"UKRAINE REPORT-2004"
In-Depth Ukrainian News and Analysis
"The Art of Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World"

"Reforms have stalled despite the accelerated economic growth in Ukraine
this year [2003]. The government failed to take advantage of the favourable
conditions in 2003 to drastically reform the public sector. The initiation
of tax and pension reforms in early 2003 did not last into H2'03.

We predict that in 2004, reforms will not accelerate either, because the
government's resources and efforts will be diverted to the election
campaign. In 2005, the new government will activate economic reforms, but
the positive effect of these reforms will show a bit later. The environment
will remain conducive to reforms in 2004-2005; economic growth will persist,
though it will decline from 8% to 6%." [article number one]

"UKRAINE REPORT-2004," Number 3
U.S.-UKRAINE FOUNDATION (USUF)
www.ArtUkraine.com Information Service (ARTUIS)
morganw@patriot.net, ArtUkraine.com@starpower.net
Offices in Washington, D.C. and Kyiv, Ukraine
THURSDAY, JANUARY 8, 2004

INDEX OF TEN ARTICLES

1.UKRAINE: MACROECONOMIC SUMMARY OF THE YEAR 2003,
PREDICTIONS AND CHALLENGES FOR 2004
ICPS Newsletter No. 214, International Centre for Policy Studies (ICPS)
Independent Public Policy Think Tank, Kyiv, Ukraine, Dec 29, 2003

2. UKRAINE MACROECONOMIC SITUATION, DECEMBER 2003
"Ukraine's excellent economic performance in the last three months of
the year should ensure that it will be among the best performing
countries in the world in 2003 in terms of GDP growth."
By Iryna Piontkivska and Ediberto L. Segura
SigmaBleyzer, Kyiv, Ukraine, January 5, 2003

3. USUF PUBLISHES INAUGURAL ISSUE OF "POTENTIAL"
A Business Journal Striving to Develop the Ukrainian Market
By Olenka Dobczanska, USUF Communications Manager
U.S.-Ukraine Foundation (USUF), Wash, D.C., Thur, Jan 8, 2004

4. UKRAINE'S DONBAS TO INVEST UP TO $181 MILLION IN POLAND
Reuters, Warsaw, Poland, Monday January 5, 2004

5. VOLIA SOFTWARE'S SOLUTION WINS FIRST PRIZE
IN UKRAINIAN SOFTWARE COMPETITION
www.ArtUkraine.com Information Service (ARTUIS)
Kyiv, Ukraine, January 8, 2004

6. UKRAINIAN PRESIDENT LEONID KUCHMA SENDS
CHRISTMAS GREETINGS TO NATION
One Plus One TV, Kiev, in Ukrainian, 6 Jan 04
BBC Monitoring Service, UK, in English, Jan 06, 2004

7. UKRAINIAN HOLIDAY FEAST BREAKS 40-DAY FAST
FOR UKRAINIAN CANADIANS IN SASKATOON AREA
Ukrainians Celebrate Christmas on January 7
By Dan Kinvig, The StarPhoenix (Saskatoon), Canada.com,
Saskatoon, Saskatchenwan, Canada, January 7, 2004

8. ORTHODOX MARK CHRISTMAS TODAY IN TORONTO
"In the Greater Toronto Area, 124,000 Orthodox Christians, including
Ukrainians, Serbians, Macedonians, Bulgarians, Russians..are celebrating
Christmas today." By Melissa Leong, Staff Reporter, Toronto Star
Toronto, Ontario, Canada, Jan. 7, 2004.

9. YULIA TYMOSHENKO: "THE OBSERVERS WILL HAVE
EVERYTHING THEY NEED: FLASHLIGHTS, AND EVEN
GAS-MASKS IN CASE THEY ARE POISONED WITH GAS"
[Yulia Tymoshenko Visited Canada and Came Back With An Idea]
Interview with Yulia Tymoshenko, By Volodymyr Aryev
Zerkalo Nedeli, Mirror-Weekly, Kyiv, Ukraine
Saturday, 27 December 2003 - 9 January 2004 year

10. "DEMOCRACY AND UKRAINE'S FUTURE"
Speech by U.S. Ambassador to Ukraine John Herbst
Institute of International Relations, Taras Shevchenko National University
Kyiv, Ukraine, Tuesday, December 23, 2003
=========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER ONE
=========================================================
1. UKRAINE: MACROECONOMIC SUMMARY OF THE YEAR 2003,
PREDICTIONS AND CHALLENGES FOR 2004

ICPS Newsletter No. 214, International Centre for Policy Studies (ICPS)
Independent Public Policy Think Tank, Kyiv, Ukraine, December 29, 2003
ICPS: http://www.icps.kiev.ua/eng/topics/

Reforms have stalled despite the accelerated economic growth in Ukraine this
year. The government failed to take advantage of the favourable conditions
in 2003 to drastically reform the public sector. The initiation of tax and
pension reforms in early 2003 did not last into H2'03.

We predict that in 2004, reforms will not accelerate either, because the
government's resources and efforts will be diverted to the election
campaign. In 2005, the new government will activate economic reforms, but
the positive effect of these reforms will show a bit later. The environment
will remain conducive to reforms in 2004-2005; economic growth will persist,
though it will decline from 8% to 6%.

GOVERNMENT FAILED TO USE ALL REFORM OPPORTUNITIES

The government of Ukraine failed to benefit from the favourable conditions
in 2003-the economic upturn, advantageous foreign economic situation, and
rapprochement with the EU, USA, and international organisations-and
undertake profound reforms of the economy's public sector. Following a
flurry of tax and pension reforms in H1'03, transformations took a slower
pace:

[1] The system of insurance payments to social funds, which is one of the
important factors driving the economy into the shadow, has remained
unaltered;
[2] No viable mechanism to resolve the problem of VAT non-reimbursement
to exporters has been developed so far;
[3] Tax benefits have not undergone any sizeable cuts;
[4] Protection of corporate and property rights has not been legislatively
secured;
[5] The switch from benefits to targeted monetary assistance, as well as
reforms in the housing and public utility sector, energy sector, and other
monopoly entities, have never been initiated.

With the lack of new progress in reforming the economy, the government has
even started to back down from what had already been achieved. Specifically,
the 2004 budget does not envisage several important measures for reforming
the pension system that were set forth in the new law on pension insurance.

In addition, the 2003 state policy often led to tighter government pressure,
which stymied private initiative. Notably, the Ukrzaliznytsia state railway
corporation and the State Customs Service worked actively against the export
of oil products, attempting to curb the price rises that negatively affected
the government, and the Cabinet of Ministers obstructed exports of coke coal
and scrap metal.

In addition, the government and local administrations took the whole year to
decide how to fix bread prices (and for what types) rather than pay more
heed to conditions at the State Committee for Material Reserves or sign
advance procurement contracts for grain imports to Ukraine.

In the meantime, continuing favourable external conditions, a stable
financial situation, and the government's focus on privatising large-sized
enterprises, as well as completion of commenced reforms give reason to hope
for persisting high economic growth. In our opinion, the main problem in the
work of the current coalition government is the lack of a coordinated reform
plan, which reflects the divergence of economic views of government
officials in charge of different sectors of the economy.

ECONOMIC DYNAMIC ASSUMED A BRISKER PACE IN 2003

The economic growth rate, which had dropped mid-year to 6% due to the sharp
downturn in agriculture, accelerated towards the end of the year, and over
January-November 2003 amounted to 7.7% in real terms. Growth factors, as
previously, include the expansion of foreign trade and increased purchasing
power domestically. Construction will continue to grow the most rapidly (25%
is the annual estimate), which is connected to the investment activity of
enterprises. The growth rate in industry accelerated to 15.5%, chiefly owing
to growth in the food industry, machine building, the chemical industry, and
metallurgy. We estimate that by the 2003 year-end results, GDP will grow by
8%.

Ukraine's foreign trade volumes increased sizeably. This was brought about
not only by a rise in the exports of raw materials and semi-finished
products, but by the high growth of machinery and equipment exports as well
(according to our estimate, the 2003 growth rate will be 35%), particularly
of vehicles (55%). Imports, in turn, grew not only owing to the high need
for energy in thriving industry, but also due to larger exports of goods of
investment demand.

The NBU reported that over the first nine months of 2003, merchandise
exports picked by 26% y-o-y, while merchandise imports increased by 30%.
Foreign trade in services also followed an upward trend, although at a
slacker pace. Over January-September 2003, service exports increased by
almost 13%, while imports thereof remained virtually unchanged. We predict
that this trend will generally persist till the year end.

Lively exports fostered an even greater openness of the Ukrainian economy,
with the export/GDP ratio reaching 60%. Therefore, the national economy is
getting increasingly vulnerable to the external market situation. This
entails two trends: (1) heightened risk of a fading economic dynamic if the
situation in major export markets deteriorates; and (2) stimulated
development of the domestic market.

On the demand side, accelerated investment was the most important factor in
speeding up the economic growth from 4.8% last year to 8% this year. Our
expectation is that the 2003 results will show a record-high growth of 20%.
We believe that the key factors behind the increased investments are
improved current financial status of enterprises and optimistic expectations
for economic development in the years to come. Traditionally, enterprises'
own money has been the main source of investment; that is why the increased
corporate profits observed this year have dramatically expanded the
investment opportunities of economic entities.

However, a sectoral analysis of investments shows irregular and unstable
investment activity. Investment in fixed assets are forging ahead in
transport and communications, light industry, metallurgy, and machine
building, while the chemical and pulp&paper sectors have even suffered cuts
in investment. Such a dynamic signals that stable production capacity
renewal trends remain out of reach and do not cover the entire economy.

In 2003, consumer demand grew by 10%; we consider the following to be key
factors behind it: (1) increased personal incomes; (2) better economic
expectations than last year; and (3) a more active usage of savings
accumulated in previous years.

MACROFINANCIAL STABILITY PERSISTS,
DESPITE ESCALATING INFLATION

The persisting financial stability has also been a reason for a strong
economic dynamic. A high current account balance of payments (over 3 billion
USD annually) has stimulated hard currency inflows to the country, thus
stabilising the hryvnia exchange rate, which the National Bank virtually
tied to the US dollar at 5.33 UAH/USD. In the meantime, in the light of the
worldwide trend to a weakening dollar, as well as an escalated inflation
rate in Ukraine's major trading partner-Russia-a perceptible hryvnia
depreciation is taking place in real terms, which first of all is
contributing to price competitiveness of Ukrainian exports.

Price and exchange rate stability has been facilitated by 100% replenishment
of budget revenues, which enabled to fully finance the Consolidated Budget
expenditures. However, for most of the year the government refrained from
doing so, apparently considering it more expedient to accumulate funds to
offset peak external payouts, and to raise minimum wages and pensions at the
year-end. Again, state capital investments suffered from incomplete
financing. This automatically diminishes the role of the public sector in
the economy under the circumstances when private investments are advancing
far more speedily. Underfinancing applies above all to local budgets;
meanwhile, the execution level of expenditures of the general fund of the
State Budget is almost 100% of the plan.

Over the year, the budget surplus has hit 2% of GDP and become one of the
causes of a liquidity crisis in the inter-bank market, whose peak came in
mid-November. Improved administration of budget revenues and higher industry
and import growth rates compared to GDP pushed the share of GDP
re-distribution via the budget up to 28%. A better execution of the revenues
part compared to that of expenditures has to do with the accumulation of
large sums of money on the State Treasury's account. We expect that the 2003
Consolidated Budget will be executed with a 0.2% GDP surplus.

For the most of the year, the inflationary dynamic was calm, as well.
However, in autumn prices did begin to surge; we explain this burst of
inflation largely by an increased production cost of flour, bread, and meat,
due to the higher prices for imported grain, as well as partial price
liberalisation for flour and baked goods during October-November 2003. Since
the beginning of the year, prices on flour and baked goods have skyrocketed
by 72% and 27%, respectively. In addition, price rises were also triggered
by the overheating economy. According to preliminary estimates, consumer
prices will have increased by 8.5% at YE'03.

In a bid to curb inflation and the demand for currency, the National Bank
resorted to a tighter monetary policy. This led to a leveling-out of the
demand-supply equilibrium in the inter-bank forex market, as well as
dampened the lending rate. According to our estimate, in 2003 the growth
rate of the banks' deposit base and of their credit portfolio will roughly
equal 60%.

CHALLENGES IN 2004

We are pessimistic about the prospects for continuing reforms. According to
our assumptions, the pro-government coalition will retain its power over the
parliament and executive government till October 2004, with the composition
of the coalition and the government majority remaining unchanged, though
certain ministers are likely to be reshuffled.

The quality and results of the state policy pursued by the current coalition
still will not be high enough, and most reforms will be tabled at least
until the election, because the government fails to understand their
importance and also because of pressure from influential business groups.
Such reforms may be initiated by the new president already in 2005, though
their tempo and quality will depend on the personality of the new head of
state.

We predict that government activity in 2004 will be aimed at stimulating
final consumption and finalising the reforms already launched, rather than
at investments and new unpopular reforms. This will help to retain the
rather high GDP growth rate; however, it will no longer be supported by such
a strong foreign economic situation as this year. Therefore, ICPS leaves
unaltered its forecast for real GDP growth in 2004, at 6.5%.

A slower growth rate of real personal incomes at the end of 2003 will bring
about a negligible decrease in consumption next year from 10% to 9%; at the
same time, investment growth will stall perceptibly, sinking from 20% to 8%,
which we attribute to the following: (1) the factor of the presidential
election; (2) slowed export growth; and (3) decelerated bank lending to the
economy ensuing from the accelerated inflation at this year-end and a
tighter monetary policy.

In light of the presidential election, the government will stimulate final
consumption and even increase budget expenditures up to 28.5% of GDP, in
order to fully honour its social obligations.

Cuts in the corporate profit and personal income tax rates will drive down
budget revenues, from this year's 28% to 27% of GDP next year. However, the

government will be able to finance the 1.5% deficit of GDP at the expense of
foreign borrowings and privatisation. We expect the increased budget deficit
to reanimate the market of domestic public borrowing.

We believe that the 2004 budget is an unsuccessful attempt at a compromise
between long- and short-term government objectives, namely, reforms
undertaken and increased social outlays prior to the presidential election.
On the one hand, the document envisages a raise in the minimum wage and
increased spending on subsidies and assistance. On the other, it still
offers no solution to the problem of the quality of budget expenditures.

The focus on macrofinancial stability will persist. The price growth rate,
in the light of a better harvest expected in 2004, will diminish to 6%
y-o-y. The National Bank will continue to buoy a stable UAH/USD exchange
rate. Sizeable foreign debt repayments and the risk of escalated inflation
will impede the liberalisation of the financial sector, which is one of the
key requirements of the World Trade Organisation. Our opinion is that the
National Bank will only abolish sectoral restrictions right before the
accession to the WTO in 2005.

In 2004, the major challenge of Ukraine's foreign economic policy will be
the European Union's enlargement. This time, another ten countries will
adopt the EU's common foreign economic policy, which will dramatically
affect Ukrainian exports to these countries. In 2004-2005, Ukraine will also
be missing out due to non-tariff restrictions, which will do away with the
positive effect from the liberalisation of custom tariffs. According to our
estimates, Ukraine's exports to candidate countries in 2004-2005 will shrink
by 320-340 million USD annually. (END) (ARTUIS)
LINK: http://www.icps.kiev.ua/eng/topics/
========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER TWO
=========================================================
2. UKRAINE MACROECONOMIC SITUATION, DECEMBER 2003

By Iryna Piontkivska and Ediberto L. Segura
SigmaBleyzer, Kyiv, Ukraine, January 5, 2003

"ECONOMIC GROWTH"

"Ukraine's excellent economic performance in the last three months of the
year should ensure that it will be among the best performing countries in
the world in 2003 in terms of GDP growth. In November 2003, Ukraine's
real GDP grew by 12.1% yoy, following growth rates of 12.3 yoy in October
and 15% yoy in September. During January-November, Ukraine's GDP
grew by 7.7% yoy supported by an expansion of 15.5% yoy in industrial
output and a marked growth in construction of 23.0%."

NOTE: To read the entire Ukraine Macroeconomic Situation, December
2003 report click on: http://artukraine.com/econews/MACRO-Dec03.pdf.
=========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER THREE
=========================================================
3. USUF PUBLISHES INAUGURAL ISSUE OF "POTENTIAL"
A Business Journal Striving to Develop the Ukrainian Market

By Olenka Dobczanska, USUF Communications Manager
U.S.-Ukraine Foundation (USUF)
Washington, D.C., Thursday, January 8, 2004

Washington, D.C. -- The inaugural issue of POTENTIAL, "Where Business
Opportunities are Endless," the U.S.-Ukraine Foundation's [USUF] newest
bi-lingual publication, has been printed in Ukraine. POTENTIAL is a journal
that promotes business and economic development in Ukraine by creating and
sustaining communication and cooperation between Ukrainian, American and
international businesses, educational institutions and government agencies.

POTENTIAL strives to be timely by reporting on current business news and
events and by analyzing current trends and developments in the Ukrainian,
American and global economies. But POTENTIAL hopes to also become a
unique and essential business reference guide for leaders in government and
business by publishing directories of businesses with contact information
and how-to articles on various aspects of conducting successful businesses.

The publication is produced in the Washington offices of the U.S.-Ukraine
Foundation by Managing Editor John Kun, USUF Senior Advisor Morgan
Williams, and Manager of USUF's Economic Development Program Irene
Mokra. Staff members who worked on the first issue included USUF summer
interns Andriy Shekhovtsov and Lyudmyla Polyun, USUF Program Associate
Miriam Bates, USUF Adminstration Associate Marko Serbinsky, as well as
interns Yuriy Piskalyuk and Olga Sukhanova.

The inaugural 52-page issue introduces the editorial team and gives an
overview of the Foundation's [USUF] programs. Greetings and congratulations
from important players who promote U.S.-Ukraine and international business
are interspersed throughout the issue. They include messages from Anatoliy
Kinakh, President of the Ukrainian League of Industrialist and Entrepreneurs
and the Federation of Employers of Ukraine; Congresswoman Marcy Kaptur
of Ohio's 9th District; Kostyantyn Gryshchenko, Minister for Foreign
Affairs of Ukraine; Tim Honey, Executive Director of Sister Cities
International; and Charles Grassley, U.S. Senator from Iowa and Chairman
of the U.S. Senate Committee on Finance.

Each new issue will contain an overview of the latest developments in
Ukrainian trade and business relationships. The variety of articles that
will be contained in each issue is intended to appeal to a wide audience.

Feature articles will highlight a company or institution along with an
interview with a company representative. For example, the first issue
contains an interview with Jed Sunden of KP Publications, which counts the
Kyiv Post among its publications and with Yaroslav Lyubinets of Soft-Serve,
Inc., a Lviv-based software company that is successfully operating in
Eastern Europe and the United States. There are also interviews with
Michael Considine, BISNIS Trade Specialist for Ukraine and Moldova at the
U.S. Department of Commerce, and Natalka Jaresko, President and CEO of
the Western NIS Enterprise Fund.

POTENTIAL will also contain very practical articles designed to serve as
reference material for people interested in business ventures in Ukraine.
How-to articles in the first issue include one by Nestor Scherbey on "How to
Export to Global Markets". Former U.S. commercial attache in Kyiv Andrew
Bihun provides suggestions on how do business with U.S. companies in "An
Overview of Cooperation between Ukraine and U.S." Valuable reference
information can also be found in articles which list opportunities for
internships and study in the U.S. available to Ukrainians, a guide to
selected U.S. government projects currently underway in Ukraine, and an
overview of industries, the business climate and opportunities in the U.S.
state of Iowa.

"Through POTENTIAL, I hope you will see the U.S.-Ukraine Foundation
[USUF] as an NGO [non-governmental organization] that is deeply committed
to Ukraine's democratic future. I believe we can offer information that will
be valuable and useful to Ukrainians, Americans and others in the
international arena, and that we can bring more political and business
attention to support Ukraine's democratic development," says editor
John Kun.

If you would like to receive a free copy of POTENTIAL, "Where Business
Opportunities Are Endless," contact the Foundation [USUF] by mail, phone
(202-347-4264) or e-mail (bizlinks@usukraine.org). The Foundation [USUF] is
looking for feedback in order to improve subsequent issues of this unique
publication. We would like to hear your ideas and insights. We ask for
your cooperation and support. Join a growing community of people on both
continents who contribute to POTENTIAL'S mission to promote Ukraine's
business and economic development through ties to the U.S. and other
international business communities. (END) (ARTUIS)
----------------------------------------------------------------------------
For further information contact: Olenka Dobczanska, USUF,
733 15th Street, N.W., Suite 1026, Washington, D.C. 20005
Telephone: 202-347-4264, Fax: 202-347-4267
E-mail: olenkad@usukraine.org, http://www.usukraine.org
=========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER FOUR
=========================================================
4. UKRAINE'S DONBAS TO INVEST UP TO $181 MILLION IN POLAND

Reuters, Warsaw, Poland, Monday January 5, 2004

WARSAW, Jan 5 (Reuters) - Ukraine's Donbas Industrial Union will invest
up to 673 million zlotys ($181 million) in debt and equity of a Polish
company as a vehicle for acquisitions in the future EU member state, a
Donbas representative said on Monday.

Last week Polish meatpacking equipment maker Pekpol (PEKP.WA), which
had suspended operations and was to be liquidated, said it would issue up to
273 million zlotys in new shares and up to 400 million zlotys of bonds for
Donbas.

Donbas is bidding for steel mill Huta Stali Czestochowa, with an annual
capacity of 0.8 million tonnes, in a privatisation tender for which result
may be announced this week. "(The size of the issue) will depend on Donbas's
development and plans in Poland," Donbas spokeswoman Magdalena
Kolodziejczyk told Reuters, adding that for the moment the company has
no plans for acquisitions other than the Czestochowa mill.

Donbas recently bought Hungary's Dunaferr steel mill in a $615 million deal
analysts say will give it a foothold in the European Union (News - Websites)
when 10 countries including Poland and Hungary join the trading bloc in May.

Steel is a leading Ukrainian export industry and one of the stars of its
lacklustre economy. Steel and metal products account for about 37 percent
of Ukraine's exports.

In recent years Pekpol, whose market cap is less than $2 million, has
announced various unsuccessful rescue plans including investments in
software, mobile telephony, broadcasting and insurance. (END) (ARTUIS)
=========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER FIVE
=========================================================
5. VOLIA SOFTWARE'S SOLUTION WINS FIRST PRIZE
IN UKRAINIAN SOFTWARE COMPETITION

www.ArtUkraine.com Information Service (ARTUIS)
Kyiv, Ukraine, January 9, 2004

KYIV........Volia Software's solution "Preparation of Meetings"
has been recognized as the best software product for business activity
automation at the Ukrainian nationwide software contest "Soft Regatta
2003" held in December, according to Yuri Sivitskiy, vice president for
marketing at Volia Software.

Volia Software, with headquarters in Kyiv, has taken prizes at the
"Soft Regatta" competition ever since 2000, when its "Megapolis Platform"
became the winner in the "Best Application Development Tools and
Programming Languages" nomination.

The "Soft Regatta" competition has been held annually since 1995. It is
well known among Ukrainian software developers and their colleagues from
abroad. The competition aims at determining and promotion of the best
software solutions developed by both young and well known Ukrainian
companies.

Volia Software is a U.S. based IT services company focused on delivery and
support of high-value business solutions. Founded in 1995 in Kyiv, with
offices in the U.S., Ukraine, and Switzerland, Volia Software today is a
team of more than 350 professionals with growth plans to exceed 500 by the
end of 2004 according to Yuri Sivitskiy, Volia's marketing vice president
and one of the founders of Volia Software (formerly Softline).

Volia Software is an ISO 9001:2000 certified quality system provider
specializing in development, implementation and support of software
applications, package integration, and application management across the
business process spectrum. Houston, Texas based SigmaBleyzer is a major
equity investor in Volia Software through their Ukrainian Growth Funds
(UGF).

For further information about Volia Software contact Yuri Sivitskiy at:
yuriss@softline.kiev.ua; http://www.volia-software.com/
=========================================================
"WELCOME TO UKRAINE" MAGAZINE
Just A Great, World Class Magazine about Ukraine, In English
http://www.artukraine.com/travel/wumagazine.htm
=========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER SIX
=========================================================
6. UKRAINIAN PRESIDENT LEONID KUCHMA SENDS
CHRISTMAS GREETINGS TO NATION

One Plus One TV, Kiev, in Ukrainian, 6 Jan 04
BBC Monitoring ServiceUK, in English, Jan 06, 2004

The followers of the Eastern Orthodox religion are marking a big holiday,
Christmas [on 7 January]. President Leonid Kuchma has traditionally sent
greetings to the Ukrainian people. The president of Ukraine said in his
message to the countrymen:

"Every year, this great day, which symbolizes a renewal of the world and all
of mankind, turns us back to eternal biblical commandments, urges us to be
tolerant, to have clear thoughts and to love one's neighbour. Throughout
centuries, the teaching of Christ has been uniting the Ukrainian people,
leading us through the darkness of statelessness.

Just as centuries ago, we greet the Christmas dawn by saying 'Christ is
born - let's praise his glory.' Let the birth of God's son always inspire us
to kind and noble deeds, let there be peace and joy in every home. May God
give us health, happiness and wellbeing." (END) (ARTUIS)
=========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER SEVEN
=========================================================
7. UKRAINIAN HOLIDAY FEAST BREAKS 40-DAY FAST
FOR UKRAINIAN CANADIANS IN SASKATOON AREA
Ukrainians Celebrate Christmas on January 7

By Dan Kinvig, The StarPhoenix (Saskatoon), Canada.com,
Saskatoon, Saskatchewan, Canada, January 7, 2004

SASKATOON......Father Taras Makowsky points to a blotch of food
on his ceiling over the dining room table. "That's where I usually sit," he
chuckles.

Each year, Makowsky throws a spoonful of boiled wheat thickened with
honey on the ceiling as part of his family's Ukrainian Christmas
celebration. "The more wheat that sticks to the ceiling, the more fruitful
the year," he said in an interview Tuesday, Ukrainian Christmas Eve.

Ukrainians celebrate Christmas on Jan. 7, a tradition that dates back to the
11th century, when the Catholic and Orthodox churches split. The Orthodox
church follows the Julian, rather than the Gregorian, calendar, and
Ukrainians have taken to celebrating their Christmas 13 days later than
other Christians.

Ukrainian Christmas is the climax of 40 days of fasting. Sometimes people
will not eat meat on Wednesdays and Fridays, or even for the whole 40-day
period. People give up "things that would have given us pleasure," Makowsky
says. "It's a good test on one's soul."

Makowsky believes Dec. 25 has become a very secular holiday, based on
materialism. "For us, (Ukrainian Christmas) is a much more spiritual
celebration," he says.

Ukrainian Christmas is loaded with spiritual symbolism. The Christmas Eve
feast consists of 12 meatless dishes, representing the 12 apostles of
Christ. The bread is braided in three strands, signifying the Father, the
Son and the Holy Spirit.

The Makowskys leave one place setting at their table empty to honour
deceased relatives. After a midnight mass, they return home to officially
break the 40-day fast.

Craig Zaychkowsky's tradition is to go carolling in his brightly coloured
Ukrainian dancing outfit. The 25-year-old bank employee, and other
members of the Yevshan Ukrainian Dancers, will walk to friends' houses
and sing for them in Ukrainian. They are often invited inside. "You eat a
ridiculous amount of food," he says.

Celebrating Christmas later helps to bring Ukrainians together, Zaychkowsky
says. "It's a good way to stay within the community. Everybody knows each
other."

For Audrey Matushewski, Ukrainian Christmas is all about family. "It's a
very nice blessing when you have all the family in," she says. If a family
member is missing, "it isn't the same." There are 75 people on Matushewski's
side of the family. "That's quite a crowd," she says. "There's no way you
can prepare that much food!" Makowsky estimates that there are 25,000
Ukrainians in the Saskatoon area. (END) (ARTUIS)
=========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER EIGHT
=========================================================
8. ORTHODOX MARK CHRISTMAS TODAY IN TORONTO
"In the Greater Toronto Area, 124,000 Orthodox Christians,
including Ukrainians, Serbians, Macedonians, Bulgarians,
Russians..are celebrating Christmas today."

By Melissa Leong, Staff Reporter, Toronto Star
Toronto, Ontario, Canada, Jan. 7, 2004

When it's Christmas Eve, you make it fit.

Last night, more than 1,000 people packed into the St. Mark's Coptic
Christian Orthodox Church to celebrate Christmas Eve according to the
Julian calendar. The oldest Coptic church in North America seats only 600.

People lined up plastic chairs in an adjourning community centre and set up
television screens to watch the evening mass. Some families came and left
early to make room for late-coming families.

"It's the most important thing to celebrate - the birth of Christ," said
Albert Anton, a church member of more than 30 years. "And you celebrate
it at church."

He's come every Christmas Eve since 1967. In the Greater Toronto Area,
124,000 Orthodox Christians, including Ukrainians, Serbians, Macedonians,
Bulgarians, Russians and others who follow the Julian calendar, are
celebrating Christmas today.

Many Eastern European countries celebrate Christmas on Jan. 7, in accordance
with the Julian calendar created by Julius Caesar. Most of the world uses
the Gregorian calendar, initiated by Pope Gregory XIII in 1582 as a
corrected version of the Julian calendar.

Anton attended church earlier in the evening to sign hymns and recite
praises in Arabic, Coptic and English. The four-hour long service began with
a procession of 80 deacons. The church was heavy with incense and song.
The deacons wore white robes with red stoles. They had gold, Coptic
crosses embroidered on them.

St. Mark's Church is building a massive $200 million complex in Markham
which includes a 1,000-seat church that will hold services in Egyptian, a
2,500-seat cathedral for English services and a private, non-parochial
school for about 375 students from Grades 1 to12. Church member Mofeed
Michael said St. Mark's congregation has grown from 23 families in 1964.

The Coptic Christian Orthodox Church is based on the teachings of the
evangelist St. Mark, who brought Christianity to Egypt in the first century
AD. There are about 35,000 orthodox Copts living in Toronto.

After the service, 43 days of fasting from meat and diary products ended in
a huge feast after midnight. Mina Gerges, 19, went to a family friend's
home to eat turkey and Egyptian cuisine. People also eat symbolic food such
as lamb, said Father Marcos Marcos, St. Mark's priest.

"Christ is the lamb of God that takes away the sins of the world," said the
73-year-old father of two. His daughter-in-law brought his grandchildren
from Malta to celebrate Christmas. People fast in other ways as well, Gerges
explained. "Your heart has to fast from sin," he said. "During the 43 days,
you want to become a better person."

Some families exchange gifts on Jan. 7. "We can shop on Boxing Day," Gerges
said. He planned to open presents under the Christmas tree this morning.
=========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER NINE
=========================================================
9. YULIA TYMOSHENKO: "THE OBSERVERS WILL HAVE
EVERYTHING THEY NEED: FLASHLIGHTS, AND EVEN
GAS-MASKS IN CASE THEY ARE POISONED WITH GAS"
[Yulia Tymoshenko Visited Canada and Came Back With An Idea]

Interview with Yulia Tymoshenko, By Volodymyr Aryev
Zerkalo Nedeli, Mirror-Weekly, Kyiv, Ukraine
Saturday, 27 December 2003 - 9 January 2004 year

Whatever happens in Ukrainian politics is one way or another related to the
coming presidential election. In fact, the whole year comes out of the lives
of higher legislative and chief executive bodies. Both supporters of the
government and those of the opposition are actively preparing for the
forthcoming election. Viktor Medvedchuk has visited Moscow to meet the
successor of his former patron, Aleksandr Voloshyn. Yet, at present,
Medvedchuk failed to achieve similar success with Medvedev. The key
work is at present.

Almost at the same time, Yulia Tymoshenko visited Canada and came
back with an idea to engage the Ukrainian Diaspora to observe the election.
Not 300 to 400 of its representatives, but at least 30-40 thousand. For the
time being, this is only an idea, since both the opposition and
parliamentary majority are busy with other things on the eve of the New
Year.

"------------------------------------------------------------"

NOTE: To read the rest of the interview with Yulia Tymoshenko click on:
http://www.mirror-weekly.com/ie/show/475/45058/
=========================================================
UKRAINE REPORT-2004, No. 3: ARTICLE NUMBER TEN
=========================================================
10. "DEMOCRACY AND UKRAINE'S FUTURE"

Speech by U.S. Ambassador John Herbst
Institute of International Relations
Taras Shevchenko National University
Kyiv, Ukraine, Tuesday, December 23, 2003

We are here today to discuss a very large topic: democracy and Ukraine's
future. Forgive me if I prove unable to give this subject the rigorous
treatment that it demands. I am a diplomat, not a political philosopher. But
as a representative of the oldest continuous republic on earth, and as a
friend of Ukraine, I have something to say.

Let's start with some basics. Since the Soviet Union fell apart, the U.S.
has supported the transition to democracy and a market economy in all the
Newly Independent States (NIS), including Ukraine. We have likewise
supported their complete independence and territorial integrity. At the same
time, the establishment of democracy is the stated policy of the Government
of Ukraine. It is one of the commitments that Ukraine takes on as a member
of the Organization for Security and Cooperation in Europe.

The Government has likewise declared its intent to seek integration into the
Euro-Atlantic community, including membership in NATO and the EU. This
community is the greatest collection of free societies that the world has
ever seen. Membership offers Ukraine an opportunity for freedom, prosperity
and security. All members of NATO and the EU, and those about to enter, are
democracies. That is a requirement for membership.

As Americans, we would like to see democracy flower here for two reasons.
First of all, the U.S. and Ukraine share many common interests. We would
like to establish a deep, long-term friendship and more, but that can only
happen if Ukraine is a true democracy. Secondly, we would like to see
long-term stability in Ukraine and history teaches that democracy, well
grounded in the ethos of an open society, is the best way to ensure both
enduring stability and felicity. That in turn will contribute to European
security and stability.

"-----------------------------------------------------------"

NOTE: To read the entire speech by U.S. Amb. Herbst click on:
http://www.artukraine.com/buildukraine/herbst3.htm
=========================================================
FOLK ART MAGAZINE: NARODNE MYSTETSTVO
A Great Magazine About Ukrainian Folk Art Culture....In Ukrainian
http://www.artukraine.com/primitive/artmagazine.htm
=========================================================
"UKRAINE REPORT-2004," No. 3: THURSDAY, JANUARY 8, 2004
In-Depth Ukrainian News and Analysis
TEN ARTICLES
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