"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" - Number 417
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C., Kyiv, Ukraine, THURSDAY, January 27, 2005
-----INDEX OF ARTICLES-----
"Major International News Headlines and Articles"
1.NEW UKRAINIAN PRESIDENT VIKTOR YUSHCHENKO ADDRESSES
PARLIAMENTARY ASSEMBLY OF THE COUNCIL OF EUROPE
TV 5 Kanal, Kiev, Ukraine, in Ukrainian 1410 gmt 25 Jan 05
BBC Monitoring Service, UK, in English, Tue, Jan 25, 2005
2. CHENEY CALLS NEW UKRAINE PRESIDENT YUSHCHENKO
"ALLY OF FREEDOM'S CAUSE"
By Deb Riechmann, Associated Press Writer
AP, Krakow, Poland, Wed, January 26, 2005
3.YUSHCHENKO'S OATH SEALS ORANGE REVOLUTION'S TRIUMPH
Askold Krushelnycky in Kiev, The Independent
London, United Kingdom; Mon, Jan 24, 2005
4. WHAT THEY SAID ABOUT...YUSHCHENKO'S INAUGURATION
The Wrap, The Guardian, London, United Kingdom; Wed, Jan 25, 2005
5. POLAND MUST PROVIDE TANGIBLE ASSISTANCE TO UKRAINIANS
Polish Radio 1, Warsaw, in Polish 1000 gmt 24 Jan 05
BBC Monitoring Service, UK, in English, Mon, Jan 24, 2005
6. RUSSIA STILL ALLY, NEW UKRAINIAN LEADER SAYS
Peter Finn, Washington Post Foreign Service
The Washington Post, Washington, D.C., Tue, Jan 25, 2005
7. TENT CITY IN UKRAINE'S CAPITAL CENTRE DISMANTLED
TV 5 Kanal, Kiev, Ukraine, in Ukrainian 0800 gmt 25 Jan 05
BBC Monitoring Service, UK, in English, Tue, January 25, 2005 (08:00)
8. REVOLUTIONARY YOUTH PLAN PURGE OF OLD-REGIME
Beginning of the "de-kuchma-ization of Ukraine"
UNIAN news agency, Kiev, in Ukrainian 1112 gmt 25 Jan 05
BBC Monitoring Service, UK, in English, January 25, 2005 (11:12)
9. INVESTORS MUST STAY CAUTIOUS ABOUT UKRAINE
There is still political risk in a country divided down the middle
COMMENTARY: By Ian Bremmer
Financial Times, London, UK, Mon, January 24, 2005
10. "BOOMING UKRAINE"
COMMENTARY: Roland Nash, chief strategist Renaissance Capital
Prime-Tass, Moscow, Russia, Tue, January 25, 2005
11. "RUSSIA-UKRAINE: A NEW CONTEXT"
COMMENTARY: Arseny Oganesyan
RIA Novosti, Moscow, Russia, Wednesday, January 26, 2005
12. THE UKRAINIAN ELECTIONS - VIEWS FROM RUSSIA
By Sergey Kolmakov, Deputy Director,
Government Relations, PBN Russia
Access PBN, The PBN Company, Volume 1 Issue 23
Moscow, Russia, Tue, January 25, 2005
13. KIEV-MOSCOW MENDING FENCES
Relationship that could be: "rational, successful, (and mutually)
beneficial."
ANALYSIS: Peter Lavelle for UPI
UPI, Moscow, Russia, Tuesday, January 25, 2005
==========================================================
1. NEW UKRAINIAN PRESIDENT VIKTOR YUSHCHENKO ADDRESSES
PARLIAMENTARY ASSEMBLY OF THE COUNCIL OF EUROPE
TV 5 Kanal, Kiev, Ukraine, in Ukrainian 1410 gmt 25 Jan 05
BBC Monitoring Service, UK, in English, Tue, Jan 25, 2005
Ukraine's new president, Viktor Yushchenko, has pledged that the democratic
changes ushered in with his election would be irreversible. Addressing the
Parliamentary Assembly of the Council of Europe within days of his
inauguration, Yushchenko called on Europe to update its policy on Ukraine
in accordance with the country's new, pro-European orientation.
He reinterated that full membership of the EU was Ukraine's strategic goal
and called for visa procedures to be relaxed. He said Ukraine would not join
any alliances within the former Soviet Union if they contradicted
integration with the EU. Yushchenko also pledged to find the killers of
journalist Heorhiy Gongadze and bring the case to trial within two months.
The following is the text of Yushchenko's address and excerpts from the
question and answer session broadcast live by Ukrainian television TV 5
Kanal on 25 January:
[Yushchenko] Mr Chairman, esteemed members of parliamentary delegations!
It is great honour for me to start my work as president of Ukraine by
visiting the ancient city of Strasbourg and speaking to you here, within the
walls of the oldest European political institution. The strategy of European
unity formulated in 1946 by Sir Winston Churchill - to find a means that,
like a miracle, would make the whole of Europe free and happy - has been
fully embodied by the Council of Europe. When Ukraine joined the Council
of Europe in 1995, its intention was to become part of such a Europe, to
share its values and to make a contribution to solving common problems.
Thanks to our membership of the Council of Europe - and we will mark a
decade of it in the autumn of 1995 - thanks to the unwavering attention paid
to us by CE institutions, and especially European parliamentarians, Ukraine
has been able to survive a difficult transition period. Ukraine has been
able to overcome the illnesses it inherited from its totalitarian past, as
well as the teething problems of a young democracy. We are sincerely
grateful to the Parliamentary Assembly for its support and encouraging
signals, as well for its fair and sometimes tough criticism over the past 10
difficult years.
We are grateful to you because you sounded the alarm when the horrible
tragedy of journalist Heorhiy Gongadze happened, because you stood in the
way of a final assault on freedom of speech in my country, and for your
constant attention to the Ukrainian constitutional reform. I would like to
say special thanks to two courageous PACE rapporteurs, Hanne Severinsen and
Renate Wohlwend, who were Europe's eyes, voice and conscience in Ukraine.
All together, despite all obstacles, we have been able to build a democratic
and law-abiding civil society in Ukraine, and to approach the high standards
of the Council of Europe, to implement the humanist ideals on which the
Council of Europe is based. I am confident that Ukraine's Orange Revolution
was possible in large part thanks to the fact that European values, and
first of all freedom and democracy, have firmly taken root in my people's
mentality. Ukrainians as a free European nation, a signatory of the European
convention on human rights, could not tolerate an assault on their freedoms.
They stood up and defended their right to a free and honest election,
freedom of speech and freedom to build their future.
I would like to convey the Ukrainian people's heartfelt thanks to all
representatives of the Council of Europe, parliamentarians and observers for
your support and assistance in that difficult time for Ukraine. Thank you
for sacrificing your Christmas holidays to travel all around Ukraine, from
the east to the west, for your compassion and solidarity.
Ladies and gentlemen! Right after Strasbourg, a symbol of Europe's
conscience, reconciliation and democracy, I will be travelling to Auschwitz,
a symbol of Europe's pain, the site of the Nazi's worst death camp. I will
honour the memory of its prisoners - my father was one of them - and pay
tribute to the people who liberated this camp and the whole Europe from
Fascism. For me, Auschwitz is a personal pain. It is in the details of my
father's memories, which I pass on to my children.
It is in the handful of earth on which I swore never to allow any
manifestations of anti-Semitism or intolerance to other nations, religions,
languages or cultures in Ukraine. Auschwitz and Hitlerism, Gulag and Soviet
totalitarianism, the Holocaust and the great famine in Ukraine in 1932-33,
which took up to 10 million human lives and was concealed for many years by
the Stalin regime behind the iron curtain, the deportation of entire peoples
and shooting of peaceful demonstrators, persecution of opponents and other
horrors Europe saw in the 20th century make us remember, first of all, our
common responsibility for the fate of every European country.
It makes us remember that we must never allow new division lines or new
Berlin walls to be built, behind which any crimes can be committed in secret
and go unpunished. And the main thing - it makes us remember that we must
ensure the law prevails, that any violations of human rights are
unacceptable, because the consequences can be irreparable.
REFORMS IN UKRAINE IRREVERSIBLE
In connection with this I would like to repeat your words, Mr Chairman, that
our strength is in our commitment to human rights and democracy not as
abstract values or empty words, which are often spoken but mean little, but
in responsibility based on mandatory rights, and demonstrated in practice. I
would like to reassure you that I, as president of Ukraine, will do all I
can to make sure that the democratic transformations in my country are
irreversible, that the fundamental principles of the Council of Europe
prevail, that human rights, pluralistic democracy and the rule of law are
protected.
Based on these principles, the Ukrainian government will work to ensure
further democratization of government institutions, independence of the
judiciary, real freedom of speech and improvement of the situation with the
media. We will work to strengthen civil society and fight corruption,
organized crime and illegal migration. Of course, we count on further
support from the Council of Europe in achieving these ambitious goals, on
using its powerful expert potential to speed up the adaptation of Ukrainian
legislation and practices with European standards. Ukraine's new government
will closely cooperate with all the other branches of power, especially the
legislative branch, to carry out the last two commitments we undertook when
joining the Council of Europe.
I also believe it is my moral duty to provide maximum assistance to the
investigation of the Gongadze case and other high-profile investigations of
violence against journalists and to bringing the culprits to justice.
It is my deep belief that the truly democratic nature of the changes that
you have witnessed in Ukraine, the maturity demonstrated by Ukrainian
society during the election, the Ukrainian leadership's commitment to
European values and the principles of democracy are a vivid proof of the
need for qualitative changes in our country's cooperation with the Council
of Europe and, above all, its Parliamentary Assembly beyond the framework of
procedures established decades ago under very different circumstances and
for putting it on a foundation of true partnership.
Such a step would not only confirm Ukraine's progress along the path of
democratic reforms but would prove true evolution of the assembly itself and
its ability to provide an appropriate response to today's realities. This
would also become a significant incentive for Ukraine's progress along the
path of the single European area of democratic stability, creating which is
perhaps the organization's most important goal.
The end of the presidential election in Ukraine is only the beginning of a
healing process until full recovery as a fully grown healthy system, immune
to the viruses of corruption, autocracy, censorship and any violations of
human rights. This is the beginning of confident movement towards economic
prosperity, social guarantees and a dignified life for each Ukrainian.
EU MEMBERSHIP STRATEGIC GOAL
This path is difficult, but not necessarily a lengthy one. I know how to do
it. I believe that Ukrainians can do it. I have a clear plan for
transformations in Ukraine for the next five years, and I have a team
capable of fulfilling it. I will not dwell on it in detail. I will only note
that it is based on achieving a strategic foreign-policy goal: membership in
the European Union. This is a simple and understandable formula for the
wellbeing and security of Ukrainians. Bodies of state power inside the
country will be reorganized to give a real, rather than declarative,
dimension and content to the process of integration into the European Union.
We welcome the European Union's intention to develop a new strategy of
relations with Ukraine. I am convinced that it should contain the prospect
of membership. In this regard, we view the Ukraine-EU action plan within the
European Neighbourhood policy as the first step towards attaining this goal.
In the near future, we are counting on getting the status of a market
economy and by the end of 2005 on joining the WTO and concluding an
agreement on a free trade area with the European Union.
An important psychological factor would be a simplified visa procedure
between Ukraine and the countries of the European Union. As living standards
in Ukraine improve, the wave of labour migration to the West will be
reversed, and Ukrainians will travel to Europe on holiday, to study and to
exchange experience. This goal is consistent with the huge effort made
within our organization to facilitate freedom of travel in Europe.
The initiative to make Europe a visa-free area for Council of Europe member
states will become the most convincing and humanist proof that the
integration processes on the continent are viable. I believe these serious
geopolitical and democratic processes will become a wonderful background to
our organization's third summit which I will attend by all means. Thank you
for your attention. [Applause]
[Chairman, in English] Thank you very much, Mr President, for your
inspiring, encouraging and colourful speech. Members of the assembly have
expressed the wish to put questions to you. [Passage omitted: explains
procedure]
[Question from Turkey] Mr President, taking this opportunity we would like
to learn from you your views on regional cooperation, on EU relations, on
NATO. Please be so kind to answer my questions. Thank you very much.
[Yushchenko, in Ukrainian] I am very grateful for this very extensive
question, and I will try to answer it briefly. We proceed from the premise
that our overall strategy is integration with the European organizations.
This is the global and main goal. Secondly, we are in favour of developing
various kinds of regional structures which we believe facilitate the path to
the European Union and do not contradict our progress towards Europe.
This applies to the Black Sea initiatives, economic structures based on
individual economic regional projects.
We are confident that Ukraine soon will put forward an initiative to a
number of its neighbours including Turkey about implementing new energy
projects for united Europe. Therefore, we will always welcome an effective
regional policy. This does not contradict the strategic course I have just
mentioned. Thank you.
[Chairman, in English] The next speaker is [name indistinct] from Hungary,
the Liberal group.
JOURNALIST MURDER CASE TO GO TO PUBLIC TRIAL
WITHIN TWO MONTHS
[Question] Mr President, the widow of the late Mr Gongadze is also in this
chamber. She can never get her husband back, but she is entitled to know the
truth about what happened to Mr Gongadze. You mentioned the Gongadze case
twice. We'd like to hear about your actions. How can you help truth to be
revealed and justice to be restored in the Gongadze case. I think Mme
Gongadze, all democrats in Ukraine and everybody in this chamber would like
to hear what you can tell us about this. Thank you.
[Yushchenko, in Ukrainian] My goal is to put a full stop to this moral,
ethical, judicial and conscience problem. For me and, I am confident, for my
government this is a moral challenge which requires a quick and full
response. As shortly as next week I plan to meet Giya Gongadze's mother,
listen to her and act upon all her wishes concerning the family, the burial
and so on. Several weeks ago I had a meeting with the prosecutor-general
where this was discussed. My government demands this case to be sent to
trial as soon as possible.
To date, two cases directly related to the murder of journalist Heorhiy
Gongadze have been handed over. I take full political responsibility for
making it my goal to hand this case over to Ukrainian justice, to a
Ukrainian court, in the immediate future - possibly within a month or two,
depending on the degree of completion of this case at the
Prosecutor-General's Office. And you will see a public trial of this case in
the Ukrainian court. We see this as the way out of this difficult case for
Ukraine and its different elites.
[Chairman, in English] The next speaker is Mr [Mikhail] Margelov from
Russia [affiliation indistinct].
[Margelov, in Russian] You have outlined ambitious prospects for Ukraine's
integration into the European Union. But Europe is larger than the European
Union. How do you foresee Ukraine's relations with other European countries
that are not members of the European Union and Ukraine's membership in other
European organizations other than the European Union? Thank you.
[Yushchenko, in Ukrainian] I think my reply should give more prominence to
Ukraine's relations with Russia. I will start by saying that I and my
political movement regard Russia as a strategic partner, an eternal
neighbour and an eternal strategic partner. We are convinced that many of
Ukraine's interests are formed in Russia, and we are ready to defend and
fulfil them politically. Therefore, we are in favour of building formal
relations with Russia, including in the economy, movement of capital and
labour, customs, fiscal relations, budget relations, and so on. If these
principles appeal to third and fourth countries, we do not object to
extending the circle of neighbourhood around these fundamental agreements.
MEMBERSHIP OF CIS ALLIANCES MUST NOT CONTRADICT EU GOAL
We regard the Single Economic Space [SES, with Russia, Belarus and
Kazakhstan, which Ukraine joined under former President Leonid Kuchma] based
on two principles. The principles of forming the SES must be consistent with
Ukraine's national interests, especially with regard to the delicate part of
these agreements, the supranational bodies. The second fundamental principle
is this: the principles that underlie the formation and activities of the
Single Economic Space must not come into conflict with the principles that
underlie our integration with Europe.
This way, we seek a policy that would harmonize our strategic progress to
Europe and would, beyond all doubt, provide new dynamics to relations with
CIS countries, including and above all with Russia. Thank you. [Passage
omitted: Question about divisions in Ukraine, Yushchenko says he has won in
more regions than any predecessor, no grounds for conflicts or separatism]
[Yushchenko, in reply to question from Poland overlaid with Ukrainian
commentary, about the future of nuclear reactors in Ukraine] Esteemed
colleagues, the question asked has to do with the closure of the Chernobyl
nuclear plant. You will remember a number of international agreements that
were reached. One of the clauses in these agreements said the European
community and the European Bank, various creditors, would find the resources
to help complete two nuclear generating sets in Ukraine: at the Khmelnytskyy
and Rivne stations. In 2000, when I was prime minister of Ukraine, we held a
number of international meetings in Europe which focused on raising funds
for shutting down the Chernobyl stations and completing the two nuclear
power units.
I am not going to comment on the reasons why these programmes were
abandoned, I mean raising funds for the closure of Chernobyl and funding a
number of safety projects. I merely wish to say that in the past four years
Ukraine, through payments from energy consumers, formed a fund to complete
these two nuclear units and the units were completed with Ukrainian money.
Therefore, a full stop may be put to this story.
The agreements concluded three years ago were fulfilled by Ukraine
unilaterally, the construction is finished and the nuclear units have been
commissioned. Now we are working on a safety system for the Ukrainian
nuclear industry. I am ready, after an appropriate expert study, to report
on this issue, a possible issue not just for Ukraine but also for
continental Europe, and not only Europe. Thank you. [Passage omitted:
questions about Polish cemeteries in Ukraine, democracy in general] -30-
==========================================================
2. CHENEY CALLS NEW UKRAINE PRESIDENT YUSHCHENKO
"ALLY OF FREEDOM'S CAUSE"
By Deb Riechmann, Associated Press Writer
AP, Krakow, Poland, Wed, January 26, 2005
KRAKOW - Ukraine's new President Viktor Yushchenko is an "ally of freedom's
cause," Vice President Dick Cheney said Wednesday in toasting the democratic
leader who plans to lean toward the West yet maintain his nation's historic
ties with Moscow. Echoing President Bush's inaugural address, Cheney talked
about overcoming tyranny and hatred in his remarks at a dinner with the new
leader of the former Soviet republic and, earlier, at a reception with
survivors of the Holocaust.
"What President Yushchenko has accomplished is remarkable and inspiring and
there are great tasks ahead," Cheney said in an appearance with the leader
who survived a nearly fatal dose of poison to emerge victorious in a
bitterly disputed election. "Free nations stood with him as he made his just
demands that the voice of the people be heard."
Standing side-by-side with the Ukrainian leader at dual podiums in a
cultural center, Cheney said, "President Yushchenko is an ally in freedom's
cause and President Bush and the American people stand with him."
Yushchenko, his chalky complexion bearing scars from the still-unsolved
poisoning, told Cheney that he's committed to push for liberalization and
democracy in all aspects of life in Ukraine.
Earlier, Cheney, who is on a three-day trip to southern Poland to attend the
60th anniversary of the liberation of the Nazi death camps at nearby
Auschwitz and Birkenau, told Holocaust survivors: "We must face down hatred
together. We are dedicated to the task at hand and we will never forget."
In his inaugural and again during a news conference Wednesday in
Washington, Bush said recent elections in the Ukraine, in Afghanistan
and by the Palestinians - as well as the upcoming elections this weekend in
Iraq - make him optimistic about the advance of freedom. "Look what's
happened in a brief period of time - Afghanistan, Palestinian elections,
which I think are incredibly hopeful elections, as well as the Ukraine and
now Iraq," Bush said. "We're witnessing amazing history."
On Thursday, Cheney will be among delegations led by leaders of more
than 40 nations at the commemoration in Auschwitz.
On Jan. 27, 1945, Soviet troops liberated the death camps where between 1
million and 1.5 million prisoners - most of them Jews - perished in gas
chambers or died of starvation and disease. In all, 6 million Jews were
killed in the Holocaust. At a reception for Holocaust survivors who are now
U.S. citizens, Cheney noted that the horrors of World War II took place not
in a remote section of the globe, but in the middle of the civilized world.
"Today, many Holocaust survivors have children and grandchildren and
great-grandchildren," Cheney said. "That I believe is the greatest victory
of all. Evil did not have the final say. "You survived terror. You have let
the world know the truth and you have preserved the memory of those who
perished."
Air Force Two landed during a heavy snowstorm with wind that drifted snow on
the tarmac. Cheney's first official stop was at Wawel Royal Castle, where he
met with President Aleksander Kwasniewski, a staunch supporter of the war in
Iraq who is facing increasing pressure from the public to bring Polish
troops home.
While some European nations have refrained from committing troops, Poland
has been a trustworthy partner in the war in Iraq. However, Polish Defense
Minister Jerzy Szmajdzinski has said that he thinks Polish troops should
stay in Iraq only until the end of this year.
Poland has taken command of a multinational security force in central Iraq
that currently includes about 6,000 troops - among them more than 2,400
Polish soldiers. Leaders have previously said they hope to scale down the
Polish presence significantly after elections scheduled for Sunday.
Yushchenko has said he will not reverse outgoing President Leonid Kuchma's
decision to withdraw Ukraine's 1,650 troops by the end of June, but it is
still being discussed. -30- [The Action Ukraine Report Monitoring Service]
==========================================================
3.YUSHCHENKO'S OATH SEALS THE ORANGE REVOLUTION'S TRIUMPH
Askold Krushelnycky in Kiev, The Independent
London, United Kingdom; Mon, Jan 24, 2005
KIEV - VIKTOR YUSHCHENKO, the man who led Ukraine's "Orange
Revolution", was finally sworn in yesterday as president and immediately
vowed to seek a place for the country in the heart of a "united Europe".
During a day of celebrations, Mr Yushchenko took an oath of office in the
Ukrainian parliament and then went to the central Independence Square in the
capital, Kiev, to repeat the pledge in front of hundreds of thousands of
jubilant supporters.
He told a cheering crowd that closer ties with the West and the European
Union were necessary for Ukraine's future prosperity. adding: "Our way to
the future is the way of a united Europe. We, along with the people of
Europe, belong to one civilisation. We share similar values. Our place is in
the European Union. We are no longer on the edge of Europe. We are situated
in the centre of Europe."
The speech was a demonstration of Mr Yushchenko's intent to ensure that
Ukraine follows in the footsteps of three neighbours; Poland, Hungary, and
Slovakia, all former Soviet Union countries which have now joined the
European Union.
As long as the previous regime of the pro-Russian former president, Leonid
Kuchma, was in power there was little chance that Ukraine would become
eligible for EU or Nato membership.
But Mr Yushchenko said his new administration would introduce the democratic
and economic reforms necessary to make Ukraine an attractive future member.
He also promised to root out rampant corruption, lawlessness and abuse of
human rights, which had become commonplace during Mr Kuchma's 10-year
reign.
More than 60 representatives of other countries, among them presidents and
prime ministers, attended the ceremonies in parliament and on the square.
The guests included the outgoing US Secretary of State, Colin Powell, and
the former Czech President, Vaclav Havel, who had expressed a special
desire to attend.
It was in the same central square that mass demonstrations by
anti-government protesters, sporting clothing and banners in the orange
adopted by Mr Yushchenko as his campaign colour, denounced as a fraud the
results of the 21 November elections. The poll was later dismissed by
Ukraine's Supreme Court and Mr Yushchenko decisively won a fresh ballot,
which was held on 26 December.
During the stand-off, tens of thousands of protesters lived in a tent camp
near the square and Mr Yushchenko and his senior political colleagues
addressed supporters there almost daily despite often harsh weather. The new
president said the square will go into Ukrainian history as a symbol of the
country's desire for democracy.
In a tribute to the Orange Revolution, Mr Yushchenko recalled the period as
one: "When the heart of Ukraine was beating on this square. Ukraine has
opened a new page in its history, and Independence Square has a special
place in it. It is a symbol of a free nation that believes in its future".
Kiev was a sea of orange as celebrations ran late into the night yesterday.
Most people wore or waved something orange and buildings were draped in
huge orange banners. Mr Yushchenko's first foreign visit as president will
be a trip today to Moscow to mend relations after Mr Putin's open backing
for his opponent.
Mr Yushchenko has pledged that Ukraine will only build relations with Russia
on an equal basis and in a way that will not obstruct Kiev's declared
ambitions to join the EU and Nato.
The Moscow trip is the first duty in a hectic schedule for the coming week
during which the new president will address the Council of Europe, the
European Parliament and the World Economic Forum in Switzerland. He will
also travel to Poland on Thursday for the 60th anniversary of the liberation
of the Auschwitz death camp. -30-
==========================================================
4. WHAT THEY SAID ABOUT...YUSHCHENKO'S INAUGURATION
The Wrap, The Guardian, London, United Kingdom; Wed, Jan 25, 2005
Viktor Yushchenko was inaugurated as president of Ukraine on Sunday,
following a turbulent few months that saw his poisoning, his defeat in
rigged presidential elections, mass protests against the result, and a court
ruling that the elections - which he won second time round - be held again.
Mr Yushchenko told a crowd of half a million people in Kiev's Independence
Square: "Our place is in the European Union. We are no longer on the edge of
Europe. This was a victory of freedom over tyranny." The Times was heartened
by Mr Yushchenko pledge. "After 14 years of inept and corrupt rule,
Ukrainians are hoping that the 50-year-old former prime minister and central
bank governor may, at last, set Ukraine on the elusive path to prosperity,
stability, accountable democracy and eventually membership of the European
Union," it said.
It was true Mr Yushchenko had won the election, said Spain's El Periodico ,
but his problems were only just beginning. Now he had to "lead a divided
country, traditionally put down by Russia and now divided between Vladimir
Putin and the EU". The new president faced a delicate balancing act, agreed
Germany's Frankfurter Allgemeine Zeitung . He had "the difficult task of
locking his country - split as it is between pro-western and pro-Russian
forces - more closely into western structures while at the same time not
antagonising Russia".
In the Russian Nezavisimaya Gazeta , Alexei Makarkin urged Russia to get
used to seeing Ukraine "as an independent state and not as a geographic
concept, as some kind of territory that sooner or later has to return to the
bounds of Russia". Russia needed "to get used to respecting our neighbour
not in words, but in deeds".
Mr Yushchenko faced an uphill struggle at home, too, warned Germany's Die
Tageszeitung . "The economy is gradually picking up and Europe has finally
registered the country on its radar screen. But how quickly Ukraine really
does arrive in Europe depends first and foremost on the successes of its
domestic reform." Hungary's Nepszabadsag was also pessimistic. "A
democracy created by this kind of people's power, with its hysterical
atmosphere, is not an ideal beginning," it said. Sandra Smith -30-
------------------------------------------------------------------------
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LINK: www.guardian.co.uk/thewrap
==========================================================
5. POLAND MUST PROVIDE TANGIBLE ASSISTANCE TO UKRAINIANS
Polish Radio 1, Warsaw, in Polish 1000 gmt 24 Jan 05
BBC Monitoring Service, UK, in English, Mon, Jan 24, 2005
WARSAW - [Announcer] Polish support for Ukraine must now be translated
into actions that Ukrainians can feel on a mass scale, Foreign Affairs
Minister Adam Rotfeld has told Polish radio. The minister emphasized that
Polish support for our eastern neighbour must not be limited just to
symbolic gestures.
[Rotfeld] For example, crossing the border should be made easier, for
example, [we need] a new approach to Ukrainians employed in Poland so
that they enjoy full rights. In other words we need a package which could be
translated into something tangible - spiritual, moral support is not enough.
[Announcer] Asked about relations between Russia and Ukraine Adam Rotfeld
said that Viktor Yushchenko had made a good decision to make his first
foreign trip to Moscow. The minister added that Russia is undergoing a
reasessment process with regard to its relations with Ukraine. According to
Rotfeld, Moscow "sooner rather than later will understand that it is in its
interest to support transformations in this country [Ukraine]. According to
the foreign minister, if the situation in Ukraine stabilizes, this will have
an impact on the entire post-Soviet bloc. -30-
==========================================================
6. RUSSIA STILL ALLY, NEW UKRAINIAN LEADER SAYS
Peter Finn, Washington Post Foreign Service
The Washington Post, Washington, D.C., Tue, Jan 25, 2005
MOSCOW, Jan. 24 -- One day after being inaugurated as president of Ukraine,
Viktor Yushchenko said Monday that he believed he and Russian President
Vladimir Putin had overcome the strains caused by the Kremlin's open backing
of his electoral opponent. But Yushchenko, who came here on his first full
day in office to meet with Putin, also signaled that he would follow through
on pledges of radical changes designed to bring Ukraine closer to the West,
a stance that has discomfited some in Russia's establishment.
"What occurred before the elections were mere episodes, and this issue is no
longer on the agenda," Yushchenko said at a news conference after his
session with Putin. "We assume and will continue to assume that Russia is
our eternal strategic ally."
The new Ukrainian leader balanced his conciliatory words with a warning that
his policies, including relations with Russia, would be determined by his
country's national interest rather than what he called the "byzantine"
politics of the past. Though Ukraine became independent in 1991 with the
collapse of the Soviet Union, the Kremlin has often regarded Ukraine as a
little brother.
Yushchenko, 50, emphasized his independent stance earlier Monday by
appointing Yulia Tymoshenko as acting prime minister. Tymoshenko is a blunt,
charismatic and often divisive figure who served as energy minister when
Yushchenko was prime minister from 1999 to 2001.
Yushchenko also declined to endorse Putin's aim of establishing a Single
Economic Space combining Russia, Ukraine, Belarus and Kazakhstan.
Yushchenko's allies regard this proposed entity as a Kremlin attempt to
reassert Russia's sway over former Soviet countries.
"We are led by two principles: The first is that any [economic treaty]
should answer Ukraine's national interest," he said. "The second principle
is that any document should not block Ukraine's road to other markets."
Yushchenko has said that Ukraine's entry into the European Union is his
government's principal goal.
At the Kremlin, Yushchenko was greeted warmly by Putin, who smiled and
attempted to explain what some Yushchenko supporters charged was Russian
interference in Ukraine's electoral process. In the run-up to voting, Putin
traveled twice to Ukraine and praised Yushchenko's rival, Viktor Yanukovych,
then the prime minister, whose campaign staff was stocked with Kremlin
political consultants.
"You know that Russia has never acted behind the scenes in post-Soviet
space," Putin said. "We have never acted [in a way that would] bypass the
government, and the same pertains to Ukraine. Lately, we have only been
doing what the Ukrainian government asked. You know this, it's not a secret.
We only hope that we have the same trustworthy relations with you."
Shortly before leaving Kiev on Monday morning, Yushchenko signed a decree
appointing Tymoshenko acting prime minister; officials expect a vote on her
appointment, which must be approved by parliament, in early February.
Tymoshenko, 44, was the darling of the crowd on Independence Square in Kiev
during the Orange Revolution, the street protest movement that erupted after
a controversial Nov. 21 presidential runoff in which Yanukovych was declared
the winner. The election was subsequently declared fraudulent and the result
overturned by the Supreme Court, which ordered a Dec. 26 rerun.
Tymoshenko's fiery speeches, along with her alternating folkloric and
high-fashion dress, were in sharp contrast to Yushchenko's more conservative
appearance and speaking style. But her radical pronouncements and her
mocking wit, sometimes directed at Putin, galvanized Yushchenko's political
enemies as much as they energized the crowd in Independence Square.
As energy minister, Tymoshenko was also controversial. Her extraction of
taxes from a shadowy energy industry unsettled powerful business interests
and led to her and Yushchenko being fired by the president, Leonid Kuchma.
Tymoshenko also served as deputy prime minister under Pavlo Lazarenko, who
was convicted of fraud, money-laundering and extortion in the United States
in June. She was briefly jailed in Ukraine on charges of bribery,
money-laundering, corruption and abuse of power while working for Unified
Energy Systems, a now-defunct gas trading company.
Questions have been raised about the origins of Tymoshenko's considerable
wealth. Russian officials have issued an arrest warrant, accusing her of
forgery and gas smuggling in connection with her activities as head of the
gas trading firm in the mid-1990s. She has denied the charges, dismissing
them as politically motivated.
Yushchenko said at a separate news conference Monday evening that he had
discussed Tymoshenko's situation with Putin when he was asked if the new
prime minister would be able to travel to Russia. "I was satisfied with the
answer," he said, declining to elaborate.
Putin did not comment directly on the appointment, but the head of the
Russian Union of Industrialists and Entrepreneurs, Arkady Volsky, said it
would be "a serious mistake" if parliament approved her as prime minister.
But Sergei Markov, a Kremlin political consultant, said in a recent
interview that although Tymoshenko is "radical in her tactics, she is not
anti-Russian," and that the Kremlin would work with her. In recent
interviews, Tymoshenko stressed the importance of Russia-Ukraine relations.
==========================================================
7. TENT CITY IN UKRAINE'S CAPITAL CENTRE DISMANTLED
TV 5 Kanal, Kiev, Ukraine, in Ukrainian 0800 gmt 25 Jan 05
BBC Monitoring Service, UK, in English, Tue, January 25, 2005 (08:00)
KIEV - As of this morning, the main street of the capital city,
Khreshchatyk, is free from tents. It turned out that during the night the
tent city in Khreshchatyk consisting of 10 big tents and a few smaller ones
was dismantled. The heroes of the orange events did this voluntarily. They
held a small farewell ceremony at night and left Khreshchatyk this morning.
Khreshchatyk has been tidied up during the night. There were reports
yesterday that residents of the tent city would have left [the tent city]
but they did not have money to get home. Kiev mayor [Oleksandr] Omelchenko
promised yesterday to provide the funds. We hope to find out later who in
fact saw the people off.
[The tent city in central Kiev was pitched on 22 November after the
presidential election runoff on 21 November, the results of which were later
invalidated by the Supreme Court of Ukraine. The tent city was the epicentre
of the orange revolution. Some residents of the tent city had refused to
leave until Viktor Yushchenko's inauguration on 23 January despite his order
to take down the tents.] -30- [Action Ukraine Report Monitoring Service]
==========================================================
8. UKRAINIAN REVOLUTIONARY YOUTH PLAN PURGE OF OLD-REGIME
Beginning of the "de-kuchma-ization of Ukraine"
UNIAN news agency, Kiev, in Ukrainian 1112 gmt 25 Jan 05
BBC Monitoring Service, UK, in English, January 25, 2005 (11:12)
KIEV - The Pora public organization has declared the beginning of the
"de-kuchma-ization of Ukraine" [reference to ex-President Leonid Kuchma],
which means cleansing the country of the consequences of the old regime,
"getting rid of kuchmists in government institutions, preventing them from
insinuating themselves there, enhancing Ukrainian legislation and
fundamentally changing the state management and relations between the state
and its people", organization activists Mykhaylo Svystovych and Volodymyr
Vyatovych told a news conference at UNIAN today. [Pora took the lead in
most protests against the rigging of the presidential election last year.]
They said that the first task that Pora is planning to undertake in order to
"to cleanse the country" is to create a list of those involved in
vote-rigging and to register the violations that occurred during the
election in order to forward them subsequently to the law-enforcement
agencies.
Organization activists are also planning to draw up lists of people who lost
their jobs and were expelled from institutes of education for their
political beliefs in order to restore them to their posts and institutes of
education.
The Pora members will stay out of politics but plan to monitor the
fulfilment of the newly-elected president's election programme. They will
also demand that the murderers of journalists Heorhiy Gongadze and Ihor
Oleksandrov and other high-profile cases should be investigated and that
officials of any rank responsible for the illegal acts be brought to
account.
The Pora members are confident that all state officials must be dismissed
from their posts and appointment to the posts should be made on a
competitive basis.
Volodymyr Vyatovych said that Pora "will continue to remain the Cerberus
of democracy, and will bark at every violation and injustice" by the
authorities. -30- [The Action Ukraine Report Monitoring Service]
==========================================================
9. INVESTORS MUST STAY CAUTIOUS ABOUT UKRAINE
There is still political risk in a country divided down the middle
COMMENTARY: By Ian Bremmer
Financial Times, London, UK, Mon, January 24, 2005
Now that Ukraine's Orange revolution has produced the democratic election
of the pro-Western, market-oriented Viktor Yushchenko, market expectations
for Ukraine are positively rosy.
Bond spreads are narrowing, financial analysts are talking up Ukraine's
equity market, and investors are breathing a sigh of relief.
But too much optimism is misplaced - for Mr Yushchenko or for investors in
Ukraine. There's still substantial political risk in the country. Investors
should watch closely and remain cautious.
Ukraine's fault lines have not suddenly disappeared. Mr Yushchenko's
opponent, former Prime Minister Viktor Yanukovych, still won 44.2 per
cent of the popular vote.
Millions of Ukrainians, particularly in the southern and eastern regions of
the country, are ethnically Russian, speak Russian as a first language,
worship in the Russian Orthodox Church, and support ever closer ties
between Kiev and Moscow. Mr Yanukovych is still their man. They see that
Ukrainian nationalists from the west and north of the country have pushed
the Ukrainian-speaking, Catholic, and pro-European Mr Yushchenko to
power and wonder if their political concerns will now be ignored.
If these pro-Yanukovych Ukrainians don't believe the Mr Yushchenko
administration will protect their interests, the new prime minister's
governance challenges will be even more difficult.
In addition, while Mr Yushchenko has broad parliamentary support today,
he can't be sure the support will survive the first decisions of his
presidency.
Mr Yushchenko will make some crucial choices over the next few weeks; he
will nominate a prime minister and a cabinet. The new president would do
well to ensure that all of Ukraine's influential political groups have some
representation. He's already made one smart move: he opted to keep
Volodymyr Lytvyn as parliamentary speaker. Mr Lytvyn's agrarian party will
be closely aligned with Mr Yushchenko and will provide the new president
political inroads with some of those Ukrainians suspicious of his plans.
But Ukraine's parliamentary system remains highly fragmented. If Mr
Yushchenko takes actions that splinter parliamentary cohesion - by
nominating hardliner Yulia Tymoshenko as prime minister, for example -
he risks creating instant opposition to his reform programme from
parliamentary groups who fear their interests may be brushed aside.
Mr Yushchenko must also be sure he can rein in those on his team who, in
the name of fighting corruption, are eager to launch a frontal assault on
the oligarchs who profited from the rigged privatisation deals of the
Kuchma era. Some in Mr Yushchenko's camp would undoubtedly like to
go after Mr Yanukovych and Leonid Kuchma on charges of electoral fraud.
Fighting corruption is unquestionably a worthwhile and necessary goal. But
to pick a fight before he's ready to win would be a mistake for Ukraine's
new president.
Finally, Mr Yushchenko must manage Ukraine's all-important relationship
with Russia. Russian President Vladimir Putin unapologetically campaigned
for Mr Yanukovych and has protested what he calls the "western
interference" in Ukraine's domestic politics that helped rescue Mr
Yushchenko's candidacy from widespread vote-rigging.
Sergei Ivanov, Russian minister of defence, speaking in New York earlier
this month, warned his audience of the dangers of exporting revolutions of
any colour to the region.
Mr Yushchenko may heighten Russian-Ukrainian tensions if he visits
Washington before he calls on Mr Putin, or if he refuses to engage the
Russian president in talks on the "single economic space" that Russia hopes
to create with Ukraine, Belarus, and Kazakhstan.
Candidate Yushchenko expressed the fears of millions of Ukrainians that the
plan to more closely integrate the economies of the four former Soviet
neighbours will separate Ukraine further from the world economy, that it
constitutes a thinly veiled attempt by Moscow to restore some of its
Soviet-era influence in the region, and that the project could upset
Ukraine's plans to join the World Trade Organisation.
But if Mr Yushchenko refuses to even discuss the plan, Russian resentment
may burden the new Ukrainian president with a dangerous and determined
enemy that enjoys real influence inside his country.
Make no mistake; Ukraine is a better place to invest now that Mr Yushchenko
is set to replace Mr Kuchma. But Viktor Yushchenko must now do more than
win a bitterly contested election; he must govern a deeply divided
nation. -30- [The Action Ukraine Report Monitoring Service]
----------------------------------------------------------------------------
Ian Bremmer is president of Eurasia Group and senior fellow at the World
Policy Institute.
==========================================================
10. "BOOMING UKRAINE"
COMMENTARY: Roland Nash, chief strategist Renaissance Capital
Prime-Tass, Moscow, Russia, Tue, January 25, 2005
MOSCOW - A somewhat ironic sight in Kiev currently is of blacked
out Humvees streaming orange scarves from their windows. The
Ukrainian business establishment has been quick to display its allegiance
to the new colors. With perhaps rather more sincerity, the enthusiasm and
excitement on the street during Viktor Yushchenko's inauguration last
weekend was extraordinary. The new president starts his term with the sort
of good will that requires a successful revolution to generate.
Ukraine's asset markets are sharing the enthusiasm. That once esoteric
animal, Ukrainian equity was the best performing in the world last year, up
nearly 200%. Similarly, real estate prices in Kiev rose by 30-50% last
year, with top end property now selling at U.S. $2,500-3,000 per square
meter -- before renovation. The most 'top-end' apartment building in Kiev
is already asking $5,000 a meter.
But the boom has likely only just begun. Fitch upgraded Ukraine a notch
over the weekend to BB-, three grades below Russia. With much of the
official financial community looking with considerable sympathy on the new
regime, IFI funding is likely there for the asking. Further upgrades from
all three agencies will not be far behind, and Ukraine's under-leveraged
industrial community will likely use the opportunity to begin borrowing.
Equally portfolio funds, particularly those of the EMEA persuasion, are
seeking new opportunities to diversify away from Russia, with Ukraine
looking a good substitute. And for direct investors, a market of 50 million
people will prove tempting for those already immune to the peculiarities of
the FSU investment environment. Since the beginning of this year, the index
(PFTS) has risen over 20% -- it is likely to continue to skyrocket.
Unfortunately, Yushchenko will likely need whatever boost current
enthusiasm can provide for him. Double digit growth rates (officially 12%
last year), don't disguise a public sector that remains weak and under
financed. Despite the economic growth, the budget deficit last year was
running at 4.5% of GDP. Should China stop gorging raw materials and if
metals prices fall, then the fiscal situation will deteriorate further.
Yushchenko's first economic pronouncement, delivered during the
inauguration speech, was to restore savings and raise pensions, not boding
well for fiscal austerity.
Public finances are only the most obvious of Yushchenko's difficulties.
More fundamentally, is the administration he will inherit from his
predecessor. As he has himself many times articulated, key to change in
Ukraine (as in Russia) is a radical spring-clean of the bureaucracy. But
the only body of people at his disposal to implement that overhaul is
precisely the bureaucracy he needs to change.
Seeking the solution to the Catch-22, Yushchenko has spent much time with
his fellow revolutionary, Georgia's Mikhail Saakashvili. The Georgian
answer has been to import expatriate talent and to people government with
Mr. Saakashvili's fellow business school graduates. It seems Yushchenko is
attempting the same policy, with e-mailed requests to the Ukrainian
diaspora to return to Kiev to jobs which 'may not remunerate well, but will
provide unique experience'. Bizarrely, it was reported in Kiev that
Russia's very own Trust Investment Bank, once a part of Khodorkovsky's
empire, was coordinating the search. Unique experience indeed.
Even assuming that there are enough public-spirited, independently wealthy
Ukrainians to populate the new government, it is not clear that they will
be able to implement policy. As Saakashvili is finding out in Georgia,
understanding theory, and putting it into practice are different
propositions, particularly in a country that has evolved its own way of
conducting government.
Adding external pressure to the domestic situation, Ukraine must rapidly
evolve a working relationship with Russia. Yushchenko's stop-over in
Moscow yesterday was diplomatically sensible, but is unlikely to fully
appease a Russian administration that is somewhat touchy about its
enthusiastic support of the losing candidate. The Kremlin's political spin-
doctors learned that a selective media and an official blessing is not
always enough to convince an electorate to vote for a particular candidate.
Lessons will have been learned ahead of Russia's own presidential election
in 2008.
After Georgia and Ukraine, and with Kyrgyzstan facing presidential change
this year, Russia is likely to maneuver to improve its status in the
region. Gas, oil and energy are useful tools of Russian foreign policy, and
there is no good economic reason why prices for all should not be raised
towards world prices for Ukraine.
As well as putting even more strain on the budget, higher energy prices
will undermine the competitiveness of industry and metals in the industrial
heartland of Eastern Ukraine -- precisely where Yushchenko's position is
weakest. The result could be further destabilization of the country during
any attempt at radical reform.
Viktor Yushchenko has won a remarkable, and largely unexpected, victory
in Ukraine both for his supporters and for democratic process in the region.
But, as Yegor Gaidar found in 1992, enthusiasm for an alternative to an
unpopular regime does not translate into support for a set of difficult
reforms. The West was slow to respond to Russia in the early nineties,
providing too much too late.
If the Yushchenko experiment works in Ukraine it will illustrate what is
possible to a part of the world that has become distinctly disillusioned
with the apparent failure of democracy and the free market. If President
Bush was serious in his inauguration speech about exporting freedom, he
would do well to work with Russia to provide support for Ukraine.
Whatever the speed and size of the political support in Ukraine, financial
enthusiasm is already apparent. Daily turnover on the PFTS (Ukrainian
index) is around $3 million, with OTC turnover only adding another $7
million. The entire market capitalization of traded industry is only $8
billion to $10 billion. In those circumstances, given the fund flow in the
region, Ukrainian equity is likely to fly even higher in the first months
of 2005. Experience would suggest that it may get considerably ahead of
the reality of actual economic improvement. In the meantime, the ride is
there to be experienced. -30- [Action Ukraine Report Monitoring]
==========================================================
11. "RUSSIA-UKRAINE: A NEW CONTEXT"
COMMENTARY: Arseny Oganesyan
RIA Novosti, Moscow, Russia, Wednesday, January 26, 2005
MOSCOW - Moscow's reaction to the appointment of Yulia Timoshenko as
acting prime minister of Ukraine could become virtually the highlight of
President Yushchenko's recent Moscow visit. Many commentators believe that
Ms. Timoshenko's appointment a day before Mr. Yushchenko's meeting with
President Vladimir Putin could be viewed as a slap in the Kremlin's face for
supporting Viktor Yanukovich. But is this the case?
It is true that the main appointment in Kiev has a clear political meaning,
but it is not connected with Russo-Ukrainian relations.
The post of prime minister was promised to Ms. Timoshenko for teaming up
with Viktor Yushchenko before the election. And the new Ukrainian president
seems to be a man of his word. "After considering various factors, the
Ukrainian leader decided that he simply must fulfil his promises, for
internal political considerations," said Boris Makarenko, an expert at the
Center of Political Technologies. "So, the appointment of Ms. Timoshenko is
an internal Ukrainian matter."
This view is shared by Konstantin Simonov, general director of the
Political Situation Research Center, who thinks it was clear to everyone
that Mr. Yushchenko would nominate Ms. Timoshenko for the premier's chair
in return for organizing the "orange revolution." It was also clear that
the appointment would be made soon after the inauguration. On the other
hand, by making his first foreign visit to Moscow, Mr. Yushchenko is trying
to show that Moscow can and should talk with him, the expert said.
By appointing Ms. Timoshenko, the new Ukrainian president also ruled out
the possibility of any discussion of the issue with his Russian
counterpart. There is nothing criminal in that. Alexander Khramchikhin, an
expert at the Institute of Political and Military Analysis, views this as a
clear signal to Moscow that the new Ukrainian leadership will pursue an
independent policy.
Regardless of what it may think of the new Ukrainian premier, the Kremlin
understands and accepts the circumstances of Ms. Timoshenko's appointment.
Another delicate aspect of Mr. Yushchenko's visit could be the exchange of
opinions on Moscow's broad and apparent support for his political opponent,
Viktor Yanukovich. To all appearances, Ukraine accepted Vladimir Putin's
explanation that Russia dealt with Mr. Yanukovich and other Ukrainian
politicians at the official level.
The election is over and, however dramatic the political situation has been
in Ukraine in the past few months, Moscow and Kiev should draw a line
under it and start creating a new political context for bilateral relations.
It will largely depend on the progress of the constitutional reform in
Ukraine, Kiev's relations with the regions, and the economic situation.
==========================================================
12. THE UKRAINIAN ELECTIONS - VIEWS FROM RUSSIA
By Sergey Kolmakov, Deputy Director,
Government Relations, PBN Russia
Access PBN, The PBN Company, Volume 1 Issue 23
Moscow, Russia, Tue, January 25, 2005
The drama of the Ukrainian presidential elections is over and a gradual
return to normal intergovern- mental relations with Russia began with
Monday's summit between Russian President Putin and Ukraine's newly
inaugurated president, Viktor Yushchenko.
Despite this "thawing of tensions," the election results in Ukraine have
and will continue to have long-term consequences for a wide range of
issues, including Russia's relations with the United States and the West in
general; Russia's relations with other post-Soviet republics; the character
and trajectory of Russian-Ukrainian relations; and, even the development
of Russia's own internal political agenda.
Vyacheslav Nikonov, a political policy analyst with close ties to the
Kremlin and a senior advisor to The PBN Company and our clients, said,
"Russia - and Putin personally - invested significant effort and prestige
into the Ukrainian electoral campaign, which they thought had been
successful . . . Moscow views what is now taking place as an
unconstitutional coup, as the first instance in history of a geopolitical
covert operation pulled off by a combination of Western interests on so
large a scale - i.e., revolutionary regime change in a post-Soviet republic
allied with Russia."
But in many respects it is inconceivable to think of a permanent
Russian-Ukrainian standoff. Russia and Ukraine are historically, culturally
and economically intertwined. Hundreds of thousands of Ukrainian citizens
live and work in Russia, sending salaries to their families back home, and
many Russians and Ukrainians have cross-border family ties going back
generations. While Yushchenko's election certainly emphasizes Ukraine's
European aspirations, it is inconceivable that the European Union will
welcome Ukraine into its midst in the foreseeable future. Moreover, Russia
remains one of the most important markets for Ukrainian goods and services.
Ukraine's non-energy trade balance with Russia is positive - to the tune of
US$1.5 billion. Further, Russian and Ukrainian cooperation in certain
advanced technologies - missile production, avionics, and related fields -
provides a positive impetus for future cooperation. Whether they like it or
not, Russians and Ukrainians will need to continue working together.
A CORDON SANITAIRE AROUND RUSSIA
But the elections have nonplussed Russia's political leadership, including
President Putin personally. The magnitude of this foreign political
intervention is being compared with the Russian defeat by the combined
forces of Turkey, France and Great Britain during the Crimean War in the
mid-Nineteenth Century.
From Russia's perspective, Ukraine's election results provide the U.S. and
the European Union with an essentially free hand in the economic and
political affairs of the CIS. Russia's political élite views this as the de
facto creation of a cordon sanitaire around Russia. When he came to power
in 2000, President Putin vowed to re-establish Russia's preeminence in its
traditional zone of influence, meaning throughout the former Soviet Union.
Various provisional models were considered as potential vehicles for
reintegration. Unfortunately, none produced adequate results.
The recent agreement on a unified economic zone among Russia, Belarus,
Ukraine and Kazakhstan was the first real step toward realizing Russia's
broader political agenda. Practically on the eve of the Ukrainian
elections, this agreement lowered customs duties and taxes, thereby setting
the framework for a unified market for goods and services. This subject was
discussed at length during Yushchenko's first meeting with Russian
President Putin, and the two sides agreed to build on the substantial work
already accomplished toward an integrated economic zone for the CIS
republics.
At their first presidential summit, Putin and Yushchenko made clear their
intentions to overcome the lingering effects of Russia's involvement in the
Ukrainian election process. This is without doubt a good start; but of
course the essential issues remain unresolved.
At the same time, Yushchenko's appointment of Yulia Tymoshenko as Prime
Minister was not welcomed by the Kremlin. Tymoshenko faces charges and an
arrest warrant in Russia on alleged forgery and gas smuggling from her days
as head of a private gas trading firm in the 1990s - charges she vehemently
denies.
What are the possible consequences of continued tensions in
Russian-Ukrainian relations? Russia might develop a more isolationist
posture and distance itself even further from the West. Putin's
much-vaunted "good chemistry" with leaders of Western nations, including
the United States, is also likely to suffer.
Russian political leaders are especially alarmed by the apparent volatility
and mobility of the "orange peril." In their terms, this refers to the
ability of a group of agitators to mobilize significant numbers of the
public at large by using non-governmental civic organizations and
technologies such as the Internet, cell phones, and printing presses for
banners and T-shirts.
RUSSIA'S ALIGNMENT WITH OTHER CIS COUNTRIES
Geopolitically, Russia is becoming more closely aligned with Belarus,
Kazakhstan and the Central Asian republics. Domestically, Russia is
expected to redouble its efforts toward combating "internal enemies" and -
in general - a tightening of the government's law enforcement and
administrative- regulatory structures.
If Yushchenko follows through on his "orange" rhetoric of decoupling
Ukraine from the unified economic zone and accelerating Ukrainian
momentum toward joining NATO, the Russian-Ukrainian relationship
would likely be strained.
Any of the following developments would serve to complicate Russian-
Ukrainian relations even further:
Any Ukrainian decision to review or unilaterally alter currently existing
agreements with Russia regarding transporting oil and/or gas via Ukraine to
Europe;
Any disruption of industrial cooperation - especially involving production
of aviation or military equipment of any kind - or introduction of Western
investors into this relationship;
Any hint that the Ukrainian government plans to review the status of the
Russian Navy's Black Sea Fleet, which is currently stationed in Sevastopol;
A perception that Russian business interests are being targeted for
negative treatment on a selective basis - i.e., bias - in the Ukrainian
market.
Although the first meeting between Putin and Yushchenko went as well as
could be reasonably expected, Moscow will undoubtedly observe the new
Ukrainian president's future statements and actions closely to discern
whether and to what extent he remains steadfast to his stated commitment to
overcome the current rift in relations with Russia. www.pbnco.com -30-
==========================================================
13. KIEV-MOSCOW MENDING FENCES
Relationship that could be: "rational, successful, (and mutually)
beneficial."
ANALYSIS: Peter Lavelle for UPI
UPI, Moscow, Russia, Tuesday, January 25, 2005
MOSCOW - Keeping his word, Ukraine's newly inaugurated President
Viktor Yushchenko made Russia the destination of his first state visit on
Monday.
Yushchenko and his Russian counterpart, Vladimir Putin, both focused in
what both countries have in common. They agreed on many issues, and it was
not immediately apparent where the two leaders did not find common ground.
However, there is no doubt Ukrainian-Russian relations are on the mend.
Yushchenko, inaugurated Sunday as third president of post-Soviet Ukraine,
said he wanted Ukraine-Russia relations to be "rational, successful, (and
mutually) beneficial." Putin in return stressed that his support of
Yushchenko's opponent, Viktor Yanukovych, during Ukraine's troubled
presidential elections had come at the request of the former Ukrainian
government. Putin wisely cast Russia's involvement in Ukraine's domestic
politics as state-to-state relations instead of "meddling" political
interference. Yushchenko's pragmatic words and Putin's "explanation" was
what was needed to break the ice and move forward.
What is publicly known about the Yushchenko-Putin encounter stressed mutual
interests, with Yushchenko affirming Russia as Ukraine's "eternal strategic
partner." Putin, in turn, cited the strong natural gas partnership between
the two countries and called for both Ukraine and Russia to work together
to increase market share in European markets. Putin noted that Ukraine
earns $1.5 billion annually from selling Russian natural gas to Europe.
Putin also, in a comment that was anything but subtle, reminded his guest
of Ukraine's dependence on Russia for 60 percent of its foreign trade.
For his part, Yushchenko delighted Russia's metals conglomerates, stating
again his government will review the sale of 93 percent of Ukraine's
largest steel producer, Kryvorizstal. Kryvorizstal was sold at auction to
former president Leonid Kuchma's son-in-law last year for $800 million.
Russia's Severstal had bid $1.2 billion for the Ukrainian company, with
U.S. Steel offering $1.5 billion. Calling the auction state "theft,"
Yushchenko plans not only to attract foreign investment to Ukraine's
lucrative steel sector, he is also about to start his own offensive against
his county's oligarchs.
The only possible public unease surrounding Yushchenko's visit was his
appointment of Yulia Tymoshenko as acting prime minister. Tymoshenko, an
important Yushchenko political ally and called the "gas princess" because
of the vast fortune she made heading a gas-trading firm, is technically
subject to an arrest warrant in Russia. According to Russian authorities,
she faces charges of forgery and gas smuggling. Yushchenko and Putin
discussed this issue, and it appears that Tymoshenko's legal problems in
Russia have been temporarily waived.
Coming to a compromise concerning Tymoshenko is a very positive signs
that Ukrainian-Russian relations will be exactly what Yushchenko wants -
"rational, successful, (and mutually) beneficial." Both Yushchenko and
Putin may also be calculating that Tymoshenko's pending confirmation as
prime minister, subject to a parliamentary vote, is hardly a done deal.
The publicly discussed issues of the Ukrainian-Russian relationship went
reasonably well for Yushchenko and Putin. However, they surely had many
other issues to discuss in private.
Putin certainly wanted to know whether Ukraine would honor its commitments
to the Single Economic Space, a trading bloc that includes Russia,
Kazakhstan, Belarus and Ukraine. Will Ukraine respect the military
agreements and subsidiary agreements governing the operation of the Black
Sea Fleet? Will it continue to uphold cooperation agreements concerning the
armed forces, security and intelligence services and other state agencies?
Will the status of agreements hold concerning both countries' defense
industrial complexes, gas transit and other components of the energy
sector? As Yushchenko deals with Ukraine's oligarchs, will he honor
privatization agreements involving Russian interests?
In turn, Yushchenko probably had a few questions for Putin. Is Russia
willing to make Ukraine's participation in the Single Economic Space
compatible with European Union standards? Is Russia willing to recast
agreements concerning the Black Sea fleet, ensuring their transparency? Is
Russia prepared for Ukraine to publish a wide array of agreements on
Ukraine-Russia relations that remain secret?
Specifics covering all these issues have not been made public, with the
exception of Ukraine's continued commitment to existing energy agreements.
However, it is reasonable to assume that none of the other issues presents
an insurmountable barrier as Yushchenko and Putin recast the bilateral
relationship. Dealing with these issues can be resolved in a "rational,
successful, (and mutually) beneficial" way.
Yushchenko also spoke of the need to "throw away myths and legends" about
the how Ukraine's recent political crisis has divided his country. This
comment appears to be directed at those Ukrainians who did not vote for him
as well as at his huge Russian neighbor. Yushchenko needs a united Ukraine
to be an effective partner with Russia as well as to constructively engage
European institutions. Given all the bitter sentiment that has marred
Ukraine-Russia relations over the past few months, Putin probably came
away from his meeting with Yushchenko thinking a new bilateral relationship
could indeed be "rational, successful, (and mutually) beneficial." -30-
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