed in
removing me. They simply gave me and my team additional strength. They
gave additional understanding to our country as to who is who in Ukrainian
politics. Therefore I do not think they succeeded.
[Presenter] Yuliya Volodymyrivna, at the initial stage, as it has now
emerged, a certain Boris Abramovich Berezovskiy [Russian fugitive tycoon]
played quite an important role. Do you know anything about the role played
by Boris Abramovich and about the agreements between him and Mr
Yushchenko's team? It is interesting that they say nothing about you.
[Tymoshenko] In actual fact after all the TV links which Berezovskiy had
with Ukraine even every child in Ukraine must know the details by now. I
would not want to comment though - Boris Berezovskiy is a prominent British
politician and therefore only people who are close to him can make comments
about him. In any case Ukraine is following closely the developments and
trying to give its own assessment.
HURT BY PRESIDENT'S REMARKS BUT DOES NOT
WANT TO GET INVOLVED IN SMEAR WAR
[Presenter] Yuliya Volodymyrivna, your remarks about Mr Yushchenko have
been very mild. Why do you make a distinction between Yushchenko and his
entourage?
[Tymoshenko] It must be because I really want to believe that. I very much
want to believe and to see that the entourage of Viktor Andriyovych
Yushchenko, which has so discredited itself, should not cast a shadow on the
president of my country.
I don't want to sound disrespectful of the president of my country. I don't
think I should judge him. I think that at present Ukrainian society is
capable of assessing the actions of every politician.
I don't want myself or my team to be involved in a smear war. I think it is
a dirty and unpromising business. I was indeed very hurt when after my
resignation I heard the president of my country making some vague
accusations against me. I think one should not allow oneself to be so petty
as regards relations between the two politicians who used to be partners.
[Presenter] Has Mr Yushchenko telephoned you after your resignation? Has he
had any personal talks with you?
[Tymoshenko] No, he has not. I have only heard interviews the president has
given to the world in which every time he speaks worse and worse about the
former prime minister of Ukraine.
Today I opened the internet and read there that the president said in
America that in the wake of Tymoshenko's resignation, the investment climate
in Ukraine will significantly improve.
To be honest with you, I would be happy to sacrifice myself in order to
improve the investment climate, however it seems to me that men in politics
should also be gentlemen in politics. But since we have big problems in this
respect I shall try to behave in a very restrained way and be careful in my
assessments.
WANTS HONEST RELATIONS WITH RUSSIA
[Presenter] Yuliya Volodymyrivna, we spoke to Russian President Vladimir
Vladimirovich Putin and asked him why many people had the impression that
Russia did not support the leaders of the Orange Revolution. Vladimir
Vladimirovich replied: we were ready to have a constructive dialogue but
nobody wanted to talk to us.
Don't you think that it was a mistake and that now when your chances of
return are very and very high, your attitude to Russia and Russia's role as
regards both Ukraine's international and domestic policy may change?
[Tymoshenko] Above all, as far as I can remember myself my attitude to
Russia has always been respectful and warm. I think that simply there was a
period in my political life when I was in very radical opposition to the
previous president of our country and simply, on the initiative of the
former leadership, I was included in the enemies of Russia.
That was done deliberately. I categorically cannot agree with this state of
affairs. As a politician and as the leader of one of the major political
forces in Ukraine I would want very much to restore warm and friendly
relations.
I want this policy to be honest without toadying to either side, without any
empty gestures as was the case in the past but with a significant
intellectual component present in these relations. I believe that our
countries will succeed in that.
[Presenter, addressing the audience] Does anyone have any questions?
[Passage omitted]
[Unidentified man in the audience] Yuliya Volodymyrivna, could you please
say what in reality are you proposing for uniting Russia and Ukraine?
[Presenter, interrupting] Nobody was talking about unification, don't
frighten me.
[Man in the audience] For improving relations between Russia and Ukraine.
[Tymoshenko] First of all one should move to very consistent talks at
government level because the governments have all the levers to improve
these relations. I believe that we can build a free trade space.
I believe we can have a serious exchange of major economic programmes -
for example, we need to build wonderful relations in aircraft building, in
space and engineering.
Our systems are so closely integrated that we do suffer as a result of them
currently being artificially broken up. I think we need to preserve an
absolutely free movement of all of us across our border so that, God forbid,
there are no visas and that families and friends are not split up on the
opposite sides of the border.
We need to do everything to prevent getting further and further away from
each other.
[Presenter] Does that mean that Ukraine will not join NATO and EU, otherwise
visas are inevitable?
[Tymoshenko] You know, in principle the president of our country came to
power by declaring his intention for Ukraine to join the European Union, and
you know how difficult the situation is now in this respect.
You know that the situation is far from being simple in Europe, and as it
turned out not all the doors are open for Ukraine.
Therefore we need to have a very harmonious policy with Russia and the
European Union so that under no circumstances we destroy what we have got.
[Presenter] Thank you. More questions?
[Unidentified man in the audience] Yuliya Volodymyrivna, good evening. You
could not come to Russia as prime minister. Perhaps you will come as
president?
[Tymoshenko] I know for sure that in the very near future I would come to
Russia because I want this very much. I believe this will happen. As for in
what capacity, this probably would not be that important but I would like it
to be a status that will allow us to be good friends again.
Dismisses accusations against her
[Presenter] Judging by Mr Yushchenko's statement, I am afraid they are
planning a status of a suspect and an accused for you. According to Russian
prosecutors, the cases [against you] have not been closed yet.
[Tymoshenko] I can only say that male politicians for eight years have been
trying to create an image of a unique villain and for eight years they have
not succeeded in that. I know that no persecution or accusations will change
the course I outlined for myself in politics.
I want to show to my people that politics can be honest. This is my goal in
life. I think nobody will stop me from achieving it.
[Presenter] Yuliya Volodymyrivna, thank you very much for the interview. I
am sure you will still achieve many heights in Ukrainian politics and then I
will feel entitled to remind you that you promised that relations between
our countries would be wonderful.
[Tymoshenko] Yes, I will strive for that. I would like to thank all the
people in your studio because I can hear their warm applause. I would like
simply to say that in my person they will have Ukraine as a very reliable
partner because I sincerely want that.
As for my return, when I resigned I wrote a message to [acting Prime
Minister Yuriy] Yekhanurov wishing him every success as future prime
minister. But today I read a joke.
Everyone knew that I had a camp-bed in the room next to my office and
that I spent many a night there, so the joke said: don't remove the
camp-bed because in a few months' time I shall be back.
[Presenter] Thank you, Yuliya Volodymyrivna. -30-
[The Action Ukraine Report (AUR) Monitoring Service]
==============================================================
21. CONCENTRATION CAMP SURVIVOR: PURSUIT OF JUSTICE
Simon Wiesenthal spoke for all 11m victims of Hitler's murder machine.
He was born in Buczacz, Galicia, now part of western Ukraine
By Christian Tyler, Financial Times
London, UK, Wed, September 21 2005
Simon Wiesenthal, who has died at the age of 96, survived Hitler's
concentration camps and dedicated the rest of his life to bringing the
perpetrators of genocide to justice. He was a pioneer in the field of human
rights whose campaigning led indirectly to the creation of today's
international war crimes tribunals.
Liberated from Mauthausen at the age of 36, Mr Wiesenthal found his fellow
Jews too shocked after the slaughter of the Holocaust to seek justice, and
the victorious Allies too distracted by the cold war to pursue the
murderers.
He began collecting the information that would eventually bring hundreds of
them - including the infamous Adolf Eichmann - to trial.
The description "Nazi hunter" usually applied to Mr Wiesenthal was
misleading. His own sleuthing days did not last long, and he was never
motivated by a thirst for revenge.
Although disappointed by the light prison sentences handed down in German
and Austrian courts after the war, he opposed capital punishment. He
believed suspects should always be tried but accepted old men might be too
ill to go to jail.
Mr Wiesenthal preferred to work alone. His library of secret files was
jealously guarded, for their owner refused to name suspects before the
evidence was in.
The "documentation centre" on the Danube Canal in Vienna stood on the site
of the former Metropole Hotel, used as the Gestapo's wartime headquarters.
Nearby is a memorial to the victims with the words that became his mantra:
"Niemals Vergessen" (never forget).
Single-minded, emotional and flamboyant, Mr Wiesenthal made enemies as
easily as friends. Leaders of the World Jewish Congress denounced him as
an amateur and poseur, and were infuriated by his refusal to endorse their
claim that Kurt Waldheim, United Nations secretary-general (1972-82) and
president of Austria (1986-92), had been a Nazi.
Relations with the Wiesenthal Center in Los Angeles, a separate organisation
to which he had lent his name, were not always easy.
Among his admirers were the postwar German leaders Helmut Kohl and
Richard von Weizsäcker. Many others regarded him as a hero and he was
widely honoured.
There was charm behind the obstinacy and wisdom beneath the vanity. Mr
Wiesenthal spoke for all 11m victims of Hitler's murder machine, not just
the 6m Jews, and refused to accept the notion of collective guilt.
He understood that evil on such a scale was only made possible by the
abdication of thousands of individual consciences.
He was born in Buczacz, Galicia, on December 31 1908, then part of the
Austro-Hungarian empire, later restored to Poland and ending up in Ukraine.
He trained as an architect, which helped to save his life in the camps, and
recorded his experience in drawings. - 30 -
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