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Action Ukraine Report

"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"

UNITED STATES CONGRESS TO SNUB VIKTOR YUSHCHENKO?
Hero of the Orange Revolution, Democracy for Ukraine

"President of Ukraine Viktor Yushchenko still did not receive an invitation
to address a joint session of both chambers of the US Congress. It is
possible that such an invitation will not come at all, Radio Liberty was
told in the office of Dennis Hastert, Speaker of the House of
Representatives." [article one]

"THE ACTION UKRAINE REPORT" - Number 445
E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, MONDAY, March 21, 2005

-----INDEX OF ARTICLES-----
"Major International News Headlines and Articles"

1. "YUSHCHENKO WILL NOT VISIT CAPITOL HILL?"
Ukrayinska Pravda, Kyiv, Ukraine, Sunday, March 20, 2005

2. "HEARING FROM YUSHCHENKO"
By Andrew Stuttaford, The National Review Online
New York, NY, Saturday, March 19, 2005

3. INVITE UKRAINE PRESIDENT TO ADDRESS U.S. CONGRESS
ACTION ITEM - FOR YOUR IMMEDIATE ATTENTION & ACTION
U.S.-Ukraine Foundation (USUF) Update
Washington, D.C., Thursday, March 17, 2005

4. STATE SECRETARY ZINCHENKO DISCUSSES PRESIDENT
YUSCHENKO'S FORTHCOMING VISIT TO UNITED STATES WITH
DELEGATION FROM INTERNATIONAL REPUBLICAN INSTITUTE
Ukrinform, Kyiv, Ukraine, Friday, March 18, 2005

5. PRESIDENT VIKTOR YUSHCHENKO TO MEET WITH MYKOLA
MELNYCHENKO AND ALEKSANDR YELYASHKEVICH IN USA
Hanna Snigur-Grabovska, Ukrinform, Kyiv, Ukraine, Thu, March 20, 1005

6. YUSHCHENKO BROUGHT PUTIN TO HIS DACHA AND FED HIM
Ukrayinska Pravda, Kyiv, Ukraine, Sunday, March 20, 2005

7. UKRAINE CONTINUES TO CHALLENGE RUSSIA'S ROLE AS A
CENTER OF GRAVITY IN POST-SOVIET LANDS
Yushchenko challenges Moscow's leadership role in the post-Soviet space.
By Igor Torbakov, Eurasia Daily Monitor
Vol 2, No. 54, The Jamestown Foundation
Washington, D.C., Friday, March 18, 2005

8. "YUSHCHENKO'S FIRST 50 DAYS"
ANALYSIS: by Peter Lavelle, UPI Moscow correspondent
UPI, Moscow Russia, Tue, March 15, 2005

9. "YUSHCHENKO'S PROBLEMS"
The fate of Russian investments in Ukraine
By Elena Zvereva, Moskovskii Komsomolets, No. 55
Moscow, Russia, Wednesday, March 16, 2005

10. YUSCHENKO INITIATES CREATION OF INVESTORS' COUNCIL
Ukrainian News Agency, Kyiv, Ukraine, March 20, 2005

11. PRESIDENT VIKTOR YUSHCHENKO APPOINTS IVAN VASIUNIK
FIRST DEPUTY STATE SECRETARY OF UKRAINE
Ukrinform, Kyiv, Ukraine, Friday, March 18, 2005

12. RUSSIA AND UKRAINE MAKING UP IS HARD TO DO
Two presidents at odds, but still needing each other
Report from Moscow, The Economist
London, UK, Week of March 19-25, 2005

13. RUSSIA-UKRAINE: DON'T PANIC
Russia should avoid over-reacting to Ukraine's political plans
By Vladimir Frolov, Vedomosti
Moscow, Russia, Friday, March 18, 2005

14. PRESIDENT SAYS THERE MUST NOT BE ANY POLITICAL
SPECULATIONS WITH REGARD TO VICTORY DAY CELEBRATIONS
Ukrinform, Kyiv, Ukraine, Wed, March 16, 2005

15. ON MAY 9 WAR VETERANS WILL BE ABLE TO CEREMONIOUSLY
MARCH ALONG KHRESCHATYK STREET AND MARK VICTORY DAY
JOINTLY WITH STATE LEADERS, MYKOLA TOMENKO SAYS
Ukrinform, Kyiv, Ukraine, Wed, March 16, 2005

16. MOSCOW HOSTS CONFERENCE TO MARK 61ST ANNIVERSARY
OF EXTERMINATION CAMP DEATH LOOP'S LIBERATION DURING WWII
By Anatoli Grigoryev, Ukrinform, Kyiv, Ukraine, March 19, 2005

17. MINISTRY FOR CULTURE AND ARTS ANNOUNCES CONTEST
FOR BEST SCRIPT TO SHOOT TARAS BULBA FEATURE FILM
Viktor Chukhlib, Ukrinform, Kyiv, Ukraine, Wed, March 16, 2005

18. FOREIGN MINISTER TARASYUK: UKRAINE TO CONTINUE
SPREADING TRUTH ABOUT 1932-1933 FAMINE AND INSIST
ON ITS RECOGNITION AS GENOCIDE
Ukrinform, Kyiv, Ukraine, Tuesday, March 15, 2005
===============================================================
1. "YUSHCHENKO WILL NOT VISIT CAPITOL HILL?"

Ukrayinska Pravda, Kyiv, Ukraine, Sunday, March 20, 2005

President of Ukraine Viktor Yushchenko still did not receive an invitation
to address a joint session of both chambers of the US Congress. It is
possible that such an invitation will not come at all, Radio Liberty was
told in the office of Dennis Hastert, Speaker of the House of
Representatives.

According to an official, the organizing of such an address is a difficult
procedure, which requires a co-ordination of many officials and
institutions. At the same time, both chambers of the Congress have
already left for their Easter vacations until April 5. [terrible excuse,
Speaker Hastert has known about the Yushchenko visit for weeks]

The initiative to arrange Viktor Yushchenko's Congress address during his
visit to the US in April belongs to the Ukrainian diaspora in America. This
initiative has been supported by the minister of foreign affairs Borys
Tarasyuk, but the attempts are unsuccessful as of yet.

The tradition of foreign leaders addressing American congressmen dates
back almost two centuries. Lech Walesa, Vaclav Havel, Nelson Mandela
and Boris Yeltsin have made such a speech in the past, along with leaders
of western European states. Representatives of the Ukrainian diaspora
in the US are certain that Viktor Yushchenko also deserves an invitation
to make a Congress speech.

"President Yushchenko today is one of the most popular state leaders in the
world. The whole world knows of him - his poisoning, recovery from it and
the courage that it took to lead the Orange Revolution and to achieve the
necessary changes in Ukraine," - says Ihor Havdiak [Gawdiak], head of
Ukrainian-American Coordination Council.

However, apparently the "Orange Revolution" in Ukraine will not be reason
enough to invite Yushchenko for a Congress address.

At the same time, the beginning of Ukrainian army's pullout from Iraq and
a unilateral wish of Kyiv to have the bill for that sent to the US somewhat
lower the euphoria in Ukrainian-American relations which began right after
Yushchenko's victory.

An example of the White House's more reserved stance towards the new
Ukrainian government is an emphasis on calling the first visit of Yushchenko
to the US a "working" visit, instead of a more prestigious "state" visit.

Though the Americans explain this by lack of time, Washington was able to
organize a state visit of the Georgian president Mikheil Saakashvili in only
several weeks. Saakashvili came to the US a month after his inauguration.

Despite the numerous demands of the Ukrainian diaspora, supporting
statements from influential Senators Hillary Clinton, Richard Lugar and John
McCain, and the transparent hints of Ukrainian diplomats, the leadership of
Congress is being slow to invite Viktor Yushchenko to speak at the Capitol
Hill. And, according to observers, if such this address will not happen
altogether, the reason will be the position of president Bush, Radio Liberty
notes. -30- [The Action Ukraine Report Monitoring Service]
============================================================
2. "HEARING FROM YUSHCHENKO"

By Andrew Stuttaford, The National Review Online
New York, NY, Saturday, March 19, 2005

New Ukrainian president Victor Yushchenko will be visiting Washington in
April. That's good news.

As the winner of an election that may represent a truly remarkable extension
of democracy in a part of the world where freedom and the rule of law have
been all too rare, and all too needed, an election which seems to be acting
as an inspiration to other peoples from Lebanon to Kirkizstan, it would seem
natural that Yushchenko should also be invited to speak to a joint session
of Congress.

Weirdly, House Speaker Hastert has not got round to asking him.

Perhaps he felt legislators had more important things to do.

Such as holding hearings on baseball.

Ridiculous.
-----------------------------------------------------------------------------------------------
http://www.nationalreview.com/thecorner/corner.asp
===============================================================
3. INVITE UKRAINE PRESIDENT TO ADDRESS U.S. CONGRESS
ACTION ITEM - FOR YOUR IMMEDIATE ATTENTION & ACTION

U.S.-Ukraine Foundation (USUF) Update
Washington, D.C., Thursday, March 17, 2005

Dear Friends,

As you have heard, President Viktor Yushchenko will visit the United States
from April 4 - April 6, 2005 to meet with President Bush, U.S. Government
officials, and members of the Ukrainian-American community in Washington,
DC and Chicago.

We are very pleased that President Yushchenko has been invited to meet
with President Bush for 2.5 hours at the White House on April 4. However,
we remain concerned that the Speaker of the House J. Dennis Hastert has
not invited Pres. Yushchenko to speak at a Joint Session of Congress
during his stay here.

Since fall 2004, the world has watched the people of Ukraine and their
leader become modern heroes and examples of peace, courage,
persistence, and the victory of democracy over tyranny. Many peoples
in the region and around the world - as far as Beirut - are inspired by
the example of Ukraine's Orange Revolution as they forge out the futures
of their own countries.

The U.S. Government and many Members of Congress have expressed their
admiration of President Yushchenko's exciting agenda to target corruption,
rule of law, economic development, and integration with the Euro-Atlantic
community. Ukraine's achievements and dedication to democracy will render
it an invaluable partner and ally, standing shoulder to shoulder with the
United States and the West.

As the whole world has recognized the achievements of the Orange
Revolution, we believe that is fitting - and needful - for the U.S. Congress
to demonstrate its commitment to freedom and democracy everywhere
by inviting President Yushchenko to address a Joint Session in Congress.

President Yushchenko will join his colleagues and friends, President
Mikhail Sakaashvili of Georgia and President Karzai of Afghanistan who
also addressed Joint Sessions, to raise the bright light of democracy
to many around the world, well beyond the fall 2004 Orange Revolution.

We appeal to you to telephone Speaker Hastert immediately to urge
him to invite President Yushchenko to address Congress.

We also encourage you to call your senators and representatives
immediately to encourage them to contact Speaker Hastert.

Contact U. S. House Speaker J. Dennis Hastert at:

Phone: 202-225-2976; Fax: 202-225-0697
============================================================
4. STATE SECRETARY ZINCHENKO DISCUSSES PRESIDENT
YUSCHENKO'S FORTHCOMING VISIT TO UNITED STATES WITH
DELEGATION FROM INTERNATIONAL REPUBLICAN INSTITUTE

Ukrinform, Kyiv, Ukraine, Friday, March 18, 2005

KYIV - Ukraine's State Secretary Oleksandr Zinchenko met with a
delegation from the International Republican Institute [IRI] by United
States federal court judge Bogdan Futei [Futey] on Friday.

According to information from the Ukrainian presidential press service, Mr.
Zinchenko and members of the delegation discussed President Viktor
Yuschenko's visit to the United States that is scheduled for early April.

They also discussed the prospects for the International Republican
Institute's operations in Ukraine, including its operations under a program
for training and raising the qualifications of employees of central and
local government organs.

The International Republican Institute is a nonprofit organization that
focuses on protection of democracy, freedom of self-government, and
the rule of law. -30- [The Action Ukraine Report Monitoring Service]
============================================================
5. PRESIDENT VIKTOR YUSHCHENKO TO MEET WITH MYKOLA
MELNYCHENKO AND ALEKSANDR YELYASHKEVICH IN USA

Hanna Snigur-Grabovska, Ukrinform, Kyiv, Ukraine, Thu, March 20, 1005

KYIV - During his upcoming visit to the USA President Viktor Yushchenko
will meet there with Mykola Melnychenko (ex-president Kuchma's former
guard) and Aleksandr Yelyashkevich (once a VR deputy), Vice Premier
for humanitarian and social matters Mykola Tomenko told a news conference,
which was dedicated to the 7th European Ministerial Conference.

According to Mykola Tomenko, testimony by Mykola Melnychenko and
Aleksandr Yelyashkevich is very important to consummate the Gongadze
case.

After relevant diplomatic and organisational procedures have been completed
Messrs Melnychenko and Yelyashkevich, who both have the status of political
refugees and are in the USA, will return to Ukraine. Both men have confirmed
their readiness to testify in the Gongadze case, Mr Tomenko said. According
to Mykola Tomenko, Mykola Melnychenko has agreed to turn his audiotapes
over to the Prosecutor General Office. -30- [Action Ukraine Report
Monitoring]
===============================================================
6. YUSHCHENKO BROUGHT PUTIN TO HIS DACHA AND FED HIM

Ukrayinska Pravda, Kyiv, Ukraine, Sunday, March 20, 2005

KYIV - On Saturday night the president of Ukraine Viktor Yushchenko
and his wife Kateryna received Russian president Vladimir Putin in their
dacha house in Novi Bezradychi.

Yushchenko has shown Putin his collection of national clothing, agricultural
and household devices, the items dated to Trypillian culture and also the
collection of ancient icons.

Yushchenko joked that the entire Ukraine was represented in his dacha
house, says his official website. After that Yushchenkos invited Putin to
dine at their place.

Vladimir Putin presented a bouquet of flowers to Kateryna Yushchenko
who met the guests at the dacha. -30-
===============================================================
7. UKRAINE CONTINUES TO CHALLENGE RUSSIA'S ROLE AS A CENTER
OF GRAVITY IN POST-SOVIET LANDS
Yushchenko challenges Moscow's leadership role in the post-Soviet space.

By Igor Torbakov, Eurasia Daily Monitor
Vol 2, No. 54, The Jamestown Foundation
Washington, D.C., Friday, March 18, 2005

As Russian President Vladimir Putin prepares to meet with his Ukrainian
counterpart Viktor Yushchenko on March 19, Kyiv defies Moscow's
leadership role in the post-Soviet space.

On March 14, Yushchenko held an unprecedented meeting with a group of
about 20 top Russian business executives, including the heads of Lukoil,
Basic Element, AFK Sistema, Vneshekonombank, Vneshtorgbank,
AvtoVAZ, and Itera.

Most analysts agree that, in terms of the number of participants and their
rank, only the Kremlin has previously convened such gatherings. To be sure,
the timing of the meeting was linked with Putin's upcoming visit to Ukraine.
But it was not the Kremlin's idea to bring Russian "oligarchs" to Kyiv.

That initiative came from the Yushchenko administration and was successfully
realized in a surprisingly short period of time. It appears that the
Ukrainian president's office sent invitations on March 10-11 and, just three
days later, the leading Russian tycoons assembled in Ukraine's capital
(Vedomosti, Kommersant, March 15).

There are several reasons behind Yushchenko's invitations. FIRST, the
Ukrainian leadership is anxious to dispel any possible fears caused by the
ongoing talk of revising certain privatization deals dating from the days of
the thoroughly corrupt Kuchma administration.

SECOND, Yushchenko understands full well that his government's political
success depends mainly on its economic performance. The latter, however,
hinges on how much foreign investment Kyiv is able to attract in the
immediate future.

Yushchenko promised the Russian businessmen to create an especially
friendly investment climate for them. Having emphasized the positive role
that Russian businesses have already played in Ukraine, Yushchenko
specifically stressed, "We welcome the capital inflow regardless of
geography; what matters is that the capital is honest."

THIRD, the meeting obviously has a political dimension. As the Kremlin
makes clear that it does not regard its interest in Ukrainian elections over
and is likely dreaming of political revanche in Ukraine's 2006 parliamentary
polls, the Yushchenko government deems it important to send a warning
signal to Russian businesses that might be tempted to get involved in
Ukrainian politics. In plain words, Kyiv unambiguously explained to the
Russian "oligarchs" that providing financial support for some segments
of the Ukrainian elite in the east and south of the country who entertain
"federalist" or "separatist" sentiments might prove risky business.

According to one Russian participant in the meeting, Yushchenko began his
opening remarks with a statement that Ukraine would not be divided into
parts but would remain unified, adding, "This page in Ukrainian history had
already been turned." Having issued a stern and clear-cut warning,
Yushchenko went on to highlight all the advantages of investing in good
relations with the "orange" government rather than attempting to undermine
it (Kommersant, March 15).

More broadly, Yushchenko made clear to the leading Russian industrialists
that he intends to discuss the guarantees on Russian investments directly
and not through his Russian counterpart in the Kremlin. In other words, all
issues pertaining to the development of Russian business in Ukraine need
to be resolved in Kyiv, not Moscow.

Later, in an interview with the Moscow-based business daily Kommersant,
Yushchenko openly acknowledged that he was trying to win Russian
businessmen over to his side: "I told them bluntly: I would do everything so
that you feel more comfortable in Ukraine than in Russia." The Ukrainian
president also admitted that he did not discuss the issue of his direct
relationship with key Russian businessmen with Putin, adding, "It is
unlikely we would manage to agree on this" (Kommersant, March 18).

Some commentators point out that by reinforcing his position with Russian
big business, Yushchenko gained additional maneuvering room and would
be able to hold negotiations with Putin in a more self-assured way. At a
minimum, it will likely be more difficult for the Kremlin to resort to its
traditional argument in discussions with Kyiv -- namely, that the Ukrainian
economy fully depends on Russian one. It would also undermine the
familiar corollary of Moscow having political leverage over Kyiv.

In preparation for his meeting with Putin, Yushchenko has already asserted
Ukrainian interests in the issue seemingly dearest to Putin's heart -- the
formation of the Single Economic Space (SES). Speaking with a correspondent
from Vremya novostei, Yushchenko stressed that all agreements dealing with
the SES should correspond with his country's national interests. In
particular, these agreements "should not block the road toward [Ukraine's]
full-blown membership of the European Union." "I won't sign a single
document that contradicts this principle," Yushchenko declared (Vremya
novostei, March 17).

Many Ukrainian and Russian analysts contend that Kyiv's new Europe-oriented
foreign policy doctrine turns the Moscow-centered Commonwealth of
Independent States into an empty and senseless institution. The CIS,
predicts noted Ukrainian expert Dmytro Vydrin, will inevitably be replaced
by bilateral economic and political relations between countries that earlier
were part of the Soviet Union (Parlamentskaya gazeta, March 5). -30-
-----------------------------------------------------------------------------------------------------------
LINK: http://www.jamestown.org/edm/article.php?article_id=2369445
===============================================================
8. "YUSHCHENKO'S FIRST 50 DAYS"

Analysis: by Peter Lavelle, UPI Moscow correspondent
UPI, Moscow Russia, Tue, March 15, 2005

MOSCOW - Viktor Yushchenko has been Ukraine's president for 50 days.
During this time he has made good on a number of high-profile promises,
but policy tensions within his government -- headed by Prime Minister Yulia
Tymoshenko -- are steadily becoming evident. The "Orange Revolution" is
far from complete and faces some stormy sailing.

The final weeks of last year saw Ukraine undergo dramatic political change.
A corrupt president and his cronies were overthrown in a popular uprising.
The opposition united under the rubric of the "Orange Revolution" stood up
to a regime that no longer believed in itself.

However, almost two months into his administration, Yushchenko is finding
the unity that brought him to power is being tested. Yushchenko is not
faced with a resurgent "old regime" backlash, but rather from competing
agenda from his prime minister.

The first 50 days of the "Orange Revolution" has seen Yushchenko and
Tymoshenko pursuing and being responsible for different policy spheres.
Yushchenko has opted to pay attention to foreign policy issues, with very
general comments about economic policy. Tymoshenko's area of
responsibility is the economy and some international issues. The lack of
a strong policy overlap has seen both achieve results in their respective
spheres, but this separation can't last for long.

There is no doubt Yushchenko is on of the most popular figures on the world
today. Business leaders and politicians attending the Davos World Economic
Forum vied for a photo-op with Ukrainian president. Yushchenko's attendance
at the memorial events in Auschwitz, Poland, at the end of January also
attracted enormous media coverage.

Yushchenko is using his new-found status to its maximum effect. Promising
to unequivocally recast Ukraine's foreign policy, has gotten the attention
of Western leaders to promote his country's eventual induction into such
institutions as the World Trade Organization, the European Union and even
NATO -- while redefining relations with Russia.

The new president has also pushed hard for foreign investment. Yushchenko
and Tymoshenko don't always appear to agree on this issue.

At home, Yushchenko, with an eye on parliamentary election to be held in
year's time, has focused on defeating his political opponents by political
means. He has called for high-level and thorough investigations of past
injustices; the aggressive investigation of the slain journalist Georgiy
Gongadze stands as the best example. Yushchenko's other high-profile
domestic political interests include publicly investigating past secret
deals made by the state and finding out who poisoned him during the
presidential campaign.

Yushchenko's approach to the economy has been very general, primarily
concerned with assuring fiscal and monetary stability, creating a favorable
investment climate and building solid foundations for sustainable growth.
In short, Yushchenko can be described as an economic liberal supporting
a laissez-faire approach.

Tymoshenko is very different. Judging by her public statements, Tymoshenko
supports strong state intervention in the economy and a statist economic
policy. While Yushchenko uses political means to deal with his enemies,
Tymoshenko is attempting to exert economic and financial control over
political opponents through tough state regulation. Her calls to revisit
the privatization of a thousand formerly state-owned firms has not only
shaken business confidence, it has also alarmed minority shareholders in
former state firms. Potential foreign investors have also questioned
Tymoshenko's intentions.

While Tymoshenko and many Ukrainians would probably disagree, she
has actually torn a page from Russian President Vladimir Putin's playbook.
Ukraine's economy, much like Russia's, is largely controlled by
"oligarchic" clans -- most of whom supported Yushchenko's opponent
Viktor Yanukovych. Putin has challenged Russia oligarchs by attacking
the oil giant Yukos and significantly empowered the tax authorities.

Tymoshenko -- regarded by many as an "oligarch" -- clearly sees the
political advantages of the mere threat of re-privatization of state
property to keep her political opponents on the defensive.

Her use of the tax code for political purposes is a clear possibility. Her
demand that all state-owned firms conduct a thorough audit in a month's
time is a tall and almost impossible order -- many of these firms have
never been audited.

Yushchenko and Tymoshenko appear to represent two different faces of
the "Orange Revolution." One face is very liberal and courting the West;
the second is statist with an eye to keep political enemies on notice while
reforming the economy. Will these two aims eventually collide?

Both will probably go to great lengths to avoid any meaningful public
disagreement for the time being -- having already agreed to approach the
2006 parliamentary election as a team. However, the differences that
separate Yushchenko and Tymoshenko can't remain hidden for long.

Yushchenko's role as president and super ambassador-at-large will be
degraded in the eyes of his potential Western partners and foreign
investors if Tymoshenko moves too hard and fast against the economic
power of the "old regime." If Tymoshenko doesn't move fast enough to
fight corruption and improve the standard of living for the average
Ukrainian, the great hopes of the "Orange Revolution" Yushchenko
and Tymoshenko are identified with could be challenged by the
voters 12 months from now.

Yushchenko's first days as president have not institutionalized the "Orange
Revolution." They have only highlighted what might now be called the
"Orange Challenge." -30- [The Action Ukraine Report Monitoring Service]
===============================================================
9. "YUSHCHENKO'S PROBLEMS"
The fate of Russian investments in Ukraine

By Elena Zvereva, Moskovskii Komsomolets, No. 55
Moscow, Russia, Wednesday, March 16, 2005

[In Ukraine, the land of the victorious revolution, everyone is
talking about the possibility of reprivatization. How will this
story end, and what will happen to Russian investments in Ukraine?
How are Russian companies responding to Ukraine's political and
economic changes?]

President Putin will visit Ukraine on March 19, following in
the footsteps of a group of Russian oligarchs. In Ukraine, the
land of the victorious revolution, everyone is talking about the
possibility of reprivatization.

Over half of Ukrainian business is upheld by Russian money.
Nevertheless, a number of Russian-owned enterprises have ended
up on the "hit-list." So far, only a few have become the object of
judicial investigation; but business owners fear that it's only a
matter of time.

At his recent meeting with Russian business leaders in Kiev,
President Viktor Yushchenko promised that "nothing will happen to
the lawfully-acquired assets of Russian oligarchs." But there is
also Prime Minister Yulia Timoshenko to consider: Yushchenko's
right-hand woman, who has spoken repeatedly about a possible
redistribution of property.

How will this story end, and what will happen to Russian
investments in Ukraine? Will Yushchenko prove to be a man of his
word, or will Russian investments be forced to seek new financial
harbors again, if they can be extracted from the Ukrainian
economy?

FOR THE PEOPLE
With great difficulty, the Ukrainian economy has managed to
endure a three-month time-out. The Ukrainians permitted themselves
to weaken, and their political crisis gave inflation a substantial
boost. It was over 12% by the end of 2004, though it had only been
8% in December 2003. In general, the post-election economy in
Ukraine turned out to be extremely over-heated. And the Ukrainians
don't have a safety net such as Russia's Stabilization Fund. The
Ukrainian authorities are unlikely to be able to fix the situation
on their own. Moreover, expert assessments aren't favorable for
Ukraine either. In the immediate future, analysts predict a
significant slowdown in economic growth for all the major
economies in the former Soviet Union. For Russia, this means that
GDP growth will drop by one percentage point; for Ukraine it means
that GDP growth will halve (from 12.4% in 2004 to 6.5% in 2005).

Timoshenko's policy program - entitled "For the People" - doesn't
contain a single precise figure. Why should it? According to
Timoshenko, figures "can't affect the state's economic development,
and our priority is to have the right vision."

A WINDOW TO EUROPE
At this stage, Ukraine appears to have a definite "vision"
only in the area of foreign policy. The government has chosen a
pro-Europe course. Ukraine's new administration intends to
optimize its participation in the CIS. In other words, that means
"gradual withdrawal" from the CIS - while blatantly knocking on
the European Union's door. Actually getting through that door will
be far more difficult. It took Russia several years just to
achieve recognition as a state with a market economy. But Ukraine
is aiming to become a full-fledged part of Europe - with all the
status that entails - within a mere two years.

On what terms? Note that the European Union is dominated by
the developed economies of Germany, France, and Italy. Other EU
members are like suitcases with broken handles: hard to carry, but
too valuable to throw away. And EU novices have to make huge
concessions in order to become part of the European family. For
example, Bulgaria agreed to make a fairly bold move: at the
European Union's insistence, Bulgaria will put pressure on its own
wineries.

For the benefit of Italian and French wineries, the Bulgarians
will be allowed to expand production for the next year or two,
but then freeze it at its existing level for the following decade.
This makes it plain that the wineries of the Crimea won't benefit
from joining the EU: they will be crushed. The same can be
said for agriculture and manufacturing. Then again, the Ukrainians
are counting on getting something in exchange: open borders and
new markets.

Still, even though Ukraine is aiming to join the EU as fast
as possible, it expects to continue receiving preferential
treatment from Moscow: discount prices for energy resources. The
Timoshenko government, like all previous Ukrainian governments,
is blatantly expecting Russia to provide it with all manner of
economic concessions. And we are still providing those, apparently
in the hope of receiving loyalty in return.

But these hopes are fairly fragile. The first signal has
already been given. Yuri Boiko, head of the state-owned Naftogaz
Ukrainy company, was dismissed in early March. Obviously, the new
administration is getting rid of the previous administration's
people. On the other hand, during his period as chief executive,
Boiko made Naftogaz Ukrainy a strategic partner of Russia, and a
guarantor of stability for energy resources transit to Europe. The
new chief executive, a Yushchenko administration appointee, is not
very well-known in the oil industry; but the gas sector knows him
well. In the 1990s, he was a senior executive at Intergaz - a
company plagued by a trail of corruption scandals. So Russia may
well face some problems in the area of energy transit.

PAYING DEBTS
The new administration hasn't had time to address current
economic issues yet. It needs to do so. After all, even Ukraine's
federal budget for 2005 was passed during the political crisis. If
the new government chooses to ignore essential "error correction"
in favor of keeping its campaign promise to raise pensions and
state-sector wages, Ukraine could face an economic crisis that
would make Russia's 1998 experience look like small potatoes.

Then again, the new government has focused on entirely
different campaign promises so far: repaying those who sponsored
the revolution. At the same time, it is trying to weaken the
opposition by using economic methods. Yushchenko's current
priority is to strip eastern Ukraine of its economic might. After
all, parliamentary elections are coming up next year; and the
Ukrainian parliament is about to become much more powerful,
thanks to some recent amendments to the Constitution.

The Ukrainian authorities have launched a drastic
reprivatization process. As yet, it remains unclear how many
business owners will be displaced. At first, Yushchenko spoke of
about 30 privatization deals - the most suspicious ones - being
revised; then he spoke of ten or twenty. Meanwhile, Yulia
Timoshenko spoke of revising 3,000 privatization deals: in other
words, almost half of all privatized enterprises. A list of 162
enterprises, already marked for review, is circulating within the
State Property Fund. And although the State Property Fund's "hit-
list" hasn't been made public, the National Security and Defense
Council has released a report entitled "An overview of problematic
issues in the privatization of certain industrial enterprises in
Ukraine": this mentions dozens of Russian companies.

This report classifies a number of Ukrainian enterprises owned by
Russian companies as "subject to an activities review under their
current ownership": the Nikolaevskii Alumina Plant (owned by Russian
Aluminum), the Zaporozhskii Aluminum Combine (AvtoVAZ-Invest),
UkrTatNafta (Tatneft), and LisichanskNefteOrgSintez (TNK-BP). Then
again, the first demonstrative execution has been called off; the
Ukrainian government's working group on privatization problems
decided against revising the sale of the Nikolaevskii Alumina
Plant. But the outlook for other Russian-owned enterprises in
Ukraine looks much more grim, despite Yushchenko's latest
promises.

Ukraine's courts have already started hearings that may
result in a revision of the privatization of the Inguletsk plant
and the Zaporozhskii Aluminum Combine. To all appearances, the
same fate awaits small factories, bakeries, and stores - Ukraine's
municipal and regional authorities are already coveting those.
Evidently, the new redistribution of property will be consistent
with the spirit of current trends in Kiev: that is, "moving away
from Moscow."

At the official level, the Ukrainian authorities have stopped
talking about all these hit-lists. Senior state officials are not
in agreement on this issue. The rest of society lacks confidence
that private property rights will be respected in Ukraine.
Moreover, it's hard to convince investors that the Ukrainian
authorities won't change direction entirely some day, launching
another round of redistribution and confiscation. And while the
winners of the revolution want to appoint some new property
owners, those are unlikely to be any better than the previous
property owners. European and American corporations will still be
reluctant to invest big money in a revolutionary country.
Meanwhile, the Ukrainian authorities and their sponsors have
decided that the country is now under their control, so it's time
to get a return on investment in the revolution.

UKRAINE'S LONDON
By no means all investors are giving in to panic; especially
not investors from Russia, well-known as a land of risk-takers.
The New Russians believe that if one is clever about getting
involved in the process during a time of troubles, it's possible
to remain afloat. In other words, when the forest is cut down,
chips will fly - and these chips can be collected.

Some Russian companies view doing business in Ukraine as a
form of diversifying capital. In other words, they follow the
fundamental law of commerce: don't put all your eggs in one
basket. This is especially true of money invested in Russia, where
the authorities have made it clear that private companies can only
operate within the framework set by the state. Thus, Russian
investments in Ukraine may be viewed as taking assets abroad.
Not very far, but true nonetheless.

Moreover, Russian companies are using Ukraine as a place to
launder their capital. According to Yushchenko, Ukraine doesn't
care where money comes from. So the millions and billions coming
in from offshore zones are just as legitimate as any other money.
One senior Ukrainian state official told us: "Of course, we do see
Russian investors turning up with cash in briefcases. But what
difference does that make for us? The main point is that they're
bringing money in, not taking it out." According to analysts, up
to 55% of foreign investment in Ukraine is Russian capital coming
in via other countries.

So far, most of the Russian companies already operating in
Ukraine have frozen in anticipation. Meanwhile, newcomers are
gradually moving into this market. Having learned some lessons
from bitter experience, they aren't touching the controversial
sector of natural resources. They're leaving it to the new
administration of Ukraine. Gradually, they are moving into
alternative areas - such as banking. Having seen that Russian
companies were eager to get involved in Ukraine's privatization
process in 2001, Russian banks have made loans available to
Russian investors.

The most important thing here is to choose the right policy
and offer good terms. While Western banks have already moved
into Russia, they haven't really become active in Ukraine as yet;
it's too high-risk for them. So Russia banks have an advantage.

The state-owned VneshtorgBank is setting an example for other
bankers: it intends to start a subsidiary in Ukraine in the near
future. VneshtorgBank intends this subsidiary to service major
clients. In contrast to private banks, VneshtorgBank is willing to
take major risks. It hasn't been that long since the Ukrainian
authorities suddenly remembered their claims to Soviet property
and the assets of the former Sberbank.

Note that Ukraine never ratified the agreement that let
Russia inherit the Soviet Union's foreign debt and assets. So
we may well expect some claims and lawsuits. And although
VneshtorgBank isn't responsible for Sberbank, it might well
encounter some legal harassment involving claims relating to the
Diamond Fund and the former Soviet Union's assets abroad.

In Ukraine, they're saying that stability will set in within six
months. If it doesn't, "the West will help." After all, the West
did make some promises. But one thing is clear already: there
are hard times ahead for the ordinary citizens of Ukraine and the
business owners of Russia.
-------------------------------------------------------------------------------------------
Stanislav Belkovsky, president of the National Strategy Institute:

The battle over privatization revision strategy, just like
the battle over major assets, will continue at least until spring
of 2006 - that is, until the next parliamentary elections. The
simple revenge factor will play an important role. Viktor
Yushchenko isn't a particularly forgiving man. And he has a big
grudge against certain Kuchma-era business leaders, believing that
they had a hand in attempts to discredit him and even poison him.

Above all, this applies to Kuchma's son-in-law Viktor Pinchuk; and
the Surkisa brothers, who own the Dynamo Kiev Football Club;
Viktor Medvedchuk, Kuchma's former chief-of-staff; and Rinat
Akhmetov, president of the Shakhter-Donetsk Football Club. As for
Russian tycoons operating in Ukraine, the most vulnerable are those
who sponsored Viktor Yanukovich's presidential campaign - Oleg
Deripaska, for example.

All the abovementioned business leaders (except Medvedchuk,
perhaps) will be trying to find a common language with the new
administration. Whether they'll succeed in doing so - well, let's
wait and see.

Konstantin Zatulin, director of the CIS Countries Institute:

Obviously, now that they have won, the new authorities of
Ukraine want to take away the economic assets of the new
opposition, which is still trying to find its place in the new
political landscape. The new authorities are striking while the
iron is hot. This is clear if you look at which enterprises they
are planning to target. The Krivorozhstal steel plant has become
the symbol of reprivatization: its owners claim that they paid
more than the Ukrainian treasury received from privatization of
all other metals enterprises combined [$800 million - editor's
note]. In contrast, Ukraine's newly-appointed Emergencies Minister
once purchased the Zaliv Shipyard for a mere $1.5 million; but as
far as I know, his name isn't on any of the hit-lists. Neither are
any questions being asked about another of Yushchenko's allies:
Poroshenko.

Meanwhile, Russian tycoons who showed interest in the
privatization of Atommash in Kharkiv, via intermediaries, have
been told that this plant has already been reserved for General
Electric. So political rivals are being pushed aside, as well as
economic rivals. Unfortunately, Russia has been slow to respond
to all this.

FROM OUR FILES:

The United States has decided to give Ukraine some
encouragement. The Bush Administration has asked Congress
to allocate $60 million to Ukraine for the purpose of accelerating
economic reforms and fighting corruption.

And that's not all. President Bush also said that the United
States will provide the new government of Ukraine with a total of
over $100 million next year, as part of three key programs:
economic aid, training for military personnel, and financing
defense-related deliveries and services from the United States.

Presumably, about $88 million will go into the economy. As a
result, Ukraine will end up receiving more American financial aid
than any other CIS country. Georgia is in second place: the United
States is allocating $67 million to an economic assistance program
for the Saakashvili government.

As in Russia, during the period of intensive privatization in
Ukraine, big business focused on natural resources - especially
since by that time (2001), all of Russia's assets had already been
distributed.

MAJOR RUSSIAN ACQUISITIONS IN UKRAINE:
TNK, LUKoil, and Tatneft privatized three oil refineries in
Ukraine: in Odessa, Kherson, and Lisichansk. Total processing
facilities of these refineries account for 51% of the Ukrainian
market, and over 70% of fuel production.
Gazprom bought a 53.86% stake in Rivneazot: Ukraine's largest
plant producing nitrates, phosphates, and combined fertilizers.
Siberian Aluminum owns the controlling interest in LAZ: the
Lviv Bus Plant.
AFK Sistema bought the controlling interest in UMS, Ukraine's
largest mobile telecommunications operator.
Russian Aluminum controls the Nikolaevskii Alumina Plant.
Russian companies still consider the following sectors to be
the most attractive investment prospects in Ukraine: metals,
telecommunications, food, steelworks, pharmaceuticals, and trade.
[Translated by Gregory Malyutin]
===============================================================
10. YUSCHENKO INITIATES CREATION OF INVESTORS' COUNCIL

Ukrainian News Agency, Kyiv, Ukraine, March 20, 2005

(Ukrainian News, Ruslan Kyrylenko, 03/14/2005) President Viktor Yuschenko
set forth the initiative of creating the Council of Investors to guarantee
investors' direct communication with authorities, and discuss cooperation.
Journalists learned this from Iryna Heraschenko, presidential press service
chief, who referred to Yuschenko's meeting with Russian businessmen in Kyiv.

According to her, Yuschenko said this council may be formed in the nearest
future. He also called for a permanent and regular dialogue between the
authority and business.

The Ukrainian side was represented at the meeting by National Security and
Defense Council Secretary Petro Poroshenko, the President's First Aide
Oleksandr Tretiakov, State Secretary Oleksandr Zinchenko, First Deputy
Prime Minister Anatolii Kinakh, Fuel and Energy Minister Ivan Plachkov.

The Russian party was represented by Ambassador to Ukraine Viktor
Chernomyrdin, as well as representatives of the Russian business in the
field of banking operations, power engineering, communications and
electronics, including LukOil petroleum company head Vagit Alekperov.
As Ukrainian News reported, Yuschenko urges foreign investors to boost
cooperation with Ukraine. -30- [Action Ukraine Report Monitoring Service]
===============================================================
11. PRESIDENT VIKTOR YUSHCHENKO APPOINTS IVAN VASIUNIK
FIRST DEPUTY STATE SECRETARY OF UKRAINE

Ukrinform, Kyiv, Ukraine, Friday, March 18, 2005

KYIV - President Viktor Yushchenko signed a decree to appoint people's
deputy Ivan Vasiunik First Deputy Secretary of State, the presidential
press service told Ukrinform on Friday.

Ivan Vasiunik was an adviser of Prime Minister Viktor Yushchenko in 2000
and 2001, in 2001 and 2002 he was first deputy chief of the central election
staff of the "Our Ukraine" bloc. He was elected to the Verkhovna Rada under
the bloc's list in 2002.

On March 5, 2005 Ivan Vasiniuk was elected to the presidium of the political
council of the newly created party "People's Union "Our Ukraine". -30-
===============================================================
12. RUSSIA AND UKRAINE MAKING UP IS HARD TO DO
Two presidents at odds, but still needing each other

Report from Moscow, The Economist
London, UK, Week of March 19-25, 2005

A PRAGMATIST who only picks fights he can win­ or a bereaved
nationalist, locked into a quixotic pursuit of Russia's lost empire?
For most of his first term as Russia's president, Vladimir Putin
seemed to be the first.

But, after his crass support for the losing candidate in Ukraine's
tumultuous elections, Mr Putin looked ill-informed, amateurish, even
downright dangerous. His visit to Kiev this weekend will test how far
he can now restore his previous pragmatic reputation.

His immediate goal will be to muster a bit more cordiality than he and
Victor Yushchenko, Ukraine's new president, managed at a frosty meeting
in Moscow in January. Mr Putin will need to clear his mind of excitable talk
of "orange revolutions" in other bits of the former Soviet Union, even
Russia itself (the flag of Pora, the youth movement in the vanguard of
Ukraine's street protests, sometimes flutters at demonstrations in Moscow
these days). He will need to rise above putative plans of Boris Berezovsky,
a renegade oligarch given asylum by Britain, to move to Kiev. He must also
pass over Mr Yushchenko's choice of Boris Nemtsov, a disgruntled Russian
liberal, as an adviser.

Mr Putin's broader aim will be to stop Mr Yushchenko's desire for closer
integration with the European Union compromising Ukraine's relations with
Russia. So long as Ukraine's ambitions to join the EU remained more
theoretical than real, they did not. But under Mr Yushchenko, whose
strategy is to cultivate the conditions for an EU membership application
without waiting for a nod from Brussels, the two allegiances seem sure to
collide. Bold hopes for a single economic space comprising Russia, Ukraine,
Belarus and Kazakhstan­a scheme to which Leonid Kuchma, Mr Yushchenko's
predecessor, signed up now look out of the question, even if some sort of
free-trade zone may be plausible. The long-term future of Russia's Black
Sea fleet, based in the Crimean port of Sebastopol, would also surely be
called into question were Ukraine to join NATO.

Mr Putin may also inquire about the future of some other Russian assets. At
a meeting on March 14th, Mr Yushchenko reportedly reassured a clutch of top
Russian managers or "oligarchs" that their holdings in Ukraine would not be
unfairly picked on in the government's review of dodgy Kuchma-era
privatisations. (Russian investment in Ukraine is hard to measure
precisely, since much arrives via third countries, but it is extensive.) Mr
Yushchenko says only a few dozen companies will be involved; a few
thousand, said Yulia Timoshenko, his prime minister. Mrs Timoshenko is
still technically under investigation by Russian prosecutors over an old
corruption case; her nomination did not please the Kremlin.

For much of his ten-year presidency, Mr Kuchma tried to cultivate both
Russia and the West. Towards the end, however, the crutch that Mr Putin
offered after Mr Kuchma was widely linked to the murder of Georgi
Gongadze, a journalist, skewed Mr Kuchma's loyalty. Like the wrangle over
reprivatisation, a fresh investigation into the Gongadze case appears now
to be reaching a climax. On March 4th a former interior minister due to
give evidence apparently shot himself in the head (twice). Rumours that Mr
Kuchma is protected by a secret immunity deal are denied by Mr Yushchenko.
Mr Kuchma's foreign-policy balance between east and west was also disturbed
by suspected arms dealings with Saddam Hussein (the troops he sent to Iraq
to assuage the Americans began to return home this week).

One more mystery relevant to Mr Putin's visit also demands a nice balance
between justice and political expedience: Mr Yushchenko's near-fatal
poisoning last autumn. There have been persistent rumours of Russian
involvement. But even if this could be proved and, as in the Gongadze case,
the Ukrainian authorities hint that they know more than they are prepared
to say Mr Yushchenko is unlikely to make a fuss. Paramount though the EU
may now be, relations with Russia are still too important for
grudge-bearing. -30- [The Action Ukraine Report Monitoring Service]
===============================================================
13. RUSSIA-UKRAINE: DON'T PANIC
Russia should avoid over-reacting to Ukraine's political plans

By Vladimir Frolov, Vedomosti
Moscow, Russia, Friday, March 18, 2005

[The new Ukrainian leaders have declared a course for accelerated
integration into the European Union and NATO. Could Ukraine join
NATO? These prospects shouldn't be exaggerated. According to opinion
polls, the Ukrainian public resolutely objects to NATO membership.]

Moscow can't be happy about the latest news from Kiev. The new
Ukrainian leaders have declared a course for accelerated integration
into the European Union and NATO; they intend to revive GUUAM and
promote democracy in the post-Soviet zone. The government of Yulia
Timoshenko declared the need for revising the agreements on the
Common Economic Zone and launched debating over re-privatizing
some Russian assets. It seems to offer plenty of incentives to get
despondent.

However, Russia shouldn't hurry with the response. The plans
Kiev has outlined has few new aspects - almost all of these plans
were available in Leonid Kuchma's diverse policy. Claims against
RusAl, which owns the Nikolayev Alumina Plant, were offered under
the previous authorities, whereas the MTS faced a threat of losing
UMC, Ukraine's largest mobile communications operator, when local
oligarchs displayed their concern for it in summer 2004. On the
contrary, Russian businessmen get an opportunity to regain their
assets in the case of re-privatizing FC Dinamo Kiev and some
regional energy companies of Ukraine. Severstal and Evrazholding
will again be able to run a tender of privatizing Krivorozhstal,
whereas AFK Sistema will struggle for Ukrtelecom.

Confirming its readiness for large-scale cooperation along with
tough protection of its interests in response to specific unfriendly
actions of Kiev is the optimal line for Russia.

Could Ukraine join NATO? These prospects shouldn't be
exaggerated. According to opinion polls, the Ukrainian public
resolutely objects to NATO membership - 48% versus 15% (a poll
done by the Democratic Initiatives Foundation and KMIS). The
Ukrainians are quite satisfied with non-affiliation with any blocs; a
prospect of being involved in any international conflicts arises alarm
and repulsion. The formula "it's no concern of mine" remains the
prevailing public mindset, which is evident by the public aversion
for sending the Ukrainian peacekeepers to Iraq ("Ukraine may
become an object for attacks of Islamic terrorists"), as well as
collapsing the idea of dual citizenship with Russia ("This is
Chechnya!").

Ukraine's non-affiliation with any blocs is fixed in the
present Constitution, whereas introducing an amendment abolishing
this groundbreaking principle wouldn't get the required amount of
300 votes at the parliament. Moreover, in the coalitional agreement
with socialist leader Oleksandr Moroz Yushchenko assumed a public
commitment to preserve Ukraine's non-affiliation with any blocs.

The new Ukrainian authorities are not unanimous with regard to
the priority of joining NATO. In the plans of Timoshenko's Cabinet,
NATO is only mentioned in the context of cooperation on the
Partnership for Peace program. New Defense Minister Anatoliy
Hrytsenko stresses that NATO accession "is not a priority" for his
ministry, although this strategic goal was declared yet under
Kuchma.

At the same time, Foreign Minister Borys Tarasyuk says that
NATO membership is an indispensable intermediate stage in the way
for the EU; allegedly this is confirmed by experience of countries
from Eastern Europe and the Baltic states. However, experience of
Sweden, Finland and Austria proves the contrary.

To all appearances, President Yushchenko will be balancing
among these two lines, depending on which of them approaches the
chief goal of his life - Ukraine's ascension the EU by the end of
his second presidency in 2014. Joining the EU, rather than NATO
membership is a priority for Yushchenko.

The EU is the main goal of the incumbent foreign policy of
Ukraine. "We belong the EU, Ukraine affiliated with the United
Europe is my goal!" Yushchenko stated in his appeal at
Independence Square.

Moscow shouldn't regard this as a bluff. Unlike NATO,
integration in the EU enjoys the support of 44% of respondents and
28% object to it. Conditions on commencing the ascension
negotiations could be formed already by 2008, in case the recently
passed EU-Ukraine plan of actions is implemented successfully.

The course for accelerated EU integration casts doubt on
Ukraine's involvement in the Common Economic Zone (CEZ) project.
As a matter of fact, implementation of a key CEZ's aspect - free trade
zone - without the "geopolitical accessories" represented by the
customs and currency unions or a supra-national regulating body is
compatible to Ukraine's European project. The initiative of founding
a CEZ-light is most likely to become Ukraine's response to Moscow.

Under similar circumstances it would be best for Russia to
preserve its course for forming a Common Economic Zone,
independently of Ukraine's involvement. Russia has no other
integration processes which could be of interest to Ukraine; it is
still possible to fight for the CEZ.

Ukraine's support for being involved in the CEZ (56%) is still
higher than the support for EU membership (44%); 18.5% more would
support joining the CEZ if this doesn't hamper Ukraine's integration
in the EU (according to a poll done by the DIF in February). Public
opinion polls done in Ukraine in 2004 showed a steady trend: above
605 of the respondents were opposed to introducing a visa regime
with Russia, which will be required in case Ukraine joins the EU;
above 50% are ready deny EU membership for the sake of free
travels to Russia.

As of now, the level and efficiency of Russia's institutes for
partnership with the EU and NATO is higher than in Ukraine.
However, the situation could be changed rapidly under Yushchenko.
This is unlikely to suit the interests of Moscow.

It is possible to try and merge efforts with Ukraine for the
sake of forming the common regime of relations with the EU if the
immediate membership prospects are absent. This could be a common
free market zone for Russia's and Ukraine's commerce with the EU or
a common visa regime between the EU on the one hand and Russia
and Ukraine on the other, which will enable to preserve visa-free travel
between our states, Ukraine's joining the Russia-EU dialog in all
four areas.

Proper attention should be drawn to Yulia Timoshenko's words
that she only discerns the opportunity of Ukraine's joining NATO in
an alliance with Russia, since "Ukraine and Russia cannot belong to
qualitatively different or, even less so, hostile defense spaces."
This is not posturing, but an offer for Moscow to seriously
reconsider Russia's strategic direction. -30-
---------------------------------------------------------------------------------------------------
Vladimir Frolov is a private consultant, deputy director of
the Effective Politics Foundation in 2003-2004. [Article
translated by Andrei Ryabochkin]
===========================================================
14. PRESIDENT SAYS THERE MUST NOT BE ANY POLITICAL
SPECULATIONS WITH REGARD TO VICTORY DAY CELEBRATIONS

Ukrinform, Kyiv, Ukraine, Wed, March 16, 2005

KYIV - Speaking at a plenary session of the Council of Ukrainian veteran
organisations in Kyiv on March 16, President Viktor Yushchenko said
there must be no political speculations with regard to Victory Day
celebrations. This should be an unpopliticized, patriotic day, focused
on WWII veterans, President Yushchenko noted.

He appealed to WWII veterans not to let anyone make decisions on Victory
Day celebrations within some party organisations. As the President
suggested, WWII veterans must cooperate with the authority in organising
Victory Day events. Viktor Yushchenko also urged reconciliation between
Soviet Army veterans and veterans of the Ukrainian Rebel Army.

The Head of State supported the veteran organisations' initiative to
celebrate Victory Day during two days. According to the latest scenario, on
May 8 festive events to honor WWII veterans will be staged Ukraine-wide, and
on May 9 a column of WWII veterans will parade along Kyiv's thoroughfare,
Khreschatyk to celebrate Victory Day together with the nation's leaders.
===============================================================
15. ON MAY 9 WAR VETERANS WILL BE ABLE TO CEREMONIOUSLY
MARCH ALONG KHRESCHATYK STREET AND MARK VICTORY DAY
JOINTLY WITH STATE LEADERS, MYKOLA TOMENKO SAYS

Ukrinform, Kyiv, Ukraine, Wed, March 16, 2005

KYIV - Vice Prime Minister Mykola Tomenko says that the Verkhovna Rada
and the Government have no principal differences concerning their wish to
organize a true national holiday for war veterans on May 9.

Therefore, he noted, the Tuesday's discussion in the Parliament and a
resolution adopted about holding a parade prove that celebration of the
60th anniversary of Victory in the Great Patriotic War will be staged at the
highest level, the Vice Prime Minister press service told Ukrinform.

Mykola Tomenko noted that on "May 9 war participants will be able to
ceremoniously march along the central Kyiv street and mark the Victory
Day jointly with state leaders". -30-
===============================================================
16. MOSCOW HOSTS CONFERENCE TO MARK 61ST ANNIVERSARY
OF EXTERMINATION CAMP DEATH LOOP'S LIBERATION DURING WWII

By Anatoli Grigoryev, Ukrinform, Kyiv, Ukraine, March 19, 2005

MOSCOW, RUSSIA - Moscow played host to a conference, dedicated
to the 61st anniversary of liberation of the Nazi extermination camp
"Death Loop" near the village of Pechora, Vinnytsia region during WWII.

The conference was sponsored by the Federation For Peace And Accord
and the RUF Jewish public organisation, which unites former inmates of
ghettos and extermination camps. The conference was attended by WWII
veterans, activists of public, ethnic-cultural, youth organisations.

According to Aron Zusman, RUF Presidium chairman, The Death Loop
was established in late 1941 and existed until March 18, 1944. Within
that period about 50,000 people perished there, basically Jews. -30-
============================================================
17. MINISTRY FOR CULTURE AND ARTS ANNOUNCES CONTEST
FOR BEST SCRIPT TO SHOOT TARAS BULBA FEATURE FILM

Viktor Chukhlib, Ukrinform, Kyiv, Ukraine, Wed, March 16, 2005

KYIV - As Minister for culture and arts Oksana Bilozir tipped off to
journalists in Kyiv Tuesday after she met at President Viktor
Yushchenko's office with the French movie celebrity, Gerard
Depardieu, a contest will be shortly announced for the best script
to shoot a feature film about Taras Bulba, the writer Nikolai Gogol's
immortal character.

As Ms Bilozir noted, Gerard Depardieu's visit to Ukraine has been by
no means accidental as he will likely be the film's producer. The film
will be the brainchild of a triangular, Franco-Ukrainian-Polish artistic
project. According to Oksana Bilozir, President Viktor Yushchenko
will personally patronize the project's materialization. -30-
============================================================
18. FOREIGN MINISTER TARASYUK: UKRAINE TO CONTINUE
SPREADING TRUTH ABOUT 1932-1933 FAMINE AND INSIST
ON ITS RECOGNITION AS GENOCIDE

Ukrinform, Kyiv, Ukraine, Tuesday, March 15, 2005

KYIV - Foreign Affairs Minister Borys Tarasyuk, who is attending the
sixty-first session of the United Nations Organization's commission on
human rights in Geneva, has against drawn the attention of the international
community to the crime of the totalitarian Communist regime against the
Ukrainian people.

In his address at the session, Mr. Tarasyuk said that the famine of the
1932-1933 period took the lives of over 7 million people. He stressed the
artificial nature of the famine and stated Ukraine's intention to secure
recognition as of the famine as an act of genocide against the Ukrainian
people.

Mr. Tarasyuk also said that the non-violent "Orange revolution" in Ukraine
opened a new chapter in the history of the country and had a significant
effect on the geo-political situation in the world. According to him, the
new Ukrainian government has set itself high but achievable goals in the
area of implementation of political, administrative, and judicial reforms.

He stressed that the new democratic Ukraine is an integral part of the
European community of democratic nations and that it cannot close its
eyes to human rights violations in any country. In this context, he said
that Ukraine is calling for improved mechanisms for cooperation in the
area of human rights protection within the framework of the United
Nations Organization.

Among other things, he called on the Security Council to pay greater
attention to protection of human rights and give the United Nations
Organization's high commissioner for refugees a greater role in its
affairs. -30- [The Action Ukraine Report Monitoring Service]
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PUBLISHER AND EDITOR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer Investment Banking Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
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Senior Advisor; Ukrainian Federation of America (UFA)
Coordinator, Action Ukraine Coalition (AUC)
Senior Advisor, U.S.-Ukraine Foundation (USUF)
Interim Secretary-Treasurer, Ukraine-U.S. Business Council
Publisher, Ukraine Information Website, www.ArtUkraine.com
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