"THE ACTION UKRAINE REPORT"
An International Newsletter
In-Depth Ukrainian News, Analysis, and Commentary
"The Art of Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World"
"THE ACTION UKRAINE REPORT" Year 04, Number 175
The Action Ukraine Coalition (AUC), Washington, D.C.
Ukrainian Federation of America (UFA), Huntingdon Valley, PA
morganw@patriot.net, ArtUkraine.com@starpower.net (ARTUIS)
Washington, D.C.; Kyiv, Ukraine, TUESDAY, September 28, 2004
-----INDEX OF ARTICLES-----
"Major International News Headlines and Articles"
1. "UKRAINE-U.S. RELATIONS HINGE ON FALL ELECTIONS"
COMMENT: By Richard Holbrooke, Jan Kalicki and Mark Brzezinski
Detroit Free Press, Detroit, Michigan, Monday, September 27, 2004
2. NEW DEFENSE MINISTER KUZMUK SAYS IT'S HIGH TIME TO
WITHDRAW UKRAINIAN CONTINGENT FROM IRAQ
UNIAN, Kyiv, Ukraine, Monday, September 27, 2004
3. MOROZ BELIEVES KUZMUK WAS APPOINTED UKRAINIAN
DEFENSE MINISTER TO USE ARMY FOR POLITICAL PURPOSES
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 27, 2004
4. KUCHMA SAYS UKRAINE'S MAIN FUTURE LIES WITH
RUSSIA AND ITS PARTNERS
United Press International, Kramatorsk, Ukraine, Mon, Sep 27, 2004
5. UKRAINE CANNOT AFFORD TO SHUT DOWN ITS MILITARY-
INDUSTRIAL COMPLEX IN ORDER TO JOIN NATO SAYS
PRIME MINISTER VIKTOR YANUKOVYCH
Supports dual citizenship and Russian as second state language
Inter TV, Kiev, Ukraine, in Russian, 27 Sep 04
BBC Monitoring, UK, in English, Mon, Sep 27, 2004
6. YUSHCHENKO WANTS TO SIMPLIFY PROCESS OF TOURIST
ENTRY INTO UKRAINE, USE TOURISM TO CREATE JOBS
"Press Service of Viktor Yushchenko," Kyiv, Ukraine, 27 Sep, 2004
7. UNION OF UKRAINIAN WOMEN URGES POLITICIANS TO
STOP ATTACKING YUSHCHENKO'S WIFE CHUMACHENKO
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 27, 2004
8. CIS TO SEND 600 ELECTION OBSERVERS TO UKRAINE
CIS observer hopes OSCE observers will also be objective
Source: TV 5 Kanal, Kiev, in Ukrainian, 27 Sep 04
BBC Monitoring Service, UK, in English, Mon, September 27, 2004
9. MIST TV AND RADIO COMPANY IN LVIV ASKS POLICE
TO PROVIDE GUARDS AFTER TWO ARSONS
Political terrorism related to Mist TV broadcasting Channel 5
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 27, 2004
10. QUESTIONS RAISED OVER 562,000 SIGNATURES COLLECTED
IN RUSSIA IN SUPPORT OF UKRAINIAN PRIME MINISTER
Vysokyy Zamok web site, Lviv, in Ukrainian 16 Sep 04
BBC Monitoring Service, UK, in English, Sat, Sep 25, 2004
11. UKRAINIAN PRIME MINISTER AND ELECTION HOPEFUL
GIVES RUSSIAN NEWS MEDIA PRIVILEGED BRIEFING
Yanukovych invites all Russian news media heads in Moscow to Kyiv
RTR Russia TV, Moscow, Russia, in Russian, 27 Sep 04
BBC Monitoring Service, UK in English, Mon, Sep 27, 2004
12. U.S. OVERSEAS PRIVATE INVESTMENT CORPORATION
CAN OFFER UKRAINE TWO BILLION IN INVESTMENT FUNDS
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 27, 2004
13. WESTERN NIS ENTERPRISE FUND ATTRACTS $40 MILLION
FROM OPIC FOR TWO LOAN COMPANIES IN UKRAINE
Western NIS Enterprise Fund, Kyiv, Ukraine, Mon, Sep 27, 2004
14.FALSIFICATION OF ELECTIONS ALREADY UNDERWAY IN UKRAINE
Officials laying groundwork for Yanukovych victory. Open violations
suggest the authorities never planned to hold a free and fair election.
By Taras Kuzio, Eurasia Daily Monitor
Volume 1, Issue 93, The Jamestown Foundation
Washington, D.C., Monday, September 27, 2004
15. EDITOR'S NOTE REGARDING THE ARTICLE: SAMUEL ADAMS:
UKRAINE'S CONTRIBUTION TO AMERICAN LIBERTY"
Several readers indicate they believe the article is not at all accurate
By Volodymyr Senchenko, The Ukrainian Observer, Issue: 199
The Willard Group, Kyiv, Ukraine, September 2004
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER ONE
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1. "UKRAINE-U.S. RELATIONS HINGE ON FALL ELECTIONS"
COMMENT: By Richard Holbrooke, Jan Kalicki and Mark Brzezinski
Detroit Free Press, Detroit, Michigan, Monday, September 27, 2004
Americans are increasingly focused on our pivotal presidential choice on
Nov. 2. But many may not be aware that partway around the world, at
the doorstep of an expanded Europe, the citizens of Ukraine will be
making an important choice in their Oct. 31 elections for president.
Ukrainians will decide whether a pro-Western reformer, Viktor Yush-
chenko, or a pro-Russian statist, Viktor Yanukovich, will be elected.
That choice is theirs and theirs alone to make. But friends of Ukraine
can certainly express concern about issues at stake.
The first issue is the freedom and fairness of the election process -- to
ensure that the power of the incumbent president, who cannot run again,
is not mobilized to suppress open debate and unfettered choice. There
is reason for concern, because oligarchic interests will likely try to stack
the political deck, and to protect ill-gotten gains from past and pending
privatizations.
The second issue affects the United States even more directly, for
Ukrainians will decide whether to support those who favor integration into
NATO and the European Union, or those who favor realignment with
Russia and Belarus, the latter already under the sway of an unsavory
dictator.
After meeting with Russian President Vladimir Putin last month, Ukraine's
President Leonid Kuchma amended his government's national security
doctrine to turn away from NATO and the EU. The impact was felt
immediately: Instead of continuing to plan to transport Caspian oil from the
Black Sea to central Europe and eventually the Baltic, Kuchma now plans
to transport Russian oil to the Black Sea and further congest the
environmentally sensitive Turkish Straits.
Both the EU and the Turkish government have expressed deep concern
about this development. But the Bush administration has been largely silent.
Our European and Turkish allies recognize the stakes. Will a country of 48
million people, almost the size of Texas, have the opportunity to pursue a
common destiny with its neighbors to the north and west? Or will Ukraine
take a course in which new lines could be drawn across post-Cold War
Europe? Will energy flows continue to be subject to control by Russian
monopolies, or will they reach markets competitively and support the
freedom of Ukraine and the Caspian states?
Strategically located between a newly assertive Russia and an expanded
NATO and EU, Ukraine can be a bridge to increased cooperation between
these two realms. Or it can create new grounds for division. What remains
to be seen is whether this pivotal European country will take the path of
reform or the path of increased state control. This decision will impact a
similar drama being played out between reformers and statists across the
vast expanse of Russia itself. The most important interest here is to create
durable political, economic and security ties engaging the Euro-Atlantic
community with both Russia and Ukraine.
Americans can make clear where we stand: with those in Ukraine
supporting free and democratic choice. With our European allies, we can
make clear that EU and NATO doors are open if Ukrainians choose the
path of integration and reform. But this brings us back to our own
elections in November. There is one candidate who believes in democratic
action, rather than ideology, and favors making common cause with our
allies. There is another who has failed to do so, to the great detriment of
America's vital national security interests. The stakes in the United
States, as in Ukraine, could not be higher. -30-
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Richard Holbrooke is former U.S. ambassador to the United Nations. Jan
Kalicki served as a White House counselor in the Clinton administration.
Mark Brzezinski served on the National Security Council as director for
Russia/Ukraine. Write to them in care of the Free Press Editorial Page,
600 W. Fort St., Detroit, MI 48226.
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http://www.freep.com/voices/columnists/eukran27_20040927.htm
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER TWO
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2. NEW DEFENSE MINISTER KUZMUK SAYS IT'S HIGH TIME TO
WITHDRAW UKRAINIAN CONTINGENT FROM IRAQ
UNIAN, Kyiv, Ukraine, Monday, September 27, 2004
KYIV - Newly-appointed Defense Minister of Ukraine Oleksander
Kuzmuk believes it's high time to withdraw the Ukrainian peacekeeping
contingent from Iraq. He has disclosed it to the Ukrainian service of BBC.
O.Kuzmuk thinks Ukraine has already fulfilled its historical mission, having
participated in the anti-terrorist operation as a part of the coalition
forces. Now Ukraine is still fulfilling the tasks.
At the same time, O.Kuzmuk emphasizes the temporary government was
created in Iraq to regulate the processes in the country, and the elections
are due in January. In this connection, Ukraine has a right to raise the
question of the gradual reducing of its contingent and finishing the mission
in Iraq.
Answering the question whether the military reform in Ukraine, initiated by
Yevhen Marchuk, will be altered, the new Minister has pointed out that the
military reform will be conducted in accordance with the adopted documents.
Answering whether his appointment will influence Ukraine's approach to
NATO, O.Kuzmuk has underscored that it is the official course of Ukraine,
and the Defense Ministry will support it. -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER THREE
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3. MOROZ BELIEVES KUZMUK WAS APPOINTED UKRAINIAN
DEFENSE MINISTER TO USE ARMY FOR POLITICAL PURPOSES
Ukrainian News Agency, Kyiv, Ukraine, September 27, 2004
KYIV - Socialist Party leader, presidential candidate Oleksandr Moroz
believes that Oleksandr Kuzmuk was appointed as minister of defense for
the purpose of using the army in reaching political aims. He said this to
voters in Fastiv, Kyiv region.
Moroz predicts that a force-like outcome of the election campaign is very
likely. He said Kuzmuk's appointment is aimed at taking votes of the army
personnel under control. "Why Kuzmuk was appointed? To tell who
should vote, how and for whom," the candidate remarked.
As Ukrainian News earlier reported, President Leonid Kuchma named
Kuzmuk defense minister on September 24. On July 3, Ukraine launched
the election campaign that must end the day before the voting day of
October 31. -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER FOUR
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4. KUCHMA SAYS UKRAINE'S MAIN FUTURE LIES WITH
RUSSIA AND ITS PARTNERS
United Press International, Kramatorsk, Ukraine, Mon, Sep 27, 2004
KRAMATORSK - Ukraine's economic future lies with Russia and its
partners, outgoing President Leonid Kuchma said Monday, Interfax news
agency reported.
Ukraine has been seeking to strengthen its trade ties with the United States
and the 25-nation European Union, but Kuchma who will be stepping down
after the coming Ukrainian presidential election chooses his successor, said
the country's main future still lies with its major partners in the
Russian-led Commonwealth of Independent States.
The country needs to continue cooperating in the Common Economic Space
of Russia, Ukraine, Belarus and Kazakhstan, Kuchma said while celebrating
the 70th anniversary of the Novokramatorsk Machine-Building Plant.
"Our future is in the competitive economy of mighty enterprises deeply
integrated with the system of the international labor division and the
economy of modern influential national and international financial and
industrial group," Kuchma said.
"I am pinning hopes on the development of relations with the four CIS
member countries, primarily Russia and the Common Economic Space,"
he said. -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER FIVE
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5. UKRAINE CANNOT AFFORD TO SHUT DOWN ITS MILITARY-
INDUSTRIAL COMPLEX IN ORDER TO JOIN NATO SAYS
PRIME MINISTER VIKTOR YANUKOVYCH
Supports dual citizenship and Russian as second state language
Inter TV, Kiev, Ukraine, in Russian, 27 Sep 04
BBC Monitoring, UK, in English, Mon, Sep 27, 2004
KIEV - Excerpt from report by Ukrainian Inter TV on 27 September:
[Presenter] At a meeting with the heads of leading Russian media
organizations, Prime Minister Viktor Yanukovych spoke of his intention to
introduce dual citizenship in Ukraine and to give Russian the status of a
second state language. Oleksandr Lukyanenko continues.
[Correspondent] There have never been so many chief editors of leading
Russian and Ukrainian media organizations assembled in one room before.
[Passage omitted: Yanukovych's health; Yanukovych says he wants to
introduce dual citizenship and make Russian a second language.]
[Correspondent] Yanukovych also said that it is not definite that Ukraine
will join NATO. It is much more beneficial to develop partnership relations
with the alliance. The reasons for this are purely economic. If Ukraine
joins NATO it would have to close down its military-industrial complex, and
Ukrainian cannot afford to close down an entire branch of its economy.
[Passage omitted: Russians discuss meeting.] -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER SIX
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6. YUSHCHENKO WANTS TO SIMPLIFY PROCESS OF TOURIST
ENTRY INTO UKRAINE, USE TOURISM TO CREATE JOBS
"Press Service of Viktor Yushchenko," Kyiv, Ukraine, 27 Sep, 2004
KYIV - "By promoting tourism we can solve the problem of unemployment
and first of all in those regions where it is the most urgent one," Victor
Yushchenko stated in his appeal on the occasion of World Tourism Day on
27 September.
The candidate for the presidency of Ukraine is convinced the "promotion of
tourism in Ukraine means dozens of thousands of jobs, growth of budgetary
funds and serious investments into the country's economy." He has emphasized
that one of the key issues of his Action plan "Ten steps for the people" is
the creation of five million jobs, and tourism comes in handy here.
Yushchenko believes it is necessary most of all to simplify the process of
tourist entry into Ukraine from the European Union states, Switzerland, the
USA, Canada and New Zealand, granting tourist visas at Ukrainian customs.
He has pointed out that Turkey, Egypt and other countries chose this way,
having turned into the world's leading tourist states.
Victor Yushchenko will create "favourable conditions for investing into the
tourism business." He promises to introduce a preferred treatment of small
and medium business' taxing within the tourist sphere in depressive regions,
and to direct a fixed part of taxes, imposed on the objects of tourist
business in each region, at the development of the tourist infrastructure of
this region.
Yushchenko also believes it is highly important to compile the National
tourist list of cultural and historical heritage of Ukraine such as, Sophia
Cathedral in Kyiv, Kamyanets-Podilsky fortress etc. According to
Yushchenko, it is necessary to consider both preserving our historical
heritage and funding the development of infrastructure about it and bring
it up to the world standards.
Victor Yushchenko will raise the status of the State tourist administration
of Ukraine and finance it fully. The main tasks of this state body are to be
tourism promotion in Ukraine, attraction of foreign sponsors, who
determined to invest into building and updating of tourist infrastructure's
objects in recreation area and about historic monuments in Ukraine. -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER SEVEN
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7. UNION OF UKRAINIAN WOMEN URGES POLITICIANS TO
STOP ATTACKING YUSHCHENKO'S WIFE CHUMACHENKO
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 27, 2004
KYIV - The All-Ukrainian social organization Union of Ukrainian Women
is calling on deputies of the Verkhovna Rada, presidential candidates and
leaders of political parties to stop attacking, terrorizing and accusing the
wife of presidential candidate Viktor Yuschenko, Kateryna Chumachenko,
of having antagonistic feelings for Ukraine.
The leader of the Lviv regional branch of the Union of Ukrainian Women
organization disclosed this to journalists, citing a letter addressed to
politicians.
"Daily destructive attack is carried out from the screens of the first
national [television channel] and radio broadcasts from the lips of the
figure-head presidential candidate Roman Kozak against a mother of three
young children, which is [breast] feeding a 5 months old baby. This is a
huge wrongdoing. This is a crime," it is mentioned in a statement.
It is stated in the message that these accusations also breach conventions
of the United Nations Organization. The Union of Ukrainian Women states
that Chumachenko has done very many things for the revival of Ukrainian
culture and education. The Union of Ukrainian Women has 16,000 members.
As Ukrainian News reported previously, Oleksandr Bazyliuk, the leader and
presidential candidate of the Slavonic Party, called on Rada in September to
prohibit those aspiring for the presidency to be nominated for this post if
members of their family are foreign citizens.
Bazyliuk had earlier called on Yuschenko to withdraw his candidacy from
the presidential elections, asserting that his wife, Kateryna Chumachenko,
is a citizen of the United States. -30-
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ACTION UKRAINE REPORT-04, No. 175: ARTICLE NUMBER EIGHT
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8. FORMER SOVIET REPUBLICS (CIS) TO SEND 600 PRESIDENTIAL
ELECTION OBSERVERS TO UKRAINE
CIS observer hopes the OSCE observers will also be objective
Source: TV 5 Kanal, Kiev, in Ukrainian, 27 Sep 04
BBC Monitoring Service, UK, in English, September 27, 2004
KYIV - [Presenter] About 600 observers from the so-called Commonwealth
of Independent States (CIS), meaning former Soviet republics, are expected
to monitor the presidential election in Ukraine. The Central Electoral Com-
mission has already received 120 applications from seven countries of the
CIS.
The observers will begin arriving in Ukraine on 15 October and will work in
all the regions. Today in Kiev CIS observers said they hoped that OSCE
observers will be objective.
[Anatoliy Golovatyy, captioned as CIS observer] We hope that OSCE
representatives will be objective in their assessment of the election and
the campaign, the same way the CIS mission will be. If any problems arise
during our work, we shall coordinate and discuss it with them. -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER NINE
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9. MIST TV AND RADIO COMPANY IN LVIV ASKS POLICE
TO PROVIDE GUARDS AFTER TWO ARSONS
Political terrorism related to Mist TV broadcasting Channel 5
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 27, 2004
KYIV - The Mist television and radio company (Lviv) asks Lviv police
to guard the building, where the company is stationed, due to arson. The
company's director Ihor Shumylo informed journalists about this.
"That police provided guard," he said.
He added that the company started guarding the building itself. He said
that some residents of the apartment block where the company is
stationed couldn't sleep peacefully after two arsons. "They don't sleep
at nights," he said. He said that the company also stepped up security
measures.
As Ukrainian News earlier reported, Mist connects arson of an electrical
control unit in the building where it is located with its broadcasting of
Channel 5. Unidentified people set fire to a building in Lviv, where the
Mist TV and radio company is located, on Sunday, September 26.
The fire destroyed an electrical control unit, as a result of which there
was a temporary interruption of electricity supply to the entire building
and the antenna that rebroadcasts Channel 5 across Lviv became
dysfunctional. -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER TEN
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10. QUESTIONS RAISED OVER 562,000 SIGNATURES COLLECTED
IN RUSSIA IN SUPPORT OF UKRAINIAN PRIME MINISTER
Vysokyy Zamok web site, Lviv, in Ukrainian 16 Sep 04
BBC Monitoring Service, UK, in English, Sat, Sep 25, 2004
LVIV - How was it possible to collect 562,000 signatures of Ukrainian
nationals living in Russia in support of [Ukrainian Prime Minister and
presidential candidate] Viktor Yanukovych? According to the Ukrainian
Foreign Ministry, only 200,000 Ukrainians who have the right to vote live
in Russia. A representative of [opposition bloc Our Ukraine leader and
presidential candidate] Viktor Yushchenko in the Central Electoral
Commission, Yuriy Klyuchkovskyy, demands an investigation into this
fact, [Ukrainian information agency] Ukrop reports.
"If half a million Ukrainian citizens live in Russia and the prime minister
is aware of this, why hasn't the Foreign Ministry, which is answerable to
him, registered this number of voters? Why doesn't it want to make an
appropriate report to the Central Electoral Commission?" Klyuchkovskyy
reasonably inquires. Following the Ukrainian Foreign Ministry's report, the
Central Electoral Commission set up electoral commissions in the Russian
Federation to poll 200,000 voters.
Klyuchkovskyy also wonders who collected the signatures and how it was
done. This may be done only by other Ukrainian citizens at the request of
respective proxies. "However, we don't have such proxies abroad," he
says. "If these orders were passed through embassies and consulates of
the Ukrainian state, then this violated the Ukrainian legislation, and the
signatures were not legal.
If, at the same time, this was assisted by Russia's power-wielding agencies
and Russian citizens, who are not permitted to take part in the Ukrainian
presidential election at all, this raises even more questions." -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER ELEVEN
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11. UKRAINIAN PRIME MINISTER AND ELECTION HOPEFUL
GIVES RUSSIAN NEWS MEDIA PRIVILEGED BRIEFING
Yanukovych invites all Russian news media heads in Moscow to Kyiv
RTR Russia TV, Moscow, Russia, in Russian, 27 Sep 04
BBC Monitoring Service, UK in English, Mon, Sep 27, 2004
MOSCOW - [Presenter] What kind of neighbour will Russia get after 31
October, presidential election day in Ukraine? Today Ukrainian Prime
Minister Viktor Yanukovych, who is a candidate in the presidential election,
set out his views on the future of relations between Moscow and Kiev for
the benefit of representatives of the Russian mass media. Yevgeniy Popov
presents this report.
[Correspondent] The Moscow offices of the editors-in-chief of the main
Russian media outlets were empty today. All the media chiefs are in Kiev
at the invitation of the Ukrainian prime minister. The first thing
Yanukovych had to say at the meeting was that it would be good if Russia
were to increase the flow of information about the affairs of its closest
neighbour.
[Yanukovych, speaking Russian] I would like our cooperation with you to
result in an expansion of the information space in Russia. In reading the
papers and watching TV, it has often occurred to me that there is very,
very little information.
[Correspondent] The editors-in-chief are promising to sort out the problem.
Questions were then taken. It was not a journalist, but Russian Ambassador
Viktor Chernomyrdin who asked the first question. How do you feel after
Friday's [24 September] incident? Yanukovych laughed and said Viktor
Stepanovich was far from being the first person to ask that question today.
[Yanukovych] I replied by saying they would have to keep on waiting.
[Correspondent] The rest of the meeting took place without TV cameras
present. When it ended, the participants emerged discussing its results very
emotionally. Apparently, Yanukovych made at least three sensational
statements during the hour he answered questions. The first was about the
possibility of Ukraine joining the North Atlantic alliance. Ukraine will not
join NATO for economic reasons.
[Passage omitted: Gleb Pavlovskiy, editor-in-chief of Russkiy Zhurnal, says
Ukraine's defence industry will die if it loses its traditional customers.]
[Correspondent] Yanukovych was asked many questions about the status
of the Russian language and the law on dual citizenship in Ukraine. Citizens
here are now allowed to hold only one passport. In reply, the prime minister
unexpectedly expressed the wish that a joint agreement on dual citizenship
should be concluded with Russia, while the Russian language would get the
status of second state language. [Passage omitted: Pavlovskiy says many
people in the two countries regard them as a "single space".]
[Correspondent] After the meeting with the prime minister, the editors-in-
chief gathered at a meeting of the Russian Club which was set up in Kiev a
month ago, in order to discuss what they had heard. Nobody was in any
doubt that today's event in Ukraine would definitely get extensive
coverage in the Russian mass media.
There was one other item of news which the representatives of the Russian
media were the first to learn from Viktor Yanukovych. Experts are drawing
up a plan to build a bridge between Crimea and Krasnodar Territory. This
structure is to eliminate an almost 300-km-long detour and strengthen
relations between the two countries still further. -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER TWELVE
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12. U.S. OVERSEAS PRIVATE INVESTMENT CORPORATION
(OPIC) CAN OFFER UKRAINE TWO BILLION
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 27, 2004
KYIV - The Overseas Private Investment Corporation intends to invest
in Ukraine USD 2 billion. Corporation President Peter Watson declared
this intention during his meeting with Ukrainian Prime Minister Viktor
Yanukovych. Watson said they could offer USD 2 billion to the Ukrainian
government. He added that it would be a stage-by-stage financing, linked
with economic growth.
In the presence of Yanukovych, Watson signed two credit agreements
worth a total of USD 40 million with Western NIS Enterprise Fund and
ProCredit Bank, including on USD 30 million with Western NIS Enterprise
Fund for the financing of housing construction through mortgage crediting,
and on USD 10 million for five years with ProCredit Bank for financing
small and midsized businesses.
Watson also said that on Monday afternoon, the corporation would make
one more statement on providing a loan of USD 200 million for the
development of small and middle-scale enterprises. He also noted that
earlier the corporation had given Ukraine USD 15 million for the
transport and housing construction sectors.
Watson noted that the granting of such credits to Ukraine shows that
Ukraine is a strong, efficient and reliable partner of the US.
Yanukovych noted that resumption by the Overseas Private Investment
Corporation of financing small and medium businesses in Ukraine is very
important to him, and he was trying to secure this from the very start of
his work as Prime Minister. Yanukovych also said that Ukraine had set
up an investment agency for drawing funds, with which the corporation
would work. -30-
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER THIRTEEN
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13. WESTERN NIS ENTERPRISE FUND ATTRACTS $40 MILLION
FROM OPIC FOR TWO LOAN COMPANIES IN UKRAINE
Western NIS Enterprise Fund, Kyiv, Ukraine, Mon, Sep 27, 2004
KYIV - Western NIS Enterprise Fund (WNISEF), the leading private
equity fund in Ukraine and Moldova, is the sponsor for $40 million in loan
facilities from the U.S. Overseas Private Investment Corporation (OPIC).
The facilities will allow WNISEF's two portfolio companies, International
Mortgage Bank (IMB) and ProCredit Bank, to significantly expand their
operations in Ukraine. WNISEF acted as a catalyst for attracting OPIC's
funds to these companies.
The first loan worth $30 million will fuel the growth of IMB, Ukraine's
first specialized residential mortgage provider. WNISEF created IMB in
response to the dynamic growth of Ukraine's middle class and strong
demand for home ownership. Within the past two and a half years the total
portfolio of residential mortgage loans in the Ukrainian banking system
increased by 300%, with 2004 showing strong 29% year on year growth.
Still, demand for mortgage loans by far outstrips the existing banking
system's ability to supply the long-term debt demanded by the marketplace.
IMB was designed to be a large part of the solution to this dilemma. Its
mission is to be the country's leading mortgage provider, providing clients
with superior customer service and products developed with international
know-how and standardized to enable future securitization. The OPIC loan
is symbolic of strong international financial institution support for IMB's
business strategy, and will provide IMB with long-term capital for lending
as the market develops.
Initially capitalized with $7 million by WNISEF, IMB's registration with the
National Bank of Ukraine (NBU) is underway. On September 6, 2004 the
NBU Board gave its first stage approval for the establishment of IMB. While
awaiting final registration, WNISEF launched a pilot mortgage-lending
program, the International Mortgage Program. With over $1.5 million loans
approved in just nine months, the pilot program has successfully proven
IMB's business concept. This OPIC loan will ensure continued rapid
growth of IMB's strong mortgage portfolio.
An additional $10 million will be lent by OPIC to ProCredit Bank, one of the
leading banks in Ukraine that focuses on micro, small- and medium-sized
enterprises. Since its inception in 2001, ProCredit Bank has disbursed over
56 thousand loans worth $234 million, of which business loans make up $207
million. Today ProCredit Bank is represented in 15 cities with 22 branches
and four representative offices. By the end of 2004, the Bank plans to
expand its network to 30 branches. ProCredit Bank will use OPIC's funds to
further expand its micro- and small lending activities in its current and
new branches located across the country.
Commenting on the loan facilities, President and CEO of WNISEF Natalie
A. Jaresko said, "WNISEF is thrilled that International Mortgage Bank and
ProCredit Bank were the first Ukrainian businesses to attract capital from
OPIC since the resumption of its lending activities in Ukraine. This
confirms OPIC's confidence in these institutions and in the Ukrainian
banking sector. Furthermore, it is another concrete example of the unique
value WNISEF brings to its portfolio companies, ensuring that they are
market leaders in terms of access to capital, profitability, innovation,
quality of products and services, maintaining international standards, and
transparency. " WNISEF and IMB were advised by Zenith Capital, an
independent financial advisory firm represented by Roman Matkiwsky.
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For additional information, please contact: Oksana Rudiuk, External
and Corporate Relations Manager, Western NIS Enterprise Fund
Phone: +380 (44) 490-5580; Fax: +380 (44) 490-5589
E-mail: orudiuk@wnisefk.com; www.wnisef.org
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER FOURTEEN
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14.FALSIFICATION OF ELECTIONS ALREADY UNDERWAY IN UKRAINE
Officials laying groundwork for Yanukovych victory. Open violations
suggest the authorities never planned to hold a free and fair election.
By Taras Kuzio, Eurasia Daily Monitor
Volume 1, Issue 93, The Jamestown Foundation
Washington, D.C., Monday, September 27, 2004
Although Ukraine's presidential elections are still six weeks away, last
week the authorities hinted at two methods it could use to secure the
election of Prime Minister Viktor Yanukovych.
FIRST, officials could deploy all available "state administrative resources"
to win additional percentage points for Yanukovych. According to Ukrainian
government officials who spoke to Eurasia Daily Monitor on condition of
anonymity, Defense Minister Yevhen Marchuk was fired last week after he
refused to guarantee that the armed forces would be ordered to vote for
Yanukovych. Marchuk's replacement is the highly discredited and corrupt
former defense minister, Oleksandr Kuzmuk (Ukrayinska pravda, Sep-
tember 24).
Kuzmuk was forced to resign in October 2001 after being caught red-
handed lying about the complicity of the armed forces in the shooting
down of a civilian airliner over the Black Sea.
During the 2002 parliamentary elections the pro-presidential For a United
Ukraine bloc obtained upwards of one-third of its 11% tally from votes
forcibly collected in the armed forces (prior to Marchuk's appointment),
hospitals, psychiatric institutions, and prisons. His appointment is aimed
at ensuring that the armed forces will "vote as required." Kuzmuk was a
member of parliament in the Labor Ukraine faction, which is based upon
the Dnipropetrovsk clan's party of the same name and led by Serhiy
Tyhipko, the head of Yanukovych's election campaign.
SECOND, officials could submit fake signatures for the presidential
candidates who are loyal to Yanukovych (Ukrayinska pravda, September
23). Each of the 26 registered presidential candidates was required to
submit to the Central Election Commission a minimum of 500,000
signatures in their support by mid-September. Yet, the Committee of
Voters of Ukraine (CVU) noted that its regional branches had witnessed
the collection of signatures for only seven: Yanukovych, Viktor Yush-
chenko, Petro Symonenko, Oleksandr Moroz, Natalie Vitrenko, and
Leonid Chernovetskyi (cvu.org.ua, September 21).
Where then, did the remaining 19 candidates each obtain half a million
signatures? Information collected by the CVU and the civic organization
"I Know!" (Znayiu), together with survey data from the Razumkov Center,
point to the widespread use of bogus signatures. Two-thirds of the
candidates who support Yanukovych were guaranteed signatures on
their behalf by members of Yanukovych's shadow presidential campaign
team.
Preparation of the requisite signatures for these "pseudo-candidates" was
delegated to the Kyiv-based law firm De Jure. Firm employees were given
lists of signatures collected for Yanukovych as well as databases of
Ukrainian citizens from state organizations, such as the Pension Fund, the
State Automobile Inspection Agency, and the State Tax Administration.
Large numbers of students from the Kyiv Agrarian and Polytechnic
Universities were also hired to counterfeit the signatures, at a going rate
of 20-40 kopecks per name. The Yanukovych camp has regularly hired
students to turn up at rallies as alleged "supporters." The "pseudo-
candidates" obtained ready-made signature packets that they submitted
to the Central Election Commission last week.
The Razumkov Center has provided concrete data confirming the scam.
According to a survey conducted in the first half of September (i.e. the
final two weeks to collect signatures) only 23.8% of Ukrainians admitted
to having signed a petition in support of a candidate. Of these, 11.8% were
for Yanukovych, 8.1% for Yushchenko, 2% for Symonenko, and 1% for
Moroz. Another 1.5% signed for the remaining 22 candidates (Ukrayinska
pravda, September 23).
The gulf between these figures and the signatures submitted back the
concerns raised by the CVU and "I Know!" Yanukovych's election campaign
team, for example, claims they collected 7.2 million signatures (i.e. 19% of
voters) and yet only 11.8% admitted to having signed for him. Around 1%
of these 11.8% claimed they were forced to sign for Yanukovych. Of
Yanukovych's alleged 7.2 million signatures, 45% were from Donetsk.
Pseudo-candidates who support Yanukovych are useful in several ways.
First, they dominate 60% of territorial commissions, placing them in a good
position to potentially manipulate the final vote. In its August report the
CVU concluded that these candidates, "appear to be registered in order to
put Yanukovych representatives on the commissions" (cvu.org.ua). Local
"parties of power" loyal to Yanukovych provided these thousands of
commission officials and paid the $100,000 deposit for each candidate. In
Lviv oblast, for example, the Social Democratic United Party performed
this task (Ukrayinska pravda, August 27).
An August 26 presidential administration document leaked to Eurasia Daily
Monitor entitled "Expert Survey of the 'Effectiveness' of the Use of
Candidate Resources During the Election Campaign in Ukraine" concluded
that the pseudo-candidates could add upwards of 5-6% to Yanukovych's
election result.
These votes for pseudo-candidates are also aimed at preventing Yushchenko
from winning in the first round (Zerkalo nedeli, August 14-20; Ukrayinska
pravda, July 28). Each candidate will drain small percentage points away
from the opposition, just as the numerous virtual parties created by the
authorities in the 2002 parliamentary elections took votes away from the
opposition.
In addition, these candidates obtain free time on state television, which
they are using to attack Yushchenko. These attacks from the extreme left
(Oleksandr Yakovenko) and right (Roman Kozak), as well as Slavic Party
candidate Oleksandsr Bazyliuk, target Yushchenko's American wife. The
extreme right claims they, as "nationalists," support Yushchenko, while the
extreme left attacks him for allegedly being a "nationalist." Spots for
these two candidates are immediately followed by Yushchenko's campaign
message, a step that the Supreme Court ruled illegal, as campaign messages
have to be separated by 20-minute gaps (Ukrayinska pravda, August 27,
September 1 and 8).
These open violations suggest that the authorities have never planned to
hold a free and fair election. As Zerkalo nedeli (August 21-27) pointed out,
"The meticulous preparation, centralized planning, and scale of the
operation testify that the authorities charge the election commissions with
more than administrative functions. One can only guess what their true
motives are." -30-
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Taras Kuzio is a Visiting Professor, Institute for European Russian
and Eurasian Studies, Elliott School of International Affairs, George
Washington University, Washington, DC.
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ACTION UKRAINE REPORT-04, No.175: ARTICLE NUMBER FIFTEEN
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15. EDITOR'S NOTE REGARDING THE ARTICLE: SAMUEL ADAMS:
UKRAINE'S CONTRIBUTION TO AMERICAN LIBERTY"
Several readers indicate they believe the article is not at all accurate
By Volodymyr Senchenko, The Ukrainian Observer, Issue: 199
The Willard Group, Kyiv, Ukraine, September 2004
LINK: www.Ukraine-Observer.com
EDITOR'S NOTE: The Action Ukraine Report published the article
"Samuel Adams: Ukraine's Contribution to American Liberty," in its issue
number 173 distributed on Sunday, September 26, 2004. The article was
originally published in "The Ukrainian Observer," a monthly magazine
published in Kyiv for several years by The Willard Group. We have
receiving information from several readers who state they absolutely
believe the information found in this article is not at all accurate.
We have contacted the editor of "The Ukrainian Observer" in Kyiv and
informed him what we have been told by our readers about this article. The
editor said he would check out this information and these concerns and get
back to us. We will let you know when we hear back from the editor of
"The Ukrainian Observer." (EDITOR) -30-
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