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Action Ukraine Report

 "THE ACTION UKRAINE REPORT - AUR"
                               An International Newsletter
                                     The Latest, Up-To-Date
                In-Depth Ukrainian News, Analysis, and Commentary

                "Ukrainian History, Culture, Arts, Business, Religion,
    Sports, Government, and Politics, in Ukraine and Around the World"

"THE ACTION UKRAINE REPORT - AUR" - Number 599
Mr. E. Morgan Williams, Publisher and Editor
Washington, D.C., Kyiv, Ukraine, THURSDAY, November 10, 2005

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

1. UKRAINE - MACROECONOMIC SITUATION - OCTOBER 2005
REPORT AND ANALYSIS: By Olga Pogarska and Edilberto Segura
SigmaBleyzer, Emerging Markets Private Equity Investment Group
Kyiv, Ukraine, Wednesday, November 9, 2005

2UKRAINE AGAIN LOWERS FORECAST FOR GDP GROWTH
                   THIS YEAR TO UNDER FOUR PERCENT
AP Worldstream, Kyiv, Ukraine, Wed, Nov 09, 2005

3. UKRAINIAN PRESIDENT LAMENTS DECLINE IN INVESTMENT
UT1, Kiev, Ukraine, in Ukrainian 1630 gmt 9 Nov 05
BBC Monitoring Service, UK, in English, Wed, Nov 09, 2005

4.     UKRAINE PRES: OPPOSITION SHOULDN'T BLOCK WTO,
                                         BUDGET BILLS 
Associated Press, Kiev, Ukraine, Wed, November 9, 2005

5.   SENIOR RUSSIAN MP WARNS UKRAINE AGAINST GOING
                         IT ALONE FOR WTO MEMBERSHIP 
RIA news agency, Moscow, in Russian 0851 gmt 8 Nov 05
BBC Monitoring Service, UK, in English, Tuesday, Nov 08, 2005

6SENIOR RUSSIAN MP SAYS UKRAINE JOINING NATO WOULD
                             ERECT NEW "BERLIN WALL"
          The MP thinks that Ukraine joining NATO would be madness
RIA news agency, Moscow, in Russian 1211 gmt 9 Nov 05
BBC Monitoring Service, UK, in English, Wednesday, Nov 09, 2005

7.   UKRAINIAN PRESIDENT VETOES POULTRY IMPORT BAN
Agence France Presse (AFP), Kiev, Ukraine, Tue Nov 8, 2005

8. UKRAINIAN PM, GERMAN INVESTORS DISCUSS FREE ZONES,
         IMPROVING INVESTMENT CLIMATE, GAS TRANSPORT
UNIAN news agency, Kiev, in Ukrainian 1836 gmt 8 Nov 05
BBC Monitoring Service, UK, in English, Tue, Nov 08, 2005

9.   UKRAINE WRONG TO LIMIT INTERNATIONAL ACCESS TO
 OFFSHORE OIL FIELDS, US AMBASSADOR JOHN HERBST SAYS
Interfax-Ukraine, Kyiv, Ukraine, Wed, November 09, 2005

10.  UK OIL AND GAS FIRM CARDINAL RESOURCES EXPANDS
                                    UKRAINIAN HOLDINGS 
By Ihor Yatsenko, FirsTnews, Kyiv, Ukraine, November 09, 2005

11. MILLENNIUM CHALLENGE CORPORATION BOARD IN THE US
             NAMES FISCAL YEAR 2006 THRESHOLD COUNTRIES:
                       UKRAINE INCLUDED FOR THE FIRST TIME
Millennium Challenge Corporation (MCC)
Washington, D.C., Tuesday, November 8, 2005

12. BAYER CROPSCIENCE MARKETING NEW CLASS OF HERBICIDE
                     FORMULATION IN POLAND AND UKRAINE
                   Pioneering formulation technology for cereal herbicides
Seed Quest website, news release from Bayer CropScience
Monheim, Germany, Thursday, October 27, 2005

13EUROPE FACING SERIOUS SHORTAGE OF SKILLED IT WORKERS
         Turkey, Ukraine expected to have shortfall of 30 percent in three years
Ian Limbach, Financial Times, London, United Kingdom, Tue, Nov 8 2005

14.      THE MOOD IS SOBER YET UPBEAT AT IEA'S INAUGURAL
                UKRAINIAN INVESTMENT SYMPOSIUM IN BOSTON
International Economic Alliance (IEA)
Boston, Massachusetts, Wednesday, November 9, 2005

15U.S.-UKRAINE FOUNDATION AND PARTERS HOLD SECOND
        WORKING SESSION OF U.S.-UKRAINE POLICY DIALOGUE 
U.S.-Ukraine Foundation (USUF), Washington, D.C.,
Kyiv, Ukraine, Wednesday, November 9, 2005
 
16.              "TEAR DOWN THE JACKSON-VANIK WALL"
EDITORIAL: The Ukrainian Weekly
Ukrainian National Association (UNA)
Parsippany, New Jersey, Sunday, November 6, 2005

17CONG WELDON SAYS SECRETARY RICE AND CONG THOMAS
   STAND IN THE WAY OF JACKSON-VANIK REPEAL FOR UKRAINE
By Peter Savodnik, Staff Writer, The Hill newspaper
Washington, D.C., Wednesday, November 9, 2005

18CONG WELDON MEETS WITH PRIME MINISTER OF UKRAINE
         CALLS FOR IMMEDIATE REMOVAL OF JACKSON-VANIK
Office of U.S. Congressman Curt Weldon (R-PA)
U.S. House of Representatives
Washington, D.C., Wednesday, November 2, 2005

19.      VITALI KLITSCHKO'S RETIREMENT ENDS BIG DREAM
                          OF KLITSCHKO BOXING BROTHERS
Roy Kammerer, AP Worldstream, Nov 09, 2005

19.        COURAGEOUS KLITSCHKO WAS NEVER A QUITTER
John Rawling, The Guardian, London, UK, Thursday Nov 10, 2005

21.           "COPING WITH FREEDOM AT KURKOV'S ZOO"
          Novels by Andry Kurkov, one of Ukraine's most famous writers
         Sympathetic insights into the opaque world of post-Soviet politics
By Judy Dempsey, International Herald Tribune (IHT)
Neuilly Cedex, France, Wednesday, November 9, 2005
========================================================
1
.   UKRAINE - MACROECONOMIC SITUATION - OCTOBER 2005

REPORT AND ANALYSIS: By Olga Pogarska and Edilberto Segura
SigmaBleyzer, Emerging Markets Private Equity Investment Group
Kyiv, Ukraine, Wednesday, November 9, 2005

   UKRAINE - MACROECONOMIC SITUATION - OCTOBER 2005
                      Monthly Update Report By SigmaBleyzer
                           [Report with Graphics is attached]

                                            SUMMARY
[1]  In September, Ukrainian economic growth recovered, expanding by
3% yoy while cumulative growth remained unchanged at 2.8% year-over-
year (yoy).

[2]  Over January-August 2005, the consolidated budget registered a
surplus of about 2.7% of period GDP on the back of over-fulfillment of
revenues and lower than expected expenditures.

[3]  In October, the government successfully placed EUR 600 million of
Eurobonds and re-sold Kryvorizhstal steel plant for a record high price for
Ukraine. While the sale will soften budget deficit concerns for this and
next year, it raised a number of challenging questions related to
distribution of privatization receipts and future re-privatization deals.

[4]  Consumer price inflation decelerated to 13.9% yoy in September; price
and exchange rate stability in the near future will crucially depend on how
and when the money from the Kryvorizhstal privatization will be spent.

[5]  Ukraine intensified negotiations to join NATO.

                                   ECONOMIC GROWTH

Following contraction of the gross domestic product (GDP) by 1.6% yoy in
August, the Ukrainian economy rebounded at 3% yoy growth in September.
As a result, cumulative GDP growth remained unchanged at 2.8% yoy over
January-September.

The stabilization of the cumulative growth rate occurred thanks to
acceleration in agriculture and the extractive industry, still moderate
growth in the processing industry and slower contraction in domestic trade
and construction.

Due to a good harvest this year, value added in agriculture increased by
3.9% yoy over January-September. However, this is a considerable slowdown
compared to the impressive 24.7% yoy growth in the respective period last
year. Domestic trade continued to decline, though at a slower pace.

Over January-September, value added in the sector contracted by 4.2% yoy;
however, reduction was actually reported for wholesale trade rather than for
retail. In fact, benefiting from rising household demand (due to a 24.4% yoy
increase in real income over January-August), retail trade turnover
increased by 21.8% yoy over January-September.

At the same time, turnover in wholesale trade declined by almost 10% yoy
over the period. The reduction in wholesale trade should be primarily
attributed to the considerable slowdown in manufacturing. Compared to
January-September 2004, this year's value added in manufacturing declined
by 13.5 percentage points (pps), reaching 3.1% yoy growth.

Following completion of large repair and infrastructure works, construction
continued to report decline in its value added, which contracted by 7.2%
yoy. However, the sector performance improved slightly compared to the
8.1% yoy reduction in January-July.

In general, this year's sharp deceleration of Ukrainian GDP growth is partly
attributed to a high base effect, rising energy prices, declining world
demand for metals and, most importantly, a sharp downturn in both domestic
and foreign investments.

Considering current macroeconomic performance, the government downgraded
its GDP forecast for 2005 to 3.5% yoy in mid-October, down from 4% yoy set
just a month ago. This was the fourth downgrade of economic growth for this
year, down from the original 8.2% yoy growth set in March.

Despite quite optimistic GDP growth for 2006 (forecasted by the government
to reach 7% yoy), the prospects for economic growth next year are not very
favorable. Following two years of good harvest, agriculture may perform
quite poorly due to a high base effect and smaller planted areas (down by
22.6% yoy as of October 3rd).

Moreover, despite another socially-oriented budget, consumption may grow
at a more modest rate due to a high base effect, while acceleration in
investment activities may be expected only in the second half of the year
due to political uncertainties related to parliamentary elections in spring
2006.

After declining over June-July, industrial output growth rebounded in
August, expanding by about 1% yoy. Despite September's reported
industrial output increase of same 1% yoy, cumulatively it kept
decelerating.

Over January-September, the growth in industry slowed to 3.2% yoy
compared to 14.4% yoy in the corresponding period last year.

The major reason for growth deceleration in the sector was a further
slowdown in manufacturing. The slowdown should be attributed to
considerable deceleration in machine-building and further contraction in
metallurgy.

On the back of explosive growth in the respective period last year (33.5%
yoy) and lower investments in machinery and equipment, growth in
machine-building slowed to 5.3% yoy over January-September.
Cumulatively, metallurgical output declined by almost 3% yoy over the
period.

However, following stabilization of world steel prices, contraction in
metallurgy slowed considerably to 1.2% yoy in September, up from a 7%
yoy decline a month ago. On the upside, stimulated by high world demand
for base metal ores, output in the extractive industry grew by 6.5% yoy in
September, bringing cumulative growth to 3.5% yoy.

The food industry expanded by 14.5% yoy over January-September, up
from 12.1% yoy recorded in the respective period last year.

                                         FISCAL POLICY

Over January-August 2005, the consolidated budget surplus reached UAH 6.8
billion (about $1.34 billion), which is equivalent to 2.7% of period GDP. So
far, positive budget performance was achieved thanks to over-fulfillment of
consolidated budget revenues and lower than expected expenditures.

Budget revenues constituted UAH 84 billion ($16.6 billion), increasing by
35.8% yoy in real terms. Over the period, collections from enterprise profit
tax and import duties increased by 48.2% yoy and 55.7% yoy in real terms,
respectively. Value added tax reported the largest increase in receipts, by
a real 81.3% higher than in the corresponding period last year.

However, this success is somewhat exaggerated due to advance payment of
enterprise profit tax and accumulation of VAT refund arrears in the amount
of UAH 2.6 billion (about $515 million) as of October 1st.

At the same time, expenditures grew by a more moderate 27.3% yoy in real
terms to reach UAH 77.2 billion ($15.3 billion). According to the State
Treasury of Ukraine, over eight months of the year, state budget
expenditures were executed by 53.6% of the planned amount for 2005.

At the same time, expenditures of the general fund of the state budget were
under-financed by 6.3% of the planned amount for January-August. At the
same time, social expenditures were fully executed. Over January-August,
social payments grew by a real 58.5% yoy. Under-fulfillment of other
expenditures may be explained by uncertainties related to the financing of
the targeted fiscal deficit.

The targeted budget deficit for 2005 is planned to be financed through
increases in privatization revenues and new borrowings. At the end of
October, however, it was unclear whether the government would have
sufficient resources to finance the expected deficit.

In particular, in the Budget Law 2005, receipts from privatization were
envisaged at UAH 7 billion ($1.39 billion), while less than 10% of that
amount was received as of October 1st.

Thus, the government actively issued domestic T-bills over January-July
to compensate for modest privatization revenues and reduce the cost of
previous borrowings.

However, in August-September, it stopped issuing new domestic instruments.
As a result, domestic debt declined during these months; since the beginning
of the year it has increased by 7% to UAH 22.4 billion ($4.4 billion).
External debt declined by 7.7% year-to-date (ytd) to $11.2 billion (in
hryvnia equivalent, external debt shrunk by an impressive 12.1% ytd).

To secure enough resources to finance the budget deficit on the back of
stalled privatization, declining public debt and considerable non-resident
interest in Ukrainian securities, the Ministry of Finance successfully
placed 10-year Eurobonds of EUR 600 million at the beginning of October.

Robust demand for Ukrainian Eurobonds, which exceeded EUR 2 billion
according to the Ministry of Finance, allowed the securities to be placed at
a record low annual yield rate of 4.95%. The leading international ratings
agencies, Standard & Poor's and Fitch, assigned a BB- credit rating to
these securities.

Poor privatization performance over January-September should be primarily
attributed to the controversial re-privatization issue. The situation
changed dramatically in October.

On October 24th, Ukraine sold 93.02% of the shares of Kryvorizhstal, a large
and profitable plant accounting for about 20% of Ukraine's steel production
with its own significant raw-material reserves and a close location to the
Black Sea ports. Kryvorizhstal was sold to Mittal Steel for about $4.8
billion on an open auction.

The price was six times higher than the amount paid in the mid-2004 tender
by the previous owner and exceeded the most optimistic forecasts.
However, despite the fact that the auction was fair and transparent, the
re-privatization process was not smooth.

Just one week before the event, the Ukrainian parliament adopted a number
of resolutions aimed at suspending the re-sale of Kryvorizhstal and
retention of the plant into state ownership.

Since these decisions were not fully lawful (due to the existence of the law
and a decree by the government regarding privatization of the plant) and the
deal was successfully resolved, this did not help the international image of
Ukraine.

The sale of Kryvorizhstal for the record high price (for both Ukraine and
the region) will soften budget deficit concerns for this and next year.
Moreover, it provided a powerful political boost for President Yushchenko
and his administration as one of his main election promises was fulfilled.

However, the resolution of the Kryvorizhstal deal will most likely not be
sufficient to revive the privatization process and attract foreign
investments in Ukraine despite the fact that there are a lot of other large
and potentially very interesting state-owned enterprises remaining.

The major reasons lie in slow economic reforms and political uncertainties
related to forthcoming parliamentary elections and subsequent appointment
of the new government.

Shortly after the Kryvorizhstal privatization, a number of challenging
questions were raised. The first was whether the sale ends re-privatization.
There were about 30 more enterprises whose privatization might have been
reconsidered.

With the appointment of Mr. Yekhanurov as Prime Minister, a clear message
was sent that despite popular pressure to continue re-privatization, the
government will be seeking to negotiate with the current owners of companies
rather than initiate the re-privatization procedure. However, it is unclear
how those enterprises that privatization was already contested will be
treated.

The second quite important question was how the funds received from the
privatization of Kryvorizhstal will be spent. Excluding amounts to be repaid
to the former owner and reserved for budget deficit financing, it is still a
substantial amount equivalent to approximately one-fifth of the annual state
budget revenues planned for 2005.

The opinions divide into those advocating using the money for social needs
and those for stimulating economic growth. The variety of opinions, even
among the ruling team, signifies that there is no clear vision and strategy
for the country's sustainable development.

In mid-October, the parliament refused to approve the draft fiscal budget
for 2006 developed by the Cabinet of Ministers as a basis for further
considerations. The major disagreement between the parliament and
government officials was the size of the fiscal deficit next year.

According to the draft, state budget revenues and expenditures were
estimated by the government at UAH 118.7 billion ($23.5 billion) and UAH
127.4 billion ($25.2 billion) with the deficit representing less than 2% of
2006 GDP.

At the same time, members of parliament insist on increasing the deficit to
3% of GDP and approving the budget with more realistic macroeconomic
parameters. The debates on the budget in the parliament are expected to
recommence at the beginning of November.

                                      MONETARY POLICY

In September, the monthly consumer price index (CPI) accelerated slightly
to 0.4% month-over-month (mom), up from zero inflation reported for the
previous month. At the same time, it changed the trend to descending in
annual terms, reporting a 13.9% yoy increase, down from 14.9% yoy in the
previous month.

Favorable consumer price performance in September should be attributed to
deceleration of food inflation to 16% yoy on the back of slower price growth
for sugar, bread, meat and vegetables. Gasoline prices gained 7.4%
month-over-month (mom), contributing to further acceleration of non-food
prices.

In annual terms, non-food prices accelerated to 5.2% yoy in September. The
surge in gasoline prices by more than 20% over August-September compared
to July's level may stimulate a further increase in transportation tariffs,
which already advanced by 23.7% yoy.

Together with a 13.2% yoy increase in the cost of public utilities, they
caused service tariffs to accelerate to 13.5% yoy. At the same time,
stabilization of world prices for crude oil may have a positive effect on
both non-food and service prices. In September, the producer price index
(PPI) stood at 14.6% yoy, unchanged from the previous month's figure.

The favorable price index dynamics was partly achieved thanks to NBU
measures to contain inflation and smaller purchases of foreign exchange. In
particular, the net purchases of foreign currency amounted to about $210
million, down from $736 million a month before.

During September, the foreign exchange market was almost balanced, which
may be explained by a smaller supply of foreign currency on the back of
increasing demand for it. As a result of substantial external debt service
and redemption payments and smaller purchases of foreign currency, the
NBU's international reserves declined by $194.4 million.

During October, the market for foreign currency was almost balanced as
growing demand for foreign currency due to increasing imports of fuel was
compensated by a larger foreign currency supply as a result of the
government's placement of EUR 600 million of Eurobonds.

The sale of Kryvorizhstal for a record high price raised concerns regarding
stability on the foreign exchange market and fulfillment of the monetary
targets for this year. On October 26th, the NBU Council decided to convert
the whole amount received from privatization of the plant into national
currency.

Not to endanger price stability and stability of the forex market, the
respective hryvnia amount will be immediately placed into the State Property
Fund account at Ukrainian Treasury. However, the situation will crucially
depend on how and when this money will be spent.

Following a number of restrictive measures introduced by the NBU in
August-September (including tightening of the regulations on reserve
requirements and an increase in the refinancing rate), September reported
deceleration of money supply growth at 31.3% yoy, down from a 35.6%
yoy increase in August.

At the same time, despite the gradually increasing lending interest rate,
the growth of credit to private sector expanded to 45% yoy in September. In
contrast, the growth of deposits continued to decelerate, slowing to 31.3%
yoy, down from a 37.1% yoy increase a month ago, responding to declining
deposit interest rates.

                    INTERNATIONAL TRADE AND CAPITAL

On the back of strong national currency, weakening external demand for
Ukrainian exports and higher production costs, Ukraine's foreign trade
balance continued to worsen in August.

Although exports growth recovered that month, advancing by 2% yoy up
from an almost 1% yoy decline in July, the deficit widened considerably
compared to the previous month due to a 40.7% yoy surge in imports.

As a result, the merchandise trade deficit reached $491 million in August,
a record low for the last six years. Robust growth in the first quarter of
2005, allowed exports to report a cumulative 6.8% yoy growth over
January-August.

However, the growth of imports exceeded that of exports by almost four
times. Thus, for the first time during the last five years, the cumulative
trade of goods account reported a deficit of $372 million over
January-August. For the same period last year, the trade of goods was in
surplus of about $3 billion.

By product breakdown, cross border metals sales remained the largest
contributor to growth of goods exports over January-August. At the same
time, exports of metallurgical products continued to decelerate sharply as
monthly growth rates turned into a negative 11.1% yoy in August, down
from an impressive 60% yoy increase in January.

Cumulative growth decelerated from 50% yoy in 2004 to below 16% yoy
over January-August. Exports of mineral products and machinery and
equipment account for the second and third largest shares in total
merchandise exports.

While growth in the volume of exported mineral products decelerated
from 23.5% yoy in 2004 to 15.7% yoy over January-August, exports of
machinery and equipment declined by 13.3% yoy in January-August, in
contrast to more than 30% yoy growth in 2004.

On the upside, export of cereals, primarily grain, expanded by 70% yoy
over the period, up from 50% yoy growth in 2004.

On the import side, imports of energy resources, accounting for the largest
share in total imports, advanced by 10.4% yoy over the period. Following a
decline in oil and gas imports in July, they rebounded in August, expanding
by about 8% yoy.

Acceleration was reported for almost all imported goods, especially for
foods, textiles, vehicles and machines and equipment. Considering
merchandise trade performance, this year's current account will
considerably narrow, but may remain in surplus by the end of the year
due to a positive trade balance of services and net transfers (mainly
remittances from abroad).

        OTHER DEVELOPMENTS AND REFORMS AFFECTING
                            THE INVESTMENT CLIMATE

During October, NATO General Secretary Mr. Scheffer visited Ukraine
and held a number of meetings with Ukrainian authorities. The visit was the
result of intensified dialogue on Ukraine's membership in the Alliance,
begun in April of this year.

While Mr. Scheffer did not announce the possible date of Ukraine joining
the Alliance, Ukrainian authorities hope this will occur in 2008.

During the informal Ukraine-NATO consultations in the defense ministers'
session held in Lithuania in late October, NATO representatives expressed
their readiness to help Ukraine implement necessary reforms and provide
financial support to utilize obsolete ammunition.  -30-
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NOTE: To read the entire macroeconomic report in a PDF format,
including several color charts and graphics click on the following link:
http://www.sigmableyzer.com/files/Ukr_Monthly_Ec_Report_10_05.pdf
----------------------------------------------------------------------------------------------
CONTACT: Olga Pogarska, Kyiv, opogarska@sigmableyzer.com.ua
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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2.   UKRAINE AGAIN LOWERS FORECAST FOR GDP GROWTH
                     THIS YEAR TO UNDER FOUR PERCENT

AP Worldstream, Kyiv, Ukraine, Wed, Nov 09, 2005

KYIV - Ukraine said Wednesday that GDP growth this year will be under 4
percent, the third time the government has lowered its forecast since the
beginning of the year.

"Unfortunately our optimistic prognosis regarding GDP growth of 4.5 to 5
percent will not work," said Economics Minister Arseniy Yatsenyuk.

He said the new estimate for the economy's growth in 2005 was 3.8 percent.
Currently, GDP growth is at 2.8 percent over last year and the government
hopes to increase it another percentage point by the end of the year, said
Yatsenyuk.

Last year, Ukraine recorded 12 percent economic growth, which earned the
ex-Soviet republic accolades as the fastest growing economy in Europe. But
some officials have questioned the accuracy of those figures.

Economists had earlier predicted a downturn in growth this year, caused in
part by falling world metals prices and investor uncertainty about the new
government's plans, particularly its reviews of past privatization deals.

Initially, the government of former Prime Minister Yulia Tymoshenko
predicted GDP growth this year to be 8.2 percent, but in September
decreased its prognosis to 6.0 to 6.5 percent. Several days later, the new
government of premier Yuriy Yekhanurov again lowered the forecast to
4.5 to 5 percent.  -30-
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3.  UKRAINIAN PRESIDENT LAMENTS DECLINE IN INVESTMENT

UT1 State TV, Kiev, in Ukrainian 1630 gmt 9 Nov 05
BBC Monitoring Service, UK, in English, Wed, Nov 09, 2005

KYIV - [Presenter] Competitiveness should become a feature of the
domestic economy next year. This is stated in the draft state programme
for Ukraine's development.

The document was discussed today at a cabinet meeting attended by
President Viktor Yushchenko, parliament speaker Volodymyr Lytvyn,
MPs and heads of regional administrations.

The economy is not in good condition and the hryvnya has depreciated,
Economics Minister Arseniy Yatsenyuk said. This was due to the sharp
increase in social payments, administrative interference in the economy,
and the growth of fuel prices.

Due to reprivatization, investment in the country has fallen by 90 per cent.
In particular, the president linked this to the abolition of territories of
priority development.

[Yushchenko] This was perhaps the last straw that led to rather poor
relations between the authorities and business, and caused disappointment
among those people, or rather those structures, that saw prospects for
working in Ukraine for many years.

In four territories, we have an absolute outflow of external investment.
Starting with the twice honoured Donetsk Region and ending with
Transcarpathian Region.

[Yekhanurov] Our main task in the fourth quarter is to transform 2005
from a year of unrealized possibilities into a year of stabilization for the
sake of growth. The main criterion is the growth of competitiveness of the
economy.

Secondly, to strengthen the executive chain of command of state power.
These will be the main tests of our strength.   -30-
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4.      UKRAINE PRES: OPPOSITION SHOULDN'T BLOCK WTO,
                                            BUDGET BILLS 

Associated Press, Kiev, Ukraine, Wed, November 9, 2005

KIEV - President Viktor Yushchenko pleaded with Ukraine's opposition
Wednesday to give the new prime minister a chance amid disputes over
next year's budget and membership in the World Trade Organization.

He told a Cabinet meeting that Prime Minister Yuriy Yekhanurov "had no time
to do anything bad...and it's not good to cut his wings." Yushchenko also
called on opposition politicians to stop trying to block legislation needed
for WTO membership and to adopt the proposed 2006 state budget.

He has made WTO membership by year's end a top goal, and has said that
work has accelerated under Yekhanurov, who was named to the job in
September after Yushchenko dismissed former Prime Minister Yulia
Tymoshenko.

Lawmakers have shown no inclination to quickly pass the six more bills
needed to qualify for WTO membership. Last week, parliament passed the
2006 budget in the first reading, but only after heated debate. Yushchenko
said that parliament and the government share responsibility for this ex-Soviet
republic's progress.

Parliamentary speaker Volodymyr Lytvyn criticized the level of cooperation
between parliament and the government. "We need to think about our
relations," he said. "As experience has shown, cooperation ended after the
appointment of a new premier."  -30-
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5.    SENIOR RUSSIAN MP WARNS UKRAINE AGAINST GOING
                         IT ALONE FOR WTO MEMBERSHIP 

RIA news agency, Moscow, in Russian 0851 gmt 8 Nov 05
BBC Monitoring Service, UK, in English, Tuesday, Nov 08, 2005

MOSCOW- Ukraine's membership of the World Trade Organization [WTO]
without coordination with Russia could damage Ukraine's industry and the
relevant Russian-Ukrainian cooperation ties, the chairman of the Duma
committee for the CIS and ties with compatriots, Andrey Kokoshin, told
RIA-Novosti today.

"It is fundamentally important that the problems of Ukraine's membership of
the WTO, the pace and character of the relevant agreements should be
coordinated with Russia, and also with Kazakhstan and Belarus," he said.

He said: "If Ukraine joins the WTO without proper coordination with Russia
and some other CIS countries, this might inflict serious damage on a whole
number of branches of Ukraine's economy and the relevant Ukrainian-Russian
cooperation ties."

The MP believes that this could inflict further damage on the free trade
regime with a limited list of exemptions in Russian-Ukrainian relations.

"The free trade regime ensures a preferential regime for supplies of many
types of products of metallurgy, agriculture, food and chemical industries
to Russia," Kokoshin said.

Ukrainian President Viktor Yushchenko said earlier that Ukraine might join
the WTO as early as this year. "We are on the home straight and we have
every chance to join the organization," he said. -30-
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6.  SENIOR RUSSIAN MP SAYS UKRAINE JOINING NATO WOULD
                               ERECT NEW "BERLIN WALL"
           The MP thinks that Ukraine joining NATO would be madness
 
RIA news agency, Moscow, in Russian 1211 gmt 9 Nov 05
BBC Monitoring Service, UK, in English, Wednesday, Nov 09, 2005

MOSCOW - The accession of Ukraine to NATO would erect a "Berlin
wall" between it and Russia together with Belarus. This opinion was
expressed in a conversation with journalists on Wednesday [9 November]
by the chairman of the State Duma Committee for the CIS and Ties with
Compatriots, Andrey Kokoshin.

According to him, after this step "there would be a totally different visa
regime, which would hit tens of millions of people".

"From the point of view of Ukraine's security this is absolutely absurd.
Ukraine is not being threatened either by Russia or by Belarus, who are its
main neighbours," Kokoshin said.

The MP thinks that Ukraine joining NATO would be "madness and would
hit hard at Ukrainian industry, especially science-intensive parts of it,
including the defence industry".

"A significant part of Ukraine's science-intensive military and civilian
production is not needed by anyone in Europe or in NATO," he said.

Kokoshin stressed that Ukraine is being pulled towards NATO "for
ideological and political reasons". "Cynical politicians think that Ukraine
should be spilt away for good and then our life will be controlled by
outside forces," he noted. -30-
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7.    UKRAINIAN PRESIDENT VETOES POULTRY IMPORT BAN

Agence France Presse (AFP), Kiev, Ukraine, Tue Nov 8, 2005

KIEV - President Viktor Yushchenko has vetoed a bill banning poultry
imports into Ukraine, saying the measure, aimed at protecting the country
from bird flu, could harm its bid to join the World Trade Organization
(WTO).

Ukraine's parliament on October 20 narrowly passed a measure that
slapped a six-month ban on imports of poultry and its derivatives into
Ukraine following the discovery of a potentially fatal bird flu virus in
neighbouring Russia and Romania.

But Yushchenko said that "the introduction of the six-month moratorium
can negatively reflect on Ukraine's WTO ascension process," a
statement said Tuesday.

The Ukrainian leader said that the bill in its current form did not meet
international standards, did not spell out how to compensate for lost
customs revenue, and did not address the import of other products that
could be the conduit for the bird flu, including wild fowl.

The ban garnered 229 votes in October, just three above the needed 226
ballots to pass in the 450-seat chamber. Deputies need 300 votes to
override a presidential veto.

Ukraine's state veterinary service has banned the import of poultry and
derivatives from Croatia, Romania and Turkey, as well as several regions
of Russia, as well as import of live wild and pet birds. Joining the WTO
is one of the top goals of Yushchenko's nine-month-old administration.
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8.  UKRAINIAN PM, GERMAN INVESTORS DISCUSS FREE ZONES,
         IMPROVING INVESTMENT CLIMATE, GAS TRANSPORT

UNIAN news agency, Kiev, in Ukrainian 1836 gmt 8 Nov 05
BBC Monitoring Service, UK, in English, Tue, Nov 08, 2005

Kiev, 8 November: Ukrainian Prime Minister Yuriy Yekhanurov has discussed
prospects for cooperation in the investment field with representatives of
German businesses, UNIAN learned from the cabinet's press service.

During the meeting, representatives of German companies that have been
working on the Ukrainian market for some time, as well as potential
investors, raised the issue of improving the investment climate in Ukraine
and joining efforts in resolving the problems that German companies
encounter in their activities in Ukraine.

According to the German businessmen, the companies that operated in

special economic zones are facing a number of problems caused by the
zones' liquidation.

Yekhanurov said that the cabinet was working on amending the laws on
special economic zones. "We have to find a version of the law acceptable
for both the cabinet and the manufacturers," the prime minister said. He
also said that the cabinet in looking at ways to simplify the procedure
for allocating land plots for the construction of industrial facilities.

The issue of cooperation in the gas field was also raised at the meeting.
Representatives of the Ruhrgas concern said that Germany's biggest gas
company is interested in developing cooperation with Ukraine in the field of
gas extraction, production and storage, but first of all, in transporting
gas through the territory of Ukraine.

"Ukraine has to maintain its position as a powerful transit country," a
member of Ruhrgas' board of directors [and head of the company's office in
Ukraine], Hilmar Enke, said. He added that Ruhrgas is ready to take part in
the modernization of Ukraine's gas transportation system and other joint
projects with the country's gas companies.

Yekhanurov said that the Ukrainian government is also interested in carrying
out joint investment projects in the gas field and is going to come up with
serious initiatives in this area in the near future. -30-
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9.    UKRAINE WRONG TO LIMIT INTERNATIONAL ACCESS TO
 OFFSHORE OIL FIELDS, US AMBASSADOR JOHN HERBST SAYS

Interfax-Ukraine, Kyiv, Ukraine, Wed, November 09, 2005

KYIV - Ukraine would be making a mistake if it passed bill limiting foreign
[international] access to Ukrainian offshore oil and gas fields, U.S.
Ambassador to Ukraine John Herbst said on Wednesday.

If Ukraine is serious about attracting foreign investment in the oil and gas
industry, passing this bill would be a serious error, the ambassador said at
the Oil and Gas Industry of Ukraine forum.

The ambassador also noted that Ukraine could show its allegiance to free
market principles by rejecting the draft law.

As reported, the Ukrainian parliamentary committee for the fuel and energy
complex and for nuclear policy and safety has supported a draft law
submitted by the communist faction to restrict access by foreign investors
to oil and gas fields in Ukrainian territorial waters.

The draft law proposes to issue licenses for the development of offshore

oil and gas fields only to companies in which 60% of the charter capital is
state owned or has been transferred to the charter capital of joint stock or
holding companies in which the state owns a controlling stake.

The committee has recommended to parliament to pass the draft law in its
first reading.

According to the explanatory note to the document, the aim of the draft law
is to make it possible to provide offshore development rights exclusively to
companies in the state sector, to ensure additional guarantees that state
interests will be protected during the development of strategic natural
resources.

The only company in Ukraine that is developing fields in the Black and
Azov seas is Chernomornaftogaz, which is 100% owned by the state
company Naftogaz Ukrainy.

As reported, Chernomornaftogaz and the U.S. company Hunt Overseas
Oil Company signed a protocol of intent in November 2003 to start joint
exploration and development of oil and gas fields in the deep waters of the
Black Sea.

In June 2005, Naftogaz Ukrainy and Hunt Overseas Oil Company signed a
memorandum on joint geological exploration in Ukraine. This joint work is
expected to start in 2005.

According to the protocol, Hunt Overseas Oil Company will develop a
12,000 square km zone of the deep water section of the Black Sea, or
10% of Ukraine's deep water Black Sea territory.

Hunt Overseas Oil Company is the largest private oil and gas company in the
United States, and operates in the United States, Canada, Yemen and Peru.

In his remarks, Herbst also said Ukraine should make the process of
licensing the production of oil and gas more transparent, and guarantee
property rights, if it wants involve U.S. companies and technology in the
oil and gas business in Ukraine.

Herbst said U.S. companies could contribute to the development of the
Ukrainian energy sector and the consolidation of the country's energy
security through realizing projects to more intensively produce oil and gas
at existing fields, and through developing new ones.

He said the use of new technologies in gas and oil prospecting and in
drilling would secure more effective and longer production lives for wells.
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10.  UK OIL AND GAS FIRM CARDINAL RESOURCES EXPANDS
                                  UKRAINIAN HOLDINGS 

By Ihor Yatsenko, FirsTnews, Kyiv, Ukraine, November 09, 2005

Development of Ukraine's oil and gas reserves is being accomplished by a
number of small to medium-sized companies that believe the country may
eventually reach a level of energy self-sufficiency.

Onshore exploration continues but Ukraine is still in the process of
determining how best to exploit its offshore resources, with the United
States quite unhappy about the possibility that foreign firms may be
excluded from coastal drilling operations.

KYIV, Nov. 9 (FirsTnews) -- Cardinal Resources (CR), British oil and gas
exploration and production company, said on Tuesday it has completed the
acquisition of 100 percent of Rudis Drilling Company (RDC) in Ukraine from
Hares Group LTD. The move will allow Cardinal to develop new oil wells and
remodel a number of old ones.

Robert J. Bench, CR's chief executive officer, said the $14.8 million deal
is expected to increase its net daily production by 75 percent from an
average of 631 barrels of oil per day in January-June to over 1,100 barrels
daily.

Current RDC's reserves are estimated at about 9.1 million barrels of oil
equivalent, according to CR's experts. The reserve estimate is based on the
expectation that a 20-year production license would be granted for each of
the licenses. Acquisition of RDC is expected to increase CR's current
reserves from 18.4 to 27.5 million barrels in oil equivalent.

Hares Group LTD, in its turn, acquired 20 percent of CR's share and the
right to appoint an executive director in its board of directors.

"Thanks to the deal on purchasing 20 percent shares we will have access to
modern western technologies as well as to the international financial
markets. The transaction is the great achievement not only for our company
but also for the entire branch," said Misbah Al Droubi, chief executive
officer of Hares Group.

RDC's assets comprise three licenses for geological exploration and
development of pilot production of the hydrocarbon fields of
Bilousivsko-Chornukhinska, Dubrovska, and North-Yablunivska oil and

gas fields in Poltava region during the next three-five years, according to
Bench.

In addition, the company has an about 50 percent share in a joint activity
project with Ukrgazvydobuvannya, a subsidiary of Naftogaz Ukraine, where
RDC has been recovering oil and gas wells. RDC's fields are located about
40 kilometers away from the existing Cardinal wells in the
Rudivsko-Chernovozavodske field.

At the first stage, CR is planning to develop five new oil wells and
complete remodeling of four more wells. Currently a new oil well is being
developed by the company in the Dubrovska field.

Presently RDC is pumping about 500 barrels of oil per day. Its January-June
net profit totaled about $480,000, before exploration costs of $835,000.

"The acquisition of RDC represents the initial step in executing our
strategy to acquire additional operated oil and gas assets in Ukraine, where
CR could apply local knowledge along with the modern technologies to
create value for stakeholders," said Bench.

In order to complete the deal, CR issued shares while about $6 million would
be paid in cash. In case the company fails to pay prior to 1st December
2005, Hares has the right to require CR to satisfy any outstanding amount by
the issue of additional shares. Any unpaid balance would attract interest of
1 percent per month from January 2006 till the date of payment.

RDC was licensed in 2001 to perform exploration of resources, developing
oil and gas wells, and installation of drilling complexes. RDC carries out
deep drilling of wells, capital repair and well recovery, directional drilling
and horizontal drilling, both on its own licensed areas and on licensed
areas of other deposit users.

Hares Group has been operating in Ukraine since 1992 in various areas
including steel production and trading, real estate development, industrial
engineering and oil and gas exploration. The company's oil and gas activity
is held through Hares Group Limited, a Cyprus company. -30-
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11. MILLENNIUM CHALLENGE CORPORATION BOARD IN THE US
            NAMES FISCAL YEAR 2006 THRESHOLD COUNTRIES:
                     UKRAINE INCLUDED FOR THE FIRST TIME

Millennium Challenge Corporation (MCC)
Washington, D.C., Tuesday, November 8, 2005

Washington, D.C. - Today, the Board of Directors of the Millennium
Challenge Corporation (MCC) selected a total of 13 countries to
participate in the Threshold Program for fiscal year 2006.

The Threshold Program is designed to assist countries that do not qualify
but are close and are committed to undertaking the reforms necessary to
improve policy performance that may eventually help them qualify for
Millennium Challenge Account (MCA) Compact assistance.

The Board selected 13 countries to participate in the Threshold Program:
Guyana, Indonesia, Jordan, Kenya, Kyrgyz Republic, Malawi, Moldova,
Paraguay, Philippines, São Tomé and Principe, Ukraine, Uganda, and
Zambia.

Since its establishment last year, MCC has signed Compacts with five
nations, Madagascar, Honduras, Cape Verde, Nicaragua, and Georgia,
totaling over $900 million.  MCC is also actively engaging with other
MCA-eligible countries in Compact negotiations and currently expects to
sign three more within the next few months.

Under the fiscal year 2005 Threshold Program, MCC has committed nearly
$13 million to help improve girls' primary education in Burkina Faso and
almost $21 million to help Malawians fight corruption.  Additional threshold
plans are in the final stages of completion and are expected to be received
by MCC within the next few months.  -30-
-------------------------------------------------------------------------------------------------
NOTE: The Millennium Challenge Corporation (MCC), a U.S. government
corporation designed to work with some of the poorest countries in the
world, is based on the principle that aid is most effective when it
reinforces good governance, economic freedom, and investments in people

that promote economic growth and elimination of extreme poverty.
------------------------------------------------------------------------------------------------
CONTACT: Jerry I. Dutkewych, Ph.D., Director, Country Relations,
Millennium Challenge Corporation, 875 Fifteenth Street N.W.,
Washington, D.C.20005, JIDutkewych@MCC.gov
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http://www.mca.gov/public_affairs/press_releases/pr_110805_fy06_th_select.shtml
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12.  BAYER CROPSCIENCE MARKETING NEW CLASS OF HERBICIDE
                     FORMULATION IN POLAND AND UKRAINE
                   Pioneering formulation technology for cereal herbicides

Seed Quest website, news release from Bayer CropScience
Monheim, Germany, Thursday, October 27, 2005

MONHEIM, Germany - Bayer CropScience has launched its new class
of herbicide formulations named ODesi® in Poland and Ukraine as the
firstmarkets world wide. Poland is the first country where Alister® - the
new state-of-the-art autumn herbicide - is placed on the market.

This year the company also started marketing Grodyl maxi® in Ukraine
which is also using the innovative ODesi formulation technology.

This new class of herbicide formulations allows formulation of
sulfonylurea-based herbicides as liquids. ODesi stands for "OD (oil
dispersion) technology" and "easiness" of use. The oil may also carry
additives, a safener or other dissolved active ingredients, intended for
dilution with water before use.

Commenting on the introduction of the first ODesi-formulated herbicides
in Poland and Ukraine, Dr. Rüdiger Scheitza, Member of the Board of
Management of Bayer CropScience said: "The patented new liquid
formulation is a breakthrough technology in this substance class and we
expect our ODesi technology to become an important value driver for
our cereal herbicide business in the forthcoming years."

The ODesi fluid power formulation combines the advantages of solid and
liquid formulations. This represents a triple leap forward: the formulation
simultaneously improves retention, spreading and uptake on the plant leaves.

The clear benefits for farmers are better performance also under critical
weather conditions and greater convenience.

Farmers can handle ODesi-formulated herbicides easily because they are
pumpable and simple to dose. From 2006 onward Bayer CropScience
plans to launch step by step more products with the ODesi technology.

Bayer CropScience, a subsidiary of Bayer AG with annual sales of about
EUR 6 billion, is one of the world's leading innovative crop science
companies in the areas of crop protection, non-agricultural pest control,
seeds and plant biotechnology.

The company offers an outstanding range of products and extensive service
backup for modern, sustainable agriculture and for non-agricultural
applications. Bayer CropScience has a global workforce of about 19,000
and is represented in more than 120 countries. -30-
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http://www.seedquest.com/News/releases/2005/november/14023.htm
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13. EUROPE FACING SERIOUS SHORTAGE OF SKILLED IT WORKERS
         Turkey, Ukraine expected to have shortfall of 30 percent in three years

By Ian Limbach, Financial Times, London, United Kingdom, Tue, Nov 8 2005

If IP and wireless networks are such hot technologies at the moment, where
are the people who can run them? Europe is facing a damaging shortage of
skilled IT workers that could limit economic growth and international
competitiveness in the region.

Three years from now, Europe will need nearly 500,000 more skilled

resources than are available on the job market.

The startling scenario is revealed in a recent survey by IDC, the research
consultancy, which seeks to measure the skills gap across 31 European
countries for three advanced IT competencies: wireless networking, IP
telephony and IT security. The report was commissioned by Cisco
Systems.

Eastern European nations face the widest skills gaps both today and in
coming years, although Hungary and the Czech Republic fare notably
better.

Russia is expected to have a shortfall of 60,000 skilled technicians in
2008. At the bottom of the list are Turkey and Ukraine, which will each
have a spread between supply and demand of 30 per cent in three years.

But even in Europe's leading economies, demand will significantly outstrip
supply. Although their gaps may be lower in percentage terms, the absolute
number of resources needed will be significant. Germany could lack nearly
88,000 technicians in 2008, while the UK and France could each face a gap
of 40,000 people.

"There is a perception that ICT [training] is no big deal. But in 2008, no
one country is really well positioned. This is a wake up call for all of
 us," warns Yvon Le Roux, a vice president at Cisco. And there are signs
that Europe is already feeling the crunch.

Half of the organisations that had hired IT staff in the last 12 months
reported difficulty in finding candidates with the right skills. "When
companies start stealing employees from each other, there's a gap,"
says IDC analyst Marianne Kolding.

If the market mismatch is not addressed, it could hinder technology
adoption in both the private and public sectors, thus impacting overall
business competitiveness and economic growth in the region, warns
Mr Le Roux. Likewise, ICT-driven productivity gains may falter.

The gap is being driven both by the success of new technologies and a
failure of training programmes to keep pace with adoption. "It's now easier
for smaller businesses to install networks, but they still need someone to
maintain them.

Technology adoption is running away," says Ms Kolding. She points to the
case of Turkey, where annual growth in wireless networking is 43 per cent
and in VoIP deployments is 21 per cent. "And yet they lack the base skills
coming out of the [educational] system," she warns. The answer, say experts,
is greater investment in technology skills training by both the private and
public sectors.

A recent European Commission competitiveness report recognises that good
infrastructure and "highly and appropriately e-skilled labour" are key to
attracting foreign direct investment into the EU. "The challenges are to
better monitor the demand and supply of e-skills and to remove gaps,
shortages and mismatches," says the report.

Another aid could be greater investment in research and development. ICT
represents just 18 per cent of R&D spend in the EU, compared to more
than 30 per cent in other major OECD economies, reports IDC.

The greatest risk is doing nothing. "Since it doesn't affect your
performance right here, right now, there is a tendency to ignore the
problem. But a backlog is building and it takes time to build a strong base
of skills," says Ms Kolding. Students need to be enticed back to IT-related
studies following the sector's downturn, she adds.

Of course, Europe does face other ICT challenges. In a separate
Cisco-commissioned report, 46 per cent of European businesses and
governments felt organisational issues were a barrier to productivity
growth, while 21 per cent named business process integration and 16 per
cent cited technology integration. Only 7 per cent felt technology capabilities
were lacking.  -30-
---------------------------------------------------------------------------------------------------
SOURCE: Networking Skills in Europe: Will an Increasing Shortage Hamper
Competitiveness in the Global Market?," IDC, October 2005
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14.    THE MOOD IS SOBER YET UPBEAT AT IEA'S INAUGURAL
              UKRAINIAN INVESTMENT SYMPOSIUM IN BOSTON

International Economic Alliance (IEA)
Boston, Massachusetts, Wednesday, November 9, 2005

BOSTON - On October 31st at the Harvard Club in Boston, the Deputy
Economic Minister of Ukraine Volodymyr Ignaschenko spoke with
investors and corporate leaders at the inaugural U.S.-Ukrainian Investment
Symposium hosted by the International Economic Alliance (IEA).

In front of the hundred-plus assembly of fund managers, brokers, and
multi-lateral banks (representing more than one trillion USD in fungible
assets), the Deputy Minister scaled back expectations for the "Orange
Revolution" while certifying that slower, less ambitious reforms of the
economy are indeed taking place.

At the height of its post-Revolution fervor, the new Government of Viktor
Yuschenko made many sweeping promises to improve Ukraine's investment
Climate, to enact tough structural reforms, battle corruption, etc.

These promises, backed by robust GDP growth of 13% in 2004, bought

the government of Ukraine a honeymoon of friendly relations with the
foreign investment community and a grace period of favorable attention
within which to enact some of the promised legislation for businesses.

One year later, delegates at IEA's Symposium wrote up a list of outstanding
reforms that beg more government action as investors grow frustrated with
the speed of progress.

Jaroslawa Johnson, Managing Partner at Chadbourne Parke Ukraine, and
Sarah Carey, Partner at Squire Sanders, pointed to the lack of reform in
regulating the joint-stock companies, corporate tax code, and banking
system, particularly for minority and/or foreign stakeholders in Ukrainian
business ventures.

Elena Voloshina, Program Officer from the delegation of International
Finance Corporation [IFC] executives, added the on-going issue with
business permits and inspections, which are used as vehicles for
corruption by regulators and create barriers to market entry for small-
(SME) and medium-sized (MME) businesses in Ukraine.  SMEs and
MMEs still account for less than 8-12% of Ukraine's GDP.

As the smoke clears - sober investors, private equity, and venture capital
see real opportunities

"In February/March a lot of companies came to our offices wanting to
learn more about [Ukraine] and almost 90% of them have returned come
August/September to start exploring options and look at investment
opportunities," added Jaroslawa Johnson with a caveat for investors.

"These imperfections are terrific for private equity," said Roman Kyzyk
from Draper Fisher Jurvetson, the country's oldest venture capital firm
and investor in Ukraine's high-tech industry.

Raiffeisen Bank CIS Director Jeffrey Millikan said, "Of course there are
problems.  That's why you come in and invest." "The pricing could not be
better right now," said Natalie Jaresko, CEO and President of the WNIS
Enterprise Fund (WNISEF) and Managing Partner of Horizon Capital.

WNISEF echoed the relatively optimistic remarks of Ukraine's legacy
investors, who have worked with the country for a decade or more and
have bwitnessed many ups and downs in the market.

Like other of Ukraine's more seasoned investors, Chairman of Calyon
Bank Ukraine Jacques Mournier views the country as a "European market
in adolescence", which has nevertheless demonstrated basic positive
changes and has withstood an unprecedented test of its maturity during
the "Orange Revolution".

"Before and after the 'Orange Revolution', politicians have taken positions
that angered foreign investors, but these are short-term blips.  A lot of
people have made the strategic decision that Ukraine is the next frontier,"
said Kamen Zahariev, Ukraine Country Director for the European Bank
for Reconstruction and Development (EBRD).

While slow change in Ukraine and competing opportunities in other regions
may force analysts to scale back last year's predictions for the Ukrainian
economy, the EBRD's resoluteness is a testament to the steady increase of
investment opportunities in Ukraine.  It is the region's largest co-financer
of investment projects.

While navigating the rollercoaster of Ukrainian politics over the last four
years, EBRD has increased its exposures in the country by 65% from 170
million Euros in 2001 to an estimated $450 million Euros by the end of this
year.  The post-Revolution recovery of Ukraine has been slow, but steady.
----------------------------------------------------------------------------------------------
CONTACT: Kiril Stefan Alexandrov, Executive Director, International
Economic Alliance, Hosts of the US-Russian and US-Ukrainian
Investment Symposia, 12 Francis Avenue, Cambridge, MA  02138 
LINK: www.IEAlliance.org , E-mail: kiril@post.harvard.edu .
NOTE:  Your AUR editor attended the Ukraine symposium in Boston.
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15.  U.S.-UKRAINE FOUNDATION AND PARTERS HOLD SECOND
        WORKING SESSION OF U.S.-UKRAINE POLICY DIALOGUE 
                                 November 14-17, Kyiv, Ukraine


U.S.-Ukraine Foundation (USUF), Washington, D.C.,
Kyiv, Ukraine, Wednesday, November 9, 2005

WASHINGTON/KYIV - The U.S.-Ukraine Policy Dialogue is a
practical and effective approach to facilitating democratic reform in
Ukraine and assisting in the restoration of a genuine and meaningful
strategic partnership between our two countries.

This two-year, State Department-funded project, managed by the U.S.-
Ukraine Foundation (USUF), hosts four week-long working sessions,
held alternately in Washington and Kyiv. The program began in the late
spring of 2005.

During the sessions government officials, members of the Verkhovna
Rada [parliament] and Congress, and representatives of non-governmental
organizations, the media and the business community engage in action-
oriented, focused discussions to find paths in policy-making that address
important problems and issues.

The next session of the program will be held in Kyiv, Ukraine from
November 14 through the 17th. 

The dialogue is coordinated by four Task Forces managed by U.S. and
Ukrainian institutional partners and experts. The four Task Forces are:

[1] Foreign Policy & National Security: Managed by the Atlantic Council
and Razumkov Centre for Economic & Political Studies.

[2] Politics & Governance: Managed by the U.S.-Ukraine Foundation,
George Washington University, and Razumkov Centre for Economic &
Political Studies.

[3] Economics & Business: Managed by SigmaBleyzer Emerging
Markets Private Equity Investment Group and the International
Centre for Policy Studies.

[4] Media & Information: Managed by the Kennan Institute of the
Woodrow Wilson International Center for Scholars and the "Europe
XXI" Foundation.

For more information visit the Foundation webpages devoted to Policy
Dialogue: www.usukraine.org/dialogue.shtml . Please contact Taras
Mazyar with questions/comments at taras@usukraine.org . -30-
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          Power Corrupts and Absolute Power Corrupts Absolutely.
========================================================
16.                "TEAR DOWN THE JACKSON-VANIK WALL"

EDITORIAL: The Ukrainian Weekly
Ukrainian National Association (UNA)
Parsippany, New Jersey, Sunday, November 6, 2005

We've written before about a remnant of the Cold War that continues

to hamper U.S.-Ukraine relations: the Jackson-Vanik Amendment to
the U.S. Trade Act of 1974.

Once a very useful tool in punishing states, most notably the Soviet Union,
for restricting emigration, the provisions of this amendment were applied to
the newly independent states that arose on the territory that once was the
USSR.

Thus, independent Ukraine, which never restricted emigration, was, in
effect, being punished for Soviet policies of the past.

To be sure, Ukraine has been granted annual waivers from the amendment's
provisions, but the annual certification of Ukraine's compliance with
freedom of emigration requirements not only creates a burden but leaves
a bad impression - an erroneous impression that Ukraine is not entitled to
permanent normal trade relations with the United States because of some
sort of substandard behavior.

When President Viktor Yushchenko assumed office in January of this year,
most observers thought it was a sure thing that Jackson-Vanik's restrictions
would no longer be applied to Ukraine. In fact, the newly elected president
made Ukraine's graduation from Jackson-Vanik one of his priority goals.

On his first visit to the United States in April, Mr. Yushchenko sought
support for immediately ending the applicability of Jackson-Vanik to
Ukraine. He said in his address to the joint meeting of Congress: "Please
make this step towards Ukraine. Please tear down this wall."

Many in the United States, both in the executive and legislative branches
of government, agree that Ukraine deserves to be graduated.

Members of the Congressional Ukrainian Caucus have been particularly
supportive, and several bills have been introduced in both houses of
Congress calling for ending the Jackson-Vanik sanctions and extending
permanent normal trade relations to Ukraine.

Now, two former U.S. ambassadors to Ukraine, William G. Miller and
Steven Pifer, have joined forces to head the Jackson-Vanik Graduation
Coalition.

Ukrainian American organizations also are involved in the coalition,
which has declared October and November as "Jackson-Vanik
Graduation Months" for Ukraine.

To that end, the coalition is spearheading actions aimed at lifting the
provision's restrictions, and it is seeking the public's support of its
campaign.

Graduating Ukraine from Jackson-Vanik restrictions will rightfully
recognize the significant progress Ukraine has made in becoming a
democratic state and a free-market economy.

It will spur Ukraine's further progress on the economic front, and it will
help Ukraine gain membership in the World Trade Organization -
something that President Yushchenko seeks to complete by the end of
this year.

In addition, it will promote Ukraine's general acceptance in the world
community as a reliable and stable partner in all spheres of activity.

If the United States truly is interested in promoting Ukraine's
democratization and its integration into Euro-Atlantic structures - as
it has underscored on numerous occasions - then now is the time to
graduate Ukraine from the outdated and injurious sanctions of
Jackson-Vanik.  -30-
--------------------------------------------------------------------------------------
NOTE: Editorial reprinted with permission. Roma Hadzewycz,
Editor-in-Chief, The Ukrainian Weekly, 2200 Route 10, PO
Box 280 Parsippany, NJ 07054. The Ukrainian Weekly archive:
http://www.ukrweekly.com ; e-mail: staff@ukrweekly.com
---------------------------------------------------------------------------------------
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========================================================
17. CONG WELDON SAYS SECRETARY RICE AND CONG THOMAS
   STAND IN THE WAY OF JACKSON-VANIK REPEAL FOR UKRAINE

By Peter Savodnik, Staff Writer, The Hill newspaper
Washington, D.C., Wednesday, November 9, 2005

House Ways and Means Committee Chairman Bill Thomas (R-Calif.) and
Secretary of State Condoleezza Rice are to blame for the United States'
taking so long to lift the Jackson-Vanik trade measure from Ukraine, Rep.
Curt Weldon (R-Pa.) said in a recent interview.

Ten months after Ukrainians overthrew a regime widely regarded as corrupt
and freely elected President Viktor Yushchenko, Weldon said, it is
"embarrassing" that Washington has yet to take action.

The Jackson-Vanik provision, part of the 1974 Trade Act, was originally
imposed on the Soviet Union to punish it for its refusal to let Jews
emigrate to Israel and the United States.

The provision barred the Soviet Union - and, after the 1991 communist
collapse, the 15 independent, post-Soviet states - from gaining
most-favored-nation status.

Being a trade measure, Jackson-Vanik falls under the jurisdiction of the
House Ways and Means Committee. Thomas has staked out no public
position on the measure.

"It's not the issue of trade," said Weldon, who is vice chairman of the
House Armed Services Committee. "It's the issue of respect. The president
needs to call Bill Thomas and tell him to get it done."

Asked if he had discussed the trade measure with Thomas - and why, almost
 a year after Ukraine's Orange Revolution, it remains in place - Weldon
said: "If you talk to Thomas, he'll tell you it's Condi Rice."

Weldon recalled that on a recent Air Force One trip with President Bush, the
issue of Jackson-Vanik came up. Weldon said the president voiced full
support for lifting Jackson-Vanik.

Ianthe Jackson, a spokeswoman for the Ways and Means Committee,
declined to comment.

A State Department press officer noted that the last public comments made by
a State Department official on Jackson-Vanik came in late July, when Daniel
Fried, assistant secretary for European and Eurasian affairs, addressed the
House International Relations Subcommittee on Europe and Emerging Threats.

At that hearing, Fried reiterated the administration's wish to move as
rapidly as possible to lift Jackson-Vanik.

Weldon added: "It's really an embarrassment that when Yushchenko was
here we didn't get that bill up on the floor." The Ukrainian president
visited the United States in early April; during his stop in the nation's

capital, he addressed a joint session of Congress.

While most members of the House International Relations Committee and
Senate Foreign Relations Committee - Republicans and Democrats alike -
support lifting Jackson-Vanik from Ukraine and Russia, some members
believe the measure is a useful bargaining chip. Sen. Joseph Biden (D-Del.)
switched his support for lifting the measure in 2002, after Russia imposed
quotas on U.S. poultry imports.

In recent years, some of the post-Soviet states have been "graduated" from
Jackson-Vanik. Others, such as Russia and Ukraine, receive yearly waivers.

While the trade measure has no direct economic impact, it retains symbolic
power that, many Ukrainians insist, deters foreign companies from investing
in the country.

During his trip to Washington last week, the new Ukrainian prime minister,
Yuriy Yekhanurov, discussed Jackson-Vanik with Weldon and other U.S.
officials.

Weldon hosted a breakfast for Yekhanurov while he was in Washington.

The issue of Jackson-Vanik, with Ukraine's application to the World Trade
Organization and its desire to obtain market-economy status from the United
States, tops Kiev's foreign-policy concerns.

Sergiy Korsunsky, the chargé d'affaires at Ukraine's embassy in Washington,
said that Sen. Richard Lugar (R-Ind.), chairman of the Foreign Relations
Committee, told him in a conversation Monday that Ukraine should have
been exempted from the trade provision "a long time ago."
----------------------------------------------------------------------------------------------------
Peter Savodnik covers campaigns for The Hill. Prior to moving to
Washington, he covered local and state politics for The Daily Progress, in
Charlottesville, Va., The Vineyard Gazette and The Forward. His byline
has appeared in The Washington Times, The Washington Monthly, The
Wall Street Journal Europe, The Wilson Quarterly, Policy Review, National
Review and elsewhere. He graduated from Middlebury College and did
his master's at the University of Chicago. E-mail: psavodnik@thehill.com .  
----------------------------------------------------------------------------------------------------
http://www.hillnews.com/thehill/export/TheHill/News/Frontpage/110905/jackson.html
----------------------------------------------------------------------------------------------------
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18. CONG WELDON MEETS WITH PRIME MINISTER OF UKRAINE
         CALLS FOR IMMEDIATE REMOVAL OF JACKSON-VANIK

Office of U.S. Congressman Curt Weldon (R-PA)
U.S. House of Representatives
Washington, D.C., Wednesday, November 2, 2005

WASHINGTON, D.C., - U.S. Rep. Curt Weldon (R-Pa.), co-chair of
the Congressional Ukrainian Caucus and vice chairman of both the
House Armed Services and Homeland Security Committees, led a
bipartisan group of Congressional lawmakers on Wednesday in
demanding that the United States lift Jackson-Vanik restrictions from
Ukraine.

Jackson-Vanik, the Soviet-era trade barrier currently plaguing Ukraine's
accession to the WTO, was a highlight of discussions with Ukraine Prime
Minister Yuriy Yekhanurov, who was wrapping up his first visit to the
United States since taking up the post of Prime Minister in September.

"The U.S. must lift Ukraine out of Jackson-Vanik immediately. There is no
fathomable reason why Jackson-Vanik should continue," said Weldon, as
he read off a list of major Jewish American groups who have also called for
Jackson-Vanik to be lifted.

Jackson-Vanik was enacted in 1972 in reaction to the severe restrictions the
Soviet Union had placed on emigration of its citizens, most notably of
Jewish descent. "It is time to remove this Cold War dinosaur from the halls
of Congress," Weldon added.

President of the Ukrainian Congress Committee of America Michael Sawkiw
put into context the current state of the U.S. efforts to help Ukraine
achieve market economy status and entry into the WTO under the shadow

of Jackson-Vanik.

"Ukraine has been in compliance with all measures associated with the
original amendment. Unfortunately, words have not turned into deeds,"
he said.

"Today's efforts by Rep. Weldon.will help ignite a fire under this issue,
and once and for all finally 'graduate' Ukraine from this archaic law. I
believe President Yushchenko said it best in his campaign last year - Not
words, but actions," Sawkiw said.

Vera Andreyczyk of West Norriton, Pa., president of the Ukrainian
Federation of America, spoke about the urgency of lifting Jackson-Vanik.
"It has to be done this year. Yushchenko needs this to show that the U.S.
keeps its promises," said Andreyczyk.

She congratulated Weldon for his work on this issue. "I am delighted
Curt Weldon has taken the lead on this; he is a true friend of Ukraine,"
she said.   -30-
-------------------------------------------------------------------------------------------------
http://curtweldon.house.gov/News/DocumentSingle.aspx?DocumentID=36425
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========================================================
19.       VITALI KLITSCHKO'S RETIRMENT ENDS BIG DREAM
                          OF KLITSCHKO BOXING BROTHERS

Roy Kammerer, AP Worldstream, Nov 09, 2005

When WBC champion Vitali Klitschko called it quits Tuesday because
of his broken-down body, a big dream of the two Klitschko brothers
died.

Vitali and younger brother Wladimir become huge idols in places like
Germany and their homeland Ukraine, hoping this was a springboard for
their plans to conquer America and the heavyweight division together.

They wanted to at least hold world titles at the same time, something they
boasted about a lot early in their careers. "For Christmas I want all four
world titles - but mama says I have to give two to my little brother, "
Vitali said while holding up his then-WBO belt in a popular 1999 German
television commercial.

In the end, the body of the 34-year-old Vitali wouldn't go along with their
plans after 20 years in the ring, dating back to lacing up as a 14-year-old
in a Kiev Army club. Along the way he fought his way to a military world
title and one in kickboxing.

Tuesday's operation for torn right-knee ligaments, which forced the
cancellation of Saturday's title defense against Hasim Rahman, was
Klitschko's fifth major surgery in five years.

Klitschko adviser Bernd Boente said the big heavyweight had expected
the training injury to lead to a minor operation - and was shocked when
he woke from the anesthesia to hear the bad news.

"Mr. Klitschko will have to take a six-month break. With this serious
injury, it's impossible for him to box _ the knee is completely unstable,"
surgeon Neal Elattrache of the Kerlan-Jose Clinic said.

Klitschko faced getting the WBC title he won on April 24, 2004, stripped
for failing to defend it. After consulting with family and advisers, he
decided to end his career with a record of 35-2 (34 knockouts).

Both losses came because of injuries during fights he led. Against Byrd, he
threw in the towel in the 10th round because of the shoulder, which would
force his first operation in April 2000.

A brutal WBC title loss in June 2003 against Lennox Lewis, who retired
afterward, was stopped in the sixth round because of the bloody cuts
around Klitschko's eye.

The fight, however, cemented Klitschko's reputation in the United States
and perhaps made him the heavyweight division's biggest draw. It also
buried his reputation as a quitter and soft "Euro" fighter from the Byrd
bout.

When Wladimir later avenged the family honor against Byrd, beating him
over 12 one-sided rounds to take back the WBO belt, he jumped the ring
ropes, shook his fist and shouted: "I love my brother - and we are not
soft."

The two brothers, sons of a teacher and air force officer, are inseparable.
They turned professional together in 1996 after Vitali became the military
champion and Wladimir the 19-year-old Olympic super heavyweight gold
medalist.

Don King, among others, recruited them, but the brothers signed with
German promoter Hans-Peter Kohl. They quickly became huge stars in
Germany, cultivating a gentleman's image as they earned Ph.D.'s from
the University of Kiev.

The two brothers made a series of commercials in Germany, likely
making them among the world's best-paid boxers.

In Ukraine, they also rank among the country's biggest sports idols and
Vitali and members of his camp said the boxer may now take up politics.

Vitali backed last year's "Orange revolution," in which pro-Western Viktor
Yushchenko was elected president of Ukraine against a Russian-backed
candidate. There have been constant rumors he will run for mayor of Kiev.

"He and his brother played leading roles in the Orange Revolution - a
political career is possible," Boente said.

For years Vitali took a back seat to Wladimir - who was treated by his
handlers as a future world champion - and whom he often calls the more
talented of the two.

But Wladimir's reputation was battered by knockouts to Corrie Sanders and
Lamon Brewster, while Vitali's soared with the Lewis slugfest and flattening
Kirk Johnson and Danny Williamson. "I'm not so sure sometimes about
Wladimir, but Vitali, that is one tough guy," said Fritz Smudek, Vitali's
trainer who also coached the younger brother for years. -30-
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========================================================
20.       COURAGEOUS KLITSCHKO WAS NEVER A QUITTER

John Rawling, The Guardian, London, UK, Thursday Nov 10, 2005

For Don King to have suggested that Vitali Klitschko somehow lacked a

true fighting heart is an extraordinary statement, even in his world of hype
where the boundaries between fact and fiction are frequently and
conveniently blurred.  King has an ulterior motive, of course.

The 72-year-old promoter was frustrated that Klitschko had repeatedly
postponed a title defence against his fighter Hasim Rahman, who had been
due to fight the 6ft 7in champion in Las Vegas this weekend before yet
another injury to Klitschko meant the fight had to be called off for a
fourth time.

Now Rahman, along with three others in King's stable, will fight it out to
determine who should be Klitschko's heir as world heavyweight champion. It
seems his statuesque body has let him down once too often, and a cruciate
ligament torn in training last week was the final straw that prompted his
retirement.

But anybody who witnessed his heroic performance against Lennox Lewis in
the summer of 2003 would surely laugh in the face of King's insinuations that
Klitschko was in some way a phoney champion. He took the fight at short
notice yet came desperately close to victory, and rarely has such a display
of bravery been seen in a boxing ring.

On the scorecards of three judges Klitschko had been ahead by the end of the
sixth round. But, by then, his face had been ripped apart by Lewis's blows
and it was inevitable that the fight had to be stopped on medical advice,
despite Klitschko's protestations.

For many that performance, even in defeat, established Klitschko as the
uncrowned champion, and the feeling was compounded when the ageing
Lewis took the sensible decision not to step into the ring to face Klitschko
a second time, choosing his own retirement instead.

Klitschko had seemingly buried forever the slur that he was a quitter. In
boxing, such accusations stick and in 2000 he had become the unfortunate
recipient of criticism when he chose to retire on his stool when clearly
winning a WBO world title fight against Chris Byrd, one of King's fighters.

For the record, he had what medical men describe as a torn rotator cuff,
an agonisingly painful shoulder injury that would later require surgery.

But the university educated Klitschko, a doctor of sport science like his
younger brother Vladimir, had committed a sin in the eyes of some within the
boxing world. For all his physical attributes, there were now whispers that
he was not the genuine article.

But he became the WBC champion in April 2004 when he stopped the South
African Corrie Sanders in eight rounds, and had dreams of going on to fight
his childhood hero Mike Tyson.

The ambition was never fulfilled after, last year, Britain's Danny Williams
knocked out Tyson to earn his own shot at the title.

"When I was an amateur, I told everyone in the Soviet Union that I would be
a professional world champion and would beat Tyson. All my friends laughed,
but I remember looking at the TV and saying 'One day I will beat you, Iron
Mike'. But Williams fought him and destroyed my dream."

Instead Williams was given the chance to fight for the title only for
Klitschko to hand the British champion a brutal beating, knocking him
down four times in an eighth-round defeat last December.

"He looked a bit robotic, and people questioned his style, but he was very
effective and a lot better than he looks," Williams said yesterday. "He hits
hard and there was no way I could get to him past that long reach. As well
as that, he is a true gentleman outside the ring and I wish him all the luck
for the future."

A succession of injuries has prompted Klitschko to leave at the top, and
one of sport's most intelligent and likeable figures will be much missed.

However, he will use his hero status in the Ukraine to continue to play a
part in his country's political life and to work as a representative for the
children's charity, UNESCO.  -30-
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http://sport.guardian.co.uk/boxing/story/0,10146,1638729,00.html?gusrc=rss
-----------------------------------------------------------------------------------------------
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21.              "COPING WITH FREEDOM AT KURKOV'S ZOO"
           Novels by Andry Kurkov, one of Ukraine's most famous writers
         Sympathetic insights into the opaque world of post-Soviet politics

By Judy Dempsey, International Herald Tribune (IHT)
Neuilly Cedex, France, Wednesday, November 9, 2005

BERLIN - If anyone is seeking macabre but sympathetic insights into the
opaque world of post-Soviet politics, then Andrey Kurkov's novels are
probably one of the best places to start.

As one of Ukraine's most famous writers - his books are translated into
more than 30 languages - Kurkov's novels contain some of the magic
and surrealism of Russia's great writer of the early 20th century, Mikhail
Bulgakov.

Bulgakov, who was born in Kiev in 1891, had his characters flirting with
death while venting their deep disdain for petty officials and the
suffocation of the Stalinist system.

The characters in Kurkov's novels, which span the ebbing years of the Soviet
system in Ukraine and the corruption of the post-Soviet period led by Leonid
Kuchma - who was replaced as president in December by Viktor Yushchenko -
also dance with death, officialdom and the secret police. But they contain
something more. Of his 13 novels, only two do not have any animals as
characters.

Kurkov, who was born in St. Petersburg in 1961 but moved with his parents
to Kiev when he was 3 years old, regards animals as human beings. Both
find it difficult to deal with freedom, a theme that crops up time and again
in Kurkov's often sad but not self-pitying novels.

"My first animal was a very positive rat," recalled Kurkov during a bright
cold morning in the outskirts of west Berlin, where he was due to give a
reading of his latest and prescient novel, available only in German, "Die
Letzte Liebe des Präsidenten" (The President's Last Love).

"My first novel was a philosophical novel about the history of the evolution
of the Soviet utopian mentality. Yet strangely, in this book, the rat turned
out to be more pro-Soviet than anybody else in it."

Kurkov's use of animals in his fiction goes back to his childhood, when he
had three hamsters. "I think I have some feeling of eternal guilt because my
poor animals were never happy," he said, laughing. "I think I started
writing because of the tragic death of my hamsters. I gave them lots of
freedom. They were running around the flat.

One of them was killed accidentally by my father with the door. The second
was eaten by a stray cat that I had brought home to feed. And when the last
one was still alive, I wrote my first verse of the solitude of one hamster
who had lost his friends. Two or three days later, he fell down from the
balcony."

Kurkov has such a fascination with animals, and especially penguins (his
novel "Death and the Penguin" introduced him to the English-speaking world),
because he wants to show how difficult it is to be given freedom after being
denied it for so many years.

"That is what happened to Ukraine. That is what happened to my hamsters.
Just give them a tiny bit of freedom and they get knocked over or whatever."

He says "Death and the Penguin" came closest among his novels to the
tragedy of the post-Soviet era. "I thought penguins were always very
Soviet in their behavior because they are collective animals and they do
everything together. They live in a colony.

If you separate one penguin from the group, he is lost, irritated and
disorientated. He does not know what to do. This is what happened to
the Soviet people. To my parents actually."

Kurkov's parents are now retired. His father was a military test pilot and
then a civilian test pilot for the Soviet Antonov aircraft enterprise. His
mother was a doctor. "On my mother's side I have lots of doctors, and on
my father's side I have lots of communists," Kurkov said.

"In 1991, the Soviet Union collapsed. Getting back to my parents, these are
two characters who at the same time are like penguins. They are deserted by
the Soviets. And both are in the same sense immigrants because the penguin
is far away from his Soviet fatherland in a foreign situation and alone,
like my parents.

Viktor, my main character, has lost his motherland. The motherland has
disappeared. He does not know what to do. In my novels, I tried to explain
the absurd situations in which they find themselves. I call it logical
absurdism."

While Kurkov uses animals to explain how human nature copes with freedom,
he also shows how freedom has taken on a definition and momentum of its
own throughout the almost anarchic years of the 1990s, when Ukraine broke
away from Russia.

He says the vacuum left by the communist system was filled by criminals.
"In fact, for years the whole economy was run thanks to the racketeering
and protectionism of these people because they were charging 10 percent
for every business, but they were solving the problems as well," he said.

With a cheery laugh, he said it was these people who made things work.

Kurkov's characters come up not only against the bureaucracy of the
post-Soviet era but also the invisible hand of violence, which is always
lurking in "The President's Last Love."

Set in 2013, its tells the story of Sergej Pawlowitsch, president of
Ukraine, who is covered with unusual freckles that the doctors cannot
remove.

The extraordinary thing is that it was published in early 2004, seven months
before Yushchenko, then a presidential candidate, was poisoned, allegedly
by his political opponents. His face is now completely pockmarked.

The novel is also about corruption and endless political infighting - almost
a replica of what happened to Yushchenko before December's Orange
Revolution and then about nine months later, when his fragile government
collapsed amid political intrigue and officials' ambitions.

Kurkov tries to explain what drove him to write a novel that in fact turns
out to be close to reality.

"I was asked about this from a member of the secret services," he recalled.
"I was asked whether my book could be used as a script for poison. I said I
did not think so, because the people who organize poisonings don't read
books or novels.

And logically, I could explain it very easily because there were so many car
accidents in Ukraine when politicians and businesspeople were killed. Then
we had a phase when parliamentarians were killed with Kalashnikovs. So I
felt they would not use the same methods again because it is boring.

"And of course, the former president, Leonid Kuchma, used to say that
Ukraine was a very European country anyway. And European countries do
not use Kalashnikovs during presidential elections. So what else can they
use? They can only use agents of viruses, biological weapons or poison."

Yet for all that, Kurkov is cautiously optimistic about his country and
explains why he would find it difficult to live elsewhere.

"I think I would not be able to write here if I lived here," he said,
referring to Germany. "It is very stable and boring. I imagine there are
hundreds of writers in Germany who do not know what to write about.

They go to creative writing schools and they come back home but do not
know what to write about. It's all the stuff about human relations. If you
do not have much imagination and you are not a psychologist, what can
you write about?"

Kurkov has refused offers from American universities to live abroad.
"Of course I do reading tours," he said. "But I always feel sorry for the
writers who emigrate, who try to survive as writers abroad.

You arrive in the country, it takes you 20 years to understand the people
there. There are writers who can describe the life better."

The exceptions, said Kurkov, are Milan Kundera, the Czech writer who
left his native country in 1968, and the Albanian writer, Ismail Kadare.
---------------------------------------------------------------------------------------------
LINK: http://www.iht.com/articles/2005/11/09/features/kurk.php
---------------------------------------------------------------------------------------------
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contact us immediately if you do not wish to receive this Report.
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                        PUBLISHER AND EDITOR - AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
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Director, Ukrainian Federation of America (UFA)
Coordinator, Action Ukraine Coalition (AUC)
Senior Advisor, U.S.-Ukraine Foundation (USUF)
Chairman, Executive Committee, Ukraine-U.S. Business Council
Publisher, Ukraine Information Website, www.ArtUkraine.com
Member, International Ukrainian Holodomor Committee
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      Power Corrupts and Absolute Power Corrupts Absolutely.
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