"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 571
Mr. E. Morgan Williams, Publisher and Editor
Washington, D.C., Kyiv, Ukraine, WEDNESDAY, September 28, 2005
--------INDEX OF ARTICLES--------
"Major International News Headlines and Articles"
1. UKRAINE: NEW CABINET OF MINISTERS BEGINS TO TAKE SHAPE
The Action Ukraine Report (AUR)
Compiled from twenty-five news stories published
by the Ukrainian News Service, Kyiv, Ukraine
Kyiv, Ukraine, Wednesday, September 28, 2005
2. CENTRE-RIGHT DOMINATES UKRAINE'S NEW CABINET
By Tom Warner in Kiev, Financial Times
London, UK, Wednesday, September 28 2005
3. UKRAINE'S QUEST FOR MATURE NATION STATEHOOD
CONFERENCE OPENS IN WASHINGTON, D.C.
Ukrainian National Information Service (UNIS)
The Action Ukraine Report (AUR)
Washington, D.C., Wednesday, September 28, 2005
4. U.S. OPTIMISTIC UKRAINE ECONOMY, REFORMS "BACK ON TRACK"
State Dept Official calls on Ukraine to fight corruption, continue reforms
By Tim Receveur, Washington File Staff Writer
USINFO, U.S. Department of State
Washington, D.C., Wednesday, September 28, 2005
5. BANKING SECTOR UPBEAT ON CHANGES IN UKRAINE'S
POLITICAL LANDSCAPE
By Alla Vetrovcova, FirsTnews
Kyiv, Ukraine, Tuesday, September 27, 2005
6. UKRAINIAN BANKS RAISE DEPOSIT INTEREST RATES TO
INCREASE THEIR LIQUIDITY
IntelliNews - Ukraine This Week
Kyiv, Ukraine, Monday, September 26, 2005
7. SOCIETE GENERALE PLANS TO ACQUIRE BANKS IN
UKRAINE, MONTENEGRO
Agence France Presse, Paris, France, Monday, 26 September 2005
8. MACROECONOMICS: PRESCRIPTION FOR WEAKNESS
COMMENTARY & ANALYSIS: Yuriy SKOLOTIANY
Zerkalo Nedeli, Mirror-Weekly, No. 37 (565)
International Social Political Weekly
Kyiv, Ukraine, Saturday, 24-30 September 2005 year
9. AMNESTY INTERNATIONAL SAYS UKRAINIAN AUTHORITIES
HAVE FAILED TO ACT AGAINST TORTURE BY POLICE
Aleksandar Vasovic, AP Worldstream, Kiev, Ukraine, Tue, Sep 27, 2005
10. QUESTIONS OVER YUSHCHENKO'S PACT WITH OLD FOE
Ukraine: Not all has gone to plan since last year's Orange
Revolution, writes Chris Stephen in Moscow.
Chris Stephen in Moscow
Irish Times, Ireland, Monday, Sep 26, 2005
11. DEMOCRACY IN UKRAINE:
THE BITTER TASTE OF THE ORANGE REVOLUTION
Amid scandal and political paralysis, the promise of a new era for Ukraine
under Viktor Yushchenko has already begun to look hollow. Now Amnesty
International has joined the chorus of critics with allegations of police
torture. Andrew Osborn reports
COMMENTARY AND ANALYSIS: Andrew Osborn
The Independent Online Edition
London, UK, Wednesday, 28 September 2005
12. OBSERVER: QUEEN'S BLESSING
Award for Viktor Yushchenko, Ukraine's revolutionary leader
Financial Times, London, UK, Wed, September 28 2005
13. "NOTHING'S OK"
Signing the memorandum, the president may have earnestly wished
to put an end to the crisis. But the price he paid was too high:
the deal gave rise to a more serious crisis, a crisis of trust.
COMMENTARY: Serhii Rakhmanin
Zerkalo Nedeli, Mirror-Weekly, No. 37 (565)
International Social Political Weekly
Kyiv, Ukraine, Saturday, 24-30 September 2005 year
14. RUSSIA CANCELS ARREST WARRANT FOR FORMER UKRAINIAN
PRIME MINISTER YULIA TYMOSHENKO
Associated Press (AP), Moscow, Russia, Monday, September 26, 2005
15. YUSHCHENKO INITIATES CREATION OF BABYN YAR HISTORICAL
AND CULTURAL RESEARCH IN KYIV
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 26, 2005
16. "THERE WILL BE NO MORE REVOLUTION"
Field Commander of "Orange Revolution" in Moscow
INTERVIEW: with Yuri Lutsenko by Vladimir Soloviev
Kommersant, Russia's Daily Online
Moscow, Russia, Monday, September 26, 2005
=============================================================
1. UKRAINE: NEW CABINET OF MINISTERS BEGINS TO TAKE SHAPE
The Action Ukraine Report (AUR)
Compiled from twenty-five news stories published
by the Ukrainian News Service, Kyiv, Ukraine
Kyiv, Ukraine, Wednesday, September 28, 2005
The following has been reported by the Ukrainian News Service:
[1] SECRETARY OF NATIONAL SECURITY & DEFENSE COUNCIL:
President Viktor Yuschenko has appointed Anatolii Kinakh as Secretary
of the National Security and Defense Council.
Kinakh, 51, was First Deputy Prime Minister in Yulia Tymoshenko's
government since February. From September 8 to September 27, he
worked as Acting First Deputy Premier.
Yuschenko reduced the authorities of the National Security and Defense
Council's Secretary. Before early September, the post was occupied
by Petro Poroshenko
[2[ FIRST DEPUTY PRIME MINISTER: As Ukrainian News reported, on
September 27, Yuschenko appointed Stanislav Stashevsyi First Deputy
Premier, replacing Kinakh at the post.
Stashevskyy was elected to parliament in March 2002. He is a member
of the parliament budget committee. Before being elected an MP, he
was the deputy head of Kiev city state administration and a member
of the Unity [Yednist] party [led by Kiev mayor Oleksandr Omelchenko].
Stashevskyy was born in 1943. He graduated from Kiev Polytechnical
Institute in 1972, majoring in electric engineering. Stashevskyy has a
degree in technical science.
Stashevskyy was a deputy director and chief engineer of
Kievelectromontazh company from 1979 to 1987. In 1987, he became
a deputy head of the main directorate for housing and civil construction
of Kiev executive committee. In 1992, Stashevskyy was appointed first
vice-president of the state municipal construction corporation
Kievmiskbud.
In 1996, he became the first vice-president of the Hlavkievmiskbud holding.
From October 1996 to March 2001, Stashevskyy was the first deputy head
of Kiev city state administration. In March-November 2001, he was fuel and
energy minister.
Stashevskyy is a member of the Construction Academy and a distinguished
builder of Ukraine.
[3 DEPUTY PRIME MINISTER: President Viktor Yuschenko has appointed
Viacheslav Kyrylenko as deputy prime minister.
37-year old Kyrylenko served as Minister of Labor and Social Policy in
the Cabinet led by former Prime Minister Yulia Tymoshenko.
[4] DEPUTY PRIME MINISTER: President Viktor Yuschenko has appointed
Roman Bezsmertnyi as deputy prime minister.
39-year old Bezsmertnyi hold the post of the deputy prime minister for
territorial administrative reform in the Cabinet led by former Prime
Minister Yulia Tymoshenko.
[5] MINISTER FOR FOREIGN AFFAIRS: President Viktor Yuschenko
has appointed Borys Tarasiuk as Minister for Foreign Affairs. Tarasiuk,
56, served in the previous Cabinet led by former Prime Minister Yulia
Tymoshenko
[6] MINISTER OF ECONOMY: President Viktor Yuschenko has
appointed Arsenii Yatseniuk as Minister of Economy
.
By another decree, Yuschenko dismissed Serhii Teriokhin from the
post of Economy Minister.
As Ukrainian News reported, since March Yatseniuk was the first deputy
governor of the Odesa region. Yatseniuk occupied the post of the first
deputy chairman of the National Bank of Ukraine from January 2003 to
February 2005, and resigned from the post due to disagreements with
NBU chairman Volodymyr Stelmakh.
[7] MINISTER OF FUEL & ENERGY:Today Ivan Plachkov was re-appointed
as fuel and energy minister. The 48-year old Plachkov served the post of
the fuel and energy minister in the Cabinet of Ministers led by Yulia
Tymoshenko.
[8] MINISTER OF COAL INDUSTRY: President Viktor Yuschenko has
appointed Viktor Topolov as Minister of Coal Industry. The 59-year old
Topolov served as Minister of Labor and Social Policy in the Cabinet
led by former Prime Minister Yulia Tymoshenko.
.
Yuschenko appointed Topolov as Minister of Coal Industry on August 18,
and on July 25 reorganized Fuel and Energy Ministry and created Ministry
of Coal Industry.
[9]] MINISTER OF EMERGENCY SITUATIONS: President Viktor
Yuschenko has appointed Viktor Baloha as Minister for Emergency
Situations and Protection of Population from Chornobyl Accident
Consequences.
The 42-year old Baloha has chaired the Zakarpattia regional state
administration since February 4.
[10] MINISTER OF AGRARIAN POLICY: President Viktor Yuschenko has
appointed Oleksandr Baranivskyi as Minister of Agrarian Policy. The
50-year old Baranivskyi served as agrarian minister in the previous
Cabinet led by former Prime Minister Yulia Tymoshenko. He is a
member of the Socialist Party.
[11] MINISTER OF AFFAIRS OF FAMILY, YOUTH & SPORT: President
Viktor Yuschenko has appointed Yurii Pavlenko as Minister for Affairs
of Family, Youth and Sport. The 30-year old Pavlenko served in the
previous Cabinet led by former Prime Minister Yulia Tymoshenko.
[12] MINISTER OF ENVIRONMENTAL PROTECTION: President Viktor
Yuschenko has appointed Pavlo Ihnatenko as Minister of Environmental
Protection. Ihnatenko served in the Cabinet led by former Prime Minister
Yulia Tymoshenko.
[13] MINISTER OF EDUCATION: President Viktor Yuschenko has
appointed Stanislav Nikolaenko as Minister of Education and Science.
Nikolaenko, 49, served in the previous Cabinet led by former Prime
Minister Yulia Tymoshenko
[14] MINISTER OF INDUSTRIAL POLICY: President Viktor Yuschenko has
appointed Volodymyr Shandra as Industrial Policy Minister. On
February 4, Yuschenko appointed Shandra as Industrial Policy Minister
in the Tymoshenko-led Cabinet of Minister.
From 2002 through March 2005, Shanra was a deputy of the Verkhovna
Rada, and earlier worked as board chairman of Slavuta ruberoid plant.
[15] MINISTER OF THE CABINET OF MINISTRY: President Viktor
Yuschenko has relieved Petro Krupko from the post of Minister of the
Cabinet of Ministers and appointed Bohdan Butsa to replace him.
In February, Yuschenko appointed Krupko as First Deputy Minister of the
Cabinet of Ministers, having relieved him from the post of Deputy Minister
of the Cabinet.
Butsa, 45, Verkhovna Rada's deputy (accepted its deputative powers on
July 8) was elected from the list of Our Ukraine block of parties under No.
93. In Rada, he replaced Oleksii Ivchenko, board chairman of the nation
joint stock company Naftohaz Ukrainy.
[16] MINISTER OF DEFENCE: Anatoliy Hrytsenko will stay on as defence
minister
[17] MINISTER OF THE INTERIOR MINISTER: President Viktor Yuschenko
has appointed Yurii Lutsenko as the Interior Affairs Minister.
Lutsenko, 40, served as acting Interior Affairs Minister after the dismissal
of the Yulia Tymoshenko-led Cabinet of Ministers. He was appointed as
Interior Affairs Minister on February 4.
After his appointment to the post in February, Lutsenko said that his main
task was to change the image of the Interior Affairs Ministry. He promised
to decriminalize and depoliticize the organs of the Interior Affairs
Ministry.
Several personnel changes have been made in the leadership of the ministry
and its regional divisions since Lutsenko's appointment. After his first 100
days in office, Lutsenko positively appraised the process of
decriminalization and de-politicization of the ministry.
After this, he outlined the five priorities of the police for 2005: full
control over the sale of spirit in Ukraine, ending illegal use of natural
resources, establishing control over the procedures for registering
automobiles, continuing the fight against election crime, and reforming
the police.
[18] MINISTER OF LABOR & SOCIAL POLICY: President Viktor Yuschenko
has appointed Ivan Sakhan to the post of labor and social policy minister.
From April 2004, Sakhan, 57, held the post of director general at Ukrainian
Aluminum company, a subsidiary of Russian Aluminum that was later
renamed into Aluminum of Ukraine.
Sakhan served as labor and social policy minister from June 1998 to
November 2002 when the government was led by Valerii Pustovoitenko,
Viktor Yuschenko and Anatolii Kinakh.
As Ukrainian News earlier reported, Yuschenko removed Viacheslav
Kyrylenko from the post of labor and social policy minister and appointed
him deputy prime minister.
[19] MINISTRY OF CULTURE: President Viktor Yuschenko has relieved
Oksana Bilozir of her duties as Minister for Culture and Tourism.
Bilozir is a leader of the Social-Christian Party since April 2004. From May
2002 through March 2005 she was a deputy of the Verkhovna Rada from
the faction of Our Ukraine block of parties.
[20] MINISTRY OF JUSTICE: President Viktor Yuschenko has relieved
Roman Zvarych from the post of Justice Minister. due to resignation of the
Cabinet of Ministers.
[21] MINISTRY OF HEALTH: President Viktor Yuschenko has removed
Mykola Polischuk from the post of health minister.
Polischuk was a member of parliament in the Our Ukraine faction from
May 2002 to July 2005. -30- [Compiled and edited by The Action
Ukraine Report (AUR) Monitoring Service, Washington, D.C,]
=============================================================
2. CENTRE-RIGHT DOMINATES UKRAINE'S NEW CABINET
By Tom Warner in Kiev, Financial Times
London, UK, Wednesday, September 28 2005
Viktor Yushchenko, the Ukrainian president, yesterday announced a new
cabinet dominated by members of his centre-right, pro-western Our Ukraine
party in an effort to boost its profile ahead of parliamentary elections due
in March.
Besides Yuri Yekhanurov, an Our Ukraine leader who was confirmed as prime
minister last week, two out of three deputy prime ministers and over half of
the ministers announced yesterday were party members.
The appointments cheered foreign investors and Mr Yushchenko's supporters,
who had worried he could bring back unpopular veterans of the government of
his predecessor, Leonid Kuchma. Mr Yushchenko had been expected to
reward Mr Kuchma's former supporters with cabinet seats because their votes
in parliament were crucial to getting Mr Yekhanurov confirmed.
Jorge Zukoski, president of the American Chamber of Commerce, said the
new cabinet was an improvement on the previous one led by the populist
Yulia Tymoshenko, which was plagued by infighting.
Mr Yushchenko's administration appeared to distance itself further from Mr
Kuchma's yesterday after the prosecutor-general's office questioned two
opposition leaders - Viktor Yanukovich, Mr Yushchenko's defeated
challenger for the presidency last winter, and Viktor Medvedchuk, leader
of the pro-Russian Social Democrats - for alleged misuse of state funds.
Mr Yanukovich's office said the summons contradicted an agreement Mr
Yushchenko signed last week in return for support for Mr Yekhanurov, in
which the president pledged not to permit repression of the opposition.
Most of the new cabinet ministers not from Mr Yushchenko's party were
apolitical technocrats. -30- [Action Ukraine Report Monitoring Service]
=============================================================
3. UKRAINE'S QUEST FOR MATURE NATION STATEHOOD
CONFERENCE OPENS IN WASHINGTON, D.C.
Ukrainian National Information Service (UNIS)
The Action Ukraine Report (AUR)
Washington, D.C., Wednesday, September 28, 2005
WASHINGTON, D.C. - Michael Sawkiw, Jr., President of the Ukrainian
Congress Committee of America opened the sixth installment of the now
traditional Ukraine's Quest for Mature Nation Statehood series commenting
that, "Ukraine is indeed a country of immense proportions and holds within
its balance the linchpin of stability and security in Europe." The
Conference is being held in Washington, D.C., Tuesday and Wednesday,
September 27-28.
The Roundtable was organized to analyze Ukraine's transition to an
established national identity in the hue of what has become known as
Ukraine's Orange Revolution. As chairman of the Roundtable Steering
Committee, Mr. Sawkiw noted that "the Orange Revolution was about the
creation of a political nation."
According to Sawkiw, the people of Ukraine moved "the arrows of political
development towards an open society" expressing their European identity.
Walter Zaryckyj, President of the Center for US-Ukrainians Relations and
program coordinator for the Roundtable series, noted that the first three
roundtables had Ukraine's external relations as their themes. "Today's
roundtable marks the culmination of the third in a series that looked at
internal themes," said Mr.Zaryckyj. According to Zaryckyj, "the conferences
were designed to be a trilogy of trilogies, as Ukraine emerges from the post
Soviet space and becomes a mature nation-state."
Nita Lowey (D-NY), congresswoman from Yonkers, New York echoed
American support for Ukraine. "The United States must remain steadfast
in our support for Ukraine," according to Lowey, ranking member on the
Foreign Operations Subcommittee of the House of Representatives
Appropriations Committee and a member of the Congressional Ukrainian
Caucus. Lowey noted that there will be bumps in the road, citing the recent
deal President Yushchenko signed with former adversaries.
Recent changes in Ukraine's government, although notable, have not eclipsed
the proceedings. Mr. Anton Buteiko, Ukraine's Deputy Foreign Minister
commented that "Following elections in the United States, Republicans and
Democrats shake hands and cooperate."
For many in Ukraine, the changes in government are part of normal political
developments. Mr. Buteiko was Ukraine's Ambassador to Romania and
resigned from his post in 2003 in a protest against the policy pursued by
former President Kuchma to sign the agreement on a Single Economic
Space.
Mr. Buteiko underscored Ukraine's European identity having himself
returned from meetings in Brussels where he led talks to intensify Ukraine's
entry in the European Union and Euro-Atlantic structures, including NATO.
The morning session addressed physical and economic factors of Ukraine's
"center of gravity." Mark von Hagen, professor of history at Columbia
University and former president of the International Association of
Ukrainianists chaired the session charged to contemplate the political
dimension of Ukraine's center of gravity.
Stephen Nix, chairman of the International Republican Institute and Nelson
Ledsky, chairman of the National Democratic Institute highlighted Ukraine's
advanced development of civil society and political party development.
In particular, Mr. Ledsky pointed to the Committee of Voters in Ukraine's
recent statement condemning President Yushchenko's agreement with
former rival Victor Yanukovych as proof positive that civil society will
become the bastion of Ukrainian democracy.
"Any discussion of Ukraine's body politic would be remiss without a
discussion about the body economic," according to Andrij Bihun, Senior
International Trade Specialist with the U.S. Department of Commerce
and chair of the session contemplating the economic dimension to Ukraine's
national identity. Mr. Bihun observed that Ukraine's economy is no longer
a patient in cardiac care, but still requires post operative supervision.
Anthony Wayne, Assistant U.S. Secretary of State noted that despite deeply
rooted problems of corruption, Ukraine has advanced deliberate steps,
integrating WTO norms into their legal framework making eventual
membership a reality.
He observed that Ukraine is strategically located between the Caspian
and Black Seas and should do more to capitalize on that advantage and
shift the direction of the Odesa-Brody pipeline toward the European Union.
Mr. Wayne noted however, that it is fully within Ukraine's purview to
develop regional business initiatives with all its neighbors. "President
Bush and President Yushchenko agreed to develop a bilateral market
access agreement by the end of the year," according to Mr. Wayne.
Brian Cox from the U.S. Treasury Department noted several currency controls
and financial monitoring agreements between the United States and Ukraine
aimed at abetting transnational organized crime. He noted there may be
several hurdles to the Ukrainian economy, many of which will require serious
attention, such as the marked deceleration of Ukraine's economic growth.
Ariel Cohen, senior research fellow at the Heritage Foundation, noted
Ukraine has matured and the United States can no longer treat Ukraine like
a "child."
Dr. Cohen noted that the populism of the past eight months may have long
lasting effects on the economy which may not be fully felt until after the
March 2006 elections. He cautioned that Ukraine will be competing with
other emerging economies like India and Korea and must strengthen its
financial institutions and economic policies.
Combining presentations with learned philosophers like Myroslav Popovych,
director of the Hryhoriy Skovoroda Philosophy Institute and a panel
foreshadowing the upcoming March 2006 parliamentary elections with
members from the Ukrainian political continuum, round out the end of the
first half of the first day of "Roundtable IV: Ukraine's Transition to an
Established National Identity." -30- [Action Ukraine Report]
===========================================================
4. U.S. OPTIMISTIC UKRAINE ECONOMY, REFORMS "BACK ON TRACK"
State Dept Official calls on Ukraine to fight corruption, continue reforms
By Tim Receveur, Washington File Staff Writer
USINFO, U.S. Department of State
Washington, D.C., Wednesday, September 28, 2005
WASHINGTON - The United States is optimistic that Ukraine is "back on
track"in moving its economy forward and fighting the high levels of
corruption inside the country, said Assistant Secretary of State for
Economic and Business Affairs E. Anthony Wayne.
Corruption at many levels of government and in the private sector undermines
investor confidence and trade relations, Wayne told a Washington conference
on Ukraine's Transition to an Established National Identity September 27. He
emphasized that Ukraine must increase transparency to "eliminate
opportunities for malfeasance."
Wayne recommended making budgets, revenues and other financial documents
accessible to the public and "rigorously investigating and prosecuting
wrongdoing." He also called on Ukraine to streamline regulations and make
the rules of doing business more transparent.
According to the assistant secretary, President Bush and Ukrainian President
Viktor Yushchenko have made progress on a bilateral trade agenda, including
"constructive discussions on Ukraine's accession to the World Trade
Organization [WTO] and on enforcement of intellectual property rights.
On September 22, the Ukrainian Parliament approved Yushchenko's choice,
Yuriy Yekhanurov, as the country's new prime minister. Wayne said the
United States is optimistic that with the confirmation, "the process of
economic reform is back on track." Wayne said he hopes the new government
will "muster the political will" to move forward on reforms required to meet
WTO norms.
Additionally, "it is essential that the new Cabinet maintain a steady policy
that minimizes state intervention and allows the market to function
effectively," he said.
EFFORTS TO PROTECT INTELLECTUAL PROPERTY RIGHTS
Wayne praised the Ukrainian government's recent efforts to bolster the
protection of intellectual property rights. On August 2, new amendments to
Ukraine's laser-readable disc law went into effect that will strengthen its
licensing regime and enforcement efforts to stem the illegal production and
trade of compact discs and digital versatile discs. .
In response, the United States lifted the 100 percent tariffs that had been
imposed on $75 million worth of Ukrainian exports to the United States since
2002 and restored normal tariffs levels. Ukraine has been designated a
Priority Foreign Country for its failure to protect intellectual property
rights; the United States currently is evaluating whether to change that
designation.
Wayne said an assessment of Ukraine's eligibility for benefits under the
U.S. Generalized System of Preferences, or GSP, also is under way.
The Bush administration is urging Congress, Wayne said, to exempt Ukraine
from the provisions of the Jackson-Vanik amendment to the 1974 U.S. Trade
Act and to authorize the president to grant permanent normal trade relations
to Ukraine.
He said Ukraine for more than a decade has been in full compliance with the
freedom of emigration requirements of the Jackson-Vanik law.
ENERGY ISSUES
Wayne called on Ukraine to develop "a concerted energy diversification
strategy," which might include partnering with foreign countries interested
in possible hydrocarbon reserves in Ukraine's Black Sea waters. "Above all,
we encourage the Ukrainian government to establish clear rules of investment
in the sector," he said.
He also suggested that Ukraine develop a commercial plan for the
Odessa-Brody pipeline, and explore coal bed methane and safe nuclear
technologies. Better energy conservation policies also are needed, he said.
Wayne praised Ukraine's 2004 elections and the "Orange Revolution," saying
the world was inspired by the "courage of the Ukrainian people and their
hunger for democracy."
He said he was proud of the role the United States and Europe played in
helping to guarantee free elections and said the United States is "committed
to helping ensure that the political and economic transformation of Ukraine
continues to move forward."
Ukraine should not face a choice between closer ties to the West or closer
ties to its former Soviet partners, Wayne said. "This is a false choice ..
Ukraine will deepen its ties in both directions and increasingly serve as a
bridge between regions," he said.
The conference booklet notes that the conference is the sixth in a series,
"Ukraine's Quest for Mature Nation Statehood Roundtable," which had its
genesis in April 2000 when several Ukrainian/American organizations came
together to consider ways to support the U.S.-Ukrainian dialogue. -30-
-----------------------------------------------------------------------------------------------------
http://usinfo.state.gov/eur/Archive/2005/Sep/27-288540.html?chanlid=eur
=============================================================
5. BANKING SECTOR UPBEAT ON CHANGES IN UKRAINE'S
POLITICAL LANDSCAPE
By Alla Vetrovcova, FirsTnews
Kyiv, Ukraine, Tuesday, September 27, 2005
Usually business takes a very dim view of political chaos, but leaders in
Ukraine's banking sector indicate that through the current fog of political
rhetoric and invective, they are able to see a future that is brighter for
both the economy and the fiscal situation.
KYIV, Sept. 26 (FirsTnews) -- Local banking sector experts view the recent
appointment of Yuriy Yekhanurov as prime minister as positive for business.
They also predict that the slumping economy should stabilize during the last
two quarters of the year.
It's expected that the new cabinet of ministers will adopt systematic
actions that will help stabilize the worsening economic situation. They
point out that the previous government neglected mortgages, leasing, and the
support of farming.
Andriy Kyyak, vice chairman of Ukrainian Financial Group Commercial Bank,
expects that Yekhanurov will bring more stability to the governmental reform
programs.
"I expect that there will be a clearer understanding with regards to
inflation rate, the budget and GDP growth at the end of 2005 so that we can
calculate the cost of resources by the end of the year," Kyyak said.
According to Kyyak, Yekhanurov is known as a very experienced politician,
and one of his most valuable qualities is that "he has provided policies in
support of entrepreneurs. We hope that the system of regulations from the
government will become clearer," he said.
It is important to regulate social payments that are a very big burden on
the economy. That is the keystone, when "the main burden is always coming
in the third and fourth quarters to have the financial system balanced at
the end of the year," Kyyak said.
Denis Dolmatov, head of department of stock markets at Va-Bank, thinks
that there are some alarming signals in the banking sectors.
"With regards to the US dollar exchange rate, so far it is quite stable. At
the same time we anticipate the economic situation to worsen, probably, by
the spring time," Dolmatov said.
Michal Yanda, deputy chairman at UkrSibbank, considers that personnel
changes in the Ukrainian government should not alter the main direction the
country is taking, which is to enter the World Trade Organization (WTO) and
European Union (EU) integration. But much depends on the results of the
parliamentary elections in March 2006, which should affirm the country's
goals.
"If [the business environment becomes more transparent], then political
changes won't influence the economic sector and they'll have no effect on
investors. For example, the government has changed three times in the Czech
Republic, and yet the attitude of foreign investors hasn't changed," Yanda
said.
"There were a lot of political scandals in governments of Bulgaria, Poland
and the Czech Republic, and [investors] didn't react to them. The key is the
parliamentary elections in the spring, when the trend toward EU integration
will be confirmed," Yanda said.
Yanda thinks Ukraine has already integrated a lot into the international
economy.
According to Yanda, foreign investors view Ukraine, with a population of 48
million, as a huge potential market and "with a lot of money in the future,
this is a last piece [in Europe] in which they can invest for developing
their businesses.
"Only a dictatorship would push investors out of the country, and I think
there's no threat of that," Yanda said. -30-
------------------------------------------------------------------------------------------------------------
LINK: http://www.firstnews.com.ua/en/article.html?id=103056
=============================================================
6. UKRAINIAN BANKS RAISE DEPOSIT INTEREST RATES TO
INCREASE THEIR LIQUIDITY
IntelliNews - Ukraine This Week
Kyiv, Ukraine, Monday, September 26, 2005
Ukrainian banks raise deposit interest rates to increase their liquidity
During 8 months of 2005 most of the local banks were improving their credit
programs offering clients credits with lower interest rates. Such policies
led to lower liquidity levels in many banks. To improve the situation with
the liquidity the banks started to increase deposit interest rates to
attract new clients and to obtain more funds.
In September National bank of Ukraine for the first time during the last 8
months registered amoung Ukrainian banks an average increase of deposit
rates.
Banks try to increase UAH deposits
First banks that announced about deposit rate increase were the biggest
Ukrainian banks, in particular PrivatBank, Aval Bank, UkrSibbank and
Ukrsotsbank. Now interest rates on deposit are up to 16% in UAH and to 11%
in USD. At the end of the summer the rates were 12% and 9-11% respectively.
The present increase of UAH deposit rates is caused by the necessity to
obtain balance between long term UAH deposits and long term deposits in
foreign currencies (mainly USD and EUR deposits). Thus, the banks are trying
to lower high demand for deposits in foreign currency and attract more UAH
deposits.
Banks attract less money than borrow and this harms their liquidity
There is another imbalance in the banking sector that moves the banks to
increase deposits rates. Since the end of spring the gap between the funds
attracted and lent out started to become wider. The banks lent more funds
that they attracted. Again this had a negative impact on the liquidity of
the system.
During summer the prices on real estate market and demand for new loans
increased. Banks were forced to credit their clients using expensive
short-term financial resources, purchased on interbank market. At present
banks want to substitute these short term funds with long term.
The policy of the central bank negatively influences banks'
financial strength
The other reason that caused banks to rise the deposit rates is the
aggressive politics of the central bank that aims to have stricter control
over the money supply. Targeting to restrain inflation NBU introduced since
September new regulations on mandatory reserves.
According to the new rules the banks should form on daily basis 100% of
their mandatory reserves instead of 80% as it was before. At the same time
NBU rose from 7% to 8% the reserve requirement for funds deposited on
current accounts.
Also the regulator introduced obligatory minimum amount that should remain
on a daily basis on correspondent accounts of commercial banks in NBU. The
central bank policy resulted in interest rise by 3-5pps on interbank market
and deficit of financial resources.
Banks prefer to issue bonds to avoid using expensive interbank resources
Some experts predict that the rise of interbank interest rate is temporary
and the trend will be reversed after banks get accustomed to the new
regulating rules presented by NBU.
Other experts say that that if banks fail to secure a solid deposit base in
the nearest future they will quickly lose their liquidity and will be forced
to limit the growth of their loan portfolio. It is also possible that banks
will soon significantly rise their credit interest rates.
Many banks now do not want to used expensive interbank resources and find
other sources of funds. The most obvious solutions are to issue bonds or to
attract syndicated loans. Ukreximbank, UkrSibbank and Ukrsotsbank together
attracted USD 575mn by means of bonds issue in 2005. Since the beginning
of the year other banks issued bonds worth USD 120mn.
S&P notices weakening of Ukrainian banking system
The rise of activity is observed on market of syndicated credits as well. At
present the total value of attracted and negotiated syndicated credits makes
up USD 400mn. The banks want to attract even a larger value of syndicated
credits, but foreign banks are too cautious to lend more.
This is why the most feasible way to new attract funds is increasing client
deposits via higher interest rates. According to NBU's statistics during
first the 7 months of 2005 individuals brought to local banks UAH 15bn (USD
3bn) and real sector about UAH 7bn (USD 1.4bn).
Last week S&P announced its concerns regarding the rise of expenditures of
Ukrainian banks. Ratio between expenses of banks and their revenues amounts
to 75%, S&P informs. This is limiting factor for Ukrainian banking sector
development. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
Send in names and e-mail addresses for the AUR distribution list.
=============================================================
7. SOCIETE GENERALE PLANS TO ACQUIRE BANKS IN
UKRAINE, MONTENEGRO
Agence France Presse, Paris, France, Monday, 26 September 2005
PARIS - The French bank Societe Generale is preparing to acquire the
fifth-biggest bank in Ukraine, Ukrsibbank, the business daily La Tribune
reported Monday, citing a Ukrainian source.
It also said that SocGen planned to acquire the third-biggest bank in
Montenegro, Podgoricka Banka, without citing a source for this information.
Societe Generale already has a presence in Serbia, which is formally
linked with Montenegro in a loose federal alliance.
In recent months, the French bank has pursued an acquisitions policy,
notably in eastern Europe and in the Mediterranean region.
Societe Generale declined to comment on the La Tribune report.
The price of its shares jumped 2.54 percent to 93 euros in midday Paris
trade, boosted by a note by UBS that outlined the advantages of an eventual
tie-up with French bank BNP Paribas. Meanwhile, the CAC 40 index was
1.63 percent higher. -30- [Action Ukraine Report Monitoring Service]
=============================================================
Send in names and e-mail addresses for the AUR distribution list.
==============================================================
8. MACROECONOMICS: PRESCRIPTION FOR WEAKNESS
COMMENTARY & ANALYSIS: Yuriy SKOLOTIANY
Zerkalo Nedeli, Mirror-Weekly, No. 37 (565)
International Social Political Weekly
Kyiv, Ukraine, Saturday, 24-30 September 2005 year
Currently the Ukrainian economy is in a faintish state. Last month it had
negative dynamics for the first time in the last five years. For the period
of January to August 2005, there has been an almost fivefold decrease in
GDP growth (from 13.6 percent to 2.8) and a 4.5 decrease in industrial
output (from 15.6 percent to 3.5 percent).
The growth of fixed capital investment reduced by almost four times (from
32.2 percent to 8.5 percent); at the same time the share of state investment
has also reduced by four times.
The Ukrainian economy has neared the dangerous line separating it from a
full, long-term recession. It is also disturbing that this process occurs
against the general growth of inflation. During first eight months of the
year, the official consumer price index (CPI) increased by almost 1.5 times
as compared to last year (6.75 percent compared to 4.35 percent).
That is why many experts have started speaking of the threat of a
large-scale crisis. Should this be so, the government will have to switch
from talking about "fundamental increase in living standards" to protection
of social achievements, which once again may well prove to be a mere
fiction. The only positive fact is that the approval of the new prime
minister was not dragged on and a new Cabinet of Ministers will be set up
soon.
It is our deep conviction that real economic growth is the only reliable
source for the improvement of Ukraine's wellbeing, as well as the priority
for any government. It can't be a hostage to even the best political
intentions.
That is why ZN decided to look into this country's future and asked
well-known experts to share their recipes for the recovery of business
activities and the curbing of inflation.
We asked them the following three questions:
1. What immediate actions would you recommend to the newly created
government for fast and efficient elimination of the threat of economic
recession and inflation growth? And elimination of which of these two
threats should be a priority?
2. What strategic (regulatory, fiscal) reforms are most urgent?
3. What format for cooperation between the National Bank of Ukraine (NBU)
and the Cabinet of Ministers would you recommend as the most effective and
the least likely to impede the functional independency of the NBU?
[1] Analtoliy Halchynsky: Ex-head of the NBU board and professor at the
Institute for Strategic Assessments:
1. The most important thing the new Cabinet can do is to restore public
trust in the new government. To this end, it must do at least the following
three things:
- first - Stop promising more than it can do. In my view, Tymoshenko's
cabinet became a hostage to the populists promises made at the Maidan that
are basically unrealizable at the current level of economic development of
this country.
- second - Demonstrate its political will to give up a series of unfeasible
social programs, which are currently beyond the economic strength of
Ukraine. The newly appointed prime minister should not only openly tell the
nation about this, but also should put forward specific proposals to
parliament concerning their suspension---or three to four year delay---in
implementation. The threats of artificial inflation spiral and budget crisis
can be eliminated only on this basis.
- third - Promise the nation that the "swelling" state consumption, which is
measured as a budget share in the GDP, will not only stop growing (as was
the case this year), but will gradually reduce within the next three to four
years. The 2006 budget should allow for this approach. It is impossible to
overcome stagnation and return to the track of economic growth of 7 to 8
percent without this measure. There are no miracles in the economy.
2. In the social sphere, the most important measures are to ensure social
assistance and monetization of social payments to various strata of the
population. In the economic sphere, the key objective is to solve the whole
of institutional problems concerning the market of arable lands, their
capitalization, consideration of their costs in the pricing mechanisms.
These questions cannot be postponed. They must be solved immediately,
since the investment attractiveness of the agricultural sector and
opportunities for its faster upgrade depend to a significant degree on this.
3. Constitutional cooperation between the cabinet and the NBU is possible
within the limits of inflation targeting, which is to unite monetary and
non-monetary instruments of price stabilization. It is important to raise
the authority of the NBU Board. The board should not be based on the
principal of industry or party representation of the government. It must be
comprised of the money specialists, of people who at least can differentiate
between M1 and M2.
[2] Ihor Yushko: Ex-finance minister, NBU Board member, vice president of
Interpipe Corporation
1. One must urgently find non-monetary methods of influence and increase
economic demand for money. There are quite a few real measures that could be
taken in the near future. For example, one of the methods that we applied in
2002 was a significant limitation of the bills of exchange in import
operations.
It immediately increased the demand for cash, because paying with bills of
exchange was forbidden. Now the possibility of paying with bills of exchange
is unlimited. This released a significant money supply, which has come out
of the economic sector into the consumption sector.
If this is not enough, one can turn to the tolling schemes, where most of
barter went to after the ban. Currently, almost half of local enterprises
are working according to commission schemes. What does that mean? The
enterprises keep minimal profit that is enough for living and paying
salaries.
They don't pay the tax on profit and, what is most important, all payments
are made outside of Ukraine---which means that dollar or euro work instead
of hryvnia. By reducing tolling volumes with legislative measures, we can
gradually reinstate circulating assets of the enterprises. Of course this
must be done gradually, by introducing 10 percent, then 20 percent, and so
on cash payment limit.
Just imagine how many billions of hryvnias will be involved in monetary
payments. Thus, the NBU will not have to invent anything, to turn the screws
and introduce special reserve accounts. There are some other opportunities
in the medium term.
2. Much is currently said about means and methods of attracting foreign
investments. I would like to remind you that a national investor, or our own
population, is the major investor in any state. When there was a mortgage
project in question, I insisted that we could not endlessly attract
resources from abroad for refinancing purposes.
If we do not immediately launch financial accumulating systems and attract
our major investor---the population---we may waste all of our efforts,
because it is impossible to maintain mortgage relations in a state while
relying only on the external investments. Thus we will never ensure either
urgency or controllability of the pricing policy.
The second level of pension provision and accumulating insurance schemes
(life, health) are in question. Of course, this is a thankless job, the
effect of which could be visible only in three or five years, and someone
else may reap the political dividends of it. Yet this problem must be dealt
with now, since it is the question of the national interest and of the
national strategy.
3. The representatives of the National Bank and of the government must
return to a normal dialogue and, most important, start cooperating
effectively. The major problem of the dismissed cabinet is that there was no
constructive discussion between the Economics Ministry, the National Bank,
and the Finance Ministry.
Any minister or any other senior state official must have a definite
political culture. When he comes to power, he must have a general idea of
how to combine the economic interests, the interests of the society, and his
own political motives in one whole. The interests of the society, however,
must always come first.
[3] Serhiy Korablin: Doctor of Economics at the Institute of Economic
Forecasting at the National Academy of Science of Ukraine:
1. As for the growth of output and prices, it is not difficult to maintain
zero inflation. Considering economic inertia, the National Bank could have
ensured it within a month or two. It would have been enough to slow down the
rate of money supply and, if need be, its absolute level.
However, the problem is that the economy will react to such actions with the
decline of business activities, decrease in budget revenues, and increase in
debts and non-payments.
Due to this, the eternal dilemma, "inflation or economic growth," should be
formulated in the context of an optimal, but not zero, inflation. At the
same time, one must bear in mind that its decrease is connected not with the
amount of money supply but with the development of market institutions.
The unenviable situation in which Japan and Argentina found themselves by
the end of the last decade is an illustrative example of this. The same is
true about Germany, where absence of growth of prices and output is
accompanied with record-breaking unemployment.
Ukraine left the inflation suppression zone more than five years ago. At the
same time, the maximum rate of GDP growth was registered at inflation close
to 10 percent. (This tendency generally stays in line with the dependency
between the level of economic development of different countries and
inflation that could be tracked down in the 1990s.) In such conditions, it
is necessary to set clear limits of government responsibility for further
decrease in the price dynamics.
The price "explosion" of 2004-2005 was instigated not so much by increase in
money supply as by mistakes in budget and investment policy. Given the
slowdown of the growth rate of the monetary base (27.3 percent for eight
months of this year as compared to 31.8 percent for the similar period of
the previous year), the growth rate of consumer prices in Ukraine increased
from 4.3 percent to 6.7 percent.
This is not surprising given the race for salary increases and
"socialization" of the budget, a result of which the incomes of the
population for the period of January to June grew by 44 percent as compared
to 22 percent for the similar period of 2004. Meanwhile, cash flows
redirected to the consumer market do not find an adequate support with
investment and consumer goods supply.
2. The "lesson" of current inflation processes is rather obvious:
- the opposition of the price and economic trends is rather conditional:
elimination of the non-monetary factors of the price growth enables
decreased inflation and at the same time an increased output rate;
- price dynamics depends not only on the money supply, but also on the
structure of aggregated expenditures. At the same time, unlike consumer
demand, the investment demand expands the output potential, thus urging
goods supply and price decrease;
- sustainable disregard of the acting legalization (for example March
amendments to the 2005 budget) depresses entrepreneurship and negatively
effects investment and price dynamics;
- social justice has its natural financial boundaries. Their narrowing down
as a result of the slowing economic growth cuts down the support to the most
vulnerable populations: children, pensioners, people with disabilities,
youth;
- regular public criticism of the currency policy by the Economics Ministry
not only testifies to the serious communication problems of the cabinet and
NBU, but also undermines the currency market and provokes the agiotage
sentiment.
3. Now it is time to discuss the general economic strategy of the
government, its goals and methods of achievement, as well as those
achievements---rather than talk about the cooperation between the cabinet
and the NBU. Also we should not forget about legal nihilism demonstrated by
all branches of Ukrainian government. If they go on like this, none of the
reforms will be insured against failure.
[4] Ihor Shumilo: Executive Director of the National Bank of Ukraine for
Economic Issues:
1. Unfortunately, the general tendencies for inflation and GDP in the next
few months are already predetermined to a considerable decree. Spurring on
the growth with significant increase of the population demand did not and
will not produce the expected result in short nor long terms.
There are no appropriate financial resources for that. At the same time,
strict curbing of inflation with monetary methods will not be effective and
will only negatively impact economic activity.
The accumulated inflation potential, serious increase in prices for a number
of foodstuffs, set the inflation limit of 5 percent for the remaining four
months of the year. In sum, with the existing 6.7 percent, it makes about 12
percent for the whole of 2005. This is, however, possible on the condition
that the cabinet will not exceed the pre-set budget deficit and budget
expenditures.
The key condition for elimination of the threat of inflation growth as well
as further economic recession is a fundamental change of the priorities of
the government and of the cabinet as a part of it.
As first priority, I rank the objective of regaining the trust of businesses
and investors. This is impossible without urgent settlement of property
rights and real separation of business from government. The government must
immediately publish the list of those enterprises whose privatization it is
going to review in court.
It must also assume obligation, confirmed by the president, that this is a
final list. The shorter this list, the better it will be for renewal of the
activity and investment intentions.
At the same time, it is necessary to propose a transparent procedure of
peaceful agreements with current owners. All members of the government, as
well as other leaders, must make their income statements public and pass
their assets into management. This should also apply to the members of their
families.
Trust in the government and the predictability of its actions is now most
important.
The second priority is to realistically assess the achievement of the 2005
budget targets and to adopt the 2006 budget, which will not provoke
inflation and hinder economic growth.
We must admit that this year's budget targets are mostly being met through
taking away money from businesses (advanced payments and non-return of
VAT make up about 5 percent of GDP). This, along with the uncertainty with
property rights, has brought about the decrease in investment activity.
This is a bad practice and it has already exhausted its potential. Further
accumulation of the debts is impossible. Moreover, it is necessary to settle
the issue of its repayment to the enterprises. This means reduction of the
revenue section of the budget.
The 2006 budget should not be based on the populist promises and social
bribing of voters. We must admit that further increase in nominal social
standards will only cause inflation, economic stagnation, and decrease in
real income of the people.
2. We must face the truth: The Ukrainian economy is very low producing
(criteria: GDP per capita) and cost consuming (the ratio between
intermediate material goods and the value added has significantly worsened
and now makes up about 60 percent to 40 percent). Major export goods have a
very low degree of processing and are very sensitive to changes in the world
market.
Social commitments, laid down in the legislation during the last 15 years do
not correspond to the level of economic development in the country. This
prevents the government from giving support to those who really need it.
This, together with an unreformed budget sphere, cost consuming and
low-quality services of the state, resulted in a situation when the budget
ceased being a tool of the government's economic policy.
But the most important thing, in my view, is that society is even less
prepared for deep structural reforms than the government. That is why I
understand how difficult it will be for those politicians who dare speak
openly and truly. But if we want to live in a prosperous and successful
country, and I believe that we do, we must start unpopular actions.
Preparation of the so-call green and white books (budget reform, adjustment
of the social promises of the state with its actual resources, financial
rehabilitation of the energy and housing and communal sectors, creation of
the conditions for the development of stock market) should become the first
step toward structural reform.
Such an approach helps to identify real problems, rather than just their
symptoms, and to consider pluses and minuses of possible solutions. It is
important to hold public discussion and to gain public support, without
which it is impossible to carry through deep structural reforms.
3. One way to increase cooperation between the National Bank and the
cabinet, and at the same time provide additional guarantees of NBU
independence, could be a memorandum on the agreement on targets,
means of their achievement, and forms of cooperation that we propose.
For example Canada and New Zealand have a similar experience.
The ultimate goal of any government is quality and sustainable economic
growth. Price stability, that is low inflation, is both the condition and
the best means to ensure the achievement of this goal. The mid-term targets
of price stability for the Cabinet of Ministers and the NBU are to limit the
inflation to 10 percent in 2006-2007 and to between 5 percent and 6 percent
starting from 2008.
We suggest that these targets should be laid down as general strategic
benchmarks for the NBU and the government in this memorandum At the
same time, the cabinet must recognize the complete political and operational
independence of the NBU to use monetary tools to achieve short- and mid-
term inflation targets. -30- [The Action Ukraine Report Monitoring]
--------------------------------------------------------------------------------------------------------
LINK: http://www.mirrow-weekly.com
==============================================================
Send in names and e-mail addresses for the AUR distribution list.
==============================================================
9. AMNESTY INTERNATIONAL SAYS UKRAINIAN AUTHORITIES
HAVE FAILED TO ACT AGAINST TORTURE BY POLICE
Aleksandar Vasovic, AP Worldstream, Kiev, Ukraine, Tue, Sep 27, 2005
KIEV - Amnesty International on Tuesday sharply criticized Ukrainian
authorities for their apparent failure to clamp down on torture and police
maltreatment.
The London-based human rights organization said that "in Ukraine
allegations of torture are rarely investigated and if such investigations
are carried out, most often they are flawed."
"A suspect, a witness or a bystander - all can be at risk of being tortured
or ill-treated by police," researcher Heather McGill said in the report.
A spokeswoman for the Interior Ministry, Inna Kysel, said officials were not
ready to comment on the report.
The Ukrainian police force gained notoriety for its heavy-handed tactics and
corruption during the decade-long tenure of former President Leonid Kuchma.
After his inauguration in January following the Orange Revolution, Ukraine's
President Viktor Yushchenko pledged to overhaul the police and other law
enforcement and intelligence agencies.
Yushchenko has disbanded and announced a reform of the traffic police,
notorious for bribe-taking. He has also dismissed a number of top ranking
police officials and sharply criticized the customs and intelligence
agencies.
Since January, a number of police officers have also been arrested on
charges stemming from bribe-taking to murder. However, Amnesty said little
has been done on ending torture, strengthening crime prevention and
improving conditions in Ukraine's decrepit and overcrowded jails.
According to the report, "the Ukrainian authorities admit that police
officers abuse their power because they try to achieve high crime disclosure
by any means."
In the report, McGill said that between 2001 to June 2005 many Ukrainian
detainees "were suspended from metal bars - beaten with fists or kicked, or
beaten with - heavy books - or filled water bottles, that do not leave marks
on the body."
Psychological pressure has reportedly been used on a number of occasions,
"such as threats of rape, threats of convictions for other crimes, or - as
in one case - separating a mother from her sick baby."
A separate study published earlier this year by the independent Institute
for Social Research in the eastern city of Kharkiv, said that 62.4 percent
or former detainees complained of ill-treatment after arrest.
More than 44 percent complained of interrogators and policemen twisting
their arms, legs or necks, while 32.8 percent said they were punched or
kicked. Amnesty demanded that Ukrainian authorities investigate "all
allegations of such human rights violations ... that the guilty are punished
and the victims compensated." -30-
==============================================================
Send in names and e-mail addresses for the AUR distribution list.
==============================================================
10. QUESTIONS OVER YUSHCHENKO'S PACT WITH OLD FOE
Ukraine: Not all has gone to plan since last year's Orange
Revolution, writes Chris Stephen in Moscow.
Chris Stephen in Moscow
Irish Times, Ireland, Monday, Sep 26, 2005
Ukrainians watching the TV news last week could be excused trying to adjust
their sets: there before their eyes was the sight of the country's most
bitter rivals, President Viktor Yushchenko and former prime minister Viktor
Yanukovich, joining hands in parliament.
Mr Yanukovich is blamed for trying to poison Mr Yushchenko last year and rig
a presidential election, but the two men have now formed an electoral
alliance to create a new government, due to be announced tomorrow.
Their new prime minister, Yuri Yekhanurov, a regional governor, has promised
that this week's new cabinet will contain technocrats committed to reform.
However, the events of the past month have left many wondering whether such
reforms can stay on track with the break-up of the team that brought Ukraine
the Orange Revolution.
At the start of the month, Mr Yushchenko's chief of staff Oleksandr
Zinchenko resigned, accusing senior government figures of being as corrupt
as the former regime.
Then Mr Yushchenko's key adviser, TV magnate Petro Poroshenko, quit his
post, and finally Mr Yushchenko sacked Yulia Tymoshenko and her entire
cabinet, saying he had lost confidence in their ability to govern.
With Ukraine's notoriously fractious parliament in disarray and refusing to
agree a new prime minister at the start of last week, Mr Yushchenko reached
out to the only man able to deliver, Mr Yanukovich, and his Party of
Regions. Mr Yushchenko announced: "It's time to bury the war hatchet." He
shook hands with his adversary.
The result is a political alliance that has left ordinary Ukrainians
bewildered. "This alliance of Yanukovich and Yushchenko will dismay their
supporters," thundered the normally pro-government newspaper Ukraine
Moloda.
"This means that once more, east and west, business and power will be mixed
up. Many of those who stood on Independence Square will view this as a
betrayal."
Meanwhile, question marks remain over Ukraine's stalled reforms. Ms
Tymoshenko had been the prime mover behind an ambitious programme to
re-examine privatisations by the previous regime of Mr Yanukovich.
These included the sale, at half price, of steel giant Kryvovizhstal to
Viktor Pinchuk, son-in-law of former president Leonid Kuchma. This mill is
up for auction again at the end of October and it will be seen as a key test
of the government's commitment to free enterprise.
A second test will be its willingness to investigate the evidence of
corruption that Mr Zinchenko had provided.
This weekend, chief prosecutor Svyatoslav Piskun insisted all leads would be
followed up, but added cryptically that the information would be passed to
the president, making no mention of whether that would lead to prosecutions.
Mr Yushchenko is also under pressure after allegations in the media that
exiled Russian tycoon Boris Berezovsky bankrolled the Orange Revolution,
allegations the businessman has denied.
Finally, Mr Yushchenko, having sacked the last government, will now have to
prove that this new "technocratic" administration can halt his country's
recent decline.
Since Mr Yushchenko took power, economic growth has slowed from 12 per
cent to 6 per cent, inflation is rising and opinion polls show those
thinking the country is on the right track have slumped from 43 per cent in
April to 23 per cent now.
This month's bloodletting may be the start of fresh instability. Ms
Tymoshenko remains a powerful figure, particularly in western Ukraine, and
she has committed herself to fighting for power in parliamentary elections
in six months' time. These elections have added significance, because with
them will come constitutional changes moving power from president to
parliament. -30- [The Action Ukraine Report Monitoring Service]
==============================================================
11. DEMOCRACY IN UKRAINE:
THE BITTER TASTE OF THE ORANGE REVOLUTION
Amid scandal and political paralysis, the promise of a new era for Ukraine
under Viktor Yushchenko has already begun to look hollow. Now Amnesty
International has joined the chorus of critics with allegations of police
torture. Andrew Osborn reports
COMMENTARY AND ANALYSIS: Andrew Osborn
The Independent Online Edition
London, UK, Wednesday, 28 September 2005
The Ukrainian President Viktor Yushchenko will be feted by the Queen in
London next month and lauded by Cherie Blair for his role in last year's
"orange revolution", which ended a decade of Soviet-style authoritarianism.
The Royal Institute of International Affairs has decided to make him the
first recipient of its prestigious Chatham House Prize, an honour bestowed
on "the individual deemed to have made the most significant contribution to
the improvement of international relations in the previous year".
The veteran Ukrainian politician has become accustomed to international
plaudits since last December, when he succeeded in overturning the results
of a rigged election by bringing thousands of protestors onto Kiev's streets
before going on to decisively defeat his discredited rival in a re-run.
Time magazine has since named Mr Yushchenko among the 100 most influential
people in the world and he has received substantial recognition in America,
including the sought-after John F Kennedy Profile in Courage award.
Few leaders of former Soviet republics get the chance to address the US
Congress or receive the rapturous reception which he did. Fewer still find
themselves in the running for this year's Nobel Peace Prize. However, Mr
Yushchenko appears to be falling victim to a phenomenon which plagued a past
winner of the Peace Prize, Mikhail Gorbachev. He was admired in the West for
his role in peacefully bringing about an end to Communism but despised at
home.
Mr Yushchenko is sliding ever closer to the same paradox. Respected abroad,
many are already accusing him of betraying the ideals of the orange
revolution he fathered. His critics allege that he has become so dazzled by
international praise that he has taken his eye off the ball and presided
over the replacement of one corrupt elite with another.
That he has broken his revolutionary promises, befriended the very people he
railed against during the revolution, failed to stamp out corruption
nationally let alone among his own inner circle and not made a sufficient
break with the discredited methods of his Soviet-era predecessor Leonid
Kuchma. His critics' message is stark: the revolution has not delivered on
its early promise and shows no signs of doing so.
Amnesty International yesterday added its voice to a growing chorus of
criticism, accusing him of doing too little to stamp out police brutality
and torture. The human rights group said that, although Mr Yushchenko's
government had paid lip service to its concerns, little had been done since
January when he took office.
"Despite promising words from the new government, Amnesty International and
local human rights organisations have received allegations of torture and
ill-treatment in police detention in the six months since the new government
came to power," it said in a statement. The Ukrainian authorities said they
were not yet ready to respond to the report.
Mr Yushchenko is unlikely to welcome Amnesty's findings but what is likely
to worry him more is the serious disenchantment setting in among many of his
supporters. His main problem is that the "orange government" he put together
at the beginning of the year no longer exists.
Earlier this month he sacked his entire government after cabinet members
began to publicly accuse one another of corruption and cronyism. Mr
Yushchenko said petty infighting had brought the government to a standstill.
The most high-profile victim of his house-cleaning was his charismatic yet
controversial prime minister, Julia Tymoshenko. Known as the "orange
princess" because of her glamorous looks and decisive role in marshalling
the crowds last year, Ms Tymoshenko was for many Ukrainians a symbol of the
revolution.
Analysts argue that Mr Yushchenko's decision to dismiss her and many of her
closest aides from government has riven the orange movement in two and cost
the president valuable support.
Apparently undeterred, Mr Yushchenko yesterday continued the process of
naming members of his new government without Ms Tymoshenko's involvement.
A relatively obscure Russian-born technocrat called Yuri Yekhanurov has
taken her job as premier and Mr Yushchenko now faces the unsettling prospect
of facing off against Ms Tymoshenko at the ballot box in elections at the
end of March.
Once comrades-in-arms, the two have metamorphosed into bitter political
enemies and Ms Tymoshenko makes no secret of the fact that she wants power
at Mr Yushchenko's expense. In his bid to claw his way back to contention
the Ukrainian President has struck a pact which appears to negate at a
stroke the purpose of the orange revolution.
In essence, the revolution was about overturning the rigged election victory
of Viktor Yanukovych, Mr Yushchenko's pro-Russian rival. Many of those who
gathered in Kiev's Independence Square wanted Mr Yanukovych jailed for
election fraud and other alleged crimes.
Yet last week Mr Yushchenko was pictured on Ukrainian TV shaking his rival's
hand after signing a deal with him which secured 50 extra votes in order to
win a parliamentary vote on the appointment of his new premier.
In the eyes of his disillusioned supporters, he paid too high a price for
the 50 votes when he granted Mr Yanukovych and his supporters a legal
amnesty. Writing in the authoritative The Ukraine List, the analyst Mychailo
Wynnyckyj said it was a betrayal.
"Nine months after leading hundreds of thousands of Ukrainians into the
streets to protest against falsified elections, the President signed 'a
memorandum of understanding' with his former adversary ... in which he
agreed to support the drafting of a law that grants amnesty to all those who
committed or were complicit in falsifying the results of Ukraine's November
2004 vote!"
The pro-government daily Ukrayina Moloda also raised an eyebrow. "This
alliance will dismay many supporters of both Yushchenko and Yanukovych," it
wrote. "One of these politicians symbolises democracy, the other
authoritarianism. This means that once more East and West and business and
power will be mixed up. Many of those who stood on Independence Square will
view this as a betrayal."
Many of the original revolutionaries also wanted Mr Kuchma, Mr Yushchenko's
predecessor, to be held to account for alleged corruption. But according to
Ms Tymoshenko, speaking in a recent interview with the Russian daily
newspaper Izvestia, a decision has been taken to let him off the hook.
She said: "Yushchenko has explained to everyone that Kuchma is not to be
touched. He said that Kuchma is a former head of state and is therefore not
to be hunted like a rabbit. He will be allowed to keep all his property,
even unlawfully acquired property. In effect Kuchma has been granted a
pardon."
Ms Tymoshenko also accuses her former boss of knowing "in detail" about
corruption at the heart of his inner circle and doing nothing to stop it.
She singles out the activities of Petr Poroshenko, a confectionery tycoon
who headed the country's National Security Council until the government's
recent dismissal and who came into open conflict with her.
Mr Poroshenko, a close friend of Mr Yushchenko's, categorically denies her
accusations that he was trying to block the renationalisation of key state
assets so that they could be sold to wealthy Russian businessmen. An
investigation is underway.
Mr Yushchenko has also seen his corruption-busting image tainted by
revelations about the lifestyle of his 19 year-old son, Andrei, who is known
in the Ukrainian media as "the Son of God". Last summer, Yushchenko Junior
was revealed to be enjoying a sybaritic lifestyle, driving a rare BMW around
Kiev, and brandishing a mobile phone and a watch beyond the wildest dreams
of most Ukrainians.
Mr Yushchenko weathered the scandal by publicly berating his son but the
damage was done. There is also the troubling unsolved murder case of a
leading investigative journalist.
Georgiy Gongadze's decapitated body was found in a forest outside Kiev two
weeks after he was abducted in September 2000 while investigating
allegations of corruption at the heart of Leonid Kuchma's government. Mr
Yushchenko has repeatedly promised to bring the perpetrators to justice and
indeed three former policemen are in custody and have apparently confessed
to the murder.
But to the public's frustration, the people who ordered the killing remain
at large. Earlier this month, the international organisation Reporters
Without Borders criticised the Ukrainian authorities for dragging their
feet. Mr Yushchenko tried to stem criticism by posthumously awarding Mr
Gongadze the title "Hero of Ukraine" but the gesture won him little favour
with Lessia, the journalist's mother.
"Nobody informs me about anything and nobody contacts me," she said
recently. "If it wasn't for journalists the case would have been forgotten
long ago. Yushchenko and Kuchma are alike. Nothing has changed. I will
not go to Yushchenko. I will not offer him my hand."
To add to Mr Yushchenko's woes, the Ukrainian economy is not doing well.
Economic growth has slumped to 2.8 per cent this year compared with 12.1
per cent last year, prices are perceived to have risen unacceptably and
there have been problems keeping the country's petrol stations supplied. Mr
Yushchenko and his supporters blame the sacked Ms Tymoshenko, who
played a large role in managing the economy.
She says the figures look bad because in the past all the data was
falsified. Mr Yushchenko has also accused his erstwhile ally of trying to
use her post to get a $1.5bn tax bill owed by her former firm written off.
She denies the claim and has said she would sue him under different
circumstances.
It is all a far cry from last December, when the duo stood hand in hand in
front of tens of thousands of jubilant supporters and promised to build a
new Ukraine. A poll by the Kiev-based think-tank Razumkov last week
showed that Mr Yushchenko's personal rating had plummeted to 19.8
per cent in September from 48 per cent in February.
Ms Tymoshenko's rating, though a touch higher at 21.4 per cent, was little
better. The polling organisation concluded that Ukrainians' overall trust in
the government was "rapidly declining, and ... is approaching levels
characteristic for the final days of ex-president Leonid Kuchma's rule".
Mr Yushchenko may have won the international community's respect but if
he is to win back the goodwill he has squandered domestically in just nine
months he has some work to do. -30-
==============================================================
12. OBSERVER: QUEEN'S BLESSING
Award for Viktor Yushchenko, Ukraine's revolutionary leader
Financial Times, London, UK, Wed, September 28 2005
Support for Viktor Yushchenko, Ukraine's revolutionary leader who
recently had to fire his government, has come from elevated quarters.
Chatham House, the British blue-chip think tank, is awarding him its
inaugural prize, for improvement of international relations through his
2004 Orange Revolution.
Queen Elizabeth II will present the award to Yushchenko at the Mansion
House in the City of London on October 17. There will be a gala dinner with
a speech by Cherie Booth, Tony Blair's wife and a human rights lawyer.
Yushchenko will also speak earlier in the day. Observer just hopes their
speeches will not be made under the Chatham House Rule, where one
cannot report who said what. -30-
==============================================================
13. "NOTHING'S OK"
Signing the memorandum, the president may have earnestly wished
to put an end to the crisis. But the price he paid was too high:
the deal gave rise to a more serious crisis, a crisis of trust.
COMMENTARY: Serhii Rakhmanin
Zerkalo Nedeli, Mirror-Weekly, No. 37 (565)
International Social Political Weekly
Kyiv, Ukraine, Saturday, 24-30 September 2005 year
Viktor Medvedchuk hails President Viktor Yushchenko's steps. Yevgeniy
Kushnaryov expresses his concern lest participants in the Orange
Revolution become completely disillusioned with the new leadership.
Leonid Kuchma, without concealing his pleasure, preaches at Yushchenko and,
without concealing his displeasure, complains: "Ukraine is not like what he
wanted to see".
Viktor Yanukovych puts forward his "urgent" demands to the new leadership,
while experts regard him as a candidate for the post of First Vice Prime
Minister. His old colleagues are "sitting on suitcases," expecting to return
soon to their former offices in the Government House.
Those whom Yushchenko called bandits yesterday are called "victims of
political reprisals" today. The new leadership leans on them in lieu of
heroes of the Orange Revolution, who either accuse Yushchenko of betraying
its ideas or are accused by him of the same sin.
The president calls the chaos and dissention in the country "mutual
understanding and self-purification," making the situation look even more
absurd.
TWO MAIDANS
Last December, this scenario would have seemed impossible. This September,
it has happened. Too early were the people lulled by promises. Too soon was
the nascent democracy hypnotized into lethargy. Too late did many of us wake
up. Too painful was it to realize that we missed a unique chance.
And it lets all of us down to admit that our long-cherished dream---to wake
up in a normal country one sunny day---will remain a dream for years to
come.
But very soon Ukraine may turn into what the former president wanted to see,
because the ideas and ideals of Maidan (Maidan Nezalezhnosti, or
Independence Square, in Kyiv---site of mass protests during the Orange
Revolution) were betrayed before Yushchenko signed a pact with Yanukovych,
and before he sacked the Tymoshenko government.
The president's latest steps only formalized the betrayal. They finally
proved the impotence of the new political regime and its inability and
unwillingness to fulfill its historical mission of building a new system of
government based on entirely different values.
All Yushchenko had to do was abide by the law and at least try to keep his
own promises. One of the promises was that politics would no longer be
synonymous with "bargaining" and that politicians would never be sellers,
buyers, or go-betweens.
Yushchenko broke his oath, "for the sake of Ukraine's future," as he
explained. But does this country have a future if it has plunged back into
the dark past and turned into a marketplace where musty, secondhand
political merchandise is sold for MPs' votes and the people's dignity?
Some say that, on Maidan, Yushchenko was different. But it would be more
correct to say that Maidan must have been different to Yushchenko than it
was to the rest of us.
I, for one, remember the Maidan that was organized and inspired by those
who did not want to swallow a spit in the face, those who resolutely
protested against election fraud and falsifiers.
Now they are insulted again. This time they got a spit in the face from the
man who still takes the people's victory as his personal triumph, who is
ready to pardon those who violated the people's choice and delete a heroic
page from their history for the sake of his own political future.
I am sorry for this man. But there is no place for him on my Maidan.
THE PRICE OF THE MATTER
It was abnormal for a country in crisis to carry on for weeks without a
prime minister. It is good that Yuri Yekhanurov finally (at a second try)
got nearly 300 votes in parliament. There are no grounds at all to predict
his failure at the post of prime minister. Yekhanurov is a very nice man.
Even the most radical opponents of the new regime speak of him very
positively. There could not be a better head of this caretaker government.
So why did the trivial procedure of Yekhanurov's endorsement by parliament
arouse such a violent storm of comments, accusations, and excuses? In
politics, it does not matter much what happens. What matters is how it
happens and for what reason.
It all began when some people close to Yushchenko were accused of
corruption. His reaction was immediate and apparently inadequate: he sacked
the Tymoshenko government, although not a single member of it was mentioned
in the accusations. Then he began to talk of the government's populist moves
and poor performance.
That sounded strange, because he had sung praises to it just a few weeks
before and because its action program was actually consonant with his own
pre-election program. The Tymoshenko government thus became a hostage
to his populist promises.
Then Yushchenko went further: he initiated "a declaration of unity" with
some of his former opponents, including the Party of Regions (led by his
rival in the 2004 presidential race, Viktor Yanukovych). Yanukovych offered
him something similar immediately after the elections.
Yushchenko rejected the offer of cooperation then. If he had accepted it, he
would have demonstrated his strength. Now, extending a friendly hand to his
defeated rival, he looks weak.
They say it does not matter who helps put out a fire. But some "helpers" may
as well put it out with gas instead of water, and that is what the Party of
Regions is doing today. Making the Donetsk clan of oligarchs his ally,
Yushchenko is making himself a hostage to their growing demands and
appetites and an easy target for blackmail. Unfortunately, he never tried to
resist.
Now he hardly has a dozen reliable helpers and wise advisers in his once
"monolithic" team. Perhaps, he never had the team as such: some were
expelled and others fled. Those few who remain are either loyal to him
personally or are concerned more about their own future than the president's
or the country's.
Yushchenko rushed to beef up his thinned-out ranks with stopgap allies. Such
tactical moves are widespread in politics, but they are hardly appropriate
in this situation. Yushchenko keeps talking about the future, the
responsibility before his voters, and the need to fulfill his promises. But
why does he resort to support from his political opponents, ones who gave
different promises and relied on those who voted against him?
Yes, they are the people of Ukraine, too, but why didn't he remember about
it earlier? And why does he talk to Yanukovych, not these people? Is he sure
that his voters are ready to bless such an alliance? And is he convinced
that Yanukovych's voters approve of any alliance between him and
Yushchenko?
Were such serious concessions worth such a political bagatelle---the
endorsement of a caretaker prime minister?
Such an alliance would be justified if Yushchenko told the people honestly
and explicitly
a) why the acute political, economic, and ideological crisis broke out;
b) how the Tymoshenko government caused this crisis and how the
Yekhanurov government would overcome it;
c) what immediate steps the new government and the political leadership
as a whole would take;
d) who namely would be responsible for each area of activity in the new
government; and
e) what rights and duties each ally would have.
He did none of these.
It is still unclear what wrong the previous government did and how the new
government will differ from it. Last week's developments resembled a
Kuchma-style haggle. The only difference is that Kuchma always preferred to
play the first fiddle.
Trying to get Yekhanurov Okayed by parliament, Yushchenko hurried to buy
support from his opponents. But the Party of Regions was not the only party
in the deal.
There is a question: why did such implacable enemies of his as Tetyana
Zasukha and Viktor Pinchuk support him and even enlist dozens of other
antagonists of the new regime? Were they so concerned about the country's
future or, perhaps, their own assets?
And why did Yushchenko hear 'nay" from Volodymyr Filenko and Levko
Lukyanenko? Perhaps they did not want to pay too big a price for
Yushchenko's political well being. Or perhaps Yushchenko himself decided to
pay any price to Pinchuk, Akhmetov, and many others, who always criticized
him for wrong approaches to many problems.
But the problem lied in the absence of approaches as such. It is still
unclear whether Yushchenko was for or against re-privatization. If he was
for it, then what model and procedures did he mean? What did he mean by the
term "amnesty of shadow capital"? Why didn't he act on it, or why does he
keep talking about it?
How was he going to reform the law enforcement, health care, and education?
He never went any further than liquidating the Road Inspection Agency,
changing the uniform of the Guards, introducing Christian Ethics as a school
subject, and trying to turn the Health Ministry out of its building near the
Mariinsky Palace.
No one has an idea how President Yushchenko was going to reform this
country. It is at least clear that the president needs a manual-controlled
government, but it is unclear for what purposes. Hopefully, his purpose is
to stabilize the economic situation and abate the political disputes.
To this end, he needs professionals. But the promises he gave the opposition
between September 20 and 22 are sure to keep his hands tied. With such a
heavy burden, it will be very difficult to build a market economy and civil
democracy.
There is another scenario. The president will place loyal people in key
positions, letting them get their pieces of the pie and thus obliterating
all differences with the Kuchma regime. Then few will remember that the
people once voted for Kuchma as the lesser evil and voted for Yushchenko
as an alternative to that evil.
PLAIN ARITHMETIC
Yekhanurov's candidacy for the post of prime minister was put to vote twice.
Nothing changed in his appearance or behavior between the 20th and 22nd of
September, but the number of votes for him grew from 239 to 289.
On the eve of the first vote, Yushchenko initiated a declaration of "unity
and mutual understanding." On the eve of the second vote, he signed a
memorandum of the same. Any dictionary explains the difference between the
two documents: a declaration proclaims something while a memorandum states
factual and documentary aspects of something.
The declaration contained the leadership's promises. The memorandum
stipulated guarantees, without which the Party of Regions would turn
Yekhanurov down. As soon as it got them, Yekhanurov got an additional 50
votes.
Some allege that there was a secret protocol to the "Yushchenko-Yanukovych
pact." Others contend that there was no protocol and the promises were only
verbal. It may be true that Yushchenko promised Yanukovych and Akhmetov to
let them put their men in the chairs of governors in the East. But where is
the logic? In this case, there is a real threat of the country's cleavage,
no matter how much Yushchenko talks of unification.
In fact, it does not matter much what exactly Yushchenko promised to
Pinchuk, Akhmetov, or Pustovoitenko. We shall see everything very soon. We
can only add that at least three votes for Yekhanurov came from potential
ministers of economy and as many from potential ministers of transport. And
each of them earnestly believed that he was the only one to be offered the
post.
More likely than not, the problem is going to be resolved in the best
traditions of the Kuchma era: an inventory of promises, a few substitutions,
an arithmetic mean, and a green light to the government on a short leash.
It should be noted that attempts to enlist situational supporters were made
simultaneously by Yushchenko and Tymoshenko, and the wrestle between the
former partners is only just beginning.
Tymoshenko ought to thank Yushchenko for his open alliance with the Donetsk
clan, the memorandum, and the "bought" votes for Yekhanurov. Now she has
lots of pretexts for criticism and trump cards for her own game.
Besides, the president exposed himself as a gross traitor of the "Maidan
ideals."
The document, signed by Yushchenko, Yekhanurov, and Yanukovych, deserves
particular attention. The title "Memorandum of Mutual Understanding between
the Authorities and the Opposition" looks fine. But does the Party of
Regions represent the entire opposition?
During Kuchma's presidency the honor to bear the name "opposition" was
granted to the Communists. He called the Communist Party a "consistent
opposition" and the rest just "a mob of carpers." One of those carpers later
became president and learned the lesson well.
There may be different attitudes to the Communists or the Social Democrats,
but they are real opponents to this political leadership and are far more
active and consistent than the Party of Regions. Yet they did not sign the
memorandum. So why not call a spade a spade: an "agreement between
President V. Yushchenko and Party of Regions leader V. Yanukovych on
support for the Candidacy of Yekhanurov"?
The text of the memorandum is short and its contents are surprising. After a
brief preamble about responsibility, reconciliation, and consolidation, the
sides state the following:
POINT ONE: "Implementation of the political reform." But it was approved by
the parliament and formalized in a law, which is to take effect on January
1, 2006, unless the Constitutional Court rules it as unconstitutional.
So what should the promise to carry out this reform mean: a promise not to
break the law, a promise not to bring pressure to bear on the Constitutional
Court, or readiness to ignore the Constitutional Court's verdict if it rules
the law as unconstitutional?
It is hard to say which looks more insane in the legal sense. In the
political sense, this point looks even more absurd. Yushchenko once promised
not to block the political reform to Kuchma, Yanukovych, Solana,
Kwasniewski, Adamkus, scores of other politicians, hundreds of journalists,
and millions of TV viewers.
Does this point in the memorandum mean that the Party of Regions had
doubted his honesty until it was signed? If so, didn't the president feel
offended by such suspicions? And if he did, why did he swallow the insult?
And one more question: if the "Donetsk men" have not trusted him until
now, what makes them believe that he will not lie this time?
POINT TWO: "A ban on political persecution of the opposition." It looks
really stunning. Any persecution for political motives is prohibited by the
constitution. So all it takes to prevent such is to abide by the Organic
Law, instead of signing a legally invalid memorandum.
If we presume that the masterminds of political reprisals have ignored the
constitution, then it is naive to expect them to comply with this
memorandum.
Now let us consider the legal aspect of this point. Yushchenko undertakes to
"stop and prevent political persecution of the opposition." Does this mean
that he admits to this practice?
If not, then what is this talking about it? And what about "jails for
bandits"? Or does this point imply something like "other times, other
bandits"?
POINTS THREE AND FOUR: These suggest the same inscrutable ideas:
the authorities literally assume an obligation to amnesty for those guilty
of election fraud. Did the authors of the memorandum forget that it was in
protest against election fraud that millions of Ukrainians took to the
streets?
The people demanded respect for their civil rights, not the presidency for
Yushchenko, who joined the protest actions later. And it is not Yushchenko's
right, but rather judges' right to sentence or pardon the guilty.
Yushchenko's counselor Yuri Klyuchkovsky was courageous enough to
object, "Amnesty cannot be warranted by a memorandum, even if it has
such weighty signatures. It is warranted by the law."
Yushchenko went even further. He agreed to legislatively extend immunity
from criminal prosecution to members of local self-governments. As it is
known, many masterminds and perpetrators of all those crimes at polling
stations hold mandates of people's representatives. No further explanations
are needed.
POINTS EIGHT AND NINE: These clearly suggest that the president gives up
on any efforts to re-nationalize illegitimately privatized enterprises: he
pledged to legislatively guarantee property rights and prevent any pressure
on courts. But he should have determined his stance on this issue earlier
and at his own free will instead of now, under pressure.
The president calls for "barring pressure on courts" and thus admits to it.
At the same time, he gives no reference to facts or names. He neither points
to the offenders nor assumes any personal responsibility. He seems to forget
his own words: "Kryvorizhstal was stolen from the people!"
POINT TEN: the government's populism stems from Yushchenko's populist
pre-election promises. Proceeds from "re-privatization" were supposed to be
the major source for covering the enormous spending on higher wages and
social security programs. Where will the Yekhanurov government get such
money if the re-privatization campaign is canceled?
The Party of Regions also demanded from Yushchenko what he insisted on
during the election race but forgot afterwards, namely: to adopt a law on
the rights and status of the opposition (which would guarantee to opposition
MPs chairmanship in the standing committees on freedom of expression and
information, on budgetary affairs, and on organized crime and corruption,
and the special controlling commission on privatization); to adopt laws on
the Cabinet of Ministers and on the President of Ukraine; to transparently
form the government on principles of professionalism and separation of
business from administration.
The latter sounded like mockery (but not more hypocritical than the rest of
the text). Signing the memorandum, the president may have earnestly wished
to put an end to the crisis. But the price he paid was too high: the deal
gave rise to a more serious crisis, a crisis of trust.
Yushchenko was coerced to flog himself in public, back down on his
pre-election promises, and renounce the principles defended by millions
of people.
What did he get in return.a few dozen votes for a caretaker prime minister
and a dubious proof of his political potency?
Was this his reward to the heroes of the Orange Revolution? -30-
----------------------------------------------------------------------------------------------------------
LINK: http://www.mirrow-weekly.com
===============================================================
14. RUSSIA CANCELS ARREST WARRANT FOR FORMER UKRAINIAN
PRIME MINISTER YULIA TYMOSHENKO
Associated Press (AP), Moscow, Russia, Monday, September 26, 2005 .
MOSCOW - Russian prosecutors said Monday they had canceled an arrest
warrant for former Ukrainian Prime Minister Yulia Tymoshenko after she
appeared in Moscow over the weekend and was questioned.
Tymoshenko had been accused of bribing Russian defense officials while she
headed Ukraine's main gas distributor, the now-defunct United Energy
Systems. Tymoshenko has denied the Russian charges, saying they were
politically motivated.
Russia's main military prosecutor's office canceled the international arrest
warrant it had issued a year ago because Tymoshenko had provided
investigators with necessary "explanations" over the weekend and agreed to
show up voluntarily for questioning in the future, the prosecutor-general's
press service said in a brief statement.
Tymoshenko's spokesman, Petro Yakobchuk, said the former prime minister
had been in Moscow Sunday and was questioned by prosecutors.
"Common sense prevailed over absurdity," said Valentyn Zubov, a lawmaker
from Tymoshenko's parliamentary faction, of Russia's decision to cancel the
arrest warrant. "All the accusations against Tymoshenko were groundless....
I feel shame for Russia and (Russian President Vladimir) Putin."
Zubov said that Russia's attitude toward Tymoshenko had hurt the ethnic
Russian population in Ukraine and damaged Russian-Ukrainian relations.
Tymoshenko, who was ousted from the prime minister's job on Sept. 8, had
been protected by the immunity that all high officials enjoy. But after
losing her job, she lost that immunity. There was no suggestion that her
former ally, President Viktor Yushchenko, would consider handing over
Tymoshenko, but her position, nevertheless, became more vulnerable.
Tymoshenko didn't travel to Russia during her seven months at the head of
Ukraine's government - once canceling a planned visit earlier this year, a
day after Russian prosecutors said they wouldn't drop the charges, though
they did say they would respect her immunity as an official.
At the time, she said the visit's cancellation was due to President Viktor
Yushchenko's order to all Ukrainian officials with responsibilities for
agriculture to concentrate on the spring sowing campaign. -30-
===============================================================
15. YUSHCHENKO INITIATES CREATION OF BABYN YAR HISTORICAL
AND CULTURAL RESEARCH IN KYIV
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 26, 2005
KYIV - President Viktor Yuschenko is initiating creation of the historical
and cultural reserve Babyn Yar in Kyiv. The President signed relevant order
1172/2005-rp on September 23, a copy of which is available to Ukrainian
News.
Particularly, Yuschenko commissioned the Cabinet of Ministers to examine
the issue of creation of the Babyn Yar reserve by October 15.
As Ukrainian News reported earlier, in June, the Kyiv municipal
administration erected a monument to Nazi victims at the intersection
between Dorohozhytska and Oranzhereina streets near Babyn Yar.
About 200,000 Kyiv residents died in Kyiv during the Great Patriotic War
while about 100,000 were taken out of the city.
Over 100,000 Kyiv residents and war prisoners of various nationalities
and religious denominations were shot at Babyn Yar. -30-
===============================================================
16. "THERE WILL BE NO MORE REVOLUTION"
Field Commander of "Orange Revolution" in Moscow
INTERVIEW: with Yuri Lutsenko by Vladimir Soloviev
Kommersant, Russia's Daily Online
Moscow, Russia, Monday, September 26, 2005
At the end of last week, Yuri Lutsenko, head of the Ministry of Internal
Affairs of Ukraine, former organizer of "Orange Revolution" demonstrations,
had negotiations in Moscow with his Russian colleague, Rashid Nurgaliev.
Before departure back to Ukraine, Lutsenko told Kommersant correspondent
Vladimir Soloviev about why there would be no more revolutions in Ukraine.
After Rada disapproval's of Yuri Ekhanurov for the prime minister position,
the State Secretary Oleg Rybalchuk said that he has a backup plan -Yuri
Lutsenko. Why?
Well, first of all, Oleg is a good friend of mine. Second, that was a
special operation of some sort. If the candidature of Lutsenko for the
position of prime minister would be offered for real, it would create a
mixed reaction in Rada. The opposition factions would for sure block the
tribune and would start to scream: "E-kh-a-nu-rov!" Let's say it was a
normal political joke.
[Question] What do you think about Ekhanurov?
I've known him for a long time and I respect him. And I wouldn't hide the
secret if I'd tell you that right after Yushchenko's victory in the
corridors of Supreme Rada, I was loudly supporting Ekhanurov's
candidacy for the prime minister position. Already in that time he could
become a stabilizing factor for the situation in Ukraine.
He would be well received by business people in Ukraine and Russia. He would
be well understood by those who were demonstrating in Kiev and Donetsk. I
think he was wanted already then. However, the revolutionary situation went
in a different direction and Ekhanurov was called in only six months after.
[Question] Do you think another "Orange Revolution" could happen under the
leadership of Yulia Timoshenko?
Let's speak sincerely. The people on the squares were not standing because
of Timoshenko or even Yushenko. The people wanted freedom. They were
expressing an anger against falsifications and against the president that
they did not choose. Thus, it would be impossible to bring these people back
into the streets when democracy and freedom already took hold in Ukraine.
Of course it is possible to repeat some actions of the protest against
certain politicians. It is not difficult. I can assure you in that as a
field commander of the "Orange Revolution" (this name Lutsenko had during
the mass protests -Kommersant).
However, it is impossible to repeat the "Orange Revolution," when
socialists, nationalists, democrats, anarchists, non-partisans, Eastern and
Western Ukrainians, Christian Orthodoxy, Catholics, and atheist - all
gathered in the same city squares.
They all wanted freedom. However, what is going on now is nothing more than
internal party fight - the clash of ambitions. Right now the "Orange
Revolution" is not possible.
[Question] Were you, as a field commander, disgusted by the union of Viktor
Yushenko and Viktor Yanukovich?
God forbid. I don't split Ukraine for enemies and friends. I was protesting
not against citizen Yanukovich. I was organizing people's demonstrations
against the falsifications. For that reason, Yanukovich, who backed by 15 -
20 percent of Ukrainian voters, maybe is not my favorite, but is still a
very real politician. I took absolutely normally the dialog of the current
president and the politicians from the opposition. Of course, I have a
negative attitude to him, but it is my civil right.
[Question] So, you think it is not part of some big game of Viktor Yushenko
against Yulia Timoshenko?
Everything develops in its natural way. The cleaning stage of the revolution
is over and now it is time to make a dialog within different electoral
groups. In this sense, the high voiced dialog of Yushenko and Timoshenko or
clenching teeth dialog of Yushenko and Yanukovich - are normal things. I
think this is the right of the citizens with different beliefs to talk to
each other and to remain the citizens of one country.
[Question] What do you think about the political reform?
I have pretty good opinion about it. I was parliament member from the
Socialist party and this party was the initiator of the reform. I voted for
these bills. And besides, I consider "orange revolution" to be a real
revolution because it changed not only the president but also the powers
themselves.
If it would not be for the Constitutional changes, it would be just change
of faces. But when Rada took the decision about the reform it was a
revolution.
[Question] However, recently Viktor Yushenko suggested postponing
the reform. It looks like he doesn't really need that.
Everything is in the past now. Today, the president believes the necessity
of political reform that would start from Jan. 1 of next year.
[Question] It looks like the election campaign already has started. Are
Socialists and "Our Ukraine" staying friends?
I wouldn't call that a friendship even in today's relations. The Socialists
and "Our Ukraine" have different views for many issues. They are united by
common understanding of "being Ukrainian."
Yes, the election campaign has started, but I think Socialist Party, "Our
Ukraine" and bloc of Vladimir Litvin (Speaker of Rada -Kommersant) will run
their own campaigns. However, I think that they wouldn't fight with each
other. We have different views, but we have common strategic vision of
Ukraine's future.
[Question] When you became an interior minister, you promised within two
months to purge the police from thieves and to get rid off corruption. Did
you fire a lot of people already?
I did not promise to do so within two months. I said that I would start a
serious campaign. For seven months of this year about 5,000 people had
voluntarily resigned, about 2,000 could not pass the personal certification
and about 400 were charged with crimes.
To let you compare, I'd tell you that in National Security Service there
were no charges brought up against anybody and the tax service has only
16 people under investigation.
So, the purge was pretty radical, and that allowed me to surround myself
with colleagues and allies from the right, from the left, and the main
thing - from the back.
In June we announce the movement to decriminalize the society. And that
become possible only after internal purges within our ministry.
[Question] Does the fact that you had no connection in the past with police
prevent your job? You suffered from the police, but you never work for them.
I've never suffered from the police. The communications with law
enforcements were always normal. During the mass demonstrations of protests
we met with our acquaintances from the police before every public action and
talked about the rules of game: what we can and what we cannot do.
That's because I was responsible for hundreds of thousand my people and they
were responsible for thousands of theirs. I always respected those, who kept
the word and had the officer's honor. All these facts allowed me -a civil
person- without any problem to become the head of the Interior Ministry.
And the fact that I was not connected with police previously is rather a
plus than a minus. The outside look is always more interesting that the
inside one. But, then again, I wouldn't be the judge on that one.
[Question] What is going on now with Gongadze case?
The Prosecution Office has the case. Our job is the operative work. But, I
would be lying, if I would say that is all we care about. Georgy Gongadze
was not just a man, who woke up Ukraine. He was working for the
newspaper where I was the editor. He gave his life for the consolidation of
anti-Kuchma opposition.
Coming to the Interior Ministry on the wave of "orange revolution", I knew
that I had to contribute to this case. The investigation advanced quite far
already. It was me, who announce the amnesty for the low level case
participants if they would just name the main figures. That turned out to be
an effective tactic.
The former and still active police officers, who participated in this crime,
were giving the information to me in my office. Because of their accounts,
the investigation group arrested three murder suspects. This is a giant
step. The next question we have: who did order the murder?
The society demands the truth and the truth they shall receive. Today, we
know who did the killing. Tomorrow we'll tell who ordered it. The people
should not wait for years to learn the results of investigation.
[Question] Why did you come to Moscow?
First of all, it is not my first time in here. I was just riding the car
with the first deputy of your Interior Ministry and was remembering my first
time in here. I don't know what caused me to think about it. Maybe it was
shot of vodka, which I drank for the approval of our new prime minister, or,
maybe, it was just a special mood.
My father and I came here in 1980. In 5 a.m. we took our place in line to
the Lenin's mausoleum. It was minus 23 degrees of Celsius - pretty cold.
Then, in the top floor of the Hotel Moscow I drank vodka for a first time.
My father insisted so I'd warm up. So, for that reason Moscow is not a
foreign capital for me.
Our histories are too close - all our great victories and great defeats. I
came here for negotiations with my colleague Rashid Purgative. We have a
lot of common problems and common ways to improve our relations. Only
cooperation will help us. However, that was not the only reason for my
visit. I came here with joy because it is Moscow and because I am from Kiev.
But, I think Ukrainian authorities have a lot of questions to the people who
also found their comfort here as well.
This is temporary. Their freedom here is temporary, and they know it too.
Our meeting with the minister will touch this problem also. Everything will
be resolved- maybe not as fast as we want it, but it will be resolved.
I am sure that Mr. Bakay, (former Head of the Presidential Administrative
Office, which hides in Russia from Ukrainian authorities - Kommersant) who
suddenly becomes a Russian citizen, will respond here in the same manner
as he will be responding in Kiev.
And other our citizens, who live in your capital understand that it's all
temporary. It doesn't matter when they will answer for their crimes. What
really matters is the idea that it's unavoidable. Our mutual actions could
be improved. And I feel mutuality there.
[Question] Did you bring to Moscow something new?
One thing for sure - I did not bring an orange tie to Moscow. -30-
----------------------------------------------------------------------------------------------------------
LINK: http://www.kommersant.com/page.asp?id=612012
===============================================================
"THE ACTION UKRAINE REPORT - AUR"
An Agent Of Change
A Free, Not-for-profit, Independent, Public Service Newsletter
ARTICLES ARE FOR PERSONAL AND ACADEMIC USE ONLY
Articles are Distributed For Information, Research, Education
Discussion and Personal Purposes Only
==============================================================
UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
==============================================================
SigmaBleyzer/Bleyzer Foundation Economic Reports
"SigmaBleyzer - Where Opportunities Emerge"
The SigmaBleyzer Private Equity Investment Group offers a comprehensive
collection of documents, reports and presentations presented by its business
units and organizations. All downloads are grouped by categories:
Marketing; Economic Country Reports; Presentations; Ukrainian Equity Guide;
Monthly Macroeconomic Situation Reports (Romania, Bulgaria, Ukraine).
LINK: http://www.sigmableyzer.com/index.php?action=downloads
"UKRAINE - A COUNTY OF NEW OPPORTUNITIES"
=============================================================
"WELCOME TO UKRAINE" & "NARODNE MYSTETSTVO" MAGAZINES
UKRAINIAN MAGAZINES: For information on how to subscribe to the
"Welcome to Ukraine" magazine in English, published four times a year
and/or to the Ukrainian Folk Art magazine "Narodne Mystetstvo" in
Ukrainian, published two times a year, please send an e-mail to:
ArtUkraine.com@starpower.net.
=============================================================
"THE ACTION UKRAINE REPORT- AUR" - SPONSORS
"Working to Secure & Enhance Ukraine's Democratic Future"
List of sponsors will be included again in the next edition.
==============================================================
"THE ACTION UKRAINE REPORT - AUR" is an in-depth, private,
independent, not-for- profit news and analysis international newsletter,
produced as a free public service by the non-profit www.ArtUkraine.com
Information Service (ARTUIS) and The Action Ukraine Report Monitoring
Service The report is distributed in the public's interesting around the
world FREE of charge. Additional readers are always welcome.
If you would like to read "THE ACTION UKRAINE REPORT- AUR"
please send your name, country of residence, and e-mail contact
information to morganw@patriot.net. Additional names are welcome. If
you do not wish to read "THE ACTION UKRAINE REPORT" around five
times per week, let us know by e-mail to morganw@patriot.net. If you
are receiving more than one copy please contact us and again please
contact us immediately if you do not wish to receive this Report.
==============================================================
PUBLISHER AND EDITOR - AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
---------------------------------------------------------------------------------------------
Director, Ukrainian Federation of America (UFA),
Coordinator, Action Ukraine Coalition (AUC),
Senior Advisor, U.S.-Ukraine Foundation (USUF),
Chairman, Executive Committee, Ukraine-U.S. Business Council,
Publisher, Ukraine Information Website, www.ArtUkraine.com,
Member, International Ukrainian Holodomor Committee
==============================================================
Power Corrupts and Absolute Power Corrupts Absolutely.
==============================================================