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Action Ukraine Report
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 BIGGEST THREAT TO UKRAINE IS US"
[Article 18]
ACTION UKRAINE REPORT - AUR - Number 900
Mr. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., MONDAY, AUGUST 25, 2008
INDEX OF ARTICLES ------
Clicking on the title of any article takes you directly to the article.
Return to Index by clicking on Return to Index at the end of each article

1. GEORGIA AND THE STAKES FOR UKRAINE
Victor Yushchenko, President of Ukraine
The Washington Post, Washington, D.C., Mon, Aug 25, 2008; Page A17
Agence France Presse (AFP), Kiev, Ukraine, Sunday, August 24, 2008
By Sabina Zawadzki, Reuters, Kiev, Ukraine, Sunday, August 24, 2008
Roman Olearchyk in Kiev, Financial Times, London, UK, Mon, August 25 2008

A striking contrast to his usual hesitancy
OP-ED: By Jed Sunden, Publisher, Kyiv Post, Kyiv, Ukraine, Thu, Aug 21, 2008

OF GEORGIA MEANS THAT NATO MUST QUICKLY EXPAND EASTWARDS
We will not be the next on Russia's hitlist, vows defiant Ukraine
Roger Boyes in Kiev, The Times, London, UK, Saturday, August 23, 2008

7. GEORGIA MUST BE WHOLE AND FREE
William Taylor, U.S. Ambassador to Ukraine
Zerkalo Nedeli (Mirror Weekly), # 31 (710), Kyiv, Ukraine, 23-29 Aug 2008
8. FOREIGN DIRECT INVESTMENT IN UKRAINE SOARS 170% IN H1
Interfax Ukraine, Kyiv, Ukraine, Wed, August 20, 2008
Interfax Ukraine, Kyiv, Ukraine, Friday, August 22, 2008
Interfax Ukraine, Kyiv, Ukraine, Thursday, August 21, 2008
Mark Pollok, Ukrainian News Agency, Kyiv, Ukraine, Sunday, August 17, 2008
13. RUSSIA SEES GEORGIA OUTCOME AS PROOF OF ITS DOMINANCE, ANALYSTS SAY
The U.S. and other Western nations may not like what Russia is doing, but officials in Moscow
believe those countries lack the leverage, strength or unity to intervene, analysts say.
News Analysis: By Megan K. Stack, Los Angeles Times Staff Writer
Los Angeles Times, Los Angeles, CA, Monday, August 25, 2008

14. RUSSIAN ACTIONS REIGNITE TENSIONS OVER STRATEGIC PORT IN UKRAINE
By David L. Stern, The New York Times, New York, NY, Aug 25, 2008, Page A6
By Damien McElroy in Sevastopol, Telegraph, London, UK, Sat, 23 Aug 2008
The war in Ossetia is all about drawing a line under further NATO expansion
By Owen Matthews, Newsweek, NY, NY, Sat, Aug 23, 2008

17. THE REAL WORLD ORDER
For the Russians the strategic break point was Ukraine
On Aug. 8, the Russians invited us all to the Real World Order.
By George Friedman, Founder and CEO
Stratfor geopolitical intelligence, Austin, Texas, Mon, Aug 18, 2008
Interview: With Anatoliy Gritsenko, Chairman
Verkhovna Rada Standing Committee on National Security and Defense
Author: Tatiana Silina, Zerkalo Nedeli (Mirror Weekly) # 30 (709)
Kyiv, Ukraine, Saturday, 16 - 22 August 2008
19. RUSSIA COULD HELP UNITE A DRIFTING WEST
A French academic who pondered the possible demise of the
U.S.-Europe alliance now believes that Russia will give it a raison d'etre.
By Sebastian Rotella, Los Angeles Times Staff Writer
Los Angeles Times, Los Angeles, CA, Monday, August 25, 2008

20. EU MUST COMMIT TO UKRAINE AFTER GEORGIA SAYS THINK TANK
Reuters, Brussels, Belgium, Monday, August 25, 2008
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1. GEORGIA AND THE STAKES FOR UKRAINE

Victor Yushchenko, President of Ukraine
The Washington Post, Washington, D.C., Mon, Aug 25, 2008; Page A17

KYIV, Ukraine -- The conflict in Georgia revealed problems that extend well beyond our region. Recent events have made clear how perilous it is for the
international community to ignore "frozen conflicts."

The issues of breakaway regions in newly independent states are complex; too often, they have been treated as bargaining chips in geopolitical games. But
such "games" result in the loss of human lives, humanitarian disasters, economic ruin and the collapse of international security guarantees.

Ukraine has become a hostage in the war waged by Russia. This has prompted Ukrainian authorities and all of our country's people, including those
living in the Crimea, to ponder the dangers emanating from the fact that the Russian Black Sea fleet is based on our territory.

The tragic events in Georgia also exposed the lack of effective preventive mechanisms by the United Nations, the Organization for Security and
Cooperation in Europe, and other international organizations.

We in Ukraine hope that the Russian Federation will heed the opinion of the global community so that the issues at hand can be settled through
negotiations. We want an end to the looting and destruction of Georgian infrastructure. We must do everything possible to prevent provocations and avoid further massacres.

The ongoing conflict between Russia and Georgia affects my country's interests. Military operations have taken place close to our borders, and the Russian Black Sea fleet was directly involved. The question of Ukraine's national security was acutely raised. Given the activities of the Russian fleet, I had to issue a decree regulating its functioning on the territory of Ukraine.

Under these circumstances, Ukraine could not stay silent. We, along with other nations, engaged to seek resolution of the conflict. From the first day of hostilities, Ukraine called for an immediate cease-fire by all parties and dispatched humanitarian aid to victims regardless of their ethnicity. Ukraine upheld its firm support for the sovereignty and territorial integrity of Georgia.

On Aug. 12, I, together with my colleagues from the three Baltic states and Poland, visited Tbilisi. Our proposals seeking a solution to the conflict were in harmony with the European Union settlement plan. We highly praise the efforts of the United States and the E.U. presidency, led by the French, to achieve a cease-fire. Their actions proved efficient in putting a halt to war and bloodshed.

Ukraine favors a wider international representation in the peacekeeping force in the conflict area. A new multilateral format mandated by the United
Nations or the Organization for Security and Cooperation in Europe is the only way to guarantee security in the conflict zone.

I strongly hope that that plan will be strictly implemented by the conflicting parties. We are ready to join international efforts to provide relief and help victims resume their peaceful lives. Ukraine also stands ready to take part in the U.N. or OSCE missions by sending peacekeepers.

It is clear that in addition to the political dimensions of issues involving breakaway regions, we need to cope with the social and economic aspects of
this phenomenon. Many of these provinces are beyond the control of the respective governments or the international community. In many cases, the
absence of monitoring has turned these territories into havens for smuggling as well as illegal trafficking in arms, people and drugs.

Corruption and human-rights abuses are rampant. These areas are marked by their lack of democratic electoral procedures and their unfree or biased
media. The ethnic dimension of the problem is often exaggerated to help conceal the criminal practices.

Moreover, an area home to such activities poses a threat to the prosperity and development of adjacent nations. Official authorities are compelled to
counter attacks from separatist paramilitaries. But they are not always successful. Before large-scale combat erupted in Georgia, Russian peacekeepers failed to prevent the shelling of Georgian territory by South Ossetian separatists. Indeed, that activity intensified in the days before the greater conflict.

This weekend Ukraine celebrated the anniversary of its independence. This conflict has proved once again that the best means of ensuring the national
security of Ukraine and other countries is to participate in the collective security system of free democratic nations, exemplified today by NATO.

In accordance with national legislation and its foreign policy priorities, Ukraine will continue following the path of Euro-Atlantic integration. This
is the path of democracy, freedom and independence.

The writer is president of Ukraine.

LINK: http://www.washingtonpost.com/wp-dyn/content/article/2008/08/24/AR2008082401856.html
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2. UKRAINE VOWS TO SPEED UP BID TO JOIN NATO
Agence France Presse (AFP), Kiev, Ukraine, Sunday, August 24, 2008

KIEV - Ukrainian President Viktor Yushchenko called Sunday for stronger efforts to join NATO, saying Ukraine shares Georgia's "pain" in its conflict with Russia.

"We must intensify our work to win membership in the European security system and strengthen the defense capabilities of our country," Yushchenko said in a speech marking the 17th anniversary of Ukraine's independence from the Soviet Union.

"Anyone who cares about Ukraine must openly declare that entry into the Euro- Atlantic security system is the only way to protect the lives and ensure the well-being of our families, children and grandchildren," he said.

Yushchenko condemned the "forceful intervention and "aggression" waged against Georgia but vowed his country would not be Russia's next target. "Ukraine will do everything to prevent any military escalation in our region."

Ukraine, which has a large ethnic Russian minority, has sided with Georgia in its confrontation with Russia over the breakaway republic of South Ossetia, whose rebel leadership is backed by Moscow.

Ukraine has sided with the West in condemning Russia for sending tanks and troops into Georgian territory in response to a Georgian offensive on August 7 to retake South Ossetia, where residents have been given Russian passports.

Addressing several thousand people gathered on Kiev's independence square, Yushchenko said "the events in Georgia did not leave Ukraine indifferent.
"I share a deep empathy with all the suffering people of the indivisible Georgian land. Your pain is in our hearts."

Ukrainians watched a military parade on Kiev's main Kreshchatyk street, cheering tanks, armored personnel carriers and missiles mounted on vehicles as they rolled by.

There was also a fly-past of some 22 fighter jets and other warplanes in the parade, the first military display since 2001 to mark the anniversary of Ukraine's secession from Moscow.

At its summit in Bucharest in April, NATO leaders agreed that Georgia and Ukraine should eventually join the organization, but neither nation was given candidate status and no timetable was set.

German Chancellor Angela Merkel has underscored that NATO's offer to Ukraine and Georgia to eventually join the North Atlantic Treaty Organization remains valid.

The Georgia conflict has heightened tensions over Russia's Black Sea fleet based in the port of Sevastopol in Ukraine's Crimea republic. Ukraine has called on Russia to begin preparations for a withdrawal from Sevastopol after Moscow sent ships from the base to Georgia during its military campaign.

Russia retained control of the port after the breakup of the Soviet Union, on a lease that runs out in 2017, a deal which some see as an obstacle for Ukrainian efforts to join NATO.

Russian warships returned to Sevastopol from Georgia last week, greeted by cheering crowds of ethnic Russians, while Ukrainian nationalists have held protests nearby.

Yushchenko has been criticized by the opposition for his strong support of Georgian President Mikheil Saakashvili. He was among five leaders from eastern Europe who staged a public show of support for him in Tbilisi earlier this month.

Opposition leader Viktor Yanukovych said the parade was a "demonstration of nonexistent military power" in a commentary to the weekly Zerkalo Nedeli.
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3. UKRAINE LEADER MAKES NATO BID ON INDEPENDENCE DAY

By Sabina Zawadzki, Reuters, Kiev, Ukraine, Sunday, August 24, 2008
KIEV - Ukraine sees joining the NATO alliance as vital to its security, President Viktor Yushchenko said on Sunday in a speech bound to antagonise Russia.

Ukraine's President Viktor Yushchenko kisses the national flag during a ceremony on the Day of the State Flag in Kiev August 23, 2008. Ukraine sees joining the NATO alliance as vital to its security, Yushchenko said on Sunday in a speech bound to antagonise Russia. (REUTERS/Konstantin Chernichkin)

Marking 17 years of Ukrainian independence following the collapse of the Soviet Union, Yushchenko said Ukraine must also increase its own defences -- a clear swipe at Russia which unnerved former Soviet republics when it sent troops into Georgia over the breakaway region of South Ossetia.

In a congratulatory message to mark the day, Russian President Dmitry Medvedev called on Ukraine not to spoil their historically close ties.

Yushchenko's speech to a crowd of thousands in Kiev's Independence Square, site of 2004 street protests that swept him to power, was followed by the first display in years of Ukraine's military hardware.

Tanks, armoured personnel carriers and missile launchers rolled down the capital's central streets. Military jets flew in formation overhead and the capital shook to the boom of cannon.

"We must speed up our work to achieve membership of the European system of security and raise the defence capabilities of the country," Yushchenko said.
"Only these steps will guarantee our security and the integrity of our borders," he told the crowd, many dressed in traditional Cossack shirts.

Yushchenko, who has stepped up his calls for swift NATO membership since Russian forces entered South Ossetia, warned Russia that Ukraine would not tolerate any attempt to divide it.

"Ukraine condemns any attempts to undermine the current world order and its democratic values. We condemn acts of forceful intervention and aggression," he said. "We are well aware of the threats that are emerging more and more acutely in our region."

Moscow is angry over Ukraine's, as well as Georgia's, NATO ambitions, seeing the encroachment of the alliance on its borders as a military threat.

"PRECIOUS ASSET"

Medvedev reminded Ukraine of the strong links between the two countries which reach back a thousand years.

"Our countries are linked by years of spiritual, cultural and historical ties. I believe the main task now is not to allow this precious asset, which we inherited from past generations, to be wasted," he said in a statement. "We need to preserve it and build it up."

In April NATO states refused to give Ukraine and Georgia a Membership Action Plan -- the first step towards membership -- but said the two countries would one day join the alliance. NATO countries will revisit the issue in December.

Analysts say that Georgia's attempt to retake South Ossetia by force, which prompted Russia's incursion into Georgia, might have harmed Tbilisi's chances of joining the alliance soon.

Ukraine backed Georgia in the conflict and was angered when Russia used ships moored in Ukraine Black Sea to land troops in Georgia. Kiev leases the port of Sevastopol to Moscow.

Yushchenko tightened the rules of movement for the fleet, stationed in the pro-Russian Crimean region, and for several days there were concerns that there would be a standoff between the two countries as the ships came back.

The first boat returned, without incident and to cheering crowds, on Friday. Thousands of pro-Russian supporters welcomed the Moskva flag ship on Saturday. (Additional reporting by Oleg Shchedrov in Moscow, Pavel Polityuk in Sevastopol and Elizabeth Piper in Kiev)
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4. UKRAINE FLEXES ITS MUSCLES

By Roman Olearchyk in Kiev, Financial Times, London, UK, Mon, Aug 25 2008

KIEV - Ukraine held an army parade yesterday to celebrate 17 years of independence from the USSR. The display of military might follows Russia's invasion of Georgia, a mutual pro-western ally.

Some 3,500 soldiers, tanks, armoured personal carriers and anti-aircraft systems rumbled down Kiev's main street. A flyby of fighter jets and helicopters followed. It was the first military parade held by Kiev since 2001, planned some months ago.

Addressing an audience, Kiev's pro-western president, Victor Yushchenko, expressed solidarity with Georgia and said Kiev must also increase its own defences. "We are well aware of the threats that are emerging more and more acutely in our region. We condemn acts of aggression," he said.

Kiev's relations with Moscow deteriorated after a pro-democracy revolution propelled to power a pro-western leadership which seeks speedy membership of the European Union and Nato.

Russian President Dmitry Medvedev answered Ukraine by calling for both countries to "preserve" close ties.
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U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business relations & investment since 1995.
===================================================
5. STRONG LEADERSHIP BY PRESIDENT YUSHCHENKO
A striking contrast to his usual hesitancy
OP-ED: By Jed Sunden, Publisher, Kyiv Post, Kyiv, Ukraine, Thu, Aug 21, 2008

In the years following his accession to the Presidency in the aftermath of the Orange Revolution, President Yushchenko has damned his presidency by hesitation, half-steps and unprincipled compromises.
To name a few, his failure to launch substantial political or economic reform in the first year of his administration, tackle corruption followed by his numerous deals to undermine PM Tymoshenko during her first term as well as his back-room dealings with the Party of the Regions have doomed his Presidency to failure on domestic issues.

In striking contrast to his hesitancy in domestic issues, President Yushchenko has exhibited true leadership and force of will in the recent crisis over the Russian attack of Georgia.

President Yushchenko, along with the presidents of the Baltic States and Poland, arrived in Tblisi immediately after the invasion to give support to the Georgian people. (see video clip here: http://www.youtube.com/watch?v=Aj9D_goWE_E)
Additionally, President Yushchenko has challenged Russia's lease on the base for the Black Sea fleet on the basis of the Russian navy's illegal actions in Georgia.

It seems Ukraine may finally have the leader it hoped for during the heady days of the Orange Revolution.

Is it really a Cold War?

Russian Prime Minister Vladimir Putin’s regime has gone further than the West in using military options against the West.

Ever since the Russian invasion of democratic Georgia, pundits and politicians have been writing extensively about the "new Cold War" that is emerging between Russia and the West.

Though it is clear that the dynamics of the Russia-West relationship has changed dramatically, it has already moved beyond a Cold War. In fact, by launching a full military invasion of democratic, NATO-allied Georgia, Russia has transformed the "cold war" of words to a full-out assault on Western institutions and freedoms.

In the aftermath of World War II, the Big 3 -- the United States, Great Britain and the Soviet Union -- divided up Europe and Germany into spheres of influence with tragic consequences for the Eastern half of Europe and Germany. In the late 1940s, the division of Europe hardened with the Soviet government undermining and destroying any independent political movement in the Eastern half of Europe.

Although the Soviets used extensive force to subdue opposition and destroy the remnants of the military units caught behind in its territory, it displayed severe apprehension of using any military power directly against Western European or American territory.

The first flashpoint of the nascent Cold War was in 1948 when the Soviet army blockaded allied entry to Berlin. Though the military was at high alert, no bullets were fired, much less did the Soviet army advance into Western territory.

In 1949, NATO was formed as a military treaty unifying the West against the Russian military threat. Over the course of the remaining four decades of the Cold War, the Soviet leaders rightfully feared launching an open military attack on Western Europe or the United States. In fact, it was the lack of direct military engagement between the West and the Soviet Union that defined the Cold War era.

Looking back over the past few years of Russian actions, it was clear that Putin had already launched a Cold War against Western institutions. Russia’s role in actively undermining a democratic election in Ukraine, launching cyber-warfare against Estonia and launching gas wars against Western countries were clearly the opening salvos of the new Cold War.

Sadly, there was no Churchillian figure who grand eloquently warned the West of an iron curtain descending on Europe, or perhaps, more aptly, an oil-fused one.
While NATO was clearly formed to counter the Soviet military threat, at the most recent conference in Bucharest, NATO members bent over backwards showing deference to Russian sensibilities and accepting its right to have a veto over Ukraine and Georgia’s foreign policy.

Perhaps it was the tepid response by the West to Putin’s cold war tactics against his neighbors that emboldened the Russia Prime Minister to accelerate its Cold War tactics to outright military invasion of a European democratic country.
Georgia may still be a largely unknown country to many in the West, as are Estonia, Latvia and Ukraine, but the great success since the fall of the Berlin Wall has been the expansion of freedom and democracy to new areas in Europe, just as the post-World War II years did so to countries like Greece, Spain and Portugal.

Russia’s military invasion of Georgia is a direct challenge to this expansion. It also clearly goes beyond any actions against the West undertaken by the Soviet Union during the decades of the Cold War.
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6. UKRAINIAN PRESIDENT YUSHCHENKO TELLS THE TIMES THE INVASION
OF GEORGIA MEANS THAT NATO MUST QUICKLY EXPAND EASTWARDS
We will not be the next on Russia's hitlist, vows defiant Ukraine

Roger Boyes in Kiev, The Times, London, UK, Saturday, August 23, 2008

Viktor Yushchenko, the Ukrainian President, was in a fierce and defiant mood yesterday as he urged Nato to respond to the Russian invasion of Georgia by
moving quickly to expand the frontiers of the alliance eastwards.

In an exclusive interview with The Times Mr Yushchenko asserted that the fundamentals of international politics had changed. Ukraine had to do everything in its power to ensure it was not going to be next on the Kremlin hitlist.

"It is the first time in Europe since the Cold War that a foreign army has entered the territory of a sovereign state without any internationally accepted legal basis," he said. "If we were to be ambivalent about this it would give tacit approval to put our country and our citizens under threat."

The President - one of the figureheads of the Orange Revolution that toppled Moscow's favoured candidate for the leadership of Ukraine - was careful not
to criticise Vladimir Putin, the Russian Prime Minister, directly.

Even when the 54-year-old economist flew to Tbilisi shortly after the outbreak of the Russian-Georgian war, his words were more carefully chosen than those of the other East European heads of state.

Russians form a strong minority in Ukraine - about 17 per cent of the population, in the east and to the south in the Crimea - and could become a flashpoint in any future confrontation with Moscow.

Yesterday was the eve of Ukrainian Independence Day and it was time for the President to break cover. Over the roofs of Kiev, a Ukrainian jet fighter
howled through the sky. It was preparing for the celebrations, but its presence still induced a vague sense of menace.

This weekend the Independence Day festivities will have a martial edge. It is a good moment to display strength, although in truth the Ukrainian forces
are a mere shadow of those of Russia, which is using oil money to modernise the army and boost military might. New aircraft carriers are planned, and
new equipment across the board.

"Ukraine has to move towards the Nato alliance," the President said, drumming up support before the Nato summit in December. "It is the only way for our country to protect our national security and sovereignty. When the borders of Nato expand, so too does the region of peace and stability."

The defence budget of Ukraine - as in other nervous Central European states - is to be raised immediately. "I want to remind all political forces in our country that shout about the possible neutral status of Ukraine that neutrality can come at a very high price," he said, casting a nod at pro-Moscow
politicians.

As a young man, the President had direct experience of Russia's fear of encirclement - after graduation he did national service as a KGB border guard on the Soviet-Turkish border. "We need to increase the military budget so that there is no question about what happens tomorrow," he added.

Russia argues that the West is posing a direct threat on its borders by expanding Nato, but its invasion on behalf of the South Ossetians has cancelled out its claim to have legitimate anxieties.

"The peace and security of Europe are under threat, thus a united Europe should give a robust and appropriate response," the President said.

Instead, at the beginning of a new Russian presidency, Moscow is demonstrating its readiness to champion Russian minorities everywhere - disturbing for Estonia with 30 per cent of its population of Russian origin; Latvia with 33 per cent; Moldova with 13 per cent, and the Belarussians with 13 per cent. The Central Asian republics such as Kyrgyzstan (with 21.5 per cent Russians) could also become vulnerable.

No one seriously believes the Russians are set to march into the Baltic states - though Moscow has no problems about exploiting their dependency on
Russian oil and gas - but that is President Yushchenko's point: as full members of Nato, along with Poland, they are more secure than Ukraine. It was now essential, he said, that Ukraine should be enlisted in the Nato Membership Action Plan.

Still pockmarked from a dioxin poisoning attack before the 2005 presidential election, the President has reason enough to be wary about Russian-inspired
dirty tricks.

His face became bloated and disfigured after eating a meal with security chiefs - medical tests later showed that he had consumed several thousand times the safe dose for dioxin - and though the matter has still to be cleared up by the courts, many observers think that it was a typical KGB operation.

"This is my personal tragedy and that of my family," he said. "Unfortunately it has become an integral part of the political debate in Ukraine." Once seen as a revolutionary hero, then as a victim of mysterious poisoners, he is now viewed by many as a somewhat ineffective president, struggling to make a mark. Ahead of next year's presidential elections, his popularity ratings are at a record low.

Paradoxically, the perceived threat from Russia could boost his position and help him to brand himself as a doughty defender of Ukranian independence.
The same goes for leaders across the region: they are all starting to play the nationalist card, playing on the deep suspicion of Vladimir Putin and the Russian generals.

Interview with President Yushchenko
By Roger Boyes

Q: The Russian intervention in Georgia is making everyone in the region nervous.How are you going to guard Ukraine's independence?

Yushchenko: Recent events in Georgia show how fragile peace and stability can be not just in one country but in the whole region. It is the first time in Europe since the Cold War that a foreign army has invaded the territory of a sovereign state without any internationally accepted legal basis.
If we are ambivalent about this it will give tacit approval to put our country and our citizens under threat. In the first days of the conflict, Ukraine clearly demonstrated her position. The territorial integrity and independence of any country are sacrosanct. We have been and will remain loyal to these principles.
The main lesson from Georgia is that no single model of national security can guarantee the defence of national sovereignty. Only collective security can guarantee peace and stability and restrain aggression. Ukraine has to move towards the NATO alliance. For our country it is the only way to protect our national security and sovereignty. When the borders of NATO expand so too does the region of peace and stability.
The Russia-Georgia conflict will have a serious geopolitical impact not only on the continent of Europe but for the whole world. Today the peace and security of Europe are under threat so a united Europe should give a robust and appropriate response to this challenge.

I believe that NATO member countries will now support the aspirations of Ukraine to receive a Membership Action Plan invitation during the December session of the Alliance's ministers. It is very important both for the alliance and for Ukraine. We share common values and a common responsibility.

Q: Are you going to boost your defence?

Yushchenko: After the recent events it is clear that we need to review our defence priorities. In the August or September sessions of the Ukrainian National Security Council we will review the whole system of how we are financing the armed forces in 2008 and the perspectives for 2009.
We need to increase the military budget to ensure that there is no question about what will happen tomorrow. I want to remind all political forces in our country that shout about the possible neutral status of Ukraine, that neutrality can come at a very high price.

Q: Russia claims that you are selling arms to Georgia. Is that true?

Yushchenko: It is very difficult to comment on the unsubstantiated claims of Russian officials particularly as they have supplied no evidence. The partnership between Ukraine and Georgia is based on law and on mutual benefit, as with any two countries.
We have an inter-governmental agreement on military cooperation signed in 1995 and 1996. No limits have been set by international organisations on military technical cooperation between Georgia and Ukraine, so any comment on this subject amounts to unhelpful speculation.

Q: Are you going to try to box the Russian fleet into Sevastopol?

Yushchenko: We cannot control a foreign fleet"s operational activities. However we can and must demand that our Russian counterparts strictly abide by Ukrainian legislation regarding the stationing of the Russian navy on our territory.
It is set out in international law and there is a modus operandi for situations like this. I have issued two decrees to control the re-location of Russian troops and military equipment outside their bases as well as their crossing of the Ukrainian state border.

This fully complies with the core agreement signed between Ukraine and Russia that regulates the situation as long as the Russian navy is stationed on our territory.

We still face a lot of unresolved issues with respect to the Russian navy"s stationing in the Crimea but I am confident that we will be able to reach a compromise.

Q: So when will you start talks with Russia about removing the fleet when their lease runs out in 2017?

Yushchenko: We have repeatedly urged Russia to consider this issue. However every time we face a lack of understanding and outright reluctance on their part to solve this problem.

The withdrawal of such a complex military contingent cannot be accomplished overnight. It will take much political, economic and logistical preparation. That will include the building and upgrading of military bases in Russia where the fleet will be redeployed.
International experience suggests that one needs between seven and nine years. So we cannot help but be worried about Russia when it is unwilling even to commence negotiations. When the treaty expires the Russian troops and vessels have to be pulled out of Ukraine.

Q: How do you feel about the poisoning attempt that scarred your face? Do you know now who was behind it?

Yushchenko: The issue of my poisoning is my personal tragedy and that of my family and unfortunately it has become an integral part of the political debate in Ukraine. There is a great deal of speculation about this. We will have to wait for the legal procedures to take their course and draw a line under this matter.
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7. GEORGIA MUST BE WHOLE AND FREE

William Taylor, U.S. Ambassador to Ukraine
Zerkalo Nedeli (Mirror Weekly), # 31 (710), Kyiv, Ukraine, 23-29 Aug 2008
Every four years, the world traditionally puts aside its disputes to cheer on its athletes during the uplifting quadrennial spectacle of the Olympic Games. During this Olympic year, however, we’ve been treated to a spectacle that has been anything but uplifting, as Russian tanks, troops, and planes have swept across the border of one of its small neighbors.
Although the neighbor was Georgia, not Czechoslovakia, and the tanks bore Russian, not Soviet Union markings, the scene was chillingly reminiscent of 1968. These events directly affect Ukraine’s own national security and underscore the importance of Ukraine speaking out with one voice.

The aftermath of these events has been equally disturbing. Russian troops have refused so far to leave, and have dug in to positions not only in Georgia’s disputed areas of South Ossetia and Abkhazia, but also in Georgia proper, all in violation of Georgia’s territorial integrity. As President Bush said, “There is no room for debate on this matter…the international community is clear that South Ossetia and Abkhazia are part of Georgia, and the United States fully recognizes this reality.”

On Tuesday, NATO foreign ministers issued a strong statement in support of Georgia’s territorial integrity, independence and sovereignty, as well as its democratically elected government. U.S. Secretary of State Condoleezza Rice said the statement also “sent a message to Russia that NATO will not permit a new line to develop in Europe between those states that are a part of the transatlantic structures and those states that still aspire.”

The world’s attention now is focused on two urgent objectives: Bringing a halt to all hostilities and abuses in the conflict area, including those committed by “irregulars” in Russian-controlled areas, and helping the survivors of the conflict. Both Georgia and Russia have signed a ceasefire agreement, but the world is still waiting for Russia to honor it.
Meanwhile, there is an urgent need to allow humanitarian workers in. Ukraine, the United States and other countries have already begun delivering medical care and supplies, food, shelter, and other assistance to the survivors. While the exact number of dead and wounded is still unknown, it is clear that the people of Georgia are facing a humanitarian crisis in the swath of destruction left behind.

Ukraine has played an important role in the support of Georgia’s territorial integrity. President Yushchenko, along with other European leaders, travelled to Georgia personally to signal this support and to oversee the provision of significant material humanitarian assistance to the innocent victims of this conflict.
Prime Minister Tymoshenko sent Deputy Prime Minister Nemyria to Tblisi immediately as well. To date, Ukraine has provided to Georgia 132 tons of humanitarian assistance, including medical supplies, first aid kits, food and other items. The total value of this assistance is estimated at 30 million UAH.

Georgia’s separatist regions of South Ossetia and Abkhazia have had a long history of tension. But anyone who takes a closer look at the events of the past year should not be surprised by the events of the last few weeks. Moscow has been steadily intensifying pressure on Georgia economically, politically, and militarily, launching trade embargos and suspending air and ground transport links.
In the spring, Russia issued a government order to increase its official ties with the breakaway regions of South Ossetia and Abkhazia, completely bypassing the Georgian authorities.

Russia’s challenges then became more ominous. Last April, a Russian fighter jet shot down a Georgian drone over Georgian airspace, and in that same month, Russian combat troops and artillery began moving into Abkhazia, all on the pretext of augmenting the peacekeeping force – but without any consultation with Georgia.
In May, Russia sent railroad construction troops into Abkhazia – with no apparent legal mandate – to repair the railway leading south from Russia to the conflict zone, ostensibly for “humanitarian reasons.” By July, incidents of violence were occurring in South Ossetia, including attacks on Georgian police vehicles and an attempted assassination of a pro-Georgian South Ossetian leader.

Throughout this period, U.S. officials urged the Russian and Georgian governments to exercise restraint and find a way to resolve their differences peacefully. On August 7, after Georgia responded to shelling of Georgian villages that came from Russian peacekeeper-controlled territory in South Ossetia and moved to reclaim parts of South Ossetia, an overwhelming Russian force swarmed through South Ossetia and into Abkhazia and Georgia proper.
Russia is now questioning Georgia’s territorial integrity, just as it has done in recent statements about Ukraine and intimating that it may recognize the independence of both disputed areas, despite numerous U.N. Security Council resolutions aimed at resolving their status diplomatically.

The scenes of Russian aggression – and now the threats, both direct and indirect, against other countries such as Poland and Ukraine – have brought back frightening memories to the former captive states which have since chosen a Western model of freedom and democracy. But the world we live in today is different from 1968, when the Soviet Union invaded Czechoslovakia.
Since then, Europe, the transatlantic community, and the world have moved forward. Russia has sought to integrate into the diplomatic, political, economic, and security structures of the 21st century, and the United States has strongly supported those efforts.

But through its actions Russia has now put its international reputation and aspirations at risk. The impact of its actions is already being felt as questions are being raised about Russia’s suitability for admission into the World Trade Organization, and the prestige of an eighth seat at the G-7 economic forum.
Some critics are even questioning the appropriateness of Russia hosting the next Olympics in Sochi, which is only a marathon’s race away from the disputed territory of Abkhazia. The Russian people may learn that the cost of last week’s aggression will be measured in ways that their leaders never considered.

If Russia wants to repair the damage to its reputation – and to its relations with the rest of the world – the first step it must take is to respect the ceasefire its president has signed and stop all hostilities, including those committed by irregulars in the areas it is now occupying.
In accordance with the terms of that ceasefire, it must immediately remove from Georgia the troops it introduced after August 6. It must also permit international monitors and a more robust international presence in South Ossetia; allow humanitarian aid to be delivered; and adhere to Russia’s previously professed policy of supporting Georgia’s territorial integrity.

Without those actions, Russia will further isolate itself. As Sec. Rice said after the NATO meeting: “There can be no business as usual with Russia while this kind of activity is going on.”
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8. FOREIGN DIRECT INVESTMENT IN UKRAINE SOARS 170% IN H1

Interfax Ukraine, Kyiv, Ukraine, Wed, August 20, 2008

KYIV - Foreign direct investment in Ukraine totaled $6.918 billion in the first half of 2008, up almost 170% from the same period of 2007, the State
Statistics Committee said. Accumulated FDI in the Ukrainian economy stood at $36.451 billion on July 1, up 23.4% from the start of 2008. Per capita FDI
totaled $786.8.

Investment from Cyprus rose $2.361 billion in the half, Germany - $838.9 million, Italy - $740.2 million, Russia - $645.3 million, the Netherlands -
$618.3 million, Austria - $343.7 million, the UK - $275 million and Sweden - $260.9 million.

Ukraine had direct investments in other countries of $42.8 million in the first half of 2008, putting total direct investment in other countries at $6.198 billion, including $5.949 billion in EU countries (96% of the total amount) and $196.8 million in CIS countries (3.2%). Ukraine has direct investment in 51 countries, but mainly in Cyprus.

Loans and borrowings by Ukrainian investors to other countries stood at $123.4 million as of July 1. Total direct investment in the economies of other countries, including borrowed capital, totaled $6.322 billion.
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9. S&P FORECASTS UKRAINE'S ECONOMIC GROWTH
WILL SLOWDOWN TO 2.5% IN 2009
Interfax Ukraine, Kyiv, Ukraine, Friday, August 22, 2008
KYIV - The growth of Ukraine's real gross domestic product in 2009 will slow down to 2.5% from this year's 6.5% growth forecast and last year's 7.9% registered indicator, says Standard & Poor's in a report published on Friday.

S&P experts project the average annual inflation for 2009 at 27% from 12.8% last year and predict its slowdown to 21% in 2009 and 11.6% in 2010.
According to the report, the rating agency expects a deficit of Ukraine's consolidated budget, which was 0.9% of GDP in 2007, at 1.2% of GDP in 2008, 2.9% of GDP in 2009 and 4.5% of GDP in 2010.

The level of Ukraine's ratings mirrors the fact that the country's leadership has failed to take appropriate measures to rein in the growing inflation when the economy is overheated, say S&P experts.

An increase in domestic lending where loans extended to households in foreign currency without hedging tools account for a larger part remains excessively high, which pushes up the growth of nominal imports and a rise in the deficit of the current balance of payments, according to the report.

Considerable spending along with monetary stimulation measures were conducive to the fast growth of inflation, thus undermining the real growth of incomes and creating prerequisites for the higher volatility of the economy, the experts stress.

According to their estimates, the considerably high inflation compared to that in Ukraine's major trading partners will prompt the growth of the deficit of the current balance from 8.4% from receipts on the current account in 2007 to 27% in 2009.

S&P projects that the deficit of the current account of the balance of payments will be financed at the expense of the fast growing banking system of Ukraine and with the involvement of foreign direct investments (FDIs), although the imperfect methods for the assessment of the balance of payments may lead to the overestimation of FDIs.
Thus, demand for external financing (in gross) in interest from current account receipts will grow over the period from 117% to 152%, according to the report.
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10. UKRAINE STILL EIGHTH BIGGEST STEELMAKER IN WORLD
IN JULY, PUTTING OUT 3.68M TONNES OF STEEL
Interfax Ukraine, Kyiv, Ukraine, Thursday, August 21, 2008
KYIV - Ukraine remained the eighth largest of the world's 66 main steel producing nations in July 2008, and it increased steel production by 5.8% year-over-year to 3.683 million tonnes. The rating is published by the International Iron and Steel Institute (IISI).
Along with Ukraine, the top ten steelmakers in July 2008 were [1] China (44.886 million tonnes, a 7.5% rise), [2] Japan (10.189 million tonnes, a 1.7% rise), the [3] United States (8.5 million tonnes, a 2.7% rise), [4] Russia (6.125 million tonnes, a 0.9% rise), [5] South Korea (4.830 million tonnes, a 13.1% rise), [6] India (4.475 million tonnes, a 6.2% rise), [7] Germany (3.765 million tonnes, a 5.7% decline), [8- Ukraine]; [9] Brazil (3.198 million tonnes, an 11.5% increase) and [10] Italy (2.740 million tonnes, a 4.9% rise).
In July 2008, Ukrainian producers increased steel output by 36,000 tonnes compared to June 2008. A rise in steel production compared to the previous month was also registered in the United States, South Korea, India, and Brazil.

Last month the key steel producers, accounting for 98% of world output, smelted 117.229 million tonnes of steel, which was 6.2% up on July 2007.
In the seven months of 2008, all 66 countries on the rating produced 815.119 million tonnes of steel, which was 6.1% up on the same period of 2007.
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U.S.-Ukraine Business Council (USUBC) www.usubc.org.
Promoting Ukraine & U.S.-Ukraine business & investment relations since 1995.
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11. SOFTLINE COMPANY PERMITTED TO PURCHASE OVER 50% OF EKOTEKH
Mark Pollok, Ukrainian News Agency, Kyiv, Ukraine, Sunday, August 17, 2008
KYIV - The Antimonopoly Committee of Ukraine has permitted the Softline company (Kyiv) to purchase over 50% of the shares in the Ekotekh scientific-research institute of automatized computer systems (Kyiv). This reads the statement of the AMCU. Softline is a closed joint-stock company.

Ekotekh, registered as a limited liability company, renders services on software engineering, its implementation and maintenance. 57% of shares in Softline belong to the Cypriot UKRN III NEW WORLD GROWTH CO.LIMITED, 16% — to the SigmaBleyzer Ukraine limited liability company.

As Ukrainian News earlier reported, Softline is the Ukrainian designer and supplier of software, information analysis systems, and works as a project integrator.

Softline ended 2007 with a net profit of UAH 12.601 million, having increased its net revenue by 43.7% or UAH 32.148 million to UAH 105.776 million, compared to 2006.
NOTE: Softline company is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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12. DLA PIPER AWARDED INTERNATIONAL LAW FIRM
OF THE YEAR 2008 IN UKRAINE
DLA Piper, Kyiv, Ukraine, June 2008

KYIV - DLA Piper's Kyiv office was named "International Law Firm of the Year 2008" at the Yuridicheskaya Practika Weekly's Legal Awards, which took place on 30 May at the Hyatt Hotel in Kyiv.

DLA Piper was selected for the coveted title by an independent panel of legal experts. The panel of nine judges included representatives from the Ukrainian Ministry of Justice, the Ukrainian Council for National Security and Defence, Ukraine's Supreme Court, professors of well-known Ukrainian legal departments, as well as practising lawyers both in-house, and in private practice.

Margarita Karpenko, Managing Partner of the Kyiv office, said: "Winning this award is yet another testimony to the effort and commitment of the entire Ukrainian team since its arrival in the market in 2005. I see this award as a commendation of our progress in the Ukrainian market, the strength of our international presence and the value that we are able to add to the work of our clients."

Commenting on the win Constantine Lusignan-Rizhinashvili, Regional Managing Partner for the CIS, said: "We have an excellent team in Ukraine and this is a great accolade, which recognises their progress within the market."

The Yuridicheskaya Practika Weekly Legal Awards are now in their second year.
ABOUT DLA PIPER UKRAINE
DLA Piper Ukraine LLC is part of DLA Piper, the largest global legal services organisation. The Kyiv team comprises more than 40 lawyers and is headed by Managing Partner Margarita Karpenko.

DLA Piper is the largest global legal services organisation with offices across Europe, Asia, the Middle East and the US. Over 3,700 lawyers across 64 offices and 25 countries provide a broad range of legal services to businesses that operate on a local, regional and global level. DLA Piper is relationship driven and committed to meeting the ongoing legal needs of its clients. (www.dlapiper.com)
DLA Piper Ukraine is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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13. RUSSIA SEES GEORGIA OUTCOME AS PROOF
OF ITS DOMINANCE, ANALYSTS SAY
The U.S. and other Western nations may not like what Russia is doing, but officials in Moscow
believe those countries lack the leverage, strength or unity to intervene, analysts say.

NEWS ANALYSIS: By Megan K. Stack, Los Angeles Times Staff Writer
Los Angeles Times, Los Angeles, CA, Monday, August 25, 2008

MOSCOW -- In this historic hub of expansion and empire, Russia's military victory over U.S.-backed Georgia was cheered as evidence that Moscow has
regained its global dominance -- and proof that the rest of the world can't risk standing in its way.

As Russian soldiers poured into neighboring Georgia this month and Russian warplanes bombed fleeing, ill-equipped Georgian troops, U.S. and European
officials condemned Moscow. But the image of Russia that appeared over and over in media here was that of a country rising from its knees.

The United States and the nations of Europe may not like what Russia is doing, but officials in Moscow now believe those countries lack the leverage, strength or unity to intervene, analysts here say. Several of them repeated the same idea: that the West no longer exists as a unified force.

With the U.S. floundering economically and bogged down in two costly wars, Russian officials were confident that it could not and would not come
rushing to Georgia's defense with a military intervention, analysts here say. Europe, meanwhile, depends upon Russian oil and gas exports, and was
leery of a conflict with Moscow that could further raise fuel prices, they said.

"There is no West anymore. It's eroding and weakening," said Sergei Karaganov of the Council on Foreign and Defense Policy, a Moscow think tank.
"We are feeling very strong, and we don't trust anybody. Especially the United States."

Three or four years ago, he said, Russia would have been nervous to hear threats of expulsion from the Group of 8 leading industrialized nations, as
Republican presidential candidate John McCain suggested. Now, Karaganov said, many Russians laugh at the notion.

"I mean, who are these nations? Russia is probably stronger than any country in the G-8 except for the United States, and it has more credibility because
it hasn't killed hundreds of thousands of people recently," he said. "It has won wars, and the other countries are losing them."

He paused. "There is arrogance in my statements," he said, "but that's the way people see things."

Many here read the current conflict not as the defeat of a smaller, poorer Georgian army but as a strike against the U.S., which has backed Georgian
President Mikheil Saakashvili and trained his troops. After years of fuming while the U.S. built up ties with former Soviet republics and Eastern
European nations, many Russians view the Georgian conflict as an important turning of the tide.

"As far as the Russian elite is concerned, it's another very important step in Russia's restoration of its position in the world," Andrei Piontkovsky, a
visiting fellow at Washington's Hudson Institute, said in a telephone interview. "The public and government is so proud not only because they defeated Georgia, but because they humiliated and defeated their great geopolitical rival, the United States of America."

With war raging between Russia and Georgia, which has hopes of someday joining NATO, the U.S. was limited to sending humanitarian aid and railing
against Moscow. Badly needed aid is still pouring in: The U.S. Navy guided-missile destroyer McFaul arrived at the Georgian port of Batumi on
Sunday with baby food, bottled water and other supplies.

Georgia now finds itself on the front line in a broader, deeper and slower ideological war. Since the Soviet collapse, the last vestiges of the Cold
War have lingered in the form of a struggle between Washington and Moscow for influence in the former U.S.S.R.

"Moscow is very much concerned with the meddling of the United States in the post-Soviet space," said Sergei Markov, a Russian analyst close to the
Kremlin. "We have been watching for a long time how the United States, under the guise of helping new democracies, has in fact been gaining managerial
control over these countries."

Nations once firmly under Moscow's thumb, especially Ukraine, Georgia, Latvia and Estonia, have pulled away from Russia and worked to develop new
alliances in the West.

With regional tensions inflamed over Georgia, other neo-Cold War fights are brewing. Many Russians are keeping a close eye on Ukraine, whose loss
remains an existential challenge to a Russian culture that traces its empire to the banks of the Dnieper River. Moscow has long resisted the notion that
Ukraine is an independent nation.

Some analysts believe that watching Georgia get pummeled by Russia may have given Ukrainians a more visceral sense of vulnerability. That could result
in the opposite reaction sought by Moscow, helping to entice reluctant citizens to support Ukraine's own bid for NATO membership.

At the same time, there is increasing tension over historic Russian claims to Ukraine's Crimea peninsula, home to many ethnic Russians as well as
Russia's Black Sea fleet.

If Ukraine joins the North Atlantic Treaty Organization, Karaganov said, "it will be seen as an act of belligerence."
"Ukraine is the cradle of Russia," he said. "It's more Russian than Russia."

Meanwhile, Poland enraged Moscow last week by agreeing to host a U.S. missile defense base that the Bush administration insists is designed to bring down weapons launched from nations such as Iran. Russian officials, who regard the missile shield as deterrence meant to curb Moscow's military
might, responded by saying that Russia would be "forced to react, and not through diplomatic channels."

But for now, the biggest fight remains in the Caucasus. Russian military officials this weekend vowed to beef up their forces in Georgia in direct proportion to American military spending to rebuild the Georgian army.

Russia charges Georgia with starting the current conflict by launching a military operation meant to reassert control over the breakaway republic of South Ossetia.

In the popular Russian narrative, Moscow is the defender and peacemaker, not the aggressor and invader.

U.S. officials argue that Russia wedged itself between Georgia and its breakaway republics of South Ossetia and Abkhazia in a de facto annexation, then labored for months to provoke a conflict in order to formalize the arrangement.
Russia then reacted far too forcefully to the Georgian operation in South Ossetia, they say, exaggerating the death toll while dropping cluster bombs on Georgian civilians and occupying swaths of Georgia proper that it has yet to relinquish.

American propaganda, Russians say. Alongside a newfound sense of might, Russians appear firm in their belief that they hold the moral high ground.

"This crazy, trigger-happy monster was killing civilians in South Ossetia," said Vyacheslav Nikonov, a political analyst and head of the Russian World foundation, which promotes Russia and its language. "What else could [Russian President Dmitry] Medvedev do?"

After watching the West's reaction to the conflict, Russia's elite is rethinking its strategic planning along military lines, Nikonov said.

"We took for granted that we had some working relationship with the West, and it looks like that's not the case," he said. "There will be a serious strategic debate in this country, rethinking many things: alliances, military spending, the role of the nuclear component in the armed forces."

But other Russian analysts were more critical of Moscow. By boosting hopes for independence in Abkhazia and South Ossetia, Medvedev and Prime Minister Vladimir Putin have taken the first step toward redrawing post-Soviet borders, Piontkovsky said. There is a strong parallel between today's resurgent Russia and the rise of Germany in the 1930s from broken country to would-be empire, he argued.

"Under the same slogan of rising from the knees . . . Hitler was getting away with everything, and every demonstration of weakness from the West emboldened him to the next adventure," Piontkovsky said. "Now we can say that Putin has gotten away with dismembering countries."

CONTACT: megan.stack@latimes.com. Times staff writer Sergei L. Loiko contributed to this report.

LINK: http://www.latimes.com/news/nationworld/world/la-fg-russia25-2008aug25,0,1310864.story?page=1
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14. RUSSIAN ACTIONS REIGNITE TENSIONS OVER STRATEGIC PORT IN UKRAINE

By David L. Stern, The New York Times, New York, NY, Aug 25, 2008, Page A6
SEVASTOPOL, Ukraine — Russia’s guided missile cruiser Moskva appeared suddenly on the horizon, dark and imposing like a fortress in the twilight, and steamed on Saturday into this Black Sea port, where its sailors were given a hero’s welcome. “Russia! Russia!” chanted hundreds of supporters from the embankment, as fireworks burst.

The ship, more than 600 feet long and bristling with guns and missile launchers, was one of several from the Black Sea Fleet that patrolled the coast of Georgia during the conflict between it and Russia. The fleet — which the Russians say sank a Georgian gunboat that fired on them — is based here in Sevastopol, a city populated mainly by ethnic Russians.

The next day, in the Ukrainian capital, Kiev, President Viktor A. Yushchenko presided over the first military parade in years — with a massive display of tanks, armored personnel carriers and missile launchers — to celebrate his country’s 17th year of independence from the Soviet Union.
Russia’s willingness to send troops into Georgia, another former Soviet republic, to settle their territorial dispute this month has made Ukraine jittery, and the pro-Western Mr. Yushchenko used the celebration to again push for inclusion in the North Atlantic Treaty Organization.

“We must speed up our work to achieve membership of the European system of security and raise the defense capabilities of the country,” Mr. Yushchenko said in a televised speech to thousands gathered in the city’s main Independence Square. “Only these steps will guarantee our security and the integrity of our borders.”

The dueling celebrations, one rejoicing in Russia’s military might and the other overshadowed by it, underscore the tensions between Russia and Ukraine, where leaders had hoped the days of Russian dominance were long over. They also highlight Sevastopol’s status as something of a fault line between the two countries.

Though it is in Ukraine’s southern Crimean peninsula, Sevastopol — home to thousands of Russian naval personnel and their families — is ethnically and culturally very much a Russian town.

Crimea, connected to Ukraine by a slender causeway, was in fact considered a part of Russia, until Nikita S. Khrushchev, the Ukrainian-born Soviet leader, bequeathed it to Kiev as an act of good will in 1954.

What was considered a purely symbolic gesture at the time, however, assumed monumental importance with the breakup of the Soviet Union. Crimea — wrested from the Turkic Tatars in the late 18th century under Catherine the Great — was now a part of Ukraine.

And with it went Sevastopol, the strategic base for the Black Sea Fleet for more then 200 years and a city of deep emotional resonance for Russians. Twice it has been besieged — by British-led forces in the 19th-century Crimean War, and then for 250 days before falling to the Germans in World War II.

After the Soviet breakup, Moscow and Kiev wrangled first over the ownership of the fleet — of which the Kremlin finally took the lion’s share. Then they argued over the terms by which Russia could continue to use the base. The two countries agreed on a 20-year renewable lease in 1997.

With the ascension of Mr. Yushchenko’s pro-Western government after the 2004 Orange Revolution, and with Russia’s new assertiveness as petrodollars flow into its coffers, Sevastopol has once again been thrust under the klieg lights.

Crimea was a stronghold of Mr. Yushchenko’s political opponent, the pro-Russian Viktor F. Yanukovich.

Russian nationalists have begun agitating to reclaim Sevastopol and Crimea, although taking such an action is far from a mainstream sentiment. The mayor of Moscow, Yuri M. Luzhkov, raised Ukrainian hackles in May when he called for Russia’s western neighbor to return “what doesn’t belong to it,” The Associated Press reported.

The Ukrainians, for their part, have struck back. Mr. Yushchenko, who traveled to Tbilisi in a display of solidarity with the Georgian president, Mikheil Saakashvili, threatened to ban Russian warships from returning to Sevastopol, saying their movements were subject to Ukrainian approval. Yuriy Yekhanurov, the country’s defense minister, later said that the fleet could move unhindered.

As with his Independence Day remarks, the Ukrainian leader has also amplified his rhetoric for joining NATO, despite Russia’s clear indications that it opposes expanding the alliance to its border. Many analysts say that Europe is not seeking a battle with Russia and that the Georgian conflict has reduced, rather than enhanced, Ukraine’s chances of joining the alliance.

At the same time, the idea of eventually rejoining Russia has strong support among many in Sevastopol, though no one here is yet speaking of pushing the matter politically, let alone militarily.

“Everyone wants for Crimea to become part of Russia,” said Nina Vakula, a local resident, as she watched the Moskva.

Ms. Vakula is living proof of the ties that bind Russia and Ukraine. She is a Ukrainian citizen, but her son-in-law serves in the Black Sea Fleet and both he and her daughter hold Russian passports. The couple’s 2-year-old son, Yura, a Slavic portrait with hair bleached white from the sun, was born in Ukraine.
Ms. Vakula says that Ukrainians and Russians are part of one Slavic family, and that divisions between them are artificial.

Those sentiments are not shared by those who not only fear Russia’s return, but also worry that Sevastopol’s importance could provide a pretext for Moscow to extend its reach here.

“These people are separatists,” said Oleg Yatsenko, a student leader who traveled from Kiev to stage pro-Ukrainian rallies during the warships’ return, referring to the those who had gathered to welcome home the sailors. “They want to do the same thing here that was done in Georgia.”
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15. RUSSIA STOKES PRO-KREMLIN FEELING IN UKRAINE
By Damien McElroy in Sevastopol, Telegraph, London, UK, Sat, 23 Aug 2008
The Crimean port of Sevastopol is a Ukrainian city, but it is Russian to its core. Moscow's Black Sea fleet retained its historic base in the port after Ukraine's emergence as an independent nation in the 1990s.

Moscow's war in Georgia has frightened the Ukrainian government, however, and President Victor Yushchenko has said he will not renew Russia's lease of the port when it expires in 2017.

Russia's Georgian onslaught was deeply unpopular in many parts of Ukraine, but in Sevastopol, the sailors of the Russian fleet walk the streets in uniform and are hailed as heroes. A fervour of Russia patriotism has taken hold. Emboldened locals proclaim contempt for all things Ukrainian, newly confident of Moscow's future support for their wish to see the Crimean peninsula absorbed back into the Russian motherland.

Pro-Russian organisations are flourishing. "This city is totally Russian," said Mikhail Brytsyn, leader of the pro-Russian front organisation, the Slavic Party of Sevastopol. "People don't want anything to do with Ukraine here. Sevastopol is where we can reconstruct the historical truth and rejoin the whole of Russia. If Moscow wants, it will be able to do it, because it has the tools here."

The Crimea, which is attached to Ukraine by a slender causeway, is fertile ground for such rhetoric. An estimated 100,000 of its 2 million inhabitants hold Russian passports, while a majority of the peninsula's residents are Russian speakers and would happily return to Moscow's fold.

A swaggering entrepreneur, Mr Brytsyn recruits young men to his movement from the chain of snooker halls he owns, staging ultra-patriotic rallies. He makes no effort to hide strong Kremlin support, including funding, for his efforts.

"We are a third force," he boasted, sitting in a quay-side restaurant. "We are the cordon that supports the Russian fleet. We will defend them against the Ukrainian bailiffs who want to end the fleet's lease in 2017."

It is not an empty boast. The most powerful institution in town is the Russia navy, followed closely by the pro-Moscow city authorities. As a street level enforcer, Mr Brytsyn ranks next - ahead of any presence Kiev can muster.

The Charge of the Light Brigade catapulted the Crimea into the British imagination. Despite their eventual defeat in 1856, the tsars held on to the outpost but their Soviet successors laid the ground for future problems by annexing to Ukrainian provincial rule in 1954.

After the Soviet Union fell apart, Moscow was forced into the humiliation of seeking a 20-year lease on the home of its fleet, which was signed in 1997.
Its future is now back in play. A Kiev think tank last week accused Russia of deliberately cultivating civil unrest in the Crimea. The Centre for Research on the Army, Conversion and Disarmament reported that Russia had created "all the pre-conditions" for war in the Crimea.

Sevastopol's streets are already in ferment. Its inhabitants vow to defend their interests from any possible Ukrainian threat. A permanent picket surrounds a statue of Catherine the Great, the 18th century empress who founded the port, supposedly because Kiev wants to tear it down.

Last month tensions erupted into a violent showdown between the Ukrainian and Russian sides when a mob seized a bronze Ukrainian plaque and dumped it in the harbour.

Mrs Makarova proudly clutched pictures of the incident, in which Russians broke through a line of Ukrainian marines. "This showed we are strong," the matronly politician said. "Ukraine does not respect us and our rights. We might have another Kosovo. We want Russia intervention to defend us and after Georgia we believe they will defend us."

Ukraine's recent declaration that it will not renew the Russian lease on Sevastopol has inflamed anti-Kiev sentiment, as has its ongoing application to join Nato. "As long as the fleet is here, there will be no problems," said Anatoly LItvinov, 59, who works in the base. "I suspect people in the Ukrainian government do not understand the meaning of the fleet for Sevastopol. The fleet is a protection against everything, including Nato."

Paranoia over Ukraine's pro-Western president, Mr Yushchenko, abounds. There are unmistakable parallels with South Ossetia and Abzhakia in Georgia, where Russia nurtured local grievances against a democratic leader.

"The Ukrainian politicians do not look after the people," said a tour guide. "They have destroyed friendly relations with Russia. They are losers. Yushchenko is worse than hell."

Russia has spared no expense to lavish its largesse on Sevastopol. On a ridge above the city, a huge campus of white tower blocks has been built as an outpost of the Moscow State University, despite Kiev's protests.

Perhaps too late, pro-Ukranian forces have emerged to challenge the Crimea's slide towards Russia. Oleg Yatshenko, one of the pioneers of Ukraine's 2004 democratic Orange Revolution, has brought Ukrainian students to Sevastopol.

He laments the absence of foreign backing, however. "The Russians support separatists here," he said. "We want to take them on. We want to protest against the break-up of our country but everybody, including the local administration, is against us."
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16. A RESPECTABLE RUSSIA, VLADIMIR PUTIN'S WAR HAS
INTENSIFIED THE DEBATE OVER HIS NATION'S FUTURE
The war in Ossetia is all about drawing a line under further NATO expansion
By Owen Matthews, Newsweek magazine, New York, NY, Sat, Aug 23, 2008

On a concert podium set up last week in the ruins of the South Ossetian capital of Tskhinvali, Russia's greatest conductor took a deep breath of smoke-scented air and raised his baton.
Valery Gergiev, a native Ossetian and godfather to Vladimir Putin's younger daughter, launched into a passionate rendition of Shostakovich's Leningrad Symphony as Russian troops looked on from their armored personnel carriers.

Millions more Russians watched via satellite link. Officially, the concert was a tribute to the victims of this month's fighting in the breakaway republic. But to many Russians, the concert was freighted with political symbolism. For viewers with an eye for such things, it was a mirror image of Leonard Bernstein's rendition of Beethoven's Ninth Symphony at the fallen Berlin wall in December 1989.

Gergiev was playing for dead Ossetians, no doubt—but for many, he was also marking the symbolic end to Russia's post-cold-war retreat. And, indeed, this triumphalist turn in the aftermath of its lightning invasion of Georgia earlier this month suggests that after almost 20 years of humiliation, Russia has finally recovered what it has been so longing for: respect.

"We do not wish to aggravate the international situation," Russian President Dmitry Medvedev told a group of Red Army veterans in Kursk recently. "We simply want respect for our state, for our people, for our values."

Such a goal was the hallmark of Vladimir Putin's two terms as president. Ever since he came to power in 2000, Putin, now prime minister, has dreamed of reversing the decline in Russia's power over its own backyard. But while he talked a big game, harking back to the rhetoric of Soviet and tsarist Russian imperialism, Russia's actual power shrank dramatically.

Between 2000 and 2004, pro-Moscow regimes in Ukraine and Georgia were replaced by pro-Western ones. NATO expanded to include the Baltics, in clear violation of security guarantees that Putin's predecessor, Boris Yeltsin, claimed were given to him in the 1990s. And Russia has proved to be powerless in stopping the United States from stationing missile defense radars and missile batteries in Poland and the Czech Republic.

The war in Ossetia is all about drawing a line under further NATO expansion—and sending a strong signal to Georgia, Ukraine and Europe that Russia won't be pushed around. And from the moment Russian tanks rolled into Georgia, Russia's neighbors started to take its threats more seriously.
The invasion marked the end of Russia's browbeaten, humiliated post-cold-war era and the beginning of a new, more assertive, more imperial Russia. What will Russia's next move be?

In Georgia, according to Col. Gen. Anatoly Nogovitsyn, the deputy chief of Russia's General Staff, Russia will establish a "security zone along the administrative border of South Ossetia" that will include 18 strongpoints manned by Russian peacekeepers. Just where that border runs will be defined by Russia.

On the ground last week, Russian backhoes were seen digging in just north of the Georgian city of Gori—well beyond the old front line, and close enough to Georgia's main east-west road to cut Georgia in half within minutes.

What worries Russia's neighbors now is that the messy breakup of the Soviet Union left millions of ethnic Russians stranded in other post-Soviet states. Ukraine is 17 percent ethnic Russian; Estonia and Latvia nearly 40 percent; Kazakhstan 26.1 percent. And there are signs the Kremlin is systematically reaching out to these Russian-speaking communities through a range of lavishly funded cultural programs designed to boost Russia's soft power in the region.

Other programs are more overtly political: the Kremlin-backed annual Foros Forum convenes in Crimea, a majority ethnic Russian region in Ukraine, and aims to "shape a new generation of young Russian politicians," according to one of the organizers, Duma deputy Sergei Markov.

A selection of young activists from Kremlin-created youth groups like Nashi and the Youth Guards join the leaders and activists of Ukrainian pro-Russian movements to listen to lectures by the likes of Aleksandr Dugin, a leading light of the Eurasia movement, which preaches a Russian-led power block as an alternative to the West.

"People gather to support our fraternal Ukrainian nation, which is groaning under the pressure of NATO," says Gennady Basov, leader of the nationalist Russian Bloc Party, a pro-Moscow pressure group based in Crimea.

If Russia invaded Ossetia to end Georgian hopes of NATO membership, could Crimea be next? While he was president, Putin spoke of "dismembering" Ukraine if it continued to pursue its dreams of NATO membership. Then, the Ukrainians dismissed the threat as so much hot air. Now it no longer seems such an idle threat.

"Of course Ukraine is easy to split—it is two different countries," says Basov, who also heads Russian Choice, a campaign for recognition of Russian as an official language, and for Russian language schools in Crimea. "The east's economy depends on Russia, the west's depends on Europe; the east is Russian-speaking and Orthodox, and the west is Ukrainian-speaking and Roman Catholic."

Ukraine's government was rattled by the fear that Russia's occupation of Georgia would inspire secessionism in the Crimea. The leadership immediately ordered a survey of how many Crimeans had Russian passports (dual nationality is illegal under Ukrainian law). The count turned up only about 6,000, out of a Russian population of more than 1 million.

And, reassuringly for Kiev, support for rejoining Russia has slipped from more than 60 percent in the late 1990s to about 25 percent now, according to Vladimir Kozarin, deputy mayor of Sevastopol, a majority-Russian Crimean port city.

NATO has been deeply divided over how to respond to this threat to potential future members. Germany and Italy—not by coincidence two of Russia's biggest gas customers—sought to keep what German Chancellor Angela Merkel called "an open dialogue." George W. Bush gave unambiguous support to Tbilisi and threatened Russia with "serious consequences" if it did not withdraw from Georgia.
The Poles immediately signed up to a U.S. plan to station antimissile defense rockets on their territory—drawing an immediate threat from Russia's Nogovitsyn that "Poland, by deploying [the system], is exposing itself to a nuclear strike—100 percent."

But the far more immediate danger is to Russia itself. In the wake of the Georgian conflict, the Russian Stock Exchange took one of its biggest hits of the past decade. It dropped nearly 6 percent in a single day. Investors' greatest fear is of a new era of military confrontation between Russia and its neighbors.
In the meantime, Medvedev's ambitious agenda for reform has been hijacked by Putin's ambitions. Medvedev, when he came to office, spoke of ending Russia's culture of "legal nihilism," extortion and corruption.
Just last month Medvedev told Russian bureaucrats to stop "terrorizing" businessmen with enforcement of petty regulations and demands for bribes; he also promised to reform the justice system and property rights. But just as Medvedev was getting traction, and feeling a little more confident in his role as president, he found himself mugged by history, in the form of Putin and a small, festering little post-Soviet conflict that blew up into a full-scale war.

More profound, the "war has intensified a conservative backlash in Russia," says Lilia Shevtsova of Moscow's Carnegie Center. "The country is now highly unified against the West." Even traditional liberals have lined up to blast the Georgian aggression.
In that respect, the war has escalated a two-decade-long internal debate over whether Russia would join the international community of values, broadly defined as the West, or go over to the dark, anarchic world of rogue states and totalitarian regimes.
The war won't decide that debate either way, but if it pushes Russia into a spiraling confrontation with its neighbors and the West, it will mark a turning point in which Russia veered off in a new and unpredictable direction. (With Anna Nemtsova In Crimea)
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17. THE REAL WORLD ORDER
For the Russians the strategic break point was Ukraine
On Aug. 8, the Russians invited us all to the Real World Order

By George Friedman, Founder and CEO
Stratfor geopolitical intelligence, Austin, Texas, Mon, Aug 18, 2008

On Sept. 11, 1990, U.S. President George H. W. Bush addressed Congress. He spoke in the wake of the end of Communism in Eastern Europe, the weakening of the Soviet Union, and the invasion of Kuwait by Saddam Hussein.
He argued that a New World Order was emerging: “A hundred generations have searched for this elusive path to peace, while a thousand wars raged across the span of human endeavor, and today that new world is struggling to be born.
A world quite different from the one we’ve known. A world where the rule of law supplants the rule of the jungle. A world in which nations recognize the shared responsibility for freedom and justice. A world where the strong respect the rights of the weak.”

After every major, systemic war, there is the hope that this will be the war to end all wars. The idea driving it is simple. Wars are usually won by grand coalitions. The idea is that the coalition that won the war by working together will continue to work together to make the peace. Indeed, the idea is that the defeated will join the coalition and work with them to ensure the peace.
This was the dream behind the Congress of Vienna, the League of Nations, the United Nations and, after the Cold War, NATO. The idea was that there would be no major issues that couldn’t be handled by the victors, now joined with the defeated. That was the idea that drove George H. W. Bush as the Cold War was coming to its end.

Those with the dream are always disappointed. The victorious coalition breaks apart. The defeated refuse to play the role assigned to them. New powers emerge that were not part of the coalition. Anyone may have ideals and visions.
The reality of the world order is that there are profound divergences of interest in a world where distrust is a natural and reasonable response to reality. In the end, ideals and visions vanish in a new round of geopolitical conflict.
NEW WORLD ORDER ENDED ON AUG 8, 2008

The post-Cold War world, the New World Order, ended with authority on Aug. 8, 2008, when Russia and Georgia went to war. Certainly, this war was not in itself of major significance, and a very good case can be made that the New World Order actually started coming apart on Sept. 11, 2001.
But it was on Aug. 8 that a nation-state, Russia, attacked another nation-state, Georgia, out of fear of the intentions of a third nation-state, the United States. This causes us to begin thinking about the Real World Order.

The global system is suffering from two imbalances.
[1] First, one nation-state, the United States, remains overwhelmingly powerful, and no combination of powers are in a position to control its behavior. We are aware of all the economic problems besetting the United States, but the reality is that the American economy is larger than the next three economies combined (Japan, Germany and China).
The U.S. military controls all the world’s oceans and effectively dominates space. Because of these factors, the United States remains politically powerful — not liked and perhaps not admired, but enormously powerful.

[2] The second imbalance is within the United States itself. Its ground forces and the bulk of its logistical capability are committed to the Middle East, particularly Iraq and Afghanistan. The United States also is threatening on occasion to go to war with Iran, which would tie down most of its air power, and it is facing a destabilizing Pakistan. Therefore, there is this paradox:
The United States is so powerful that, in the long run, it has created an imbalance in the global system. In the short run, however, it is so off balance that it has few, if any, military resources to deal with challenges elsewhere. That means that the United States remains the dominant power in the long run but it cannot exercise that power in the short run. This creates a window of opportunity for other countries to act.

The outcome of the Iraq war can be seen emerging. The United States has succeeded in creating the foundations for a political settlement among the main Iraqi factions that will create a relatively stable government. In that sense, U.S. policy has succeeded. But the problem the United States has is the length of time it took to achieve this success. Had it occurred in 2003, the United States would not suffer its current imbalance.
But this is 2008, more than five years after the invasion. The United States never expected a war of this duration, nor did it plan for it. In order to fight the war, it had to inject a major portion of its ground fighting capability into it. The length of the war was the problem. U.S. ground forces are either in Iraq, recovering from a tour or preparing for a deployment. What strategic reserves are available are tasked into Afghanistan. Little is left over.
EXPANSION OF NATO TO INCLUDE UKRAINE AND GEORGIA

As Iraq pulled in the bulk of available forces, the United States did not shift its foreign policy elsewhere. For example, it remained committed to the expansion of democracy in the former Soviet Union and the expansion of NATO, to include Ukraine and Georgia.
From the fall of the former Soviet Union, the United States saw itself as having a dominant role in reshaping post-Soviet social and political orders, including influencing the emergence of democratic institutions and free markets.
The United States saw this almost in the same light as it saw the democratization of Germany and Japan after World War II. Having defeated the Soviet Union, it now fell to the United States to reshape the societies of the successor states.

Through the 1990s, the successor states, particularly Russia, were inert. Undergoing painful internal upheaval — which foreigners saw as reform but which many Russians viewed as a foreign-inspired national catastrophe — Russia could not resist American and European involvement in regional and internal affairs.
From the American point of view, the reshaping of the region — from the Kosovo war to the expansion of NATO to the deployment of U.S. Air Force bases to Central Asia — was simply a logical expansion of the collapse of the Soviet Union. It was a benign attempt to stabilize the region, enhance its prosperity and security and integrate it into the global system.

As Russia regained its balance from the chaos of the 1990s, it began to see the American and European presence in a less benign light. It was not clear to the Russians that the United States was trying to stabilize the region.
Rather, it appeared to the Russians that the United States was trying to take advantage of Russian weakness to impose a new politico-military reality in which Russia was to be surrounded with nations controlled by the United States and its military system, NATO.
In spite of the promise made by Bill Clinton that NATO would not expand into the former Soviet Union, the three Baltic states were admitted. The promise was not addressed. NATO was expanded because it could and Russia could do nothing about it.
FOR RUSSIA THE STRATEGIC BREAK POINT WAS UKRAINE

From the Russian point of view, the strategic break point was Ukraine. When the Orange Revolution came to Ukraine, the American and European impression was that this was a spontaneous democratic rising. The Russian perception was that it was a well-financed CIA operation to foment an anti-Russian and pro-American uprising in Ukraine.
When the United States quickly began discussing the inclusion of Ukraine in NATO, the Russians came to the conclusion that the United States intended to surround and crush the Russian Federation.
In their view, if NATO expanded into Ukraine, the Western military alliance would place Russia in a strategically untenable position. Russia would be indefensible. The American response was that it had no intention of threatening Russia.
WHY ARE YOU TRYING TO TAKE CONTROL OF UKRAINE?
The Russian question was returned: Then why are you trying to take control of Ukraine? What other purpose would you have? The United States dismissed these Russian concerns as absurd. The Russians, not regarding them as absurd at all, began planning on the assumption of a hostile United States.

If the United States had intended to break the Russian Federation once and for all, the time for that was in the 1990s, before Yeltsin was replaced by Putin and before 9/11. There was, however, no clear policy on this, because the United States felt it had all the time in the world. Superficially this was true, but only superficially.
[1] First, the United States did not understand that the Yeltsin years were a temporary aberration and that a new government intending to stabilize Russia was inevitable. If not Putin, it would have been someone else.
[2] Second, the United States did not appreciate that it did not control the international agenda.
SEPT. 11, 2001 TOOK AWAY AMERICAN OPTIONS IN THE FORMER SOVIET UNION
Sept. 11, 2001, took away American options in the former Soviet Union. No only did it need Russian help in Afghanistan, but it was going to spend the next decade tied up in the Middle East. The United States had lost its room for maneuver and therefore had run out of time.

And now we come to the key point. In spite of diminishing military options outside of the Middle East, the United States did not modify its policy in the former Soviet Union. It continued to aggressively attempt to influence countries in the region, and it became particularly committed to integrating Ukraine and Georgia into NATO, in spite of the fact that both were of overwhelming strategic interest to the Russians.
Ukraine dominated Russia’s southwestern flank, without any natural boundaries protecting them. Georgia was seen as a constant irritant in Chechnya as well as a barrier to Russian interests in the Caucasus.

Moving rapidly to consolidate U.S. control over these and other countries in the former Soviet Union made strategic sense. Russia was weak, divided and poorly governed. It could make no response.
Continuing this policy in the 2000s, when the Russians were getting stronger, more united and better governed and while U.S. forces were no longer available, made much less sense. The United States continued to irritate the Russians without having, in the short run, the forces needed to act decisively.

The American calculation was that the Russian government would not confront American interests in the region. The Russian calculation was that it could not wait to confront these interests because the United States was concluding the Iraq war and would return to its pre-eminent position in a few short years. Therefore, it made no sense for Russia to wait and it made every sense for Russia to act as quickly as possible.

The Russians were partly influenced in their timing by the success of the American surge in Iraq. If the United States continued its policy and had force to back it up, the Russians would lose their window of opportunity. Moreover, the Russians had an additional lever for use on the Americans: Iran.

The United States had been playing a complex game with Iran for years, threatening to attack while trying to negotiate. The Americans needed the Russians. Sanctions against Iran would have no meaning if the Russians did not participate, and the United States did not want Russia selling advance air defense systems to Iran. (Such systems, which American analysts had warned were quite capable, were not present in Syria on Sept. 6, 2007, when the Israelis struck a nuclear facility there.)
As the United States re-evaluates the Russian military, it does not want to be surprised by Russian technology. Therefore, the more aggressive the United States becomes toward Russia, the greater the difficulties it will have in Iran. This further encouraged the Russians to act sooner rather than later.

The Russians have now proven two things. [1] First, contrary to the reality of the 1990s, they can execute a competent military operation. [2] Second, contrary to regional perception, the United States cannot intervene.
RUSSIAN MESSAGE WAS DIRECTED AGAINST UKRAINE MOST OF ALL
The Russian message was directed against Ukraine most of all, but the Baltics, Central Asia and Belarus are all listening. The Russians will not act precipitously.
They expect all of these countries to adjust their foreign policies away from the United States and toward Russia. They are looking to see if the lesson is absorbed. At first, there will be mighty speeches and resistance. But the reality on the ground is the reality on the ground.

We would expect the Russians to get traction. But if they don’t, the Russians are aware that they are, in the long run, much weaker than the Americans, and that they will retain their regional position of strength only while the United States is off balance in Iraq.
If the lesson isn’t absorbed, the Russians are capable of more direct action, and they will not let this chance slip away. This is their chance to redefine their sphere of influence. They will not get another.

The other country that is watching and thinking is Iran. Iran had accepted the idea that it had lost the chance to dominate Iraq. It had also accepted the idea that it would have to bargain away its nuclear capability or lose it.
The Iranians are now wondering if this is still true and are undoubtedly pinging the Russians about the situation. Meanwhile, the Russians are waiting for the Americans to calm down and get serious.
If the Americans plan to take meaningful action against them, they will respond in Iran. But the Americans have no meaningful actions they can take; they need to get out of Iraq and they need help against Iran. The quid pro quo here is obvious.
The United States acquiesces to Russian actions (which it can’t do anything about), while the Russians cooperate with the United States against Iran getting nuclear weapons (something Russia does not want to see).

One of the interesting concepts of the New World Order was that all serious countries would want to participate in it and that the only threat would come from rogue states and nonstate actors such as North Korea and al Qaeda.
Serious analysts argued that conflict between nation-states would not be important in the 21st century. There will certainly be rogue states and nonstate actors, but the 21st century will be no different than any other century. On Aug. 8, the Russians invited us all to the Real World Order.
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18. "THE BIGGEST THREAT TO UKRAINE IS US"

INTERVIEW: With Anatoliy Gritsenko, Chairman
Verkhovna Rada Standing Committee on National Security and Defense
Author: Tatiana Silina, Zerkalo Nedeli (Mirror-Weekly) # 30 (709)
Kyiv, Ukraine Saturday, 16 - 22 August 2008

Even though most MPs were enjoying their summer vacations, the Verkhovna Rada standing committee on national security and defense convened for an extraordinary meeting on Thursday to discuss the situation in and around Caucasus and ways to minimize negative impacts for Ukraine. The committee also invited representatives of different political forces and government officials. Journalists were not admitted.

On the eve of the meeting we approached the committee’s chairman Anatoliy Gritsenko with several questions of concern for most Ukrainians.

“This Is a War”

Zerkalo Nedeli — For several days we watched with horror what was happening in Georgia. The West said shyly that Russia “exceeded the limits of the peacekeeping mission” and Russia accused Georgia of aggression against South Ossetia and “ethnic cleansing”. What do you call all this?

Anatoliy Gritsenko — We need to assess what has happened in order to localize the conflict and especially its consequences. It’s important to refrain from “black-and-white” judgments, because the situation is very complicated and the terms “aggressor” and “victim of aggression” don’t apply here.

It was clear after the Kosovo precedent that the frozen conflicts in South Ossetia and Abkhazia would erupt sooner or later. We must admit that in South Ossetia the conflict entered the “hot phase” when President Saakashvili resorted to force. I think his step was wrong and fatal. Moreover, he took it without informing NATO, EU partners, or the Ukrainian President. A head of state has no right to make emotional decisions. He must remain composed under any circumstances, even if he is provoked.

I express my solidarity with the people of Georgia as objects of military aggression, but I disagree with the Georgian President’s decision.

One month ago I supported his powerful initiatives aimed at normalizing relations with Abkhazia. Saakashvili offered Abkhazia unprecedented privileges: the post of Vice President, a representation quota in the central bodies of government, exceptional terms for its economic development, and even the right of veto in the Georgian parliament. I see two reasons why his proposals were rejected: deep mutual distrust and Abkhazia’s reliance on Russia.

As to the consequences of this military conflict, the use of force produced a result totally different from what Saakashvili counted on. I think that now, despite all efforts for preserving territorial integrity, Georgia has de facto lost both republics – Abkhazia and South Ossetia.

Zerkalo Nedeli — For ever?

Anatoliy Gritsenko — Firstly, in history one can never say “for ever”. We all remember the empires that believed they would exist forever. They broke up, and new states and new unions emerged… But I don’t see any objective possibilities for Tbilisi to regain constitutional control over Tskhinvali or Sukhumi in the next decade or two.

Secondly, I condemn the use of Grad volley missile launchers by the Georgian army. They fired at their own territory and their own citizens. The Grad launcher is not the right weapon to fight terrorists and guerillas. Instead, they should have used mobile groups or precision air strikes. Missile volleys destroy everything and leave no one alive in the target zone. Such a way to restore constitutional order is unacceptable. That’s why I believe that those officials who ordered volley missile firings must be prosecuted.

Zerkalo Nedeli — What if the order was given personally by Saakashvili?

Anatoliy Gritsenko — I said: the official who gave the order – whoever he is.

As to Russia’s actions, I have two remarks. Firstly, Russian authorities ought to be the last to call for morality and lament about civilian victims, genocide, and “ethnic cleansing”. We remember too well how they shot their parliament and practically razed the Chechen capital Grozny to the ground.

Russian brass hats had better keep their moralisms to themselves. Authoritative opinions on that score can only be expressed by the leaders who managed to find peaceful solutions to separatist conflicts. The Czech and Slovak leaders have this moral right because they managed to divide the country peacefully.
Ukraine also has this right because tanks did not crush separatist demonstrations in Crimea, because there was no bloodshed during the Orange Revolution, and because force was never used against separatists in Severodonetsk…

Secondly, Russia’s response was obviously inadequate by its power and scale. Russia violated international norms when its troops entered the territory of the sovereign state and launched offensive military operations against Georgia. It is anything but peacekeeping. It is a war.

Combat actions took place everywhere – in the air, in the sea, and on land. There were artillery and air strikes on the entire territory of Georgia and a blockade by Russian warships. There were also elements of info- and cyber-war.

Russia’s plan was quickly understood in another self-proclaimed republic – Abkhazia – and military action spread to that region as well. Abkhazian paramilitary units left the boundaries of Abkhazia and attacked Georgia with bombs, shells, and missiles.
Then Russia additionally dispatched two divisions – one to each breakaway republic – that included armored, mechanized, artillery, airborne, and special task forces. They were joined by “volunteers” whose number was never reported.

“Russia Drove Itself into a Trap”

Zerkalo Nedeli — Can we be sure today that the conflicting sides will not resume military actions? On one hand, President Saakashvili has announced Georgia’s secession from the CIS, denounced the agreements on CIS peacekeeping missions, and called Russian “peacekeepers” occupants. On the other hand, President Medvedev has announced completion of the military operation in Georgia but ordered his military commanders “to exterminate the aggressor in the event of Georgia’s new aggression”. How strong or fragile is today’s truce?

Anatoliy Gritsenko — The answer is not short. The causes of this conflict have two aspects.
[1] First, they are deeply rooted in the past. Second, they are directed to the future. Why to the future? I can explain it figuratively: between the lines of operation orders given by Russian military commanders and the Russian Foreign Ministry’s press releases one can read the words “Kosovo” and “Great Russia”.

Wasn’t it known that the precedent of Kosovo was directly projected on South Ossetia, Abkhazia, and more than 150 other frozen conflicts? Russia was strongly against recognizing Kosovo’s independence, and I believe that Ukraine should not recognize the self-proclaimed republic, either. Manifestations of separatism may spread like wildfire across the globe. So the first factor was Russia’s decision to punish the West for recognizing Kosovo’s independence.

[2] The second factor is “Great Russia”. The External Policy Concept of the Russian Federation (published under Medvedev’s presidency) states that “the influence of the West on global processes decreases” and that Russia’s potential increases. This is true. The Russian leaders must have reckoned that the time has come to regain the status of a superpower that would influence all global processes and all important regions, starting from the neighboring countries. The Baltic countries are an exception – they caught the last train to NATO and the EU. That’s why I say that the causes are deep-rooted and lasting.

And yet, could Russia have acted otherwise? Could it have won tactically by strengthening its positions in the Caucasus and not lost strategically by marring its image and undermining international trust? It could have but failed.

If Russia, in response to Saakashvili’s forcible action, had brought troops into South Ossetia to back up the peacekeepers there and then coerced him to cease fire but had not gone beyond the boundaries of South Ossetia, the assessment of its actions would have been different. And even though it would have been an encroachment on Georgia’s sovereignty, the world would have taken it calmly and Saakashvili would have faced the music. But Russia didn’t stop.

I must admit that the Russian troops acted very competently in professional terms: they struck at the second echelon – communications, logistics, infrastructure, etc. – to disable Georgian strikes. But apart from military logic there are norms of international law.
There is a sovereign state with its civilian facilities strikes at which are inadmissible in any war. That’s where Russia overstepped the line and its further actions are aggression and disproportional use of force.

Russia drove itself into a trap. With every strike and every destroyed house that millions of families all over the world saw on TV its authority shrank. I think only Fidel Castro said a few words in support of Russia. Even Belarus expressed tight-lipped concern. The world shuddered at remembering the USSR in 1956, 1968, and 1979…

The Georgian army turned out to be weaker than it was believed to be, and not because of soldiers but because of commanders who acted unprofessionally.
It’s to early yet to make final conclusions, but some actions taken during the war looked at least strange. During a war the commander-in-chief should not organize mass rallies if bombs fall not far from the capital city.
It also looks strange that the Rock Tunnel was not blocked and Russian tanks were let deeper into the country. There are many questions, but one thing is clear: the Georgian army failed to make the most of its potential.

Now let me say a few words about ceasefire. Having no consolidated support of EU countries and no mandate for a tougher position, French President Sarkozi accepted six principles of settlement written by the Kremlin. One of them was ceasefire. Saakashvili disagreed with some of them but had to accept them, too, because he was in no position to dictate his will. The main thing now is to stop the war and get the country back to peaceful life.

I think the Georgian and Russian troops will cease fire, but it’s hard to predict the Abkhazian leadership’s further steps. It wants to gain full control of the Kodor Gorge. There are many armed groups of “volunteers” in Abkhazia. They are out of control of authorities and nobody knows whose commands they will obey.

Zerkalo Nedeli — Will the sides abide by the rest of the principles?

Anatoliy Gritsenko — Although with difficulties and problems, they will. I’d like to remark that one principle is not mentioned: Georgia’s territorial integrity. Despite efforts of many countries, including Ukraine and some member states of the EU and NATO, I don’t believe that Georgia will retain South Ossetia.
I think the Kosovo precedent will repeat itself in the Caucasus: both South Ossetia and Abkhazia will proclaim independence and will be recognized by some countries. I don’t rule out that in the future they might want to join the Russian Federation.

As to Russia’s political actions, they look rather irrational, because even before the war it practically had both republics under control. All top positions there are occupied by Russian citizens who have always looked Moscow’s way and never reckoned with Tbilisi.
And then, why does Russia want to enlarge its territory? It doesn’t have enough people to inhabit what it already has. Besides, why does Moscow need to bear additional expenses for restoring those two republics? Does it need additional problems?

This war is sure to have negative political and economic impacts, and not only on Georgia and Russia. Georgia will have to borrow billions of dollars to stabilize its economy and financial system. Armenia – Russia’s strategic partner – is also in a bind. 70 percent of Armenia’s foreign trade turnover goes via the Georgian port of Poti which is blocked by the Russian Black Sea Fleet. Besides, Russian natural gas is delivered to Armenia via Georgia.

Azerbaijan and the countries that depend on its energy resources also have problems. The Baku-Tbilisi-Ceyhan – the only alternative pipeline for transporting Caspian fuels which doesn’t run via Russia’s territory – is insecure. There will be a lot of direct and indirect impacts of this war, and Ukraine will feel them, too.

“Even the Strong Can Be Snubbed”

Zerkalo Nedeli — As far as the international reaction is concerned, it was shamefully overcautious. Everybody talked about ceasefire but nobody gave a definite assessment of Russia’s behavior in terms of international law. On the day after Russia bombarded Gori, after European journalists were killed, and after the outrageous utterances by Russian top leaders Sarkozi said he “came to talk with the Russian friends about peace”.
I guess we all know that the Russians might as well have broken into Tbilisi and captured Saakashvili. I’m sure that not a single tank or plane of the European Union or NATO would have budged to defend their partner state and its lawfully elected president. It looks like Russia can do whatever it likes on any territory of its “interests”. Do you see anyone or anything that can stop Russia?

Anatoliy Gritsenko — We are talking about Russia, but let’s take a broader look at this matter: is there any international organization that could firmly and quickly stop China, the United States, Great Britain, or France? Let me remind your readers that back in 1999 I dwelt on this matter in my ZN article “Does Ukraine Need a New Defense Doctrine?” It is still topical.

Let’s begin with the United Nations. It is the only global organization, but it is incapable in case a permanent member of the Security Council is involved in a military conflict – just because it has the right of veto. This means that the United Nations can’t do anything about it. By the way, in the event of a conflict around Ukraine one of the participant or interested sides would always be a permanent member of the Security Council. So it’s clear about the United Nations.

The OSCE is the only international organization that unites all European states plus the USA and Canada. With all my respect for the OSCE, it’s always been sluggish in making decisions, and in case of a military conflict the best it can provide is a mediatory or diplomatic mission or humanitarian aid.
The CIS and GUAM [Georgia-Ukraine-Azerbaijan-Moldova – A.B.] are not even worth mentioning.

As far as NATO or the European Union are concerned, they are sure to defend their members. They will act promptly and resolutely, and their leaderships will even interrupt their vacations to meet immediately. But if the object of aggression is a country that is not their member, all it can count on is consolidated political and diplomatic support. And, as we can see today, this support may not always be consolidated.

And should the situation demand military assistance with serious material and human resources and predictable human losses, I have very big doubts on that score. Few NATO or EU countries would be ready to respond adequately and defend a non-member country, even if its political vector is directed at membership in these organizations.

It is evident now that in this situation no one, including the United States, was ready or willing to render military assistance to Georgia, even though a Georgian peacekeeping brigade was on a mission to Iraq – shoulder to shoulder with NATO and EU peacekeepers.

Zerkalo Nedeli — Does this mean that Russia is free to do whatever it likes?

Anatoliy Gritsenko — No, it’s not. The world order is imperfect and unjust and powerful states can afford to act aggressively, but we shouldn’t take it with fatalism. The strong have always ruled, but even the strong can be snubbed if their aggression goes too far. Remember how the world wars ended. Besides, today nations are interdependent as never before. Even the most powerful states are unable to exist on their won – without active economic exchange. They are vulnerable like the rest of the world. The awareness of this truth plus democratic values that make the third millennium different from the previous history may be a factor of restraint.

In this particular case Russia could have seized Tbilisi overnight and toppled Saakashvili, and no one would have stopped it, but the war wouldn’t have ended there and then.

“A Military Conflict between Ukraine and Russia Is Impossible”

Zerkalo Nedeli — You know, watching TV reports from Gori razed by Russian bombs, I was thinking of Ukrainian towns… Yes, most Ukrainians would call it stuff and nonsense and say that Russia would never unleash a war against Ukraine, but just a few weeks ago Georgians couldn’t imagine Russian bombers over Gori. Do you think that Russia’s military aggression against Ukraine is possible?

Anatoliy Gritsenko — Don’t let’s frighten ourselves. We must think, draw conclusions, and act.

Zerkalo Nedeli — OK, those Ukrainian experts and journalists who presumed that Ukraine would be next after Georgia must have been overfilled with emotions. But a number of Western journalists and analysts, including well-known British expert James Sherr and experienced U.S. diplomat Richard Holbrooke are sure that Russia, when waging a war against Georgia, was bearing in mind Ukraine.

Anatoliy Gritsenko — In spite of mistakes and faults in building relations between Ukraine and Russia, we have been able to avoid such conflicts. I think it will be so in the future, despite numerous differences in many areas.

Obviously, a conflict between Russia and Ukraine – the two largest countries in Europe – would be a catastrophe for the entire continent in all aspects: political, economical, ecological and energy. We should proceed from the following principal: conflict between Ukraine and Russia is impossible.

However, let’s overlook the concrete situation and focus on theory. Yes, a mighty state X might try to conquer a weaker state Y and it might succeed in the first stage of the war due to its military strength and element of surprise.

Nevertheless, it is not the state possessing more planes, warships and troops which wins the war, but the state which has a stronger “state power-nation-army” triangle and which is able to destroy such enemy’s triangle. The Chinese strategist Sun Tdzy taught this many centuries ago.

It is not just a mighty army that is necessary, but mostly – a strong state power supported by the entire nation. Concerning military aspects, there are a lot of possibilities for unequal actions. Shamil Basayev demonstrated that a state with just one battalion is able to discourage a big state with a two-million-army from continuing the war. I don’t approve of the actions of Basayev, but I give this example just because our readers are aware of it.

We should let the professional military-men develop their military schemes and require that our politicians manage the country effectively and responsibly since at the time being, there is no bigger threat to Ukraine than we ourselves.

Zerkalo Nedeli — I am also not inclined to predict future fatality, but during the entire conflict between Russia and Georgia, Moscow talked to Kyiv in the same tone as to Tbilisi. Ukraine was accused of arming Georgia, of supporting one of the sides of the conflict and of interfering in the Black Sea Fleet’s actions.
On the one hand, it is offensive to be silent about these accusations. On the other hand, it is obvious that Russia is trying to provoke Ukraine. How should Ukraine carry on a dialogue with Russia to keep its national dignity but not to aggravate its relations with the northern neighbor?

Anatoliy Gritsenko — How should we carry on a dialogue? Calmly, professionally and responsibly. To begin with, both sides should admit that Ukraine and Russia have never been sister nations and will never be. Relations between the states should be equitable and mutually beneficial.

I would like now to comment on the tone of Russia’s statements. Recent statements of the Russian Ministry of Foreign Affairs resemble the ones in the 1950s and 60s and are full of diplomatic sarcasm: “Ukraine has armed Georgia inciting it to intervention and ethic purges.” It is a provocative, irresponsible and untrue statement.
I asked Mrs. Loskutov, counselor of the Russian embassy to Ukraine (the ambassador is on vacation), a question: who exactly among the Ukrainian leaders incited intervention and ethic purges? Yushchenko? Tymoshenko? Yanukovych? Bohatyriova? Khinakh? Yekhanurov? Gritsenko? Who? – No one!

These statements reflect the Russians’ hostility and dissatisfaction accumulated over many years. Ideologists of the “Great Russia” don’t want to accept the right of the sovereign state to conduct its own policy and independently define its top tasks without approving them with the Kremlin.

Zerkalo Nedeli — Are we able to stand up for at least our priorities in the issue with the Black Sea Fleet?

Anatoliy Gritsenko — I have already noted that our relations with Russia should be equitable and mutually beneficial. I think that we should immediately start implementing procedures stipulated in the basic agreement on the Black Sea Fleet of 1997--procedures which are for some reason not being discussed in the Cabinet of Ministers today.

This agreement says: beginning from 2008, Russia must pay Ukraine for the facilities rented by its fleet in accordance with Ukrainian law. Ukrainian law states that rented facilities must be appraised and Russia is to pay a market rent for them. Experts estimate this rent to be around USD 1 billion per year.

And what do we have today? Beginning from 1997, Russia has been writing off USD 97 million per year from the total Ukrainian debt to Russia for gas. This year or actually next year, we could transfer to a new system of rental payments, but only if we pay off our debt for gas. Today, our debt to Russia for gas is USD 1.3 billion.

In connection with this, I propose to the government, the Verkhovna Rada and the president that USD 1.3 billion be earmarked in the new amendments to the 2008 budget law in September to pay off the debt for gas to the Russian Federation. And after that, we will be able to charge market rent for the stationing of the Black Sea Fleet of the Russian Federation in Crimea.

Yes, we will lose money this year, but we will gain during the next nine years. And all these steps can be accomplished absolutely legally according to the bilateral agreements. Sevastopol and Crimea will receive additional resources for their development. No one will contend that the Russian Black Sea Fleet is supporting the region.
We ourselves will be able to create dozens of times or hundreds of times more jobs in Crimea for USD 1 billion per year. If the government doesn’t include such an article in the amendments to the 2008 budget law, I won’t vote for this law even if my vote will be the 226th. This should be necessarily done: Russia has got a base for its fleet, and Ukraine should receive real compensation for the rented facilities and land.

Sharp-cornered triangle

Zerkalo Nedeli — Are we strong enough to conduct our own independent policy?

Anatoliy Gritsenko — Strong foreign and defense policy can be conducted only when the state and the society are united, when the state power is strong and consolidated and when the army is battle-worthy – the triangle drawn by the Chinese strategist.

What is happening in our country today when the war between our two strategic partners has broken out and we are also being drawn into this conflict?
Leaders of the political forces introduced in the parliament (except for the Communist Party of Ukraine) haven’t declared their standpoints concerning the war. And it doesn’t really matter what their standpoints would be, it is important to have them. If our leaders don’t have standpoints, what single position of the Verkhovna Rada can we talk about? Should we wait until September?

We are in general aware of the position of the President of Ukraine regarding the war as it is expressed through the statements of the Ministry of Foreign Affairs of Ukraine. Unfortunately, the President didn’t convoke the National Security and Defense Council.
He didn’t recall from vacations the Secretary of the National Security and Defense Council, the ministers, the heads of the special services and law enforcement bodies as well as the heads of the intelligent service and frontier service and the head of his own Secretariat.

As a result, 24 hour work of all services coordinated at the interdepartmental level wasn’t organized, the flows of operative information were not regulated and a systematic analysis of all incoming information wasn’t conducted.

That’s why we hear today the statements and demands on behalf of our state which our officials are not able to carry out or be responsible for. The decision about not letting in the warships of the Russian Black Sea back to the base in Sevastopol is possible to execute; however, is the President of Ukraine ready to be responsible for the negative consequences of such a step?

And what about one more apex of the triangle – the army? The army is waiting for promised money and 8000 apartments which there is no chance of their receiving since the amendments to the state budget were not adopted.
The army is using up today the supplies assigned for November and fuel bought for a price much higher than the price of fuel at the regular gas stations (according to the report of the Central Auditing Commission). And having all these problems, the army is helping people, rescuing them from floods and constructing bridges.

However, all the above is not important. The parade is what is more important. It doesn’t matter that the money for the parade was taken from the funds assigned for combat training; it doesn’t matter that tanks will break the asphalt with their tracks as there is no time to produce rubber covers; it doesn’t matter that Kyiv city administration didn’t permit the military planes to fly over the capital. This is not important. The parade should be carried out anyway even if, as the President says, there is a “second Chernobyl” and a war at the border of Ukraine.

Zerkalo Nedeli — Nevertheless, we really need a mighty army today despite all sharp disputes in the mass media on whether Ukraine needs an army or not.

Anatoliy Gritsenko — Now, there will be fewer of those that doubt the necessity of the army. It is not necessary to invent anything new to create a strong army.
[1] First, it is necessary to implement the State program for the development of the Armed Forces of Ukraine for the period up to 2011 drafted by the Defense Ministry, approved by the two governments (Tymoshenko’s and Yekhanurov’s) and supported by the members of the National Security and Defense Council.

The program is not fully implemented due to insufficient financing. The Prime Minister promised to allot 2% of GDP, and actually allotted a little more than 1% of GDP. This means that the program will fail; the army won’t be re-equipped with the modern military systems which our national military industry is now able to produce.

[2] Second, it is necessary to implement the Program for conversion of the armed forces to the contract principals of formation. This program is also being upset. It is clear that without any extraordinary measures, Yushchenko won’t be able to fulfill his pre-election promise – to create a professional contract army before 2010.
[3] Third, it is necessary to implement the Program for the development of the forces of special military operations. It was the last bill I signed in my post of Defense Minster in December 2007.

Special military forces are the most battle-worthy elements of our Armed Forces. Without any exaggeration, these forces are able to carry out strategically important tasks. They are the elite of the army. They are able to act on land, in the air and under the water. A group of four to five people can block any enemy’s headquarter, control point, airdrome or port; capture the missile starting emplacements.
They are professionals ready to carry out asymmetric tasks inside the country and abroad to convince the aggressor (it doesn’t matter what country the aggressor is) that aggression against Ukraine is fraught with serious consequences and problems even in its own territory.

And this very important program failed. At the initial stage of the program when the budget of the program was approved in the Joint Staff of the Defense Ministry, only around UAH 160 million instead of UAH 300 million were allotted. And those 160 million were allotted on paper; actually there was even less money than that. This means that modern communication systems, armament and ammunition, parachutes and so on won’t be purchased.

Why? This is happening because our defense officials are unprofessional and irresponsible. Ukraine has got no Minister of Defense, just a minister of surplus military property. There is only one professional who actually understands the military principals among five deputies of the current Defense Minister of Ukraine, and he is given only minor tasks (maybe because he worked on my team?).
No one from the leadership of the Defense Ministry told the President that it is more important to earmark money for the development of the special military forces than organize a parade (more than UAH 80 million) and construct just another, 18th, lyceum in Baturin (UAH 50 million this year for documentation and hundreds of millions next year for construction).

I don’t want to continue mentioning examples of inefficient actions or culpable omission of the state power in situations critical for the country. The main point is clear – the state power is not just weak, it doesn’t work; and when it works, this brings only negative results.

“The civilized world today is weak as never before”

Zerkalo Nedeli — Are we the weakest country in this world?

Anatoliy Gritsenko — Today, we’re talking about the war between Russia and Georgia. However, believe me, there are other global processes in the world. The analysis of these processes shows that not such conflicts and not the threats of that kind will become a real challenge for the entire civilized world.
I dare to contend that the civilized world today is weak as never before. And the existing threats are on the contrary strong as never before. I hope that when fighting against these threats, both Russia and Georgia will be on one side.

We can draw a line on the map starting at Northern Korea, through Pakistan, Afghanistan, Iraq, Iran, the Near East, Sudan and finish at the Balkans. This would be not the only but the most dangerous conflict zone.
It contains everything: frozen and burning conflicts; uncontrolled transnational terrorists and criminal organizations; tremendous financial resources; nuclear and other kinds of weapons of mass destruction, their technologies and elements; a huge number of the most dangerous regular destruction arms; world drug-business. There are a lot of troops from different countries there; the governments are inefficient there; new terrorists’ acts and new victims occur there every day.

It is very important that those criminal organizations do not follow democratic values and are ready for very decisive actions everywhere around the world. The threat is serious for any country of the world, even for very powerful ones.
By the way, the USA tried to localize those threats by applying components of biological arms. As a result – millions of victims and nothing more. It is impossible to localize this threat by only one country’s efforts. And that is the USA! What can we say about Ukraine, Georgia, and Russia in this connection?

I contend that the entire civilized world is weak as never before. Why? I can give you the four most important in my opinion reasons for that.

[1] First. During all elections (presidential or parliament), people in all developed and stable democratic countries vote approximately 50 to 50. Let’s look at Western Europe, the USA or even Ukraine. It is not possible to receive 80-90% of votes or full support there. This is possible only in authoritarian systems or in the countries experiencing a transition period. And in the entire civilized world – it is 50 to 50.
What does this mean? This means that the political leadership of most countries is weak and vulnerable especially before the elections since in this situation, it is very hard to make important, responsible and unpopular decisions. We saw how in separate EU member states and NATO member states, for instance in Spain, peace-makers were withdrawn immediately after the elections – in two weeks. A similar situation is today in the USA.

[2] Second. The next level is military-political or the level of defense ministers. It is the defense minister who should offer the political leaders of his or her state options of preliminary evaluated and thoroughly considered military-political decisions, be able to stand up for the most optimal options. And this level is not ready for such tasks in most countries of the world today.
I worked as a defense minister for two years and ten months. When I was leaving the post, only five of 40 defense ministers, with which I had started to work, kept their posts: in Belarus, Azerbaijan, Tajikistan, Turkey and Denmark.
In all other countries, the defense ministers changed and in some of them, even several times. Additionally, in many countries of the world, people from the spheres of medicine, finances, culture, and journalism are being appointed to the posts of the defense ministers.

[3] Third. The next level is high-ranking military leadership or, as a rule, heads of joint staffs. In what countries of the world are these officials battled-tried generals experienced in military planning and combat operations? Just in a few: in the USA, Turkey, Israel, and Britain. And that’s all. All others read books written according to analysis of other wars. Thus, the leaders of most states can’t count on professional advice on the part of military-men in difficult situations.

[4] The fourth reason is inefficiency of international organizations, their slow decision making process. Democratic principals also have weak features since most democratic alliances are built on principals of consensus, and a decision of, for example, NATO might be blocked by one single state.

I am sure that the leaders of democratic states must realize the weakness of separate countries and international organizations as soon as possible. Perhaps, it would be easier for them to do this today, after the conflict between Russia and Georgia when some weaknesses became obvious.

And what about Ukraine? Our leaders talk about coalition and elections… Serious regional and global problems are not interesting to them.
“I would recall Ukraine’s application for joining NATO Membership Action Plan”

Zerkalo Nedeli — I can’t help asking you: should Ukraine accelerate the process of joining NATO after the Georgian events? Or maybe this is not important to us anymore? Are our chances of joining NATO Membership Action Plan in December bigger or smaller?

Anatoliy Gritsenko — I don’t consider this issue to be important today since we aren’t talking today about real NATO membership.

Obviously, none of the countries of the world can stand alone against a serious threat. The consolidation of efforts is also more profitable from an economical point of view. And it is clear that the only effective military union on the planet is NATO. There are no other ones. There is a line to join NATO, unlike the Tashkent Treaty, from which countries are leaving.

I think that the issue of joining the NATO Membership Action Plan is not important because we are able to implement it today not waiting for NATO to make a corresponding decision in December or in April or not make it at all.

If the Ukrainian power realizes the necessity to raise the economy, develop the ecological sphere, judicial system, and military system, it would be a membership action plan. When I was a defense minister in 2005, I understood that and introduced my initiative at the meeting with the defense ministers of the NATO member states.
I said that Ukraine would like to develop its own membership action plan to raise the standards of the Armed Forces of Ukraine to meet NATO standards. “Fine, develop your own plan,” followed the answer.

Incidentally, the program “Ukrainian Break Through” is actually a membership action plan. I told Yuliya Tymoshenko that before her visit to Brussels: we shouldn’t be afraid of public opinion on this matter. The program contains points regarding a normal election system, the economy development, fighting with corruption – all things that we and not they need today. A strong battle-worthy army is necessary to us, not to the USA, as they have one.

I am sure that if in July 2006, when the meeting of the Commission on relations between Ukraine and NATO took place, there had been a coalition and new government in our country, we would certainly have received MAP. Then, at every meeting with the defense ministers of NATO member states, I reported on our new achievements. NATO knew that the Ukrainian Army understood the goals clearly and was gradually but successfully moving to meet them.

Our current government only talks about MAP but doesn’t do anything. The President could long ago have issued a decree which would oblige every minister to develop its part of MAP and implement it. However, Yushchenko didn’t do that.

That’s why a formal decision to grant or not grant Ukraine MAP in December is not of fundamental importance. I will say even more. If I were in Yushchenko’s place, I would recall Ukraine’s application to receive MAP from NATO headquarters. However, I would provide for its actual implementation without any NATO decisions.

Zerkalo Nedeli — May the Georgian events encourage the alliance member states that had doubts about Ukraine to make a positive decision for Ukraine? Or do you think on the contrary, they will be frightened?

Anatoliy Gritsenko — Some will be encouraged and some will be frightened. It is hard to make any forecasts today. However, I think that there won’t be any principal changes in the NATO position regarding Ukraine.

I am not sure that the initiative to recall the application for receiving MAP will be supported by the public. However, I would concentrate on creating an effective system of state power and achieving concrete results. And if our citizens start to feel that their life is improving every day and week, they will respect the power. They will trust the power and support any strategic decisions without any referendums.

That’s why we shouldn’t pass our problems on Europe. We should implement our own MAP. I would like to note that many countries became NATO members without any MAP. There are European states which are not NATO members and are not implementing or going to implement any MAP. Nevertheless, due to their effective domestic and foreign policy, they might be accepted to the alliance any moment they apply.

“We shouldn’t exchange our values for prices”

Zerkalo Nedeli — You wanted to talk about energy aspect…

Anatoliy Gritsenko — All EU and NATO member states provide their security collectively, however every country negotiates with Gazprom on its own. And here, some of them face with a real challenge, and some (like our government) – with temptation to exchange strategic goals and democratic values for cheap gas.

I don’t want Ukraine exchange values for prices. We did that several times. And we see the results now. There is no cheap gas there. The Russians will gain the rest of the price through illegal schemes and by controlling our economy.

We should fight and pay for our country’s independence. However, we know that gas lobby is very strong. Gas issue has become fatalistic (they say that the economy and the social sphere will collapse) since it is exactly the gas sphere which gives some businessmen opportunity to earn billions of dollars. And it is exactly the gas sphere which is a source of the biggest corruption no matter who the president or the prime minister is.

In my opinion, if our state power could conduct a rational and effective policy, the price of gas wouldn’t be really important. Yes, the price of gas will be much higher than today. However, let’s analyze this problem and see what our country has in this sphere that other countries don’t.

[1] First. Our country has its own gas – more than 20 billion cubic meters per year. Most European countries don’t.

[2] Second. We have a gas pipeline which will attract more attention after the conflict in Georgia. Most countries in Europe don’t have such a pipeline. And I would like to remind that this pipeline contributed to our gas balance additional 28 billion cubic meters of gas per year in 2004-2005 (for comparison: this year – only 9 billion).

[3] Third. We have underground gas storage facilities. Most European countries don’t.

[4] Fourth. We have coal which will be enough for approximately 400 years. Yes, the coal industry has got a lot of problems today, but still it has a potential for further development. Most European countries don’t have such coal fields.

[5] Fifth. We have nuclear power industry. Most European countries don’t.

[6] Sixth. We have hydro-power industry thanks to big rivers which most European countries don’t have.

[7] Seventh (perhaps, the most important). Energy consumption per unit of manufacturing output in our country is 4-6 times higher than in developed European countries. This gives us a possibility to reduce gas consumption starting with the housing and utilities services and every apartment.

Market price of gas will be a good stimulus to reduce our energy consumption. None of the Cabinet’s decisions is more powerful stimulus than a high price of gas.

Additionally, we should more clearly define the role of our state. Our high-ranking officials, ministers and presidents shouldn’t grovel at somebody’s feet during negotiations seeking for low price of gas to suite people who increase their capitals by 5 or 10 billion dollars every year. Let these people pay market price for gas.

The state shouldn’t negotiate on the price of gas for business. Mittal Steel, Mr. Firtash, Mr. Akhmetov. Mr. Pinchuk and others sell their products at the world market for market prices. At the same time, they don’t pay their workers salaries according to the world standards. They are able to buy gas for market price. And the state should support the budget sphere and the municipal utilities sector as it should.

Remember, they said that if the price of gas is higher than USD 130, our economy will collapse? We are buying gas for USD 296 today and most enterprises are OK. Certainly, the state should support those enterprises that experience problems. It is possible to resolve these problems in a very short period of time – 3-4 years – and then, we can forget about gas issue.
Not to mention the reserves we could have if we inspect the existing oil and gas fields, find out whose gas is in the underground storage facilities and develop new fields in the Black Sea shelf not with Vanco but with some serious investors.

If we want to be a sovereign state, we should become stronger. And MAP will not be so important then.
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19. RUSSIA COULD HELP UNITE A DRIFTING WEST
A French academic who pondered the possible demise of the
U.S.-Europe alliance now believes that Russia will give it a raison d'etre.

By Sebastian Rotella, Los Angeles Times Staff Writer
Los Angeles Times, Los Angeles, CA, Monday, August 25, 2008

MADRID -- Three years ago, an influential French academic named Francois Heisbourg made a splash with a book with a provocative question as its
title: "The End of the West?"

Heisbourg asserted that the traditional concept of the West, defined as a strategic entity formed by the United States and Europe, belonged to the past. After this month's tepid response by Western powers to the Russia-Georgia clash, many on the continent were inclined to agree.

Not so fast, says the very man who raised the question. Heisbourg is now taking a contrary view that sharpens the debate. Russia blundered in seeking
revenge for perceived humiliations at the hands of what it sees as a soft and weak West, he said in an interview Friday.

As a result, Russia provided precisely the kind of urgent catalyst that can renew the ailing transatlantic alliance, he said.

"There's a strong element of paradox," he said. "The one thing that could re-create the West is Russia acting in opposition to the West. . . . NATO had lost its way. The Russians have created a situation which gives NATO a raison d'etre again: to contain Russia."

Few observers characterize the Western reaction to the Georgia crisis, which caught Europe in its August vacation slumber, as united or vigorous. The
disarray in European capitals and Washington no doubt reaffirmed Russia's "dim view of our ability to act coherently," Heisbourg said.

"The immediate response was pathetic," he said. "There was no NATO meeting, no EU meeting. . . . The Russians assume there are divisions, and they are
right."

Divisions are inevitable because of the anti-Russian bent of new member states in Central and Eastern Europe and varying degrees of enthusiasm elsewhere for Washington's tough stance, analysts say.

"There's no unity at all within Europe. The newer EU countries are far more anti-Russian than the older ones," said Margot Light, a Russian foreign policy expert at the London School of Economics and Political Science.

In addition, the realities of economics and energy constrict the abilities of many European leaders when it comes to taking on Moscow.

"Europe will remain overwhelmingly dependent on Russian gas," said Oksana Antonenko, a Eurasia expert at London's International Institute for Strategic Studies. "Of course, many countries like Germany and Italy that buy their oil and gas from Russia, they have to worry that if the relationship deteriorates, it will have an impact on their economy."

But Heisbourg believes that Russia's power to use energy resources as a weapon is being exaggerated.

Not only must Russia worry about the vagaries of oil prices, it also runs up against the fact that the Eastern European countries most dependent on Russian fuel are the most defiant, he said. In addition, Russia has less energy leverage on key powers such as Britain and France, whose electricity comes mostly from domestic nuclear plants, he said.

The West also has economic clout of its own, with Russia's government and its wealthy businessmen plugged into the international financial system.

And the West has shown signs of closing ranks after its initial stumbles, Heisbourg said. Chancellor Angela Merkel of Germany, which is the biggest
European economy and a major recipient of Russian fuels, sounded hawkish recently when she said she favored Georgia's eventual admission into the
North Atlantic Treaty Organization.

"That's not what the Russians were bargaining for," Heisbourg said. "The way it unfolds in Germany will be tremendously important because Germany is an in-between country."

Russia shouldn't underestimate Washington's ability to lead a resurgence of Western unity once a new president replaces the Bush administration, which
is hamstrung by its lame-duck status and accumulated international resentment, Heisbourg said.

Moreover, Europe's history could enable it to complement a tough American stance by playing the role of mediator as it has in the past, analysts said.

"If you look back to Cold War history," said Light, the Russia expert, "during the Cold War Europe always had a more moderate position than the
United States had, a more pragmatic position -- just for reasons of geographic proximity and because Europe tends to have a more pragmatic
policy than the U.S."

NOTE: Contact rotella@latimes.com. Times staff writer Janet Stobart in London contributed to this report.

LINK: http://www.latimes.com:80/news/nationworld/world/la-fg-west25-2008aug25,0,540493.story
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20. EU MUST COMMIT TO UKRAINE AFTER GEORGIA SAYS THINK TANK

Reuters, Brussels, Belgium, Monday, August 25, 2008

BRUSSELS - A European Union think tank said on Monday the bloc should make
specific commitments to Ukraine after Russia sent troops into Georgia.

The European Council on Foreign Relations (ECFR) said the EU should respond
to Russia's August 8 military incursion with "stronger engagement for
democracy, prosperity and security in the broader region" but keep "tough
measures towards Moscow on the table if Russia resists".

Relations with Ukraine, with which the EU holds a joint summit on September
9, should be a key plank of such a strategy. Ukraine, like Georgia, is a
former Soviet state with a large Russian minority population whose leaders
have irked Moscow by seeking closer ties with the West, including membership
of NATO.

"The EU should ... make a special commitment to Ukraine," the think tank
said in a policy brief.

"It should recognise the right to EU membership in future, agree to a more
liberal visa regime, offer a solidarity clause backing Ukraine's territorial
integrity, and move to integrate Ukraine into the EU's energy market." Harsh
actions against Russia would be counterproductive, the ECFR said.

EU diplomats are considering the 27-nation bloc's response to Russia's
assault on Georgia, which followed an attempt by Tbilisi to retake control
of its separatist, pro-Russian province of South Ossetia.

A ceasefire -- signed by Georgia and Russia on August 15 and 16
respectively -- ended the brief war but Moscow has so far ignored Western
demands it remove its remaining soldiers from Georgia's heartland.

In its policy brief, the ECFR said the EU should also strengthen its
membership pledge to Moldova, which borders Ukraine. It should push for a
mandate to supplement Russian and Georgian troops in South Ossetia and
another separatist province, Abkhazia, with international peacekeepers, and
contribute several hundred soldiers to such a force.

The EU should also back an international commission of inquiry into the
Georgia conflict to establish its causes, the think tank said.

The EU has taken a more cautious line towards Russia than the United States,
which has said Moscow's actions could affect Russian membership of the
Group of Eight industrialised nations and its bid to join the World Trade
Organisation. (Reporting by Huw Jones; Editing by Catherine Evans)

LINK: http://www.alertnet.org/thenews/newsdesk/LO382906.htm
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If you do not wish to read the ACTION UKRAINE REPORT please
contact us immediately by e-mail to morganw@patriot.net. If you are
receiving more than one copy please let us know so this can be corrected.
PUBLISHER AND EDITOR - AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation
Emerging Markets Private Equity Investment Group;
President, U.S.-Ukraine Business Council (USUBC)
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707; Fax 202 223 1224
mwilliams@usubc.org; www.usubc.org
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Power Corrupts and Absolute Power Corrupts Absolutely.
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