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

Ukrainian History, Culture, Arts, Religion, Business, Economics,
Sports, Government, and Politics, in Ukraine and Around the World       
                   
ACTION UKRAINE REPORT (AUR), Number 952
Washington, D.C., Tuesday, February 23, 2010

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.  UKRAINE'S TYMOSHENKO RULES OUT DEAL WITH YANUKOVICH
By Natalya Zinets and Sabina Zawadzki, Reuters, Kiev, Ukraine, Mon, Feb 22, 2010

2EU TO OFFER UKRAINE 'ROAD MAP' TO VISA-FREE TRAVEL 
Yanukovych seen as more pro-Russian and less a pro-Western leader
Deutsche Presse-Agentur (DPA), Brussels, Belgium, Mon, 22 Feb 2010  

3UKRAINE'S GDP ADVANCE 7.5% IN JANUARY, CENTRAL BANK SAYS  
By Daryna Krasnolutska, Bloomberg, Kiev, Ukraine, Sat, Feb 20, 2010

4IMF SAYS UKRAINE HAS ENOUGH FOREIGN RESERVES TO MAKE ALL EXTERNAL PAYMENTS INCLUDING FOR GAS
Interfax Ukraine, Kyiv, Ukraine, Thu, February 18, 2010

5UKRAINE: VAT REFUNDS NOT PAID TO EXPORTERS TOTAL UAH 23 BILLION (3 BILLION DOLLARS), HURTING INVESTMENT 
Yurii Haiduchyk, Ukrainian News Agency, Kyiv, Ukraine, Fri, Feb 19, 2010

6UKRAINE TO INJECT CAPITAL AGAIN INTO STATE UKREXIMBANK
Sabina Zawadzki, Reuters, Kiev, Ukraine, Mon Feb 22, 2010

7PROPOSALS FOR UKRAINE: 2010-TIME FOR ECONOMIC REFORMS
Anders Aslund, Peterson Institute for International Economics
Peterson Institute for International Economics, Wash, DC, Thu, Feb 18, 2010 

8SWEDEN'S SWEDBANK APPOINTS EXPERT TO HANDLE MOUNTAIN OF BAD DEBTS
Reuters, Stockholm, Sweden, Mon, Feb 22, 2010

9UKRAINE INTERNATIONAL AIRLINES ADDS ADDITIONAL BOEING 737-800, FLEET NOW TOTAL NINETEEN PLANES
Ukrainian News-on-line, Ukrainian News Agency, Kyiv, Ukraine, Mon, Feb 22, 2010 

10.  UKRAINE: MORATORIUM ON LAND SALES NOW UNTIL JAN 1 2012
MyLand, Center for the Land Reform Policy in Ukraine, Kyiv, Ukraine, Tue, Feb 2, 2010

11UKRAINE: SO MUCH FOR LAND AUCTIONS AND FOR THE RULE OF LAW!
MyLand, Center for Land Reform Policy in Ukraine, Kyiv, Ukraine, Wed, Feb 17, 2010

12UKRAINE'S DEMOCRATIC EVOLUTION ON HOLD, FOR NOW
The big questions have been put on hold, at least for the moment.
Analysis & Commentary: By Anne Applebaum
The Washington Post, Wash, D.C., Tuesday, February 9, 2010

13DID UKRAINE'S PRESIDENTIAL ELECTION REVERSE ITS 'COLOR REVOLUTION?"
Vital that the United States and other Western governments not turn their backs on Ukraine. 
Editorial, The Washington Post, Wash, D.C., Tue, February 9, 2010

14FORMER SOVIET REPUBLICS CANNOT BE TREATED AS RUSSIA'S "SPHERE OF INTERESTS" SAYS FORMER US SEC OF STATE MADELEINE ALBRIGHT
Interfax, Washington, D.C., Wed, Feb 10, 2010

15UKRAINE: YANUKOVYCH IS BACK: Why his victory may actually be good news for Ukraine.
By Owen Matthews, Newsweek.com, NY, NY, Wed, Feb 10, 2010

16BLINDED BY COLOUR REVOLUTIONS 
We shouldn't assume the success of pro-western movements means victory for democracy
The defeat of the leaders of the Orange revolution, Viktor Yushchenko and Yulia Tymoshenko, is actually good news.
Analysis and Commentary: By Paul Robinson, Professor, Graduate
School of Public and International Affairs, University of Ottawa
Ottawa Citizen, Ottawa, Ontario, Canada, Wed, Feb 10, 2010

17UKRAINE: RETURN OF THE GOODFELLAS
Inform: Newsletter for the international community providing views and analysis
from the Bloc of Yulia Tymoshenko (BYuT); Kyiv, Ukraine, Monday, Feb 22, 2010

18UKRAINE'S FUTURE WASN'T ORANGE, NOW IT IS A LOT MORE GREY
Analysis & Commentary: By Colin Graham, The Guardian, London, UK, Mon, Feb 8, 2010

19.  UKRAINE'S PRESIDENTIAL ELECTION, VIKTORY FOR THE BLUE CAMP
The Economist print edition, London, UK, Thu, Feb 11, 2010

20UKRAINE: BLOODLESS ORANGE
Ukraine's peaceful revolution turned sour because its leader was not ruthless enough
Editorial: The Economist, London, UK, February 13-19, 2010

21UKRAINE: DOUBLE-SPEAK
The future president of Ukraine tries to prove to Russia that he is not "pro-Western" and to the West that he is not "pro-Russian"
Nina Gugushvili, Vremya Novostey, Moscow, Russia, Thu, February 11, 2010

22ELECTION IS OVER: WHO WILL HAVE TO PAY FOR UKRAINE'S FRIENDSHIP NOW?
Cost of the Matter - What is it going to cost Russia to deal with Ukraine run by Yanukovich?
Analysis & Commentary: By Sergei Strokan, Kommersant, Moscow, Russia, Tue, Feb 9, 2010

23FRANCE'S VALENTINE TO RUSSIA
Why fortify Vladimir Putin's ability to menace his neighbors?
The rationalization is so ludicrous that even those proffering it must be embarrassed.
Lead Editorial: The Washington Post, Wash, D.C., Mon, Feb 15, 2010

24YALTA: PEACE OR APPEASEMENT?
Book Review: 'Yalta,The Price of Peace' by S.M. Plokhy
By Andrew Nagorski, The Wash Post, Wash, D.C., Sun, Feb 21, 2010

25UKRAINE-RUSSIAN RELATIONS REMAIN UNCLEAR 
By James Marson, The Wall Street Journal, NY, NY, Mon, Feb 22, 2010

26RAYTHEON JOINS U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
Technology and innovation leader in defense, homeland security and other government markets 
U.S.-Ukraine Business Council (USUBC), Wash, D.C., Fri, Feb 5, 2010

27ELI LILLY JOINS U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
Making medicines that help people live longer, healthier, more active lives.
U.S.-Ukraine Business Council (USUBC), Wash, D.C., Wed, Feb 3, 2010

28MOSCOW MAKES NEW DEMANDS ON UKRAINE AFTER YANUKOVICH'S VICTORY
Window on Eurasia, by Paul Goble, Vienna, Mon, Feb 22, 2010

29UKRAINE: A NEW YANUKOVYCH?
Analysis and Commentary: By Don Jensen
Poedinok, Cross Fire #11, VOA Website, Wash, D.C., Thu, Feb 11, 2010

30'THE SOVIET STORY': A MUST SEE DOCUMENTARY
Commentary: By Robert McConnell, Vice President, Armor Designs
Co-Founder of U.S.-Ukraine Foundation (USUF), Wash, D.C., Sat, Jan 27, 2010 
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1 UKRAINE'S TYMOSHENKO RULES OUT DEAL WITH YANUKOVICH

By Natalya Zinets and Sabina Zawadzki, Reuters, Kiev, Ukraine, Mon, Feb 22, 2010

KIEV - Ukrainian Prime Minister Yulia Tymoshenko on Monday renewed her attacks on President-elect Viktor Yanukovich, whom she accuses of winning election through fraud, and rejected any post-election deal with him.

In a televised statement she accused her rival of already beginning to sell off Ukraine's gas pipeline network -- a sensitive issue since it touches on relations with Russia -- and predicted he would not stay in power for long.

The sharp attack by the fiery 49-year-old premier, who on Saturday dropped her legal challenge to Yanukovich's election, significantly raised political tensions before his inauguration on Thursday.

"Yanukovich, who came to power by lies, is not our president and he will not last long," she told a televised broadcast. "I want to say that I would not, under any circumstances, create a coalition together with Yanukovich," she declared.

Yanukovich, a 59-year-old ex-mechanic who is backed by wealthy industrialists in eastern Ukraine, beat Tymoshenko by a narrow margin of 3.5 percentage points in the Feb. 7 runoff.

She says she was robbed of victory by electoral fraud, but at the weekend she withdrew an attempt to get a high court to give the go-ahead for another vote. She said she could not trust it to fairly consider the evidence.

Yanukovich is set to be sworn in to office on Feb. 25 and now has to steel himself to working with Tymoshenko -- albeit for only a short period --  until he can force her out by forging a new coalition in parliament.

Delays in ending Ukraine's long political turmoil and bringing a measure of stability to the power structure will only continue to deter much-needed investment for the struggling economy.

The ex-Soviet state of 46 million has been kept afloat by an International Monetary Fund bail-out programme of $16.4 billion, but this has been suspended because of paralysis in decision-making and breached promises. The IMF has said it will resume the programme once stability has returned to government.

The Yanukovich camp is pressing ahead with trying to strike a deal for a new coalition among the opportunistic deputies in parliament which can involve long and tricky horse-trading. If he fails to do this, he may be forced to call an early parliamentary election with unpredictable consequences.

Until then, he is doomed to share the higher echelons of power with a prime minister who does not regard him as legitimately elected.

FUTURE IN OPPOSITION?
Yanukovich is expected to tilt Ukraine back towards the old imperial master, Russia, after five years of estrangement under pro-Western President Viktor Yushchenko. His first foreign visit after inauguration is expected to be to Moscow in early March.

One specific charge Tymoshenko levelled against him was that he had begun "selling off Ukrainian national interests in all directions", including the privatisation of the gas network system. Yanukovich has proposed creation of a consortium including Russia to run the country's gas pipelines.

On Monday, she broached for the first time a possible future in opposition if Yanukovich managed to outflank her in parliament and form a new coalition bringing in defectors from among her erstwhile allies.

"If the patriotic forces, the democratic political parties in parliament sell out politically, then I will go into opposition to bring closer the time when our state returns to a civilised way of development," she said.

Earlier on Monday, her camp said it wanted a quick parliamentary vote which she hopes will back her government before Yanukovich has time to muster support to bring it down.

The Regions Party faction of Yanukovich said on Friday it planned a vote of no-confidence in the government in early March after his inauguration. But Tymoshenko's bloc said it had collected enough signatures to force the vote this week before his swearing-in.

Tymoshenko's BYuT bloc appears to feel that the Yanukovich camp, which is busy preparing for the inauguration, will not have time to muster the necessary 226 votes for it to succeed this week. (Additional reporting by Yuri Kulikov) (Writing by Richard Balmforth; Editing by Angus)

LINK: http://www.reuters.com/article/idUSLDE61L10920100222
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2.  EU TO OFFER UKRAINE 'ROAD MAP' TO VISA-FREE TRAVEL 
Yanukovych seen as more pro-Russian and less a pro-Western leader

Deutsche Presse-Agentur (DPA), Brussels, Belgium, Mon, 22 Feb 2010  

BRUSSELS - The European Union is to offer Ukraine a plan leading to visa-free travel, Italian Foreign Minister Franco Frattini said Monday after talks with EU counterparts in Brussels. The EU is keen to strengthen ties with the new administration of Ukraine's president-elect Viktor Yanukovych, who is seen in Europe as a more pro-Russian and less pro-Western leader than his predecessor, Viktor Yushchenko.

Monday's meeting confirmed "the European will to have Ukraine closer (to Europe) ... and the idea of a road map for visa liberalization," Frattini told journalists.  "We decided that with the Russian Federation, so it's logical we do it with Ukraine as well," Frattini said.

Yanukovych is set to travel to Brussels to meet top EU officials on March 1 as his first foreign visit, diplomatic sources said. The EU's foreign-policy director, Catherine Ashton, is due to represent the bloc at his inauguration on Thursday.

Monday's move came after a number of Central and Eastern European member states pushed for the EU to offer Ukraine a path towards visa-free travel as a way of improving diplomatic ties and boosting pro-Western forces in the country.

POLISH FOREIGN MINISTER SIKORSKI
The EU "should strengthen those in Ukraine who wish to become more European by offering Ukraine a road map towards a visa-free regime," Polish Foreign Minister Radoslaw Sikorski said.

Latvian Foreign Minister Maris Riekstins added that "We have to look first at President Yanukovych's foreign-policy priorities ... Visa liberalization is one of the issues which from my point of view is important."

Ukrainian citizens enjoyed visa-free travel to EU states such as Poland until 2007. But the EU's new members then joined the bloc's Schengen zone which abolished all passport controls between EU states - and therefore obliged them to introduce visa regimes for their non-EU neighbours. That move was deeply resented in Ukraine.

Sikorski stressed that any visa-liberalization plan would come with strict conditions attached.  "A road map is not a guarantee. A road map only says that if you follow the road, you will arrive at the destination, but if you stop on the road you won't," he said.

Riekstins stressed that "the Ukrainians have a way to go on internal reforms" before they can hope for free travel to the EU.  Other ministers at the meeting did not comment directly on the proposal.

EUROPE NEEDS UKRAINE AS A RELIABLE PARTNER
But Germany's deputy foreign minister, Werner Hoyer, said that Europe "needs Ukraine as a reliable partner" and that ministers must debate "how we can actively support Ukraine in its reform process."

A number of EU commentators in recent days have said that they would welcome Yanukovych's inauguration if he proved predictable and effective. Speaking ahead of the meeting, an EU diplomat said, "If the election of Yanukovych gives clarity, stability and a leadership with whom we can have a clear relationship, so much the better."

After the Monday meeting, Ashton said that all the ministers present had called on the bloc to help Ukraine become more stable. Over the last four years, feuding between Yushchenko and Prime Minister Yulia Tymoshenko has crippled the country's reform efforts and led to a series of rows with Russia. Those arguments twice led to cut-offs in gas supplies from Russia through Ukraine to Europe. 
LINK: http://www.earthtimes.org/articles/show/310643,eu-to-offer-ukraine-road-map-to-visa-free-travel--summary.html#ixzz0gJWspRGh
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From 22 to over 100 Members in Two Years, Join Today
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3.  UKRAINE'S GDP ADVANCE 7.5% IN JANUARY, CENTRAL BANK SAYS  

By Daryna Krasnolutska, Bloomberg, Kiev, Ukraine, Sat, Feb 20, 2010

KIEV - Ukraine’s gross domestic product advanced 7.5 percent in January, helped by exports and agriculture, the central bank said. Industrial production, which makes up 25 percent of the gross domestic product, surged by 11.8 percent in January from the same month a year ago, driven by metal and machine-building industries, the state statistics data show.

“Machine-building output rose the most in January due to recovery of foreign and domestic demand,” the Kiev-based Natsionalnyi Bank Ukrainy said in a statement on its Web site. “Steel production increased due to demand from Middle East, Europe, Africa and Russia as well as due to the hryvnia devaluation, making Ukraine’s metal products cheaper and more competitive.”

Ukraine is counting on increased demand for exports that make more up than 40 percent of its GDP to haul the economy out of recession. The annual decline in GDP slowed to 7 percent in the fourth quarter from 15.9 percent in the third quarter and a record 20.3 percent in the first three months of 2009.
Still, Ukraine’s economic recovery is “slow and unstable” because it relies only on exports, while “domestic factors are weak,” the central bank said on Feb. 18. 

LINK: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQiUy1c4VHZs
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4.   IMF SAYS UKRAINE HAS ENOUGH FOREIGN RESERVES TO
MAKE ALL EXTERNAL PAYMENTS, INCLUDING FOR GAS
Interfax Ukraine, Kyiv, Ukraine, Thu, February 18, 2010
KYIV - Ukraine has sufficient foreign reserves to remain current on all of its external payment obligations, including payments for imports of natural gas, Senior Advisor at the IMF External Relations Department David Hawley said at a regular press briefing in Washington on Thursday.
Asked about the possible resumption of the IMF's cooperation program with Ukraine under the Stand-By Arrangement (SBA) after the presidential election, Hawley said that the fund is ready to discuss this issue with the Ukrainian authorities. "I can say only that the fund stands ready to discuss with the authorities policy priorities and prospects for 2010," he said.

IMF officials haven't yet met with Ukraine's new authorities since the election, but the fund's regular contacts with the authorities continue on an ongoing basis, Hawley added.

As reported, the IMF in autumn 2008 decided to disburse about $17 billion under the SBA. Since then, Ukraine has already received three tranches worth almost $11 billion. The first $4.5 billion tranche was given to the National Bank of Ukraine (NBU) in November 2008. The IMF's second tranche - worth about $3 billion - was extended in May 2009.

The funds were split between the NBU and the government of Prime Minister Yulia Tymoshenko. The third tranche (worth $3.5 billion) was provided in August 2009 and was at the disposal of the Tymoshenko government alone.

The allocation of the fourth tranche, worth $3.8 billion, was scheduled for November 2009 following the third review of the IMF's cooperation program with Ukraine. The IMF mission ended its work in Kyiv late in October 2009, but did not issue a positive statement on the completion of the review. The IMF said repeatedly that it expected a consolidated position from the Ukrainian authorities in the question of implementing anti-crisis measures.

After the Ukrainian government received the third tranche, it also used about $2.1 billion through the conversion of Special Drawing Rights (SDR) allocated by the IMF as part of a general allocation of SDRs among all the IMF member countries.

Speaking at a press conference in Washington on January 14, 2010, IMF Managing Director Dominique Strauss-Kahn stressed the possibility of resuming cooperation with Ukraine under the Stand-By Arrangement (SBA) after the presidential election in Ukraine was over.
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5.  UKRAINE: VAT REFUNDS NOT PAID TO EXPORTERS TOTAL
UAH 23 BILLION (3 BILLION DOLLARS), HURTING INVESTMENT

Yurii Haiduchyk, Ukrainian News Agency, Kyiv, Ukraine, Fri, Feb 19, 2010

KYIV - The Ukrainian Union of Industrialists and Entrepreneurs estimates the amount of value-added tax that has not yet been refunded to exporters at about UAH 23 billion [around 3 billion US dollars.]  The Ukrainian Union of Industrialists and Entrepreneurs’ President Anatolii Kinakh announced this to journalists.

"According to our expert conclusions, about UAH 23 billion of un-refunded VAT has accumulated as of today. At this rate, it will amount to UAH 28 billion by March 1," Kinakh said. According to Kinakh, the failure to refund value-added tax is one of the main problems preventing implementation of investment projects in the Ukrainian economy.

"The problem involving refund of VAT is deepening. This problem is not new, but the amount that has accumulated in the country now is unprecedented in any difficult period," Kinakh said. According to him, this problem requires immediate solution because the non-refund of value-added tax has a negative effect on the country’s economy.

As Ukrainian News earlier reported, the State Tax Administration’s Chairman Serhii Buriak has estimated that the debt on VAT refunds exceeds UAH 20 billion. The Presidential Secretariat has estimated the amount of un-refunded value-added tax at UAH 25 billion. President Viktor Yuschenko estimated the amount at UAH 19 billion in December 2009.

FOOTNOTE: USUBC MEMBERSHIP URGES STRONG ACTION - The membership of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., believes one of the highest priorities for the new Ukrainian president is to work out a plan for the government to pay out the huge VAT refunds that are long overdue to private businesses, especially exporters.  The track record of the Ukraine government on this issue is just horrible and unprecedented as explained above by Anatolii Kinakh.  Ukraine owes private business more in VAT refunds for a longer period of time than any country in the world. 

The Ukraine government continues to crush, hinder and stop badly needed private business investments in Ukraine through its many anti-private business laws, regulations, policies, actions and lack of actions.  USUBC urges the new president to stop the many anti-business actions and take real and positive actions to move the Ukraine economy and private business investments forward.  Ukraine and its people need the income, the jobs, the taxes, the investment and the wealth, now, in 2010. 
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6.  UKRAINE TO INJECT CAPITAL AGAIN INTO STATE UKREXIMBANK
Sabina Zawadzki, Reuters, Kiev, Ukraine, Mon Feb 22, 2010

KIEV - The Ukrainian government said on Monday it would increase the capital of state bank Ukreximbank for the second time so far this year to 16.4 billion hryvnias ($2 billion) through an issue of treasury bills.

The capital increase for the country's third largest bank of 4.6 billion hryvnias follows an earlier injection of 1.8 billion hryvnias -- both funded by the government giving Ukreximbank T-bill issues which it can then sell on.

The government in its decision did not state the reason for the increase but the ministers of industry and utilities have both previously said it would be aimed at allowing Ukreximbank to lend to companies in their spheres.

Ukraine is reeling from a severe economic crisis -- gross domestic product contracted 15 percent in 2009 according to preliminary statistics -- with the steel and chemical sectors particularly hard hit by low global demand.

State energy company Naftogaz, often at the centre of gas rows with Moscow over late bill payments, has also been hit hard and has accepted support from the government and state banks.

The government said the T-bills for this latest capital injection were 9-year bonds with yields of 9.5 percent. After Ukreximbank accepts the debt, the government is likely to demand that the central bank buys them, as it has done before.

This is because there is little demand for government debt with little floating cash in Ukraine's economy. The government has used this system, which involves the central bank printing money to buy the debt, to support itself, banks and Naftogaz.

The central bank now owns 60 percent of all state domestic debt, from owning virtually none over 18 months ago before a global financial crisis hit the country. (Editing by Ron Askew)(Kiev bureau; tel: +380 44 244 9150; RM: sabina.zawadzki.reuters.com@reuters.net)

LINK: http://in.reuters.com/article/bankingfinancial-SP/idINLDE61L2A420100222?sp=true
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7.  PROPOSALS FOR UKRAINE: 2010-TIME FOR REFORMS
How to reform Ukraine's economy after the presidential election

Anders Aslund, Peterson Institute for International Economics
Ceyla Pazarbasioglu, International Monetary Fund
Peterson Institute for International Economics, Wash, DC, Thu, Feb 18, 2010 

WASHINGTON, D.C. - On February 18, 2010, the Peterson Institute hosted the US launch of a report by the Independent International Experts Commission on how to reform Ukraine's economy after its presidential election.

Anders Åslund, PIIE senior fellow and co-chair of the Commission, presented the main conclusions of the report. The premise of the report, entitled Proposals for Ukraine: 2010 - Time for Reforms, is that the current combination of a new presidential mandate with the recent shock of severe economic crisis is uniquely propitious for the enactment of major reforms in Ukraine.

The Commission calls for profound structural changes in 2010, including [1] full-fledged inflation targeting; [2] gas sector reform; [3] realistic energy pricing; [4] a comprehensive deregulation of enterprise; and the [5] conclusion of an Association Agreement, including a deep and comprehensive free trade agreement, with the European Union.

Ceyla Pazarbasioglu, the International Monetary Fund's Mission Chief to Ukraine, led the discussion after Åslund's presentation. The Commission is co-chaired by Anders Åslund and Ukrainian Professor Olexander Paskhaver. PIIE Director C. Fred Bergsten is also a member of the Commission.

The entire commission report can be found online at: http://www.iie.com/publications/papers/aslund0210.pdf.

NOTE: Anders Aslund has served as a senior advisor to the U.S.-Ukraine Business Council (USUBC), www.usubc.org, for several years.
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8.  SWEDEN'S SWEDBANK APPOINTS EXPERT TO HANDLE MOUNTAIN OF BAD DEBTS
Arne Berggren To handle soured credits in the Baltics, Sweden, Ukraine and Russia

Reuters, Stockholm, Sweden, Mon, Feb 22, 2010

STOCKHOLM - Sweden's Swedbank said on Monday it had appointed an expert in bank reconstruction and problem loans to help it handle soured credits in the Baltics, Sweden and other countries.

Swedbank plunged to a 9.5 billion Swedish crown ($1.32 billion) operating loss in 2009 as it was forced to take massive provisions against bad loans in the Baltic region -- where it is a top player -- and Ukraine.

Swedbank said it had appointed Arne Berggren, a former government official who played a key role in Sweden's response to its banking crisis in the 1990s, as head of Financial Reconstruction and Recovery. Berggren has also been a senior advisor to the International Monetary Fund and the World Bank.

Swedbank has set up teams in Sweden, Estonia, Latvia, Lithuania, Ukraine and Russia to handle a mountain of bad debts triggered by the global financial crisis. The bank has also created a unit to manage and sell repossessed assets.

LINK:  http://www.reuters.com/article/idUSLDE61L0OK20100222
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9.  UKRAINE INTERNATIONAL AIRLINES ADDS ADDITIONAL
BOEING 737-800, FLEET NOW TOTAL NINETEEN PLANES
UIA Expects to add fourth Boeing 737-800 in April

Ukrainian News-on-line, Ukrainian News Agency, Kyiv, Ukraine, Mon, Feb 22, 2010 

KYIV - Kyiv-based Ukraine International Airlines [UIA] company has against increased its aircraft fleet by one to nineteen planes, the company said.  According to the report, on February 20, Ukraine International Airlines obtained a Boeing 737-800 manufactured in Seattle.

The new airliner was registered in Ukraine and obtained the registration number of UR-PSB. The Boeing 737-800 is the third plane of this modification in the aircraft fleet of the company. Ukraine International Airlines hopes to obtain the fourth plane of this type in April.

As Ukrainian News earlier reported, in September 2009, the Ukraine International Airlines obtained the second Boeing 737-800. The number of passengers transported by Ukraine International Airlines shrank by 117,000 or 6.96% to 1,563,000 in 2009, compared with 2008. Ukraine International Airlines was founded in 1992.

The airline company has a fleet of 18 Boeing airplanes, including 17 passenger airplanes and one cargo airplane. The state owns 61.6% of the shares in Ukraine International Airlines (the State Property Fund manages these shares), Austrian Airlines owns 22.5%, and the European Bank for Reconstruction and Development 9.9%.

NOTE:  Ukraine International Airlines (UIA) and Boeing are members of the U.S.-Ukraine Business Council (USUBC), Washington, D.C. 
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10.  UKRAINE: MORATORIUM ON LAND SALES NOW UNTIL JAN 1 2012

MyLand, Center for the Land Reform Policy in Ukraine, Kyiv, Ukraine, Tue, Feb 2, 2010

KYIV - Today, on February 2, 2010,  the official newspaper of the Parliament of Ukraine, Holos Ukrainy (Voice of Ukraine), promulgated the law of January 19, 2010, which imposes additional restriction upon agricultural land market of Ukraine, namely, bares it by the date of January 1, 2012.

Before the trade in farmland was impossible due to clauses of the Land Code which required coming into force of two laws - on land market and land cadastre - as a precondition for lifting the ban on trade. On December 22, 2009 the Parliament passed the law introducing additional safeguard - a date earlier of which the trade was prohibited, laws or not.

President vetoed the law and sent it back to the Parliament on December 29, 2009. MPs managed to overcome the veto on January 19, 2010. President of Ukraine Victor Yushchenko did not sign the law, and it was signed by the Speaker, according to the Constitution. Thus from today on the moratorium shall last till January 1, 2012, and thereafter, if the two laws are not passed.

LINK: http://www.myland.org.ua/index.php?id=1847&lang=en&razd=NEWS
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11.  UKRAINE: SO MUCH FOR LAND AUCTIONS AND FOR THE RULE OF LAW!
State land can be purchased for low prices. Ukraine not a state with rule of law.

MyLand, Center for Land Reform Policy in Ukraine, Kyiv, Ukraine, Wed, Feb 17, 2010

KYIV - RBC-Ukraine [website] reports today that the Parliament of Ukraine, Verkhovna Rada, turned down the draft law on land auctions. The draft was submitted by the  Government of Ukraine on January 28, 2009.

As a result, land auctions which are declared by the Land Code as mandatory in many cases of alienation of state-owned or municipal land, are still a matter of very vague legal nature. Literally speaking, the Land Code does say that it is a must to hold an auction when selling or leasing out public land, but at the same time, the procedure for doing so shall be defined by the law passed by the Parliament.

Constitutional Court of Ukraine on many occasions ascerted that the Constitution of Ukraine in inambigous terms requires the "regime of property" to be defined and set up by the law only, not by any subordinate act or a bylaw.

The Court construed the regime of property as all rules regarding acquisition, possession, use and disposal of property, including land and landed property, by means of sale, lease or allocation into permanent use or other forms of tenure.

Thus land auctions which sporadically take place in Ukrainian cities are not fully legal. We would even say that they are fully illegal.

It is sadly enough that Ukraine, failing to pass the necessary law and holding land auctions without the said law, loses two points at once: it allows state land to be taken away for lesser money and it also denies its status as a state with a rule of law.

LINK: http://www.myland.org.ua/index.php?id=1912&lang=en&razd=NEWS
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12.  UKRAINE'S DEMOCRATIC EVOLUTION ON HOLD, FOR NOW
The big questions have been put on hold, at least for the moment.

Analysis & Commentary: By Anne Applebaum
The Washington Post, Wash, D.C., Tuesday, February 9, 2010

Every revolution sparks a counterrevolution. The French revolution in 1789 was followed by Napoleon and the restoration of the monarchy. After the Russian revolution, the czar's forces regrouped and fought a bloody civil war.

Sunday's election of Viktor Yanukovych as president of Ukraine does not represent the counterrevolution -- or at least not yet. For those who don't remember, Yanukovych was the bad guy of the 2004 Orange Revolution.

AN EX-THUG AND FORMER COMMUNIST WITH A CRIMINAL RECORD
An ex-thug and former communist with a criminal record, he ran for president that year with the overt backing of the Russian government and tried to steal the election. After weeks of street protests he backed down and eventually allowed the actual winner, Viktor Yushchenko, to come to power. It was post-Soviet Ukraine's first truly democratic election.

Fast-forward to 2010, and many things look different: Yushchenko was a bitter disappointment to his countrymen. The recession hit Ukraine hard, and many difficult decisions were not made. The Ukrainian government still has not gotten around to privatizing land or removing Soviet-era subsidies from the budget.

Tensions between the western and eastern halves of the country have not decreased. As things got tougher, politicians began squabbling among themselves, making reform impossible; the value of the currency has fallen by half.

The only thing that has remained consistent over the past four years is the democratic process itself. The most striking thing about this Ukrainian presidential election is that we genuinely did not know who would win. By contrast, the only mystery about Russian elections is the question of why they bother to hold them at all, since the winner is known long in advance.

ORANGE COALITIONS FAILED TO DELIVER EXPECTED REFORMS
Six years after the Orange Revolution, Ukrainian political culture remains open, unpredictable and interesting -- so much so that formerly prominent Russian journalists have moved to Kiev to ply their trade.

"The difference between Russian politics and Ukrainian politics," one of them told the New York Times, "is the difference between a cemetery and a madhouse." And who has been the biggest beneficiary of this madhouse? Yanukovych, that original bad guy: Two parliamentary elections and one presidential election have been held since the Orange Revolution, and he has won all of them.

Ukrainians are not an illogical people: The only real advantage of democracy is that it enables people to throw out leaders they don't like. When the various "Orange" coalitions failed to deliver the expected reforms, Ukrainians took full advantage of their voting power in order to throw them out. Anyone else would do the same.

WILL YANUKOVYCH RESPECT THOSE WHO ELECTED HIM
The test now, of course, is whether Yanukovych will respect those who elected him, and ensure that democratic elections continue into the future. His success will be easy to measure: If he is evicted from office in due course, as all politicians eventually are, then he has respected the spirit of the Orange Revolution.

If he tries to stay on past his term through falsifying votes, intimidating the opposition and killing journalists, as his eastern neighbors have been known to do, then we will know that the counterrevolution has come to power. And it is by these terms that we should judge him.

Whether he tries to join NATO (he will not) or befriend the European Union (he might well) matters less to Ukraine's political future than the simple question of whether Ukrainians will be allowed to replace him if they disapprove of his choices.

Which does not mean that his choices are irrelevant: Ukrainians, like everybody else who lives in a democracy, will select future leaders based on their perceptions of how well their country is run.

"It's the economy, stupid," is not a uniquely American slogan. In the coming months, the Ukrainian government will (and should) be far more concerned with what one regional analyst calls "geo-economics," as opposed to geopolitics.

The Ukrainians need to [1] expand their relationship with the International Monetary Fund, [2] they need to negotiate stable and reasonable gas agreements with their Russian neighbors to the east, and [3] they need to conclude visa and trade agreements with their European neighbors to the west.

They are in need of practical, literate politicians, not ideologues. For their sake, we must hope Yanukovych is the former, not the latter.

THE BIG QUESTIONS HAVE BEEN PUT ON HOLD
The big questions -- Will Ukraine ultimately be "Western" or "Eastern"? Will its political culture come to resemble Europe's or Russia's? Will Ukraine eventually join European and transatlantic institutions? -- have not disappeared with the election of an "Eastern" president. But they have been put on hold, at least for the moment.

NOTE:  Anne Applebaum is a weekly columnist for The Post, writing on foreign affairs. Her column appears on Tuesdays.  Applebaum was a member of The Post’s editorial board from 2002 to 2006. She began working as a journalist in 1988, when she moved to Poland to become the Warsaw correspondent for The Economist. Later, she became the Foreign Editor, and then Deputy Editor, of the Spectator magazine in London. She was the Evening Standard's political editor for the 1997 British election campaign. For several years, she wrote the "Foreigners" column in Slate magazine.

She is the author of “Gulag: A History” (2003) and “Between East and West: Across the Borderlands of Europe” (1995). In 1992, Applebaum won the Charles Douglas-Home Memorial Trust award for journalism in the ex-Soviet Union. She was awarded the 2004 Pulitzer Prize for Non-fiction for “Gulag.” E-mail: applebaumletters@washpost.com.

LINK: http://www.washingtonpost.com/wp-dyn/content/article/2010/02/08/AR2010020802730.html
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13.  DID UKRAINE'S PRESIDENTIAL ELECTION REVERSE ITS 'COLOR REVOLUTION?"
Vital that the United States and other Western governments not turn their backs on Ukraine. 

Editorial, The Washington Post, Wash, D.C., Tue, February 9, 2010

UKRAINE'S ORANGE Revolution erupted in 2004 because of an attempt by Russian leader Vladimir Putin and his proxies to impose on Ukraine a version of Russia's corrupt authoritarianism -- beginning with a fraudulent presidential election.

The revolt's success produced a messy but functioning democracy in which elections are hard-fought and unpredictable, the press is free and civil society flourishes. Just more than five years later, the central question is whether that democratic system -- which is what prevents Ukraine from being dominated by Russia -- will survive another presidential election.

The good news from Sunday's runoff vote between Yulia Tymoshenko and Viktor Yanukovych is that so far, democracy has survived. International observers, including the Organization for Security and Cooperation in Europe, -- which denounced the 2004 vote -- praised it as "professional, transparent and honest" and said it "should serve as a solid foundation for a peaceful transition of power."

That's something the OSCE could not say about the past three Russian presidential elections, or the travesties that pass for votes in many of the former Soviet republics that Mr. Putin aspires to incorporate into a Kremlin sphere of influence.

The fact that Mr. Yanukovych, the apparent winner of the runoff, was Mr. Putin's candidate in 2004 while Ms. Tymoshenko was a leader of the Orange coalition has produced understandable but false reports of the revolution's demise.

In fact Mr. Yanukovych, who draws most of his support from Ukraine's eastern provinces, learned a lesson in 2004; he now identifies himself with the country's big industrialists, rather than Mr. Putin. Ms. Tymoshenko, whose erratic populism long ago discredited her with Western governments, made her own peace with the Russian ruler last year.

What threatens the Orange Revolution is not candidates or their policies but anti-democratic practices. In that sense, the largest threat at the moment is posed by Ms. Tymoshenko, should she choose to respond to her relatively narrow loss with court challenges and unfounded claims of irregularities. Hard hit by the global economic crisis, Ukraine can ill afford months of pointless infighting and political uncertainty.

In the longer term, Mr. Yanukovych will show

       [1] whether he is committed to liberal democracy.
       [2] Will he respect the media, which are populated by free-wheeling Russian television hosts who were driven out of Moscow?
       [3] Will he fight pervasive corruption and try to strengthen institutions such as the courts?
       [4] Will future elections remain free?

If Mr. Yanukovych passes those tests, Ukraine will remain a sovereign European country -- and Mr. Putin's authoritarian project will be doomed. That's why it's vital that the United States and other Western governments not turn their backs on Ukraine. The Orange Revolution lives on, for now -- but it will need plenty of support and nurturing in the next few years.
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14.  FORMER SOVIET REPUBLICS CANNOT BE TREATED AS RUSSIA'S "SPHERE
OF INTERESTS" SAYS FORMER US SEC OF STATE MADELEINE ALBRIGHT

Interfax, Washington, D.C., Wed, Feb 10, 2010

WASHINGTON - Russia needs to recognize that former Soviet republics are now independent and sovereign and cannot be viewed as being under the influence of Russia, said former U.S. Secretary of State Madeleine Albright.

"No country should be treated as if it were merely within the 'sphere of interest' of another. Russia's neighbors are independent and sovereign, as are other countries," Albright, who heads a special 12-strong NATO group to draw up recommendations on the military alliance's new strategic concept, said in an interview with Interfax.

Albright acknowledged that events in one nation can affect the interests of another. "But disagreements should be resolved in accordance with international law - not by the domination of the big over the small. The concept of a 'sphere of interests' is not recognized as a legal principle," she said.

"NATO does not accept the idea of a geographically distinct 'sphere of interests.' Like other countries, NATO members can be affected by developments in almost any region; this is simply a fact of life in the 21st century. That is why NATO places such a strong emphasis on its partnerships and on cooperating with organizations such as the UN, the EU, and the OSCE," Albright said.

"NATO recognizes that a high degree of international cooperation will be required to maintain stability in a world where potential dangers are quick to arise, highly mobile, and hard to foresee," Albright said.

"NATO has developed partnerships with countries in Central Asia and the Caucasus to deal with common security challenges such as terrorism and drug-trafficking and has enlisted their assistance in efforts to stabilize Afghanistan. All of these efforts serve Russian interests as well," she said.

Asked whether NATO's area of responsibility could go beyond the territory of its member states', Albright answered, "In my view, NATO's core responsibility is to defend the territory of its members."

"The alliance does acknowledge that threats to its members and to world peace can emerge without warning and from diverse places around the globe. Accordingly, NATO works with its many partners to help countries defend against terrorism, piracy, organized crime, and sabotage," she said.

Albright emphasized that her interview reflects only her personal opinions, and in no way should be viewed as the opinion of the NATO group or the U.S. administration.
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Ukraine Macroeconomic Report From SigmaBleyzer:
http://www.sigmableyzer.com/index.php?action=publications 
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15.  UKRAINE: YANUKOVYCH IS BACK 
Why his victory may actually be good news for Ukraine.

By Owen Matthews, Newsweek.com, NY, NY, Wed, Feb 10, 2010

NEW YORK - Bad news first: Viktor Yanukovych, the winner of last Sunday's presidential election in Ukraine, is a notoriously inarticulate twice-convicted felon who is backed by a clique of powerful businessmen with alleged mafia ties. He's also the candidate backed by Moscow in the 2004 presidential election, annulled after Ukraine's Supreme Court found the Yanukovych campaign guilty of massive vote-rigging.

Yet Yanukovych's victory may actually be good news for Ukraine. For starters, he would have to try hard to do worse than his predecessor, Viktor Yushchenko, under whose rule Ukraine's economy shrank by 15 percent. Yushchenko spent much of his presidential term feuding with former allies like Yulia Tymoshenko, the loser of Sunday's presidential vote.

Worse, in his last months in office, Yushchenko splurged on a series of populist spending promises ­including a 20 percent hike in pensions ­that pumped Ukraine's budget deficit to 4 percent of GDP. As a result, the IMF suspended a badly needed bailout package until after the election. Yanukovych at least warned voters that austerity was coming and has a decent chance of getting the IMF money flowing again.

But perhaps just as important as basic economic competence is the fact that Yanukovych will certainly have better relations with Russia.

Cold Warriors may wring their hands at the prospect of increased Russian influence, but from the point of view of Ukraine itself, that is a good thing. From the 2004 Orange Revolution onward, Yushchenko seemed to take perverse pleasure in jerking Moscow's chain.

He declared the man-made famines of 1930­32, which killed millions of Ukrainians, a genocide perpetrated by the Russians, and sent negotiators to talks with Gazprom who insisted on speaking to their Russian counterparts through a Russian-Ukrainian interpreter, though the two languages are easily mutually comprehensible.

In the aftermath of the 2008 Russian invasion of Georgia, tensions ran so high that the Ukrainian Security Service began preparing for a possible Russian invasion of the Ukrainian Black Sea peninsula of Crimea.

Irritating Moscow may have played well with a hard core of Ukrainian nationalists concentrated in the west of the country, but it did Ukraine as a whole no good at all. The gas cutoffs of 2006 and 2007 that followed Ukraine's failures to pay for its gas supplies (and badly damaged its reputation as a secure transit country) are just the most obvious examples. Endless tension with Russia increased the political risk for foreign investors and depressed the economy.

That in turn meant that Ukraine failed dismally to diversify away from rust-belt Soviet industries like steel and aluminum production, which it badly needs to do if it's to have any hope of real economic recovery.

Making nice with Moscow is certainly no panacea for Ukraine's ills.

But by putting an end to Yushchenko's talk of joining NATO, Yanukovych will remove a major irritant in Moscow-Kiev relations. More, you can be sure that many NATO members themselves are breathing a sly sigh of relief at Yanukovych's victory.

Ukraine's aspiration to join NATO was warmly backed by the Bush administration but by few others. Indeed, by 2009 almost all members, other than the former Soviet-bloc states like Poland, were lobbying hard against it as a pointless obstacle to normalizing relations with Russia.

The reality was that even at the height of Yushchenko's popularity, membership in NATO was never supported by more than a third of Ukraine's population anyway. In canning NATO, Yanukovych isn't so much caving to Russian pressure as acknowledging the deep and long standing ambivalence of ordinary Ukrainians to joining the club.

The European Union, on the other hand, is a different matter. Russia has expressed no strong opposition to Ukraine's pro-European noises­ unlike its hysterical anti-NATO position ­and even the beginnings of a serious attempt to become an official candidate for the EU would do wonders for Ukraine's credit rating and investment prospects.

All candidates in Ukraine's presidential election, including Yanukovych, claimed to be in favor of joining the EU ­an important indicator of the country's general direction. And the EU still stands willing and ready to engage on issues like fiscal discipline, corporate governance, and all the nuts and bolts of a functional state.

But right now the likelihood of EU membership is still vanishingly remote­ while the likelihood of a full-scale economic collapse is very real and immediate. Reversing Ukraine's steep fiscal nose dive before the country defaults on its debts is Yanukovych's most urgent problem. He may even turn to Moscow to cover some of the expected $37 billion shortfall.

But the point is that before Ukraine can seriously aspire to fly, it has to patch up the gaping holes in its airframe. Yanukovych may well be in a better position to do that than anyone else in Ukrainian politics ­if only because he's not burdened with an adversarial relationship with Russia.

After the disasters of the Yushchenko period, the bar for successful governance in Kiev has been set pretty low. His criminal record and shady backers aside, if Yanukovych shows just basic competence at running Ukraine's government, he will already be doing better than his predecessors.

By this point most Ukrainian voters are almost past caring who governs them­ as long as someone does without risking war with Russia, economic collapse, or losing heat in midwinter. 
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16.  BLINDED BY COLOUR REVOLUTIONS 
We shouldn't assume the success of pro-western movements means victory for democracy
The defeat of the leaders of the Orange revolution, Viktor Yushchenko and Yulia Tymoshenko, is actually good news.

Analysis and Commentary: By Paul Robinson, Professor, Graduate
School of Public and International Affairs, University of Ottawa
Ottawa Citizen (Canada), Ottawa, Ontario, Canada, Wed, Feb 10, 2010

While many will no doubt see it as a source of consternation, the election of Viktor Yanukovych as president of Ukraine is really a cause for celebration. The defeat of the leaders of the Orange revolution, Viktor Yushchenko and Yulia Tymoshenko, is actually good news.

In 2004, Yanukovych briefly triumphed on the back of electoral fraud. In 2010, he has beaten his opponents honestly in an election deemed by international observers to be free and fair. This alone amounts to a significant political change for the better.

For Ukrainians, the constant squabbling of the Yushchenko-Tymoshenko years will finally come to an end. For the West, the Ukrainian election offers a welcome opportunity to reassess the nature of the "colour revolutions" of the early 2000s.

The Orange revolution in Ukraine, the Rose revolution in Georgia, and the Cedar revolution in Lebanon gave rise to a myth of democratization in which the "masses" were rising up against corrupt elites. The ongoing protests in Iran have similarly encouraged some to believe that a Green revolution is also in the offing. But the colour revolutions were never quite what they seemed.

In Ukraine, for instance, the "revolutionary" leaders, Yushchenko and Tymoshenko, were high-ranking members of the existing system. Furthermore, even in the final election that defeated him in 2004, Viktor Yanukovych still managed to gain over 40 per cent of the vote. The Orange revolution was decidedly not an uprising of the entire Ukrainian people against its government, but rather a temporary victory by one party in a political struggle within a deeply divided nation.

The Orange revolutionaries proved to be incompetent rulers. The same goes for their colleagues elsewhere. In Georgia, for instance, Mikheil Saakashvili's government has proven disastrous, provoking war with Russia and what is almost certainly the permanent loss of two of the country's provinces.

As for Iran, research released last week by the World Public Opinion organization, based on an analysis of numerous pre- and post-election surveys, shows that whatever electoral fraud took place during the presidential election did not alter the result. Even if the official results may have exaggerated Mahmoud Ahmadinejad's lead, the Iranian president almost certainly did win over 50 per cent of the vote.

The vast majority of Iranians consider his election legitimate. The regime remains secure in power, and its president represents the will of its people far more than his opponents do.

In our enthusiasm to find others who appear to share our goals, we have allowed ourselves to be fooled into believing that anybody we dislike is by necessity illegitimate, that our enemy's enemy is our friend, and that anybody who talks the talk of democracy is a democrat. Our interests have suffered as a result, and so have those of our alleged allies.

The most notable example is the hope extended to both Ukraine and Georgia that they might someday join the North Atlantic Treaty Organization (NATO). In the case of Ukraine this was always a foolish idea, since the vast majority of Ukrainians oppose NATO membership. By promoting the concept, the West merely accentuated divisions within the country, while undermining the credibility of the government it claimed to be supporting.

If that was not bad enough, in the Georgian case the belief that he enjoyed NATO support seems to have played a crucial role in encouraging Saakashvili to launch his ill-judged war against Russia.

In the meantime, the mistaken belief the Green revolution will bring the Iranian regime to its knees is encouraging many in the U.S. Congress to ramp up sanctions against Iran. With the regime about to fall, now is not the time to relax the pressure, the logic goes. The result, sadly, will be further diplomatic stalemate. The regime will most likely not fall, and any chance of serious engagement will be lost for a long time.

The result of the Ukrainian election gives us the chance to put these errors right, to recognize the world is more nuanced than we have chosen to admit, and to stem our arrogant pride that history is marching inevitably in our direction. Given the revolutionary origin of their country, Americans might be excused for swallowing the myth of the colour revolutions. Given the more conservative and anti-revolutionary origins of our own, we Canadians ought to be more cautious.  
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17.  UKRAINE: RETURN OF THE GOODFELLAS

Inform: Newsletter for the international community providing views
and analysis from the Bloc of Yulia Tymoshenko (BYuT)
Kyiv, Ukraine, Monday, Feb 22, 2010

KYIV - Eagle-eyed reporters attending the celebrations at Viktor Yanukovych's election night headquarters were quick to notice some very familiar faces. Mingling in the crowd were oligarchs who bankrolled and supported Mr Yanukovych. For them, it's now payback time.

Anyone who knows anything about Ukrainian politics will tell you that behind Mr Yanukovych is an oligarch elite. They, and not Mr Yanukovych's grass-roots party members, determine the direction of his Party of Regions and it is they who will determine the direction of his presidency. Tragically, a Yanukovych presidency will serve to entrench the domination of Ukraine by this fabulously wealthy elite. So how has it come to this?

TOO COZY A RELATIONSHIP
Sadly, the much vaunted Orange Revolution slogan of "Bandits to Prison!" was never realised by President Viktor Yushchenko. Nor was the policy of an amnesty for illegal activities undertaken by businessmen in the transition to a market economy in the 1990s. And later, Ukraine's oligarchs thrived under President Yushchenko. The 2005-2006 government of Prime Minister Yuriy Yekhanurov enjoyed a warm relationship with the "national bourgeoisie," as he described them.

Mr Yekhanurov was the head of the State Property Fund in the 1990s when the oligarchs amassed their wealth. This maybe explains the coziness of this relationship and why today he is in the frame as a candidate for prime minister if a grand coalition is established.

President Yushchenko's failure to move against the oligarchs may also have something to do with his close links, and those of his brother, to the opaque gas intermediary RosUkrEnergo. Both Dmitry Firtash and Ivan Fursin - the Ukrainian half of RosUkrEnergo - supported Mr Yanukovych's campaign. As did Viktor Baloha, Mr Yushchenko's acerbic former chief of staff.

Mr Baloha went as far as campaigning for Mr Yanukovych in Transcarpathia. Suspiciously, Mr Yanukovych came first in Mr Baloha's hometown district of Mukachevo - the only West Ukrainian region Mr Yanukovych won in the second round.

While everyone enjoys a good conspiracy theory, in Ukraine you don't have to look hard to find solid evidence. After all, the country's oligarchs have become accustomed to being brazen. For example, on 9 January Ukrayinska Pravda analysed a meeting of five leading oligarchs in a French ski resort to discuss who they should back in Ukraine's 2010 elections.

Their decision was to support Mr Yanukovych. These included the top oligarchs in Ukraine's economy, including Messrs Igor Kolomoysky, Dmitry Firtash, Kostiantyn Grygoryshyn (the major funder of the Communist Party) and others, all of whom fear a Tymoshenko presidency.

These and other oligarchs provided financial, media or administrative resources to Mr Yanukovych's election campaign. Now they will also seek to push the lawmakers they control in parliament to switch their allegiances to a new pro-Yanukovych coalition.

THE POWER OF AHKMETOV
 Ukraine's richest oligarch, Rinat Akhmetov, is the president of System Capital Management group which has diverse interests including metals and mining, power generation, banking and insurance, telecommunications, media and real estate. Mr Akhmetov was a major funder of Mr Yanukovych's election campaign.

This defied the arguments of some Western analysts who claimed on many occasions in the last five years, that he and the "pragmatic" business wing of the Party of Regions would break away from the populist, anti-orange Yanukovych, who has always been closer ideologically to former Communist Party voters who drifted to the Party of Regions.

Mr Akhmetov first entered parliament in 2006 because it gave him immunity from prosecution (he had not needed immunity during the Kuchma era). He is not a familiar Party of Regions face in the Verkhovna Rada and, according to Ukrayinska Pravda, was last seen in parliament about 30 months ago.

It is worth mentioning that the only Ukrainian oligarch who remained to some degree neutral in the election campaign was Viktor Pinchuk. This was reflected in the greater freedom provided to Prime Minister Tymoshenko on the three television channels he owns (ICTV, STV, New Channel).

Mr Pinchuk has gone further than any oligarch in transforming himself into a post-oligarch businessman and philanthropist. His arts foundation, Yalta European Summit and support for AIDS charities have gone a long way to rehabilitating his image both domestically and abroad. During the election campaign, Mr Pinchuk supported initially Arseniy Yatseniuk and then moved towards Serhiy Tihipko, a close colleague from Dnipropetrovsk. Nevertheless, Mr Pinchuk came into conflict with the 2005 Tymoshenko government over insider privatisation during the Kuchma era.

GATHERING OF THE CLAN
On election night, on 7 February, Ukraine's oligarchs came to pay homage to their new "Godfather," Mr Yanukovych, in the InterContinental Hotel (see Tetiana Nikolayenko's analysis and photographs in Ukrayinska Pravda, 8 February). Besides oligarchs, many of the old guard from the Kuchma  presidency came to show their support.

As Ms Nikolayenko reported, "Arriving to greet him as guests to the (Yanukovych) headquarters of the potential victor were completely odious personalities such as former Party of Regions deputy Oleh Kalashnykov," who was caught on camera beating up a journalist, and former Minister of Transport Mykola Rudkovsky, on trial for abuse of office during the 2006-2007 Yanukovych government.

These "odious personalities" included Sergei Kivalov, the disgraced head of the Central Election Commission during the fraud-marred 2004 election, who was bizarrely awarded a state honour by President Yushchenko. Also present were the discredited former Prosecutor-Generals Sviatoslav Piskun (the "guarantor" of the immunity pledge given to President Kuchma at the December 2004 roundtables) and Gennadiy Vasyliev, as well as the discredited television host Vyacheslav Pikhovshek, who is remembered for his anti-Yushchenko programmes on 1+1 channel in the run up to the 2004 elections.

Two oligarchs snapped at the InterContinental were the financier of the Communist Party Mr Grygoryshyn and RosUkrEnergo's Ivan Fursin.

A QUESTION OF GAS
The support of these oligarchs, many of whom would not look out of place in an episode of The Sopranos or the gangster movie Goodfellas, will come at a price. Perhaps one can understand why Mr Yanukovych is so eager to reopen the gas contract with Russia.

Most likely at stake is discounted gas, provided through an opaque intermediary, in return for geopolitical favours from Russia. Up for negotiation would be part ownership of Ukraine's gas transportation network, a strategic asset long coveted by Gazprom.

Mr Yanukovych has made reopening the gas contract a priority. Ever since being prime minister in 2002, he has supported the idea of a gas consortium with Russia. As Vladimir Socor wrote in Eurasia Daily Monitor (12 February), "Following Yanukovych's victory, RosUkrEnergo co-owner and Centragas beneficiary Dmitry Firtash is also laying claim to an ownership stake - hypothetically 9 percent - in Ukraine's gas transit system, in the event of its being shared out. Firtash is one of the main financial backers of Yanukovych's Party of Regions."

Also, one can expect Yuriy Boyko, often described as the "Godfather" of RosUkrEnergo, to return to the Cabinet, most likely as fuel and energy minister. Mr Boyko was set to be arrested in July 2005 by the Security Service, then headed by Oleksandr Turchynov, for abuse of office when he was head of Naftohaz Ukrainy in 2003-2004. But, President Yushchenko intervened and ordered a halt to the criminal investigation.

 It is hardly surprising that the old guard are celebrating Mr Yanukovych's election. As President Yushchenko said in the Italian newspaper Corriere della Sera, "Everything has now changed. I am satisfied that everything is returning back to normal."

Sadly for Ukraine there are few new faces surrounding Mr Yanukovych. The old gang is still present. So it is unfair to suggest a return of the Goodfellas. The reality is they never went away.

INFORM NEWSLETTER: For further information contact taras@byti.org.ua;
Questions or comments? Email us at nlysova@beauty.net.ua 
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18.  UKRAINE'S FUTURE WASN'T ORANGE, NOW IT IS A LOT MORE GREY
The pro-western 'revolutions' that were supposed to mark post-communist politics have failed to materialise

Analysis & Commentary: By Colin Graham, The Guardian, London, UK, Mon, Feb 8, 2010

The future for Ukraine used to be orange in 2004 and now it is a lot more grey, or, according to a lot of commentators, white, blue and red­ the colours of the Russian flag. Now that voters have almost certainly backed Viktor Yanukovich, the country's apparently pro-western stance that was supposed to have gripped the nation in 2004, with its hyped-up "orange revolution", doesn't seem to have occurred at all.

In 2004, Yanukovich was deemed to be history but now he is back, and with a vengeance, having won the presidential election against the charismatic but suspect figurehead, Yulia Tymoshenko.

Five years ago, we were told Ukraine was in thrall to a new dawn represented by Viktor Yushchenko, the leader who was facially disfigured by an alleged Russian-backed security service attempt to poison him. That didn't work, but Yushchenko hasn't done much to enhance his reputation since being in office.

He has just been humiliatingly ejected after garnering just 5% of the vote, with his first term marked by a spate of corruption cases, political failures and a broken economy. No new dawn then.

A particularly tiresome event has occurred again and again ever since the Berlin wall came down. Leaders feted by the west as representing a radical fresh outlook for their post-communist, eastern European countries have generally turned out to be little different to their predecessors. In 2004, it was often conveniently forgotten that Yushchenko had at one stage been an integral part of the political establishment he was then seemingly trying to oust.

The departing president at the time was the much-denounced Leonid Kuchma who had appointed Yushchenko as his prime minister five years before the "orange revolution".

In the background to all this, it is of course Russia that looms largest, and again a major western assumption is that the big bear is about to become some kind of malign beneficiary of the vote in Ukraine, rather than it being the people themselves who have just made an informed choice.

There looks to have been less interference from the US this time than happened in 2004, when a number of Washington-backed NGOs took an active part in events in Kiev. I met some of them when in Warsaw. They had just returned from Ukraine as election observers and I saw just how objective they had been.

One office was bedecked with dozens of orange banners, flags and scarves. But with a US president now in power who is less belligerent towards Russia than George Bush was, US interest in matters happening on Moscow's doorstep has been more subdued ­ not that we can assume Washington is exactly indifferent.

A good illustration of what is really at work in the west's dealings with the former communist bloc might be to look at Ukraine's neighbour, Belarus. Still ruled by hard man Alexander Lukashenko, he has nonetheless fallen out with the likes of Vladimir Putin over energy and other issues and, as a result, has become less "Europe's last dictator" than a man the European Union, for one, can deal with. Brussels' policy is now one of encouraging "change through engagement" ­ a dubious position given that Lukashenko has shown very few signs of lessening his grip on power.

This is the man who said that his state would "wring the necks" of protesters during the run-up to the 2006 presidential election if they took to the streets. And it wasn't an idle threat. Back then, I recall, over the border in Poland, the same NGOs that had backed Yushchenko mobilised themselves to protest Lukashenko's outrages against democracy.

 It will be interesting to see how active they are during the next election in Minsk. Meanwhile, the Belarussian president is free to move around Europe after an EU travel ban was lifted as thanks for his refusal to back Russia's recognition of South Ossetia and Abkhazia's independence.

At this rate, Lukashenko could indeed become the new darling of the west in the former Soviet Union, replacing Georgia's somewhat tarnished Mikheil Saakashvili after his assault on South Ossetia in 2008. His record on upholding democratic rights has also come under fire within his own country
and elsewhere.

And it was the Georgian president who got the ball rolling with these western-backed upheavals in the last decade. His "rose revolution" in 2003 was celebrated in Washington and other like-minded capitals as a huge victory for freedom, which it hasn't proved to be. The next year they were saying the same thing about events in Ukraine.

NOTE:  Colin Graham is a British freelance journalist living in Belgrade. He previously lived in Poland for six years and Russia for three
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19.  UKRAINE'S PRESIDENTIAL ELECTION, VIKTORY FOR THE BLUE CAMP
The election of Viktor Yanukovich is not as surprising as it may seem
A former convict, a stooge of Moscow and a gaffe-prone thug

The Economist print edition, London, UK, Thu, Feb 11, 2010

KIEV - THE big picture in Ukraine often looks clear and dramatic. In the 2004 orange revolution Viktor Yanukovich was the operatic villain. In the cast-list of Ukrainian politics he is a former convict, a stooge of Moscow and a gaffe-prone thug.

But in the latest act, on February 7th he became the democratically elected president, winning 49% of the vote, against 45.5% for the defeated prime minister, Yulia Tymoshenko.

Five years ago Mr Yanukovich had been the hand-picked successor to Ukraine’s autocratic leader, Leonid Kuchma, who rigged the election in favour of his protégé but sparked mass protests that brought Viktor Yushchenko and Ms Tymoshenko to power.

In the words of Mr Kuchma, the score has now been “annulled”. Mr Yushchenko, who spectacularly failed to govern the country well, has been kicked out. Ms Tymoshenko refuses to concede defeat, causing irritation in the Ukraine and the West. And Mr Yanukovich has (almost) become a champion of democracy.

International observers say the vote was honest, and the result was unaffected by a late amendment to the election law, vote-buying, the use of vanishing ink and four girls stripping naked at one of the polling stations. So while the orange revolution has run out of steam, its democratic legacy endures—even if it has brought Mr Yanukovich’s blue party to power.

But step closer to this scene and the images start to blur; orange and blue merge into grey. Mr Yanukovich’s comeback is exaggerated, largely because he never went away. In 2004 as today, his support came almost exclusively from the Russian-speaking and densely populated industrial east of the country, and the south. His party consistently won more votes than Ms Tymoshenko’s, and he briefly served as prime minister under Mr Yushchenko.

ELECTION LOST BY THE ORANGE COALITION
His narrow victory is thanks neither to his talents nor his popularity. The election was not so much won by his blue party as lost by the orange coalition. A deep economic crisis hurt Ms Tymoshenko as a prime minister. And Mr Yushchenko called on his few remaining supporters to vote against his former ally, depriving Ms Tymoshenko of crucial votes.

Ms Tymoshenko is contesting the election in the courts and demanding a recount in Mr Yanukovich’s core regions. Her bet is not that she can change the outcome of the election, but that by exposing violations she will undermine Mr Yanukovich’s legitimacy and energise her supporters for a future political battle.

In fact, with turnout lower than usual, and a higher vote choosing the “against all” option, only a third of the electorate cast their ballots for Mr Yanukovich. “The brightest and most active voters don’t want anything to do with either candidate,” says Yuri Levenets, a political scientist.

UKRAINIANS PLACE LITTLE TRUST IN YANUKOVICH
But though Ukrainians place little trust in Mr Yanukovich, the problems he has to solve are huge. Ukraine has a 12% budget deficit and is struggling to pay pensions and salaries. Lending by the IMF has been frozen, and according to Mr Yanukovich’s team, the only option in the short-term is to print money, which will inevitably fuel inflation (already in double digits).

Mr Yanukovich’s first task is to form a coalition in parliament. He wants to avoid fresh parliamentary elections and will try to win the backing of Mr Yushchenko’s party, which may not come cheap. Mr Yanukovich may appoint a caretaker prime minister, who will implement unpopular reforms, including raising heavily subsidised gas prices, freezing government projects and bringing more of the grey economy into the open to persuade the IMF to restart the lending.

Mr Yanukovich’s government team is stronger than those of Ms Tymoshenko or Mr Yushchenko. It includes competent and Western-trained economists such as Irina Akimova, the likely economics minister. The question, however, is whether this team has sufficient will and power to build institutions, push ahead with structural reforms and curb corruption.

YANUKOVICH IS NO VISIONARY REFORMER
Mr Yanukovich is no visionary reformer. He is the flesh and blood of the rent-seeking and corrupt system of government that has dominated Ukraine ever since its independence in 1991. As a governor of Donetsk he served the interests of his backer, Rinat Akhmetov, Ukraine’s richest man, who emerged the winner from the brutal wars for control of Donetsk steelworks and mines.

Yet, paradoxically, it is the interests of people like Mr Akhmetov that could yet force the government to implement reforms. None of the Ukrainian oligarchs secured their assets with kid gloves, but all of them now want to husband what they have and to enhance its value. They argue that property rights, stability and clear rules will increase the stockmarket value of their firms. “We must build an independent judiciary at any cost,” says Boris Kolesnikov, Mr Akhmetov’s associate and a deputy for Mr Yanukovich’s Party of the Regions who was briefly arrested after the orange revolution.

Despite such views, old habits will die hard. The practice of buying judges or appointing prosecutors to safeguard business interests is alive and well. The temptation to bend the rules again to win a valuable asset could prove too much to resist.

THE RUSSIAN QUESTION 
In Moscow Mr Yanukovich’s victory is seen as a victory over the West, and a belated vindication of Vladimir Putin’s decision to back him five years ago.

Mr Yanukovich is more at home in Moscow than in Brussels. He will almost certainly offer Russia’s Gazprom (along with a European firm) a deal to form a long-term consortium to operate Ukraine’s gas pipeline system in the hope that this will reduce gas prices and dissuade Moscow from building an alternative pipeline to bypass Ukraine.

That said, Mr Yanukovich will zealously guard the interests of Ukraine’s own tycoons, who see their future in the European Union, not in Russia. As one senior Ukranian diplomat put it, “A good relationship with Russia is also what Europe wants from us.”

Ukraine’s politics may be operatic, but do not expect a great redemption or a terrible retribution. The next scene is likely to be a muddle, with the protagonists making the best of a bad job.

LINK: http://www.economist.com/world/europe/displaystory.cfm?story_id=15501625
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20.  UKRAINE: BLOODLESS ORANGE
Ukraine's peaceful revolution turned sour because its leader was not ruthless enough

Editorial: The Economist, London, UK, February 13-19, 2010

LONDON - FIVE years ago in Kiev, as the snow fell, rock bands played and hundreds of thousands of people demonstrated for free elections and against corruption, Ukraine seemed poised to be transformed from a post-Soviet oligarchy into a modern democracy.

Yet on February 7th the disgraced loser of 2004-05, Viktor Yanukovich, won the presidency at the second attempt ­even if Yulia Tymoshenko, his opponent, is reluctant to concede.

The election result feels like an extraordinary betrayal of the orange revolution. Yet the seeds of this outcome were planted even as the orange throng triumphed. Ukraine is a case study in how to entrench the gains of revolution­ and how to squander them.

TOO QUIET BY HALF 
The revolution was mercifully peaceful; but it wasn't free. On the contrary, like all such upheavals it was hugely costly, not only or principally in money.

Viktor Yushchenko, the now-outgoing president, was swept to power but incurred heavy debts: to his allies, chief among them Ms Tymoshenko, heroine of the orange crowds; to other politicians, such as the Socialists, with whom he cut deals; to the businessmen who bankrolled his campaign; and to his enemies, who extracted concessions in exchange for going quietly.

In office, Mr Yushchenko paid up. He made Ms Tymoshenko prime minister (a position she held twice). Alas, the qualities that had made her a formidable revolutionary proved a liability in government. She was relentlessly self-promoting, short-termist and populist, as for example when she imposed price caps on fuel.

SOCIALISTS PUT IN CHARGE OF PRIVATISATION
Meanwhile the Socialists were put in charge of privatisation. Unsavoury businessmen were given jobs in the presidential administration. And the "bandits" whom Mr Yushchenko had promised to punish for various crimes ­not least the poisoning that disfigured him before the election of 2004 and the attempted rigging of the outcome­ remained free. One of the alleged villains, Mr Yanukovich, became prime minister in 2006-07 and will now be president.

Some of this was unavoidable. Mr Yushchenko faced a chaotic and venal parliament, a messy constitution and a cadre of politicians whose view of the proper authority of any given office depends on their chances of occupying it. Some of the compromises he made were necessary, if distasteful.

WRONG TO REGENE ON ALL THE PLEDGES HE MADE TO AVOID CONFLICT
It would be wrong for any leader in so fragile a country as Ukraine to renege on all the pledges he makes to avoid conflict. Mikheil Saakashvili of Georgia offers a good example of the opposite danger ­of how what can initially seem like satisfyingly firm government can slip into over-mighty rule.

All the same, Mr Yushchenko repaid his debts too generously. Corruption among his cronies earned his administration almost as bad a reputation for graft as the regime it replaced­ confirming the belief of many, especially in eastern Ukraine (Mr Yanukovich's stronghold), that all the pre-revolutionary talk of cleaner government was so much self-serving cant.

The failure to punish almost anyone for the serious crimes Mr Yushchenko had denounced, or to overhaul the courts, led to disillusion among his supporters and boldness among his enemies. The orange coalition was plagued by rivalries and contradictions, collapsing on several occasions under their own weight. Especially at the beginning, when circumstances were propitious, Mr Yushchenko should have been tougher.

PEOPLE AND ECONOMY OF UKRAINE HAVE BEEN THE LOSERS
Instead, his presidency was crippled by his revolutionary debts. Rather than curing the fractious pathologies of Ukrainian politics, Mr Yushchenko succumbed to them, failing to build the institutions that underpin democracy. The people and economy of Ukraine have been the losers.

It isn't all bad. Ms Tymoshenko appears to be contesting Mr Yanukovich's victory. Yet by recognising it, as she surely must eventually, she could still confirm what had seemed one of the revolution's gains: (relatively) free elections, respected by the losers. And by relinquishing her post as prime minister and going into opposition, Ms Tymoshenko could help Ukraine to avoid the paralysis and in-fighting that have plagued it for the past five years.

The rancorous cohabitations between her and Mr Yushchenko, and between the two Viktors, never worked. Ukraine badly needs a united government and a constructive opposition if it is finally to deal with its daunting economic problems.

And, in other ways, Ukraine remains a better and more civilised country than it was before the revolution. It has freer media and a more assertive citizenry. But those achievements have been won by the orange crowds, not by the politicians they once lionised. Peaceful revolution can be a wonderful thing. But the lesson of Ukraine is that, afterwards, their leaders need to continue the struggle.

LINK: http://www.economist.com/opinion/displaystory.cfm?story_id=15501600
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21.  UKRAINE: DOUBLE-SPEAK
The future president of Ukraine tries to prove to Russia that he is not
"pro-Western" and to the West that he is not "pro-Russian"

Nina Gugushvili, Vremya Novostey, Moscow, Russia, Thu, February 11, 2010

MOSCOW - Official results of the presidential elections were not announced in Ukraine yet. However, Victor Yanukovich already starts testing his forces in the role of the head of the state. Yesterday, he outlined the main goals of his future presidency in a statement published by the website of the Party of Regions and had an interview with CNN.

In his statement published on the website of the Party of Regions Yanukovich said, "Relations with Russia and CIS will be priorities for us. Our countries are closely connected by economy, culture and history. Our economies supplement each other. It is necessary to use these advantages for the sake of our nations."

The politician stated, "We will clear the bottlenecks of misunderstanding and old problems created during the years of "orange" power. I am convinced that we will be able to restore the due level of confidence between our fraternal nations for the mutual benefit. There are no problems between our countries that cannot be solved."

Along with this, in his television interview to CNN intended mostly for the Western audience the candidate for presidency explains that he is not a protegee or puppet of the Kremlin and in making of decisions in the role of the president of Ukraine he will be guided not by interests of Russia but by interests of his own nation. In this interview Yanukovich also emphasized that provision of stability of energy supply would be the main priority of Ukraine in relations with Russia.

Answering the question about membership of Ukraine in NATO, the leader of the Party of Regions who had formerly had a firm anti-NATO stance announced that Kiev "will continue cooperation with NATO but the matter of membership of Ukraine in this organization should be settled at a nationwide referendum." This stance does not differ from the stance of Victor Yanukovich who remains the president of Ukraine yet.

Yanukovich promised to unite Ukraine after the elections that split the country into two political camps and to lead the country to the group of 20 most developed economies of the world in ten years.

Yanukovich also outlined the goals of his activity in domestic policy. He called on his long-time opponent and rival at the presidential elections Yulia Timoshenko to quit the post of the prime minister voluntarily and to go into opposition. Yanukovich also said that a new parliamentary coalition would be formed in the parliament and the existing coalition including pro-presidential bloc Our Ukraine - People's Self-Defense, Bloc of Yulia Timoshenko and Bloc of Litvin should stop its activity.

The Party of Regions does not rule out that a new coalition will be formed in the parliament already next week and the government of Timoshenko will be dismissed. Experts presume that several members of the "orange coalition" will join the Party of Regions that has 172 votes and without them Yanukovich will not have majority in the parliament necessary for changing of the prime minister

So far, Yulia Timoshenko keeps silent, does not talk to the press and does not release statements. Along with this, the second candidate for presidency is evidently not going to surrender. Senior Deputy Prime Minister Alexander Turchinov, head of the electoral staff of Timoshenko, announced yesterday that falsification of presidential elections in Ukraine was proven legally. According to him, at several polling stations the team of Timoshenko managed to achieve re-calculation of votes and allegedly revealed falsifications in favor of Yanukovich.

Now the staff of Timoshenko demands re-calculation of results of the elections at 900 polling stations. Nonetheless, so far the struggle for votes is unfavorable for Timoshenko: the staff of Yanukovich already won 17 legal proceedings about lawsuits of Timoshenko regard breaches during elections in four regions of Ukraine.

AUR FOOTNOTE:  Several very seasoned, well-informed experts in Ukraine indicate the size of the election fraud in the presidential election was much larger than was reported by the international election observers and their organizations.  Such observers could only cover a small fraction of the total number of polling stations.  Most of the voter fraud in Ukraine is not really readily visible, of course, to international election observers and some of it is extremely difficult to track and prove legally without huge and extensive monitoring resources.  Finding ways to add 1 or 2 or 3% to ones vote count is not really that hard in areas where one party has almost total monopolistic power and control. The experts in Ukraine were very surprised that the international organizations gave such a total clean bill of heath to the election and that so many governments publically endorsed the findings before the election commission in Ukraine issued their decision. 
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22.  ELECTION IS OVER: WHO WILL HAVE TO PAY FOR UKRAINE'S FRIENDSHIP NOW?
Cost of the Matter - What is it going to cost Russia to deal with Ukraine run by Yanukovich?

Analysis & Commentary: By Sergei Strokan, Kommersant, Moscow, Russia, Tue, Feb 9, 2010

Very many might take Victor Yanukovich's triumph in the election as justice, recalling that it was the Orange Revolution in 2004 that cost him presidency then (and became a nightmare for Russian political technologists). "Now that Victor Yuschenko's rule is over and Ukraine will be run by a friendly and reasonable president, everything should be fine and dandy," very many people think.

Old irritants in the Russian-Ukrainian relations may be going - but only in order to be replaced with new ones. Unfortunately, there are no guarantees that Moscow will not be caught unprepared once again.

To a certain extent, official Moscow is bound to find things in general even more difficult now. It will have to answer a question that a hostile and anti-Russian president in Kiev spared it the necessity of answering until now. Here is the question: who is going to pay for the new friendship and what are the terms of this friendship?

Now that he is president-elect and soon to become president, Yanukovich has to show his followers that they were correct to elevate him. He has to show that he is way better than his predecessor ever was. To be able to do so, Yanukovich needs support.

For example, Yanukovich declared a war on poverty but wars (even ones on poverty) take money and money is one thing Ukraine does not have. Its foreign debt exceeds $100 billion. It follows that Kiev needs a substantial loan. Guess where Kiev will be looking for it first and foremost?

Besides, it is known that Yanukovich regards the gas prices premiers Yulia Timoshenko and Vladimir Putin agreed on as unfair. What does it mean now that Yanukovich is president-elect? An attempt to return to "friendly" prices, considering the new political configuration in Kiev?

At worst, the Russian-Ukrainian relations might end up emulating the relations between Moscow and Minsk, Belarus. Unfortunately for Russia, relations of this sort with Ukraine will be a pain even worse than they are with Belarus. Unlike Alexander Lukashenko in Minsk who makes decisions on a whim and never bothers to consult with anyone else. 

Yanukovich in his bargaining with Russia will be compelled to consider every move and gesture - for fear of being suspected of a conspiracy with the Kremlin and betrayal of the so called "European choice" as the strategy of development. Indeed, Ukrainian establishment and society will be scrutinizing his every step and word.

The situation being what it is, Moscow is bound to find itself unable to demand (or expect) too much from Yanukovich for fear of jeopardizing his position, not very secure to begin with.  In other words, it is more or less clear already what Russia has that Ukraine may want and probably will. And what does Russia stand to get in return? Nobody knows.
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23.  FRANCE'S VALENTINE TO RUSSIA
Why fortify Vladimir Putin's ability to menace his neighbors?
The rationalization is so ludicrous that even those proffering it must be embarrassed.

Lead Editorial: The Washington Post, Wash, D.C., Mon, Feb 15, 2010

ON ONE LEVEL, maybe it's not surprising that France would sell an ultramodern helicopter carrier to Russia's navy, even as Russia continues to occupy illegally a sovereign nation that enjoys, at least in theory, good relations with France. After all, times are tough.

Three-quarters of a billion dollars is three-quarters of a billion dollars. And France has never hidden its inclination to submerge principle when it comes to maintaining a profitable commercial relationship with the nation that supplies so much of Europe's oil and gas.

Still, we do find it surprising -- maybe because we remember French President Nicolas Sarkozy's role in brokering an end to the August 2008 conflict in which Russia invaded Georgia, its tiny neighbor to the south. Russia promised Mr. Sarkozy a number of things, among them that it would retreat to prewar lines and force levels.

Mr. Sarkozy trumpeted these promises as a great success of French diplomacy -- more accurately, of Sarkozy diplomacy. Then Russia promptly broke those promises, and it remains, to this day, in gross violation of the cease-fire agreement as it occupies swaths of Georgian territory.

So, yes, we find it surprising that Mr. Sarkozy's response to this Russian violation is to furnish the Russian navy with a vessel that, if deployed to the Black Sea, would make Russia far more capable of inflicting damage on Georgia the next time around, or on any other neighbor that has a coastline and happens to offend Vladimir Putin's sense of imperial entitlement.

In fact, last year the chief of Russia's navy boasted that with a Mistral class destroyer in his fleet, he could have subdued Georgia in 40 minutes instead of the 26 hours it took.

Some French officials have attempted to soften the blow by pointing out that the French navy has used this class of ships -- bristling with formidable weaponry of a technological caliber not available in Russia today -- for humanitarian missions.

The rationalization is so ludicrous that even those proffering it must be embarrassed. We hope so; Mr. Sarkozy himself seems to be immune to embarrassment.

LINK: http://www.washingtonpost.com/wp-dyn/content/article/2010/02/14/AR2010021402910.html
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24.  YALTA: PEACE OR APPEASEMENT?

Book Review: 'Yalta,The Price of Peace' by S.M. Plokhy
By Andrew Nagorski, The Wash Post, Wash, D.C., Sun, Feb 21, 2010

YALTA The Price of Peace
By S.M. Plokhy; Viking. 451 pp. $29.95

Like Munich, Yalta is much more than the name of a place: It's shorthand for a pivotal historical event with all the loaded emotional baggage of its consequences.

While Munich stands for appeasement to Hitler, Yalta stands for, in the most charitable interpretation, the West's reluctant acquiescence to Stalin's takeover of Poland and most of Eastern Europe -- or, to harsher critics, outright betrayal. Either way, Yalta set the stage for the division of the continent and the ensuing Cold War.

Harvard historian S.M. Plokhy has provided a rich new narrative of the eight days of meetings in the Crimean resort between Joseph Stalin, Franklin D. Roosevelt and Winston Churchill in February 1945. Drawing upon formerly secret Soviet documents and reports and memoirs from all three sides, he brings the conference and its key players to life, making a familiar story feel lively and fresh.

But he is far less successful in his goal of "peeling off the accretion of multiple layers of Cold War myth" about Yalta -- especially when it comes to his attempt to vindicate FDR's performance there.

What Plokhy labels myth is, in fact, the conventional view of Yalta that is largely supported by his own version of events. As he points out, the ailing Roosevelt made a fundamental mistake on his way to Yalta. Meeting Churchill in Malta, he refused to discuss a common strategy since he didn't want Stalin to think that the Western leaders had "ganged up" on the Soviet leader.

As Foreign Secretary Anthony Eden complained to FDR aide Harry Hopkins, this meant that the Americans and the Brits went into the conference with no agreement on "how to handle matters with a Bear who would certainly know his mind."

Roosevelt's other miscalculation was his longstanding belief that personal diplomacy could make Stalin more accommodating. The Soviet dictator was only too happy to play the gracious host to reinforce his guest's predisposition. Kathleen Harriman, the daughter of U.S. Ambassador Averell Harriman, noted the astounding preparations of FDR's suite at the Livadia Palace.

She reported that the rugs were changed four times, requiring the heavy Victorian furniture to be moved in and out at each try because "the Soviets just couldn't make up their minds which oriental colors looked best."

Roosevelt did secure two key commitments from Stalin: The Soviet Union would enter the war against Japan after Germany's defeat, and it would join the United Nations. But the first was clearly in Soviet interests, since it allowed Stalin to seize southern Sakhalin and the Kurile Islands from Japan and establish a sphere of interest in Manchuria.

STALIN AGREED TO TWO EXTRA SEATS, FOR UKRAINE AND BELARUS
As for his support for the future U.N., Stalin played his classic game of first demanding an outrageous price -- separate membership for each of the Soviet republics -- and then making it look like a concession when he agreed to "only" two extra seats, for Ukraine and Belarus.

On the central issue of Poland, Stalin didn't yield anything meaningful. The Soviet leader explained that, unlike tsarist Russia, he wasn't seeking to wipe Poland off the map -- although that had been precisely the result of the August 1939 Molotov-Ribbentrop Pact.

Instead, he would settle for seizing eastern Poland, locking in the territorial gains of that infamous Nazi-Soviet agreement. And he insisted on installing a communist regime to replace the London-based Polish government-in-exile. He pledged to hold elections that would include non-communists, but the results were preordained.

Plokhy maintains that there was little the Western leaders could have done to change that outcome, since Soviet troops were already in control of Eastern Europe. That's a familiar argument, not easy to dismiss. Plokhy's mistake is to go one giant step further by asserting that Yalta ensured "some elements of political pluralism" in Poland.

In reality, Poland's new communist rulers, backed fully by their Soviet masters, ruthlessly persecuted opposition leaders, terrorized their supporters and falsified the results of the parliamentary elections of January 1947, proclaiming an "overwhelming" victory.

Elsewhere, though, he harbors few illusions about what the conference's terms meant for Poland and others. One chapter is pointedly called "A Polish Surrender." His attempt to paint FDR in a more positive light looks more like a strained effort to offer a catchy new take than a serious revisionist thesis. Nonetheless, Plokhy's book makes for compelling reading -- for its details and drama, not its conclusions.

NOTE: Andrew Nagorski is vice president and director of public policy at the EastWest Institute and the author of "The Greatest Battle: Stalin, Hitler, and the Desperate Struggle for Moscow That Changed the Course of World War II."  [bookworld@washpost.com]

LINK:  http://www.washingtonpost.com/wp-dyn/content/article/2010/02/19/AR2010021902180.html
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25.  UKRAINE-RUSSIAN RELATIONS REMAIN UNCLEAR 
Ukraine's President-Elect to Visit Moscow

By James Marson, The Wall Street Journal, NY, NY, Monday, Feb 22, 2010

KIEV, Ukraine - Russian President Dmitry Medvedev called Viktor Yanukovych this weekend as soon as the Ukrainian president-elect's challenger dropped a legal battle to block his inauguration. According to the Kremlin, the two men agreed that Mr. Yanukovych would visit Moscow in early March. 

On Sunday, however, Mr. Yanukovych's aides declined to confirm or deny anything about a visit, though his Web site posted the Kremlin announcement. Hanna Herman, a legislator and a deputy leader of Mr. Yanukovych's Party of Regions, said the president-elect's first priority was to form a new government and deal with domestic problems.

The call from the Kremlin on Saturday signals Russia's interest in reasserting a preferential relationship with its former Soviet neighbor. But the reaction in Kiev leaves it unclear in which direction Mr. Yanukovych will tilt Ukraine, a country of 46 million wedged between Russia and the West.

Ukraine embraced a Western agenda after the 2004 Orange Revolution, when mass protests alleging electoral fraud overturned Mr. Yanukovych's tainted victory in that year's presidential election. Viktor Yushchenko won the revote and antagonized the Kremlin, which had openly backed Mr. Yanukovych, by pushing to advance negotiations to join the North Atlantic Treaty Organization and by supporting Georgia during its 2008 war with Russia.

In the recent campaign, the Kremlin played no favorite, and Mr. Yanukovych straddled the fence, calling for good relations with Russia and with the European Union. Ms. Herman had indicated last week that his first presidential trip abroad could be to Brussels.

The question of Mr. Yanukovych's foreign-policy priorities could complicate his effort to form a majority in parliament and replace Yulia Tymoshenko, his bitter rival in the presidential race, as prime minister.

Ms. Tymoshenko on Saturday dropped her court challenge to the results of the Feb. 7 election, clearing the way for Mr. Yanukovych's inauguration on Thursday. She said there was no point in pursuing the case after the Supreme Administrative Court refused to consider evidence she presented alleging vote falsification in favor of her opponent, who won by a margin of 3.48%.

As the political struggle moves to parliament, Mr. Yanukovych's opposition Party of Regions is trying to persuade two parties in Ms. Tymoshenko's fragile coalition to switch sides and oust her as prime minister. One of those parties, Mr. Yushchenko's Our Ukraine bloc, is divided: Its many nationalist supporters in western Ukraine are wary of Mr. Yanukovych because he has shown himself willing to take Russia's positions into account.

In interviews with Russian journalists last week, Mr. Yanukovych said he wouldn't pursue NATO membership and would consider prolonging an agreement to base Russia's Black Sea Fleet on Ukrainian soil. The Kremlin also wants Ukraine to join a customs union with Russia, Belarus and Kazakhstan, a step that could impede Kiev's talks on a trade agreement with the European Union.

Ms. Tymoshenko met with Our Ukraine lawmakers last week in an attempt to persuade them to stick with her coalition.

If Mr. Yanukovych fails to form a majority, he has said he would call early parliamentary elections. That prospect would prolong political uncertainty and further damage Ukraine's economy, which shrank 15% last year.  [Write to James Marson at j.r.marson@gmail.com]

LINK: http://online.wsj.com/article/SB1000142405274870379150457507 9384080188358.html?mod=googlenews_wsj
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26.  RAYTHEON JOINS U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
Technology and innovation leader in defense, homeland security and other government markets 

U.S.-Ukraine Business Council (USUBC), Wash, D.C., Fri, Feb 5, 2010

WASHINGTON, D.C.  -  Raytheon Company has been approved for membership in the U.S.-Ukraine Business Council (USUBC), the USUBC executive committee announced today on behalf of the entire USUBC membership of over 100 companies and organizations who have business operations, investments or other development programs in Ukraine. 

Raytheon, with 2009 sales of $25 billion, is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world.

With a history of innovation spanning 88 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With global headquarters in Waltham, Mass., Raytheon employs 73,000 people worldwide.
 
RAYTHEON IN UKRAINE SINCE 1994
Raytheon's representation office in Ukraine is part of Raytheon Technical Services Company, LLC (RTSC).  RTSC's Threat Reduction Office is active throughout the former Soviet Union and has been working in Ukraine since 1994, principally engaged in Strategic Nuclear Arms Elimination projects that were part of the Cooperative Threat Reduction (CTR) Nunn-Lugar Program.

RTSC also specializes in program management, supply chain management, information management, fleet maintenance, training, shipping, and procurement. RTSC has provided logistics support for NATO's Partnership for Peace "Peaceshield" exercises and has supported cooperative programs with the Ukrainian MOD and the State Border Guards and State Customs Services. Raytheon currently employees 95 Ukrainian and 10 expatriate employees in Ukraine.  Mark Beha is resident manager of the Raytheon office in Kyiv.

JOHN MILLER, DIRECTOR, INTERNATIONAL BUSINESS DEVELOPMENT
Raytheon will be represented on the USUBC board of directors by John Miller, Director, International Business Development: Europe, Israel, Sub-Sahara, Raytheon International, Inc. whose office is in the Arlington, VA office. John is a former top ranking U.S. military officer and has worked for Raytheon for over 10 years. John was elected as a new member of the USUBC Executive Committee at the annual meeting in December.

RAYTHEON COUNTRY MANAGER UKRAINE - MARK BAHA
USUBC has been working with Raytheon's Country Manager in Kyiv, Mark Beha for some time. Mark has worked in Ukraine for over 15 years on a variety of Raytheon projects, mostly in conjunction with the U.S. Defense Department contracts. USUBC has also worked with Bill Toti, VP, Raytheon Technical Services Company, in Reston, VA. 

More information about Raytheon can be found at www.raytheon.com.

USUBC is very pleased to have Raytheon as a member," said Morgan Williams, Director, Government Affairs, Washington Office, SigmaBleyzer Emerging Markets Private Equity Investment Group, www.SigmaBleyzer.com, who serves as President/CEO of the U.S.-Ukraine Business Council (USUBC).  

"Raytheon now joins with other aerospace and defense related companies who are members of USUBC such as AnaCom, Inc., Boeing; Defense Technology, Inc; DRS Technologies, Inc.; General Dynamics; Sweet Analysis Services Inc. (SASI); UMBRA and United Technologies (Pratt & Whitney)," Williams said. 

"USUBC now has a membership base of over 100 companies and organizations which allows USUBC, www.usubc.org, to provide its new members such as Raytheon with a full-time operation and a significantly expanded program of work," according to USUBC membership director, Iryna Teluk.   
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27.  ELI LILLY JOINS U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
Making medicines that help people live longer, healthier, more active lives.

U.S.-Ukraine Business Council (USUBC), Wash, D.C., Wed, Feb 3, 2010

WASHINGTON, D.C. -  Eli Lilly & Company, Indianapolis, Indiana, has been approved for membership in the U.S.-Ukraine Business Council (USUBC), the USUBC executive committee announced today on behalf of the entire USUBC membership of over 100 companies and organizations who have business operations, investments or other development programs in Ukraine. has asked to join USUBC. 

The company was founded by Eli Lilly in 1876, and is now the 10th largest pharmaceutical company in the world.  Lilly's global employees numbers over 40,000 with approximately 40,800 engaged in research and development.  Their medicines are marketed in 143 countries. Lilly has major research and development facilities in eight countries, conducts clinical trials in more than 50 countries, and has manufacturing plants located in 13 countries.

Lilly is consistently ranked as one of the best companies in the world to work for, and generations of Lilly employees have sustained a culture that values excellence, integrity, and respect for people.  Eli Lilly has been very active on the pharmaceutical market in Ukraine for several years.

JOHN STEELE, DIRECTOR, INTERNATIONAL AFFAIRS
Lilly will be represented on the USUBC board of directors by John Steele, Director, International Government Affairs, in the Washington office.  John recently transferred from working for Lilly in Vienna, Austria to Washington,  He has experience with the pharmaceutical market in Ukraine.  John was elected as a new member of the USUBC Executive Committee at the annual meeting in December.

SERGEY KALASHNYK, COUNTRY MANAGER, UKRAINE
Ludmyla Dudnyk, USUBC representative in Ukraine and Morgan Williams, USUBC President/CEO have been working with Sergey Kalashnyk, Lilly's Country Manager for Ukraine, Moldova, and Belarus for the past several months.  Sergey has supported USUBC activities, attended meetings and kept USUBC informed about the pharmaceutical market. 

Lilly and USUBC have been working together on joint industry actions designed to keep the pharmaceutical sector in Ukraine free of unnecessary governmental intervention and arbitrary price controls.  The government of Ukraine has taken some actions in recent months very detrimental in the long-run to the private pharmaceutical industry and Ukrainian consumers.

More information about Eli Lilly & Company can be found at www.lilly.com.

USUBC is very pleased to have Eli Lilly & Company as a member," said Morgan Williams, Director, Government Affairs, Washington Office, SigmaBleyzer Emerging Markets Private Equity Investment Group, www.SigmaBleyzer.com,, who serves as President/CEO of the U.S.-Ukraine Business Council (USUBC).  

"USUBC now has a membership base of over 100 companies and organizations which allows USUBC, www.usubc.org,  to provide its new members such as Eli Lilly & Company with a full-time operation and a significantly expanded program of work," according to USUBC membership director, Iryna Teluk. 
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28.  MOSCOW MAKES NEW DEMANDS ON UKRAINE AFTER YANUKOVICH'S VICTORY 

Window on Eurasia, Paul Goble, Vienna, Mon, Feb 22, 2010

VIENNA - Moscow has demanded that incoming Ukrainian president Viktor Yanukovich among other things end Kyiv’s contacts with the CIA and allow the FSB to return to Crimea, part of a more general effort by Russia to exploit the election outcome in Ukraine and an indication of what will be at stake there in the coming months.

 In an article in today’s issue of “Vlast’,” journalist Vladimir Solovyev, drawing on both Russian and Ukrainian diplomatic sources, describes Moscow’s pleasure at the election of Yanukovich and its expectations that he will reverse many of the “orange” policies of his predecessor Viktor Yushchenko (www.kommersant.ru/doc.aspx?DocsID=1323691).

BRINGING UKRAINE BACK INTO MOSCOW'S ORBIT
Russian Prime Minister Vladimir Putin, Solovyev notes, has not been able to hide his delight that Yushchenko will soon be out of office and that the “orange” revolution which brought him to office in 2005 will now be overcome, bringing Ukraine back into Moscow’s orbit.

Last week, when Kazakhstan President Nursultan Nazarbayev visited Moscow, Putin said that he well “remembers 2005 and those quasi-revolutionary events which took place in Ukraine.  Then, the leaders of this ‘color revolution’ used the dissatisfaction of people and their expectations for change.” Now, however, Ukrainians have recognized that they were “deceived.”

PLEASED BY DEFEAT OF YUSHCHENKO
An anonymous Russian foreign ministry source told the “Vlast’” journalist that Moscow was pleased “not so much by the victory of Yanukovich than by the defeat of Yushchenko” and by the ways in which this change represented a defeat of the American policy of “promoting ‘orange revolutions’ and democratic ideals.”
           
For us,” a Kremlin source said, “the main thing is that Yushchenko will no longer be ruling in Ukraine.” But unlike his foreign ministry counterpart, the Kremlin source indicated that Moscow was prepared to work with Timoshenko but feels that “it will be easier to resolve certain questions, such as the presence of Russia’s Black Sea Fleet in Crimea” with Yanukovich.

For Moscow, “Vlast’” continues, “the five year administration of Yushchenko is recalled in Moscow as a terrible dream,” and the paper says that “Russian diplomats are joking that February 7th (the date of the second round of elections in Ukraine) should be made a red letter day like May 9th.”

RUSSIA STRUGGLED NOT TO ALLOW UKRAINE TO ENTER NATO
Saved canonical unity of the Orthodox Church
That is because, one Russian diplomat told the paper, “the last five years became a test. We struggled in order not to allow Ukraine to enter NATO and to preserve our fleet there. [And] not without difficulty, we saved the canonical unity of the Orthodox Church,” by means of a complex “special operation.”

Last week, Solovyev continues, “Putin outlined Moscow’s expectations from the new Ukrainian powers that be: ‘We would like to hope that the difficult period in the life of the fraternal to all of us Ukrainian people is behind and that it will be possible to develop normal inter-government relations, to build plans in economics and strengthen social cooperation.”

RUSSIA HAS DELIEVERED A LIST OF WHAT IT EXPECTS FROM UKRAINE
Moscow has already delivered its list of what it expects from Ukraine, the “Vlast’” journalist says. On February 13, Sergey Naryshkin, the head of the Russian Presidential Administration, spent “about six hours together with Yanukovich” during which the Kremlin official outlined Moscow’s requirements for better relations.

According to a Ukrainian diplomatic source, Solovyev continues, Moscow has prepared “a whole list of concrete steps which the new powers that be in Kyiv could undertake as a sign of the renewal of the former friendship between the fraternal peoples.”  Moscow “would like,” the source continued, to see Ukraine’s security services drop its relations with the American CIA.

In addition, Moscow would like to “renew the work of the Russian FSB office in the Black Sea Fleet, the officers of which [Yushchenko] had required to quit Crimea at the end of last year.” And it has indicated that Moscow “expects” Yanukovich to “end any military cooperation with Georgia, a link that had flourished under his predecessor.

“All these questions in principle are in the competence of the president,” the Ukrainian source said, and consequently positive actions on them can become “gestures of good will by the new powers that be of Ukraine on the path to the full restoration of relations” between Kyiv and Moscow.

Naryshkin’s visit is the first sign Russia wants to restore high-level ties. And some in Kyiv expect President Dmitry Medvedev to come to Yanukovich’s inauguration on February 25th to show that relations have resumed in that way.  And he noted that some will remember that Medvedev was responsible for Ukrainian affairs at the time of “the orange revolution.”

Meanwhile in another Moscow comment on the shift in Ukraine, Avtandil Tsuladze in today’s “Yezhednevny zhurnal” writes that “even for people who are not professionally interested in politics, it is obvious that the US had surrendered Ukraine to Putin’s Russia in order to solve more immediate tasks – “sanctions against Iran and help for NATO in the Afghan war.”

But Tsuladze says, it is clear that the Americans are not going to get what they want either on those issues because “Russian ‘hawks’ consider the US to be their chief enemy,” and “their logic is simple: the worse things are for the United States, the better it will be for them (www.ej.ru/?a=note&id=9900).
           
Meanwhile, in another indication of the reordering of the Eurasian geopolitical space, the Russian state statistics committee has now shifted Georgia from the “near abroad” category to the “far abroad,” putting it outside of the area that Moscow has made clear it considers to be its immediate sphere of influence (www.kommersant.ru/doc.aspx?DocsID=1326396).
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29.  UKRAINE: A NEW YANUKOVYCH?

Analysis and Commentary: By Don Jensen
Poedinok, Cross Fire #11, VOA Website, Wash, D.C., Thu, Feb 11, 2010
  
Ukraine’s journey since the Orange Revolution is a good example of the historical principle of contingency.  Each of the protagonists in that drama – Yushchenko, Tymoshenko, and Yanukovych –  tended to act within the bounds of necessity, ambition, or precedent, thereby setting up new precedents for later leaders – and the country itself  -- to follow. 

Thus, the Orange Revolution and its aftermath were not staged or planned events, but a cumulative snowball of crises and developments that combined to remake the system that had ruled the country before 2004. 

The question that confronts Ukraine today, soon to be led by newly elected President Yanukovych, is how much the country has really changed after all that has happened.  It is also whether Yanukovych is true to the recent hype and has grown enough as a leader to deal successfully with Ukraine’s many problems.

The Yanukovych of 2009-10 tried, with the help of a slick stable of consultants, to portray himself as a new man.  Indeed, the recent election campaign manufactured a new set of stereotypes about him that deserve a closer look: that he is not as pro-Russian as his detractors have suggested; that – especially in comparison to his two rivals -- he has become more statesmanlike; that he, rather than Tymoshenko or Yushchenko – is more capable of balancing Ukraine’s traditional ties with Russia with Ukraine’s desire for closer integration with Europe; that his policies are more realistic and prudent for the country. 

Despite an unfortunate series of gaffes and a certain thuggishness that he was unable to fully dispel, Yanukovych made his case effectively enough to emerge victorious. .

A look at the election returns and beneath the packaging, however, raises at least three grounds for concern.

[1] First, the “new” Yanukovych was elected by less than 50% of Ukrainians.  Tymoshenko picked up a disproportionate amount of support in the second round of voting, suggesting that many voters were not convinced by the Yanukovich salesmanship.  In order to consolidate his presidency, Yanukovych will have to court this large swathe of the electorate. 

The job will not be easy, since Ukraine needs less, rather than more of the kind of economic populism that would appeal to these voters, populism which has so hurt the country in the past few years.

[2] Second, Yanukovych has yet to show that he is more than the creature of the powerful interests who have long backed him, chiefly big business oligarchs in eastern Ukraine.   The coming months are likely to be marked by a new round property redistribution in their favor.  In order to carry out needed reforms, he must curtail the oligarch’s influence, reduce corruption, and strengthen the rule of law.

Aggressively moving in this direction, however, could be political suicide, since it would undercut a pillar of his support (for this reason he is also unlikely to emulate Vladimir Putin and throw them in jail, even without attacking corruption).  His presidency may be further weakened by tensions and rivalries among the oligarchs, several of whom have little in common with one another other than opposition to Yanukovych’s predecessor. 

[3] Third, he is unlikely to be able to resist the growing influence of Russia.  I take seriously his earlier image as a friend of  Moscow.  Even if that were not true, however, the real problem is that Yanukovych is not that he may be pro-Russia.  It is that he is insufficiently pro-Ukrainian.  

He is tone deaf to matters of Ukrainian culture, language, history, and national identity.  This makes it unlikely that he will use his pro-Russia reputation to strengthen Ukraine’s sovereignty and national unity.

The key issue in this regard is not Yanukovych’s views, in any case.  It is attitudes in the Kremlin. It is highly unlikely that Moscow will lose interest in Ukraine anytime soon.  This is the case for geostrategic, economic and historic reasons, and because of the threat a pluralistic, democratic Ukraine poses by example to the Russian regime at home.  For the foreseeable future Russia is unlikely to abandon its ambition to recover Ukraine (even if de facto) in general and the Crimea in particular.

So, the proof of the new Yanukovych is not in the statesmanlike rhetoric, or the fancy ads.  It will be in whether he is committed to building political institutions out of the chaos of the past five years, whether he respects the media, fights corruption tolerates political competition and strengthens the courts.  Demonstrating that will take far more commitment than merely a well-oiled public relations campaign.
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30.  'THE SOVIET STORY': A MUST SEE DOCUMENTARY 
 
Analysis and Commentary: By Robert McConnell, Vice President, Armor Designs
Co-Founder of U.S.-Ukraine Foundation (USUF), Wash, D.C., Sat, Jan 27, 2010
  
WASHINGTON, D.C. - In May, 2008, "The Soviet Story" premiered in the European Parliament where it now has been screened several times.  Since then The Soviet Story has been screened on national television in 10 countries and has won several prestigious awards at film festivals. 

It has been seen by audiences in Belarus, Estonia, Georgia, Latvia, Lithuania, Israel, Slovenia, Spain, Sweden, and Ukraine. Screenings are pending for Australia, Asia, Greece, Italy, and Poland. In the United States, public broadcasting stations began screening the film in October 2009 and to date the film has been screened by 13 television stations, many of which are members of the PBS network.

And, last Friday clips of an interview with the writer/director, Edvins Snore, and numerous clips from the film were included and highlighted in an hour-long national special on the Fox Cable Network’s Glenn Beck show.

There is so much to say about "The Soviet Story" and why it is worthy of your attention and should be shown to audiences everywhere.  So much of 20th Century history has been forgotten, ignored and has or is being rewritten.  It is important to see things seldom talked about and see how events tie together that are seldom, if ever, tied together - - events that have significant relevance to the current world situation.

COLLABORATION BETWEEN NAZI AND SOVIET SYSTEMS
The documentary illustrates the close philosophical and political similarities and collaboration between the Nazi and Soviet systems in the years leading up to and during WWII, (as the war began and started to spread, the Axis Powers included the Soviet Union), the crimes of the Soviet Union, as well as, the impact of the Soviet legacy on modern day Europe.  The film shows recently uncovered archive documents revealing how the Soviet Union helped Nazi Germany instigate the Holocaust. 

Through interviews with western and Russian historians, members of the European Parliament and victims of Soviet terror, the film goes into shocking detail and uncovers new information about the following events:  the Great Purge, the Great Famine, Molotov-Ribbentrop Pact, Katyn massacre, Gestapo-NKVD collaboration, Soviet mass deportations and medical experiments in the GULAG. 

Edvins Snore’s research is thorough, his presentation precise and documented.  So, though official Russia has tried to discredit the film, the Kremlin has no genuine facts to counter "The Soviet Story."  The reality remains that Russia needs to come to terms with its past.  Not doing so retards its governance, diminishes its people and makes honest and open relations with its neighbors a very slippery slope. 

A Latvian native Snore, 35, is both the author of "The Soviet Story" script and the director of the film. "The Soviet Story" is his debut feature documentary.  As a Master of Political Science, Edvins Snore studied the subject and collected materials for the film over 10 years and then spent over two years filming in Russia, Ukraine, Latvia, Germany, France, the United Kingdom and Belgium.

EVERYONE SHOULD SEE "THE SOVIET STORY"
Everyone should see "The Soviet Story."  No serious student of history or public official facing the complex dimensions of current international affairs can afford not to do so.

NOTE: Link to buy CD of "THE SOVIET STORY": http://buyukraine.org/digiShop/cart.php?m=product_detail&p=323
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