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Action Ukraine Report

"THE ACTION UKRAINE REPORT - AUR"
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 463
E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, SUNDAY, April 17, 2005

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

1. UKRAINE'S ORANGE REVOLUTION
ESSAY by Adrian Karatnycky
Counselor and Senior Scholar at Freedom House
FOREIGN AFFAIRS, New York, New York
March/April 2005, Vol. 84, Issue 2, p 35-52

2. TYMOSHENKO TAKES ON THE OLIGARCHS
Taras Kuzio, Eurasia Daily Monitor
Vol. 2, Issue 74, The Jamestown Foundation
Washington, D.C., Wednesday, April 13, 2005

3. "JULIA CAESAR"
COMMENTARY: By Ivan Lozowy
THE UKRAINE INSIDER, Vol. 5, No. 12
Kyiv, Ukraine, Friday, March 8, 2005,

4. PUNDIT SAYS PUTIN'S REMARKS ON UKRAINE
COUNTERPRODUCTIVE
"Putin's Energy Manoeuvre"
By Varvara Zhluktenko, Den, Kiev,in Ukrainian 13 Apr 05; p 1, 3
BBC Monitoring Service, UK, in English, Wednesday, April 13, 2005

5. PENTAGON HOPES TO WORK WITH UKRAINIAN MISSILE INDUSTRY
Inroads for U.S.-Ukrainian missile defense cooperation
By Eric A. Miller, Eurasia Daily Monitor
Vol 2, Issue, 74, The Jamestown Foundation
Washington, D.C., Friday, April 15, 2005

6. THE GREAT TERROR - STALIN'S LEGACY OF CRUELTY
Soviet History - Death and the Dictator
Two New Books Reviewed by Leon Aron
BOOK WORLD: This Week, April 17-23, 2005
The Washington Post, Washington, D.C., Sunday, April 17, 2005
=============================================================
1. UKRAINE'S ORANGE REVOLUTION
The electoral triumph of opposition leader Viktor Yushchneko and the
victory of the Ukrainian people over their country's leadership represent
a new landmark in the postcommunist history of Eastern Europe, a
seismic shift Westward in the geopolitics of the region. But what will
come next for the new president -- and the rest of the former "Soviet
Union?"

ESSAY by Adrian Karatnycky
Counselor and Senior Scholar at Freedom House
FOREIGN AFFAIRS, New York, New York
March/April 2005, Vol. 84, Issue 2, p 35-52

ORANGE CRUSH

"RAZOM NAS BAHATO! Nas ne podolaty!" The rhythmic chant spread through
the crowd of hundreds of thousands that filled Kiev's Independence Square on
the evening of November 22. "Together, we are many! We cannot be defeated!"
Emerging from a sea of orange, the mantra signaled the rise of a powerful
civic movement, a skilled political opposition group, and a determined
middle class that had come together to stop the ruling elite from falsifying
an election and hijacking Ukraine's presidency.

Over the next 17 days, through harsh cold and sleet, millions of Ukrainians
staged nationwide nonviolent protests that came to be known as the "orange
revolution." The entire world watched, riveted by this outpouring of the
people's will in a country whose international image had been warped by its
corrupt rulers. By the time victory was announced--in the form of opposition
leader Viktor Yushchenko's electoral triumph--the orange revolution had set
a major new landmark in the post-communist history of eastern Europe, a
seismic shift Westward in the geopolitics of the region. Ukraine's
revolution was just the latest in a series of victories for "people
power"--in Poland, Hungary, and Czechoslovakia in the late 198os and,
more recently, in Serbia and Georgia.

THE WINDS OF CHANGE

THE SPARK that ignited the popular fire in Ukraine's case was election
fraud. Nonpartisan exit polls during the November 21 presidential runoff
election had given Yushchenko a commanding lead, with 52 percent of the
votes, compared to Prime Minister Viktor Yanukovich's 43 percent. Yet when
the official results came in, Yanukovich, the favorite of Ukraine's corrupt
elite, had supposedly beaten the challenger by 2.5 percent.

This tally was immediately challenged. When the polling stations had first
closed, the Central Election Commission (CEC) had reported that voter
turnout in Ukraine's Russian-speaking eastern districts was consistent with
the nationwide average of 78 to 80 percent. But four hours later, after a
prolonged silence, the election commission radically increased the east's
turnout figures. The eastern Donetsk region-Yanukovich's home base--went
from a voter turnout of 78 percent to 96.2 percent overnight, with support
for Yanukovich at around 97 percent. In neighboring Luhansk, turnout
magically climbed from 80 percent at the time the polls closed to 89.5
percent the next morning, with Yanukovich winning 92 percent or more of the
votes. Indeed, in several eastern districts, turnout was as much as 4o
percent greater than during the first round of the presidential election
three weeks before. This "miraculous" last-minute upsurge was responsible
for approximately 1.2 million new votes--well over 9o percent of which went
to the regime's favorite, giving him enough for a comfortable 800,000-vote
margin of victory.

Throughout election day, independent domestic monitors sounded the alarm
about the emerging fraud. Numerous reports indicated that roving teams of
voters, tens of thousands in all, were being transported in trains and buses
from polling station to polling station, each armed with multiple absentee
ballots. If each of these people cast ten ballots, this voter "carousel"
would have padded the final result by at least half a million votes.

The efforts to steal the election for Yanukovich had started much earlier,
however. For six months, government-controlled national television had
subjected Yushchenko to a steady torrent of negative press and distortions,
while refusing him the opportunity to defend himself. Yushchenko's campaign
faced other impediments as well. Sometimes his plane was denied landing
privileges minutes before major rallies. Road barriers slowed his travel
and, once, a truck tried to force his car off the road. Yushchenko's private
security detail discovered that he was being followed by a state security
operative, who was caught with false identity papers, multiple license
plates, and eavesdropping equipment. Then, on September 6, Yushchenko
became gravely ill. His mysterious sickness forced him from the campaign
trail for nearly a month, leaving his body weakened and his face badly
scarred.

Later tests revealed that he was suffering from dioxin poisoning. The
opposition cried foul, but the government-controlled media responded that
Yushchenko had contracted the disease himself, by eating contaminated
sushi, getting herpes, or undergoing botox treatment to preserve his
50-year-old good looks.

Yushchenko was not the only one to face harassment. Activists from his
political coalition were arrested on false charges. Students living in
university housing were told by university officials that if their districts
voted for the challenger, they would be evicted from their dorms in the
middle of winter. When election day came, at polling sites in several areas
where support for Yushchenko was high, monitors discovered that pens had
been filled with disappearing ink, so that ballots would appear blank after
they were cast.

Nongovernmental groups were quick to complain. "It's the biggest election
fraud in Ukraine's history," declared the nonpartisan Committee of Voters of
Ukraine, which had deployed more than 10,000 monitors to observe the runoff.
According to the group, 85,000 local government officials helped perpetrate
the fraud, and at least 2.8 million ballots were rigged in favor of
Yanukovich. Claims of massive voter fraud were also bolstered by an unlikely
source: Ukraine's Security Service (SBU). In the days before and after the
runoff vote, a high-ranking SBU official had kept in regular contact with
Oleh Rybachuk, Yushchenko's chief of staff. SBU operatives had been
cooperating with the Yushchenko camp since the first round of elections,
regularly reporting on possible security threats and dirty tricks.

SBU wiretaps provided crucial evidence of the government's chicanery;
including late-night manipulation of data in the CEC's computer server. In
one taped conversation, an hour before the inflated turnout was announced,
Viktor Medvedchuk, the head of President Leonid Kuchma's staff, talked to
Yuri Levenets, a Yanukovich campaign operative, about CEC Chairman
Serhiy Kivalov:

Levenets: Greetings on democracy's holiday!
Medvedchuk: The same to you, Yura. [Kivalov] is panicking.
He says he's not getting anything.
Levenets: He can't be getting anything. The lads are finishing
up now; he'll have it all momentarily--literally in 15-20 minutes.
Medvedchuk: But he says that something's broken down.
Levenets: No, it's all fine. He can't have anything right now.
He doesn't have any information at all over there. It's all under
my control.

According to the telephone intercepts, the fraud involved some of the
country's highest officials. In addition to Medvedchuk and Kivalov, the
conspiracy included Eduard Prutnik, a key aide to Yanukovich, Sethi},
Lyovochkin, the president's first assistant, and Serhiy Klyuyev, a major
fundraiser for the Yanukovich campaign whose brother was the deputy
prime minister responsible for Ukraine's lucrative energy sector.

RED-HANDED

WHY DID UKRAINE'S ruling elite resort to brazen fraud to preserve its
power? The answer is corruption. In December 1991, Ukraine proclaimed its
independence, precipitating the disintegration of the Soviet Union. Former
Communist Party officials, recast as national patriots, led the new state.
In the first years of independence, corruption became widespread--but
remained minor compared to the rampant criminality that spread during the
mid-1990s.

Corruption accelerated after Kuchma's election as president in 1994. The
former director of the Soviet Union's largest missile factory; Kuchma
brought with him ambitious and greedy politicians from his home base, the
eastern city of Dnipropetrovsk. The greediest of the crew was Pavlo
Lazarenko, who, in June 2004, was convicted in U.S. District Court of fraud,
conspiracy to launder money, money laundering, and transportation of stolen
property. Lazarenko, currently free on $86 million bail, was accused of
having stolen from the state and extorted from businesses hundreds of
millions of dollars between 1995 and 1997, when he served for 12 months
as first deputy prime minister and for 7 months as prime minister. When the
scale of Lazarenko's corruption became known, some Ukrainian leaders were
outraged. But Kuchma could not have been surprised. In 2ooo, his former
bodyguard leaked hundreds of hours of transcripts of the president's private
conversations. On the tapes, Kuchma is heard dispensing favors, paying
massive kickbacks, and conspiring to suppress his opponents--making it
clear that the president sat at the head of a vast criminal system.

Several factors facilitated Ukraine's massive corruption. High inflation
meant that until the mid-1990s, many cross-border financial transactions
were conducted using a barter system, which was easily falsified to
understate the amount of goods traded; resources that were exported to
Russia ostensibly for energy often brought huge kickbacks instead.
Wide-ranging privatization also enabled government insiders and cronies to
buy state enterprises at bargain-basement prices. Steel mills, today worth
several billion dollars, were bought for a few million. Regional energy
companies fell prey to the same forces. The tax inspectorate was another
weakness in the system, as the government manipulated it to gain financial
and political advantages: competitors could be harassed or forced out of
business by inspections and fines, and oligarchs could easily evade paying
taxes.

In general, the oligarchs were able to operate their businesses without fear
of independent oversight. Under Ukraine's constitution, local government
officials are not elected but appointed by the president, who allowed
oligarchic groups to create local enclaves headed by their allies. In the
Zakarpattya (Transcarpathia) region, local and central government officials
enabled one oligarchic consortium to amass vast fortunes from the lumber
industry by stripping the forests of their trees. Now, parts of this once
richly forested mountain region have been dangerously depleted,
compounding the problems caused by deforestation in the Soviet era.

Over time, several Ukrainian oligarchic clans became dominant in the young
nation. Medvedchuk, who became presidential chief of staff in December
2002, represented the Kiev clan, which controlled regional energy and timber
companies and invested in broadcast media. The Dnipropetrovsk clan, which
invested in the energy pipeline industries, included Viktor Pinchuk, now
Kuchma's son-in-law. A powerful group from the eastern coal-mining Donbass
region included metallurgy baron Rinat Akhmetov, the post-communist world's
second-wealthiest man, with a net worth of $3.5 billion.

Each interest group established its own political party in parliament. The
Kiev clan ran the Social Democratic Party of Ukraine (United). The Donetsk
oligarchs created the Party of Regions, the ranks of which included a local
governor who later became prime minister: Yanukovich. The Dnipropetrovsk
group created and backed the Labor Party. And the influence did not stop
there. The oligarchs owned or controlled their own national broadcast media
and local and national newspapers. Each was capable of massively funding
political campaigns in the emerging pseudodemocratic system.

In the late 1990s, the oligarchic clans largely remained under the control
of Ukraine's powerful president. But in 2000-200l, Kuchma's power began to
weaken as the wealth of the robber barons grew significantly and Kuchma's
personal corruption and criminality started coming to fight. Eventually,
Kuchma even faced a vigorous opposition campaign to impeach him for his
role in an abduction that ended with the murder of the investigative
journalist Heorhiy Gongadze. But the campaign stalled as the president and
his backers blocked efforts to institute the legal procedure needed to
formally make the charges.

CHANGES

IT WAS THIS TURBULENT PERIOD that saw the metamorphosis of Yush-
chenko from colorless central banker into charismatic opposition leader. In
December 1999, pressure from Western donor countries seeking deeper
economic reforms resulted in his appointment as prime minister. As chairman
of the National Bank of Ukraine in the 1990s, Yushchenko had tamed rampant
inflation and introduced responsible fiscal controls. In taking the reins of
the
government, he was determined to impose fiscal discipline and rigorously
collect tax revenues and privatization receipts. To achieve these goals,
Yushchenko needed to crack down on Ukraine's crony capitalism. He formed
an alliance with one of the system's own--Yulia Tymoshenko, a former energy
mogul who had run afoul of the Kuchma regime. With Tymoshenko's help,
Yushchenko managed in just a year to recoup more than $1 billion in revenues
that had been siphoned off by energy oligarchs.

Yushchenko's new approach helped propel Ukraine's economic turnaround.
In 2000, his first year as prime minister, the economy grew by nearly 6
percent. In 200l, the country's annual growth rate rose to 9.2 percent.
Without busting the budget, Yushchenko used recovered energy revenues
to solve Ukraine's most urgent social problems: wage arrears to teachers,
health care workers, and other state employees, and overdue pension pay-
ments to retirees. His public image as an honest, effective leader was
secured.

In 200l, Kuchma, facing a mounting protest campaign, realized he could not
count on an increasingly independent prime minister with a reputation for
integrity. Moreover, the president's oligarchic backers were far from
pleased with Yushchenko's policies. And so, in May 2OO1, Kuchma forced
Yushchenko out after only 18 months as prime minister. Despite polls showing
that 52 percent of the public opposed the move, Kuchma and the oligarchs
prevailed.

Although the oligarchs and their temporary ally, the Communist Party, were
rid of Yushchenko, their actions had transformed him from a technocrat into
an opposition leader with a strong public base. The first sign of his
newfound popularity came in the parliamentary elections in March 2002. Half
of all parliamentary deputies were elected on national party lists, while
the other half ran as individuals. In the party-based portion, Yushchenko's
Our Ukraine captured 31 percent of the seats, and more radical opposition
parties and the Communist Party won another 45 percent. But government
manipulation of the individual-candidates election reversed the trend.
Scores of so-called "independents" flocked to the oligarchic parties,
helping create a pro-Kuchma parliamentary majority.

Still, the strong showing encouraged reformers. Yushchenko had clearly
become Ukraine's most popular politician by far. With the constitution
limiting Kuchma to two terms as president, the elite focused on finding a
successor capable of winning. A new name, that of Donetsk governor Viktor
Yanukovich, emerged. He was nominated prime minister in November 2002
and, with Russia's backing, soon became the presidential standard-bearer of
the ruling class. But any euphoria was short-lived. As the 2004 presidential
elections drew near, the elite grew nervous. Although unrelentingly
favorable television coverage and a bill doubling retiree pensions sparked a
small surge of support for Yanukovich, his criminal record (three and a half
years in jail on assault and robbery convictions) and his links to the
Kuchma regime raised serious doubts among voters.

Two days before the November 21 runoff election, Tymoshenko, the charismatic
opposition leader, worried darkly, "They are going to steal the election."
Tymoshenko was nervous about the civic response. "There will be several days
of protest, and then they will crack down S We are not adequately prepared
for this," she said. Indeed, few opposition leaders could have anticipated
the scale and persistence of the coming protests. Although Kiev was an
"orange town," decorated in the color of Yushchenko's insurgent campaign, no
one knew that orange would soon become a symbol of the public's
determination to defend their right to self-government.

AWAKENING

ON THE MORNING after the vote, Kiev was abuzz with excitement. Cars, trucks,
and buses adorned with orange banners drove down the boulevards and avenues,
honking three short bursts: Yu-shchen-ko! Responding to Yushchenko's appeal,
hundreds of thousands of Kiev residents, most of them wearing orange, walked
with a steely determination toward Independence Square. Over the years,
Ukraine had acquired an international reputation as a seamy state led by a
criminal elite ruling over a passive populace. Under Kuchma's presidency,
the authorities had cynically proclaimed the virtues of the people's
democratic choice while doing everything possible to thwart it. Where, then,
did the orange revolution come from? Several key factors contributed to the
people's resolve.

Ukraine had benefited from more than a decade of civil-society development,
a good deal of it nurtured by donor support from the United States, European
governments, the National Endowment for Democracy and private
philanthropists such as George Soros. Although such sponsorship was
nonpartisan, it reinforced democratic values and deepened the public's
understanding of free and fair electoral procedures. Authentic democratic
values were being reinforced by a new generation that had grown up initially
under glasnost, and later with a broad awareness of democratic practices
around the world.

Ukrainian society was also experiencing profound changes of its own,
including the rise of a significant middle class in Kiev and other urban
centers. In 2002, thanks in part to the ongoing effects of policies enacted
by Yushchenko when he was prime minister, GDP grew by 5.2 percent; the
next year, it increased 9.4 percent; and in 2004 it grew by 12.5 percent.
From 1999 to 2004, Ukraine's GDP nearly doubled. Although this growth
mostly benefited a narrow circle of oligarchs, it also spawned many new
millionaires and a new middle class. These new economic forces resented
the latticework of corruption that constantly ensnared them--from
politically motivated multiple tax audits to shakedowns by local officials
connected to business clans.

Another factor that promoted a dynamic civic sector was increasing awareness
of the ruling elite's corruption. The country's emerging Internet news
sites--which disseminated the damning Kuchma tapes--were an integral part of
this process. By November 2004, Ukraine, with a population of 48 million
people, boasted some 6 million distinct users accessing the Internet. A
lion's share of Internet access was generated by residents of Kiev and other
major cities--where the civic protest became the most widespread and
opposition the most determined.

Old media, too, played a modest role. Despite the government's nearly total
control of political content on national television and the significant
pressure placed on independent media, a significant array of objective
newspapers and local radio stations continued to function. And there was one
opposition television station: Channel Five had a national audience of only
around 3 percent and was confined to cable television, but it was popular in
Kiev and several other cities.

In the days before the orange revolution, journalists, bristling at
government control and censorship, launched strikes and public protests,
demanding the right to tell voters the truth. On one national television
channel, known as 1+1, the entire news team of producers, reporters, and
editors walked out, forcing the station's news director and government
loyalist Vyacheslav Pikhovshek to hold multi-hour talk marathons by himself.
He soon became the butt of jokes, including, "Question: What does 1+1
stand for? Answer: Pikhovshek and a cameraman."

In banishing Yushchenko from national television, the authorities forced him
to run a campaign based on grassroots meetings. In July, August, and early
September, Yushchenko and his representatives crisscrossed the country at a
blistering rate of five or six meetings per day. Reports told of Yushchenko
gathering crowds in the tens of thousands in cities and towns across eastern
and central Ukraine. These meetings helped create networks of civic and
party activists, crucial in organizing the mass protests.

A final factor in the orange revolution's success was its experienced
leadership. In 2001, a significant anti-Kuchma movement had flourished in
Ukraine, prompted in part by the president's "tapegate." Although these mass
protests eventually dissipated amid violence instigated by agents
provocateurs, they represented a kind of dry run for the next revolution.
Many of the leaders of the most recent civic protests cut their
organizational teeth four years ago.

FIGHT THE POWER

WITH THE MASSIVE criminal voter fraud well documented in the aftermath of
the runoff vote, Yushchenko and his advisers opted for a two-track strategy:
one revolutionary and the other constitutional and institutional, revolving
around efforts to appeal to both the parliament and the supreme court.

Engaging the revolutionary strategy, Yushchenko declared himself president
and took the oath of office in an abbreviated session of the parliament on
November 22--the first day of the nationwide protests. As "president," he
called for a nationwide general strike, urged the militia and the military
to stand with the people, and called on local governments to transfer their
allegiance to him and his council. In the hours that followed the "swearing
in" ceremony, palpable nervousness filled the air. Would the authorities
respond with force? Fortunately, the answer was no. Yushchenko's risky
tactics paid off, creating confusion within the security forces' rank and
file. Ukraine suddenly had three presidents: the outgoing but still
incumbent Kuchma; the "official" winner of the runoff, Yanukovich; and
Yushchenko, whose swearing in had been covered by the increasingly
open national media.

As C.J. Chivers of The New York Times revealed, Ukraine's military and
security services began to fragment as the protests gained strength.
Although Yanukovich and other hard-liners demanded that force be used
to disperse the protesters, the authorities dared not intervene with the
military and the SBU divided. According to Chivers, after the Interior
Ministry unilaterally marshaled troops to attack the demonstrators, SBU
leaders made clear that they would use force to protect the protesters. The
cooperation of segments of the SBU with the Yushchenko camp appears
to have been a crucial element in preserving the peace.

But Yushchenko's inner circle also understood that a successful civic coup
could set a precedent for street-driven politics and remain a long-term
source of institutional instability. The actions of the protesters therefore
needed to be reinforced by constitutional bodies. Popular demand and
coordinated pressure from the international community pushed forward the
institutional approach. Soon, deputies from the government majority began
to turn to Yushchenko, as Kuchma's power waned and the scale of the fraud
became incontrovertible. On November 27, after days of mass protests and
the siege of the cabinet of ministers, the presidential administration, and
Kuchma's residence, parliament met and by a clear majority voted to declare
the poll invalid. Six days later, Ukraine's supreme court annulled the
results of the runoff, accepting Yushchenko's legal team's evidence of
massive fraud and social high-level conspiracy. The court called for fresh
elections.

A key role in the process was played by parliamentary speaker Volodymyr
Lytvyn, Kuchma's former chief of staff. While Poland's President Aleksander
Kwasniewski, Lithuania's President Valdas Adamkus, and the European Union's
Foreign Affairs Commissioner Javier Solana worked in Kiev to negotiate the
contours of a democratic solution among the rival interests, Lytvyn brokered
the specifics of a comprehensive agreement. It featured significant new
protections in the election law to reduce the potential for voter fraud.

The agreement also called for amending the constitution to reduce the powers
of the president. As a result of these changes, by the end of 2005, Ukraine
will be a parliamentary-presidential republic; the president will be
responsible for foreign policy, national defense, and security, with veto
power over the legislature. The appointment of the government will now be
the purview of the legislature, due to be newly elected in March 2006.
Yushchenko accepted these changes with some reluctance, but most of his
key aides believe that the remaining one-year window of strong presidential
power will give him sufficient time to deal with the legacies of corruption
and to shape a broad future parliamentary majority.

On December 26, Ukrainians went to the polls for the third time to vote for
president in an election that attracted the largest contingent of
international observers in history: more than 12,000 monitors from Europe,
North America, Russia, and Asia took part. A more open media covered the
election (although not in eastern Ukraine, where broadcast media continued
to provide only a pro-Yanukovich perspective). The result was predictable:
Yushchenko received 52 percent of the votes and Yanukovich 44 percent,
with a winning margin of 2.2 million votes out of 28 million cast. The
results showed significant regional variations: Yushchenko carried 17
regions in the western, central, and northeastern parts of the count, and
Yanukovich commanded dominant majorities in Ukraine's ten southern
and eastern regions.

Early in the morning on December 27, barely six hours after the polls had
closed, Yushchenko made a brief, eloquent address to the nation.

"We are free. The old era is over. We are a new country now," he said.
Yushchenko declared what everyone knew, that he was Ukraine's third
president since independence. But he was the first with a record of
commitment to democracy and the rule of law.

FROM PROTESTS TO POLITICS

AS PRESIDENT, Yushchenko faces serious domestic and international
challenges. But his leadership team is far from inexperienced in governing.
Many of Yushchenko's ministers have served in high government posts,
dismissed only when they challenged the corrupt elite. As a result, his
colleagues both know how to run bureaucracies and understand how to
overcome resistance to reform.

Yushchenko's coalition is broad and highly representative, although also
susceptible to some infighting and division. Some members had long been
part of the opposition to Kuchma, while others had made common cause with
oligarchic parties until a few years ago. Some are members of Ukraine's
nouveau fiche, while others are civic activists deeply suspicious of the
"new oligarchs." Some belong to the social-democratic left, while others are
free-market libertarians. Some are conservative nationalists, while others
are liberal and secular. To shape a majority in the short term, Yushchenko
will also have to form alliances with politicians who until a few weeks ago
backed his opponent and the ruling regime.

In part due to his religious convictions, Yushchenko has positioned himself
as a member of the European People's Party (the Christian Democrats), a
moderate center-right group. On social policy matters he tends to support
a robust safety net for Ukraine's elderly, but he is an equally strong
proponent of fiscal discipline. These three currents and his desire to
balance them have contributed both to his centrist moderation and to his
broad-based political appeal.

His team's biggest challenge will include confronting the corrupt, criminal
legacy of the Kuchma years. Doing so will require introducing a significant
number of new cadres into the upper and middle levels of the Ukrainian state
government. It will likely mean wholesale changes in the Interior Ministry
and the tax inspectorate, which have devolved into mere political
instruments of the oligarchic groups. Yushchenko will replace the country's
governors and local executive officials, all of whom are loyalists of Kuchma
and the large oligarchic parties. In the wake of the orange revolution,
appointed regional leaders from Ukraine's Russian-speaking east came
perilously close to threatening secession. They will now certainly be
replaced, and some who have resigned are already under investigation by
the prosecutor-general's office for anti-constitutional activity.

Given eastern and southern Ukraine's overwhelming support for Yanukovich,
a crucial domestic challenge will be bridging the divide that separates them
from the western and central regions. There are strong reasons to believe
that Yushchenko will succeed. Apart from the Crimea, no Ukrainian regions or
cities have ethnic Russian majorities. Ethnic Ukrainians make up
three-quarters of the population, whereas Russians constitute only 21
percent. The ideological differences between the regions can be defined in
one word: media. In eastern Ukraine, the local press fanned the flames of
regional separatism and painted Yushchenko and his team as ultranationalists
and CIA agents. Eastern Ukrainians will slowly move beyond these stereotypes
as they gain access to more balanced information and to direct contact with
their new leaders. As important, the region's two most powerful economic
actors, Akhmetov, owner of System Capital Management, and Serhiy Taruta,
who leads the Industrial Union of Donbass, seem eager to cooperate with the
new Yushchenko team. Working to neutralize the negative impact of the
Russian media, which exert a significant influence in the Crimea and eastern
Ukraine, will also be important.

The cycle of illegal political intimidation must end as well. Yushchenko
expects vigorous prosecution of high-ranking officials suspected of
participating in the election fraud. He has stated publicly that former
President Kuchma is, like every citizen, answerable to the law. Yushchenko's
closest aides make clear that there will be no amnesty for Kuchma. The new
government will investigate his conduct in office, and if necessary, he will
be prosecuted. Yushchenko has also declared that he knows who poisoned
him, and he will take appropriate measures. There is also an ongoing
investigation into a foiled election-night plot to blow up an area one
kilometer in diameter in central Kiev and kill many members of Yushchenko's
leadership team. Two alleged Russian gangsters, believed to have connections
to Russia's security services, have already been arrested. Seven pounds of
plastic explosives were found wired to their car.

Another major task will be media reform. State television has long been a
wasteland of bland and propagandistic programming. Although much broadcast
and print content has improved in the aftermath of Yushchenko's victory,
there is still the question of diversifying ownership of privately owned
media, which are held mainly by the new government's oligarchic opponents.

In the economic sphere, Yushchenko confronts a rising budget deficit and a
slowdown in the country's growth rate, which last year was 12.5 percent and
this year is expected to fall to around 6 percent. Yushchenko's closest
aides believe that they will be able to pay for the growing debt by
revisiting several insider privatization deals that cheated the treasury.
One such case is the June 2004 privatization of the lucrative Kryvorizhstal
steel plant, bought by insiders for $800 million less than the offer from a
consortium of investors that included U.S. Steel. The Yushchenko team is
also confident it can reassert control over the notoriously corrupt energy
sector, and it is committed to eliminating Ukraine's preferential "special
economic zones," which only benefit the oligarchic elite. With measures such
as these, Yushchenko and his team feel certain that there will be no need to
reduce public benefits or raise taxes.

REACHING OUT

UKRAINE'S MOST PRESSING international challenge will be to manage the
relationship with Vladimir Putin's Russia. Putin strongly backed Yanukovich,
and Russian-led election monitors attested to his victory in the first
runoff. Putin spent four days in the week before the first-round vote
promoting Yanukovich in lengthy press interviews and public meetings.
Kremlin image-makers played a crucial role in advising and directing the
Yanukovich campaign, and the Yushchenko camp believes Russia spent
several hundred million dollars to help Yanukovich win. Yushchenko's victory
is thus a humiliating defeat for Putin and a setback for Russia's hegemonic
inclinations.

But Yushchenko's circle seeks solid, pragmatic relations with Russia.
Advisers in the new government point out that as prime minister, Yushchenko
worked to resolve Ukraine's payment arrears for Russian energy and that
during that time Russian investment in Ukraine was at its highest. A day
after his inauguration, Yushchenko traveled to Moscow for his first official
international visit, to be followed by trips to Warsaw, Brussels, and
Washington.

Even as he seeks to improve his relationship with Russia, Yushchenko's main
goal is the consolidation of Ukraine's democracy and market economy through
integration with the EU. Although such an aim once appeared fanciful for
political as well as economic reasons, the orange revolution changed all
that by generating weeks of positive publicity for Ukraine as an emerging
European democracy. In central Europe, among the EU's new member states,
the orange revolution helped people vicariously recapture the spirit of
their own civic movements of the 1980s. Lech Walesa traveled to Kiev to
speak in Independence Square, as did politicians from Germany, the Nether-
lands, Slovakia, and the Czech Republic. European institutions are voicing
their support as well. On January 13, the European Parliament voted 467 in
favor, 19 against for a resolution calling on Ukraine to be given "a clear
European perspective, possibly leading to EU membership." Although the
vote was nonbinding, The Financial Times asserted that it "was the clearest
sign to Kiev that the EU's door is open."

But EU integration will remain a long-term objective. Ukraine's population
of 48 million and its low level of economic development currently make entry
into the common market forbidding. Poland's Kwasniewski believes Ukraine
will be a part of the EU in 15 years. Some analysts contend that Ukraine
could be invited to begin the drawn-out process of EU accession within 7
years. Yet Yushchenko is moving rapidly. He has entrusted one of his closest
and longest-serving aides, Rybachuk, with the responsibility of heading the
Ministry of European Integration. Operating at the level of deputy prime
minister, Rybachuk will have authority to supervise every ministry's
relevant work in meeting European standards.

As for the United States, U.S. policy on Ukraine has long been driven by the
contingencies of the Iraq war. In the past, Yushchenko and his inner circle
have voiced their disappointment with this state of affairs. As recently as
August, in fact, they worried that in return for Kuchma's deployment of a
large force in Iraq, the top U.S. leadership was abstaining from public
criticism of Ukraine's human rights violations and the restrictions on the
freedom of the press, relying instead on lower-ranking diplomats to send
Kiev more muted signals. Iraq may linger as a sore spot, as Yushchenko has
been a proponent of withdrawing Ukraine's forces. But considering that
Kuchma already announced a June 2005 deadline for the redeployment of
Ukrainian troops, and that other key U.S. allies such as Hungary are also
pulling out, the issue is unlikely to stand in the way of warm relations.

Indeed, in recent months, particularly since the re-election of George W.
Bush, the Yushchenko team has praised the United States as a bedrock of
support for democracy and the rule of law in Ukraine. And the Yushchenko
camp has stated its gratitude for the long-term efforts of the U.S. Agency
for International Development to support free media, the rule of law, civil
society, and civic election monitoring there.

Ukraine is eager for U.S. support on a number of fronts. Economically,
Ukraine's leaders hope the United States will declare Ukraine a market
economy and push for the country's quick integration into the World Trade
Organization. Diplomatically, should Russia start flexing its hegemonic
muscles, Ukraine would appreciate Washington's backing. What is more,
quiet lobbying from the United States could only help the Ukrainian aim of
integration into Europe. In particular, Washington could encourage the
United Kingdom and Italy to add their support to those of central Europe's
leaders, who are pressing Ukraine's case for eventual integration.

TODAY, KIEV; TOMORROW......

ALTHOUGH PRESIDENT YUSHCHENKO has come to embody the orange
revolution, he is moderate and pragmatic, not a permanent revolutionary.
Yet, like his close friend President Mikheil Saakashvili of Georgia, he also
believes that democracy can spread to other outposts of the former Soviet
Union. On January 11, Yushchenko and Saakashvili issued a joint declaration.
Their countries, they said, had overcome tyranny through the efforts of
homegrown forces; outsiders could never have effected meaningful civic
revolutions.

At the same time, Yushchenko and Saakashvili thanked the international
democratic community for supporting their struggles. "We are certain that
the revolutions in Georgia and Ukraine are shaping the new wave of liberty
in Europe," the two leaders stated. "They will usher in the ultimate victory
of liberty and democracy across the European continent."

During the 17 days of the orange revolution, groups of protesters at
Independence Square gathered around several Belarusian national flags.
They were part of a contingent of activists eager to soak in the experience
of a revolution in the making and to carry its lessons back home. Kazakh
opponents of Nursultan Nazarbayev's authoritarian regime also sought to
learn from their Ukrainian counterparts. Russian civic activists, too, came
to Kiev to meet with Ukraine's protest leaders and talk about organizing for
change. In mid-January, when Russian pensioners rose up against cutbacks
in their benefits, Moscow newspapers speculated that Russia could be going
"orange."

Just as activists from Ukraine's Pora youth movement learned from contacts
with Serbia's "Otpor" and Georgia's "Kmara" youth alliances, civic leaders
from authoritarian post-Soviet states are looking to Ukraine while searching
for their own path to successful nonviolent democratic change. The orange
revolution may not necessarily spread, but people will persist in their
struggles against tyranny. And over time, some of them will prevail.
Ukraine's victory over tyranny has been dramatic and inspiring. But the
implications of that victory-throughout the region and the world--will be
fully understood only in the years to come. -30-
------------------------------------------------------------------------------------------------------------
ADRIAN KARATNYCKY is Counselor and Senior Scholar at Freedom House.
------------------------------------------------------------------------------------------------------------
Foreign Affairs, the world's leading publication on foreign policy and
international affairs, is published six times a year by the Council on
Foreign Relations, www.cfr.org; www.foreignaffairs.org
=============================================================
2. TYMOSHENKO TAKES ON THE OLIGARCHS

Taras Kuzio, Eurasia Daily Monitor
Vol. 2, Issue, 74, The Jamestown Foundation,
Washington, D.C., Wednesday, April 13, 2005

A congress of Ukraine's oligarchs is scheduled for April 13 under the guise
of the "Assembly of Ukrainian Metallurgists" (ukrrudprom.com, April 11).
Representatives from 62 metallurgical enterprises will attend the
"Extraordinary" congress in Kyiv. Prime Minister Yulia Tymoshenko described
the event as an attempt to lobby the government to reverse its decision to
raise transportation charges on Ukraine's railways by 50%.

Tymoshenko's ongoing fight against the oligarchs will likely increase her
popularity even more. As she has pointed out, five families control
Ukraine's metallurgical industry and she plans to audit every one. Russian
investors own the four largest Ukrainian oil refineries.

Deputy Prime Minister Mykola Tomenko has openly accused oligarchs and
regional barons of systematically sabotaging the government's work and
points to rising fuel and food prices as proof. The "sabotage" is directed
against the government's plan to cut the hidden subsidies, unfair
privileges, and excessive profits enjoyed by the oligarchs. "President
[Viktor] Yushchenko is mobilizing all government agencies at the central and
regional level, in particular law-enforcement bodies, in order to make the
Ukrainian authorities work as a single and well-coordinated team," Tomenko
warned (Uryadovyi Kurier, April 7).

Two other factors will also affect this looming clash between the state and
the oligarchs.

First, Ukraine's largest metallurgical plant, Kryvorizhstal, will lead the
participants at the "Extraordinary" congress. The plant was privatized for
only $800 million in June 2004 as a pre-election bribe for the
Dnipropetrovsk and Donetsk clans, represented by Viktor Pinchuk and Renat
Akhmetov respectively. Pinchuk is also former President Leonid Kuchma's
son-in-law.

The new Ukrainian authorities have stated their readiness to re-nationalize
Kryvorizhstal and re-submit it for tender. They hope to raise $3 billion
from the new sale. Tymoshenko predicted that re-privatization would take
place later this month.

The oligarchs became noticeably nervous in March, when Tymoshenko
mentioned that 3,000 enterprises would be subjected to re-privatization, a
statement that also alarmed Western investors. Yushchenko and other
government ministers have calmed Western fears by reiterating that re-
privatization would only apply to 30 companies, although which 30 has not
been made public.

Second, on April 6 the head of Donetsk oblast council, Borys Kolesnykov,
was arrested on suspicion of corruption, extortion, and attempted murder,
charges that could lead to 12 years imprisonment (see EDM, April 11).
Kolesnykov is a high-ranking member of the Regions of Ukraine party led
by defeated presidential candidate Viktor Yanukovych.

Centrist parties have pointed to his arrest to claim that the new
authorities have launched a campaign of political repression. Yanukovych
wrote a long open letter to the EU and OSCE, in which he accused the
authorities of launching "terror" against their opponents (ya2006.com.ua).

However, opposition-sponsored protests have been few, as the former
parties of power are finding it difficult to work in opposition. Centrist
parties have no real memberships and have traditionally paid or forced state
employees to join their rallies and protests. Currently, protestors in Kyiv
are paid 30-50 hryvni (about $8) to attend rallies against the government.

As "roofs" for business interests, centrist parties are inclined to closely
cooperate with the authorities rather than go into opposition, according to
former Yanukovych election consultant Dmytro Vydryn (rep.int.ua). Their only
ideology, according to former Donetsk adviser Volodymyr Kornilov, is to
support the current authorities in order to protect their businesses. As
they are business rivals, they are rarely a united force (glavred.info,
April 5).

One of the first acts of Interior Minister Yuriy Lutsenko was to increase
the strength of MVS Internal Troops in two key regions, Donetsk and
Trans-Carpathia. Under Kuchma both of these regions became de facto
autonomous fiefdoms totally controlled by the Party of Regions and Social
Democratic Party United (SDPUo), respectively. Tomenko undoubtedly had
these regions in mind when he warned, "In certain regions a conglomerate
involving local authorities, business, and law enforcement leaders.has not
been defeated yet" (Uryadovyi kurier, April 7).

Following Donetsk, the next area targeted for anti-corruption efforts will
be Trans-Carpathia, where senior SDPUo leaders, such as Kuchma crony
Viktor Medvedchuk, were elected to parliament in 1998. The region became
notorious for "corruption, banditry, election falsifications, and poverty"
(Ukrayinska pravda, April 5).

During the Orange Revolution, leaders tried to incite violence in Donetsk
region in order to give the authorities an excuse to introduce a state of
emergency. Local MVS personnel themselves worked to thwart the
organized-crime skinheads who, along with the regional governor and the
regional MVS leadership, had been preparing the provocation.

On April 7 Channel 5 television's Zakryta Zona investigative program
researched how millions of hryvni were extorted from businesses to support
the 2004 Yanukovych election campaign. If businesses refused to pay, they
would receive frequent visits by government agencies. Also, local
Trans-Carpathian businessmen were forced to sell some of their assets to
senior SDPUo leaders. Former Donetsk oblast chairman Kolesnykov was
charged with both of these crimes and his arrest could be the first of many.

Another senior SDPUo leader elected in Trans-Carpathia in 1998, Hryhoriy
Surkis, has been accused of donating 6 million hryvni ($1.12 million) to
Kuchma's "Ukrayina" Foundation from offshore accounts. The MVS has
called Surkis in for questioning.

Tymoshenko has declared that the oligarchs will no longer be able to earn
super profits from monopolistic rents and channel the resulting funds into
offshore accounts. Needless to say, the government is also attempting to
block the return of these "shadow funds," so that they do not back the
opposition in the 2006 parliamentary elections. -30-
--------------------------------------------------------------------------------------------------------
LINK: http://www.jamestown.org
=============================================================
3. JULIA CAESAR

COMMENTARY: By Ivan Lozowy
THE UKRAINE INSIDER, Vol. 5, No. 12
Kyiv, Ukraine, Friday, March 8, 2005,

After six years in a political wilderness and following two arrests, Yulia
Tymoshenko can be forgiven her tittering laugh, heard regularly these days
on Ukrainian television. She is now on top of the world in the powerful
post of Prime Minister and her poll ratings have risen dramatically.
For years at constant loggerheads with former President Leonid Kuchma,
Tymoshenko earned a tough, but largely negative, reputation. During the
Orange Revolution, however, she basked in the limelight of forcefully
leading millions of Ukrainians in overthrowing Kuchma's regime and the
sobriquet of "Goddess of the Revolution" was not unearned.

Now at the head of Viktor Yushchenko's government, Tymoshenko has benefited
from her hands-on approach to governing and, despite bumps along the way,
she has given people what they want: she is the person "trying to get
things done." According to one admittedly unrepresentative on-line poll by
Ukrayinska Pravda, Tymoshenko edged out Yushchenko as Ukraine's most
popular politician.

The future looks even rosier for Tymoshenko. On January 1, 2006 at the
latest, she will inherit expanded powers as Prime Minister, in effect
setting her free from direct control by President Yushchenko. It is less
likely that these powers will be transferred earlier, on September 1, 2005,
because for this to happen a special law on local government must first be
adopted.

The powers Tymoshenko is due to eventually receive include nominating most
of the government's ministers for confirmation by the Verkhovna Rada and
appointing local government officials.

In anticipation of these changes and in recognition of her current status,
Tymoshenko's parliamentary faction is growing rapidly and reportedly an
additional 50 MPs are ready to make the switch. Tymoshenko's position is
secure since, according to the Constitution, she cannot be removed from her
post until just prior to the March 2006 general elections. Since the
former regime is in complete disarray, most of its adherents in parliament
have been trying to ingratiate themselves with Tymoshenko. This comes
naturally to many MPs, who have traditionally shifted allegiances based on
who controls the purse strings in the Cabinet of Ministers.

The parliamentary vote for changes to the current state budget passed on
March 25 practically unanimously, by 376 votes out of 450. The only
noticeable political force to announce its opposition, the Social
Democratic Party of Ukraine (united), looks forlorn and dazed by the
assault on its privileged position, which looked unassailable only half a
year go.

Minister of the Interior Yuriy Lutsenko's initiative in arresting the head
of the Donetsk oblast council Borys Kolesnikov two days ago is a harbinger
of accounts to be settled with the old regime. Kolesnikov is one of the
people closest to the head of the Donetsk clan, Rinat Akhmetov. This is
the first high-profile arrest following the elections and may precipitate a
flurry of additional arrests based on election fraud, financial misdealing
and related criminal activity.

Abandoned by many adherents and facing hard jail time, the SDPU(o) chief
Viktor Medvedchuk has thrown down the gauntlet and announced opposition
to the new government. But his stance as champion of Russia's interests in
Ukraine has seemed weak following President Vladimir Putin's fiasco last
autumn. In desperation, the SDPU(o) has even tried a trick that worked
with Kuchma in 1994 by inviting Yushchenko to review Dynamo Kyiv, the
mainstay of the SDPU(o)'s financial empire, hoping to entice the new
President with the magnitude and breadth of their operations.

With former presidential challenger Viktor Yanukovych looking more and more
dazed, the source of a future challenge to Tymoshenko is not, thus, from
the remnants of the former regime. The real challenge may well lie in her
relations with Viktor Yushchenko.

Tymoshenko has shown a readiness in the past to turn against her mentors.
Following the 1998 elections Tymoshenko broke with her patron, Pavlo
Lazarenko. As her popularity increases, Tymoshenko cannot help but think
she is outgrowing the current President. After all, it was her
arm-twisting as Yushchenko's Deputy in 2000 that garnered an additional 9.5
billion UAH to Ukraine's budget, allowing Yushchenko to spread around the
largesse and correspondingly gain popularity among the common folk. Now
Tymoshenko is keen to be seen spreading around the goodies herself.

Since Yushchenko is largely the prisoner of his surroundings, it is these
henchmen who will probably play a key role in an eventual separation with
the Gas Princess and Goddess of whatever.

One of the several people closest to Yushchenko, Roman Bessmertny, publicly
called Tymoshenko a "blackmailer" and "con-artist," but then Yushchenko
appointed him as one of Tymoshenko's three deputies. One thing is sure
despite Bessmertny's placating noises since then - he will be spending more
of his time undermining Tymoshenko with Yushchenko behind the scenes than
reforming Ukraine's administrative system, formally his responsibility as
Vice Prime Minister.

Bad blood between Tymoshenko and National Defense and Security Council
Petro Poroshenko remains after the messy Prime Minister nomination process,
when Yushchenko reportedly told Poroshenko to go and make a deal with
Tymoshenko, who had been promised the job originally, though in uncertain
terms. Yushchenko has even been forced to publicly call for the two to mend
fences.

But, following her past tribulations Yulia Tymoshenko can be forgiven for
thinking that the last challenge she faces before she dons the laurel
wreath will also be the easiest. -30--
-------------------------------------------------------------------------------------------------------
THE UKRAINE INSIDER - is distributed via the Internet free of charge
to all interested parties as a source of in-depth information on political
events in Ukraine, including behind-the-scenes coverage of significant
current issues, the positions of policy-makers, tactics and strategy
information on Ukraine's ongoing struggle toward a free and democratic
society. Correspondence should be addressed to Ivan Lozowy via
the Internet to: lozowy@i.com.ua
==============================================================
4. PUNDIT SAYS PUTIN'S REMARKS ON UKRAINE COUNTERPRODUCTIVE
"Putin's Energy Manoeuvre"

By Varvara Zhluktenko, Den, Kiev,in Ukrainian 13 Apr 05; p 1, 3
BBC Monitoring Service, UK, in English, Wednesday, April 13, 2005

Berlin-based political expert Alexander Rahr has described as
"counterproductive" the statement made by Russian President Vladimir
Putin during his visit to Germany that if Ukraine joined the EU, this would
divide the nation. Interviewed by a Ukrainian daily, Rahr also noted that
the Russian-German agreement to build a gas pipeline across the Baltic
Sea bypassing Ukraine is likely to meet with resistance from Poland and
many other European countries and to cause an undesirable energy-related
geopolitical rivalry in Europe.

The following is the text of the article by Varvara Zhluktenko entitled
"Putin's energy manoeuvre" and published in the Ukrainian newspaper
Den on 13 April; the subheading is as published:

While in Germany, Russian President Vladimir Putin expressed scepticism
regarding Ukrainian entry into the European Union. "If Ukraine enters the
Schengen zone [visa-free travel within some EU countries], there will be a
certain problem. As far as I know, at least 17 per cent of the population
living there in Ukraine is Russian. This is a division of the people! It
recalls the division of Germany into East and West!" Putin said.

In the framework of his visit to Germany, a major agreement was signed
between Russia's Gazprom and the German chemical concern BASF.
We asked the well-known German political scientist, director of the Russia
and CIS programme of the German society of foreign policy, Alexander
Rahr, to comment on the consequences of this agreement for Ukraine
and the possible effect of Putin's statements.

"I think that such statements by Putin in Germany were counterproductive. A
public opinion poll recently conducted by a French organization shows that
most West Europeans want to see Ukraine in the EU. And I think that most
West European politicians should take that into consideration. The
statement by the Russian president that Ukraine should not be accepted into
the EU is interpreted here as an attack on the Orange Revolution and on the
democratic movement in Ukraine itself, as an attempt to display an imperial
policy that naturally very much scares everyone in Western Europe.

Public opinion in Germany has now somewhat cooled regarding Ukraine's
European integration, but not to such an extent as to talk of a
catastrophic negative. In January this year 62 per cent of Germans backed
Ukraine's joining the EU, while today the numbers vary between 40 and 45
per cent. It is just that objectively the "orange" information wave went to
sleep. But a lot depends on Ukraine itself, on how far it goes on the road
to democracy. I don't think that the continuing visa scandal provoked any
strong anti-Ukrainian feelings in Germany. Perhaps just at a primitive,
low, everyday level... [ellipsis as published]

In actual fact, the visa scandal is a typical power struggle in the
political elite of Germany. The most popular politician in the last 10
years, Foreign Minister Joschka Fischer, has not yet given the slightest
cause for criticism.

But now the opposition is beating and beating him, using his mistaken
decision to give out visas left and right. But I think that the scandal will
die down as early as this summer.

I would especially note something else. In our eyes there is a new
geopolitical confrontation developing in Europe because of energy. On the
one hand, Germany and Russia reached agreement surprisingly quickly to
build a gas pipeline that worries everyone, across the Baltic Sea from
Russia to Germany, bypassing Poland and Ukraine. It is precisely Chancellor
[Gerhard] Schroeder who is primarily advocating joining Russia to European
energy markets and thereby "nudging" Russia into the EU. This policy of
Schroeder is supported only by French President [Jacques] Chirac.

At the same time, more and more other countries are coming out against
such an energy alliance. I think that Yushchenko's visit to Poland can be
described as a counterweight to that policy. In Germany Yushchenko
understood that perhaps unlike some firms, Schroeder personally did
not want to buy Uzbek and Turkmen gas via Ukraine, because he was
building his whole strategy on Putin's Russia.

Now Yushchenko and [Polish President Aleksander] Kwasniewski are
starting increasingly actively to play with the idea of GUUAM [regional
cooperation agreement between Georgia, Ukraine, Uzbekistan,
Azerbaijan and Moldova] as a counterweight to the German-Russian gas
alliance. I think that with US support, GUUAM will strengthen and there
will be an attempt as quickly as possible to build alternative transport
flows for oil and gas from the Caspian region bypassing Russia. For this,
of course, it will be necessary to reach agreement in some way with Iran,
to build a very complicated branch through the Caspian Sea from Kazakhstan
to Azerbaijan. But evidently GUUAM is now getting so strong that the idea
may very soon take off.

Thus there are two competing energy alliances appearing in Europe. It is a
matter of enormous sums of money, of the West's energy security in the 21st
century, of joining Russia to Europe or leaving it at a distance. All these
questions have colossal weight and will now determine the fate of Europe.
In our eyes a new scenario is unfolding that started among other things
because of the Orange Revolution in Ukraine. It may lead to the desired
diversification of energy flows from East to West, but at the same time it
may lead to very serious conflicts that, of course, nobody in Europe wants."

INCIDENTALLY

In five years all the western republics of the former USSR will join NATO
and will move into the zone of EU attraction. This opinion was expressed by
the deputy director of the Europe Institute of the Russian Academy of
Sciences, Sergey Karaganov, RIA Novosti reports. He said that the main
problem for Russian policy in the European area was the absence in Russia
of strategic vision in the Europe-wide context. Karaganov said that "in
view of the absence of a strategic aim we are doomed to retreats and
unilateral concessions, often not only not beneficial, but also harmful".

In the expert's opinion, it all recalls "the policy of late Gorbachev or
early Yeltsin - Kozyrev". "If Russia fails to change its policy, then it
may become an even more independent centre than it could afford.

Moreover, not a centre of strength, but a centre of weakness," the political
scientist stressed. In Karaganov's opinion, "it is necessary to concentrate
on drafting a future Russia-EU treaty that will replace the agreement on
partnership and cooperation of 1994". The main thing, in the expert's
opinion, is that "Russia needs to decide whether we want to be with Europe
or do we want to stay alone with a falling population". -30-
=============================================================
5. PENTAGON HOPES TO WORK WITH UKRAINIAN MISSILE INDUSTRY
Inroads for U.S.-Ukrainian missile defense cooperation

By Eric A. Miller, Eurasia Daily Monitor
Vol 2, Issue, 74, The Jamestown Foundation
Washington, D.C., Friday, April 15, 2005

In the wake of Ukrainian President Viktor Yushchenko's state visit to
Washington April 4-6, U.S.-Ukrainian military cooperation could make
significant progress in missile defense cooperation. The presidential joint
statement agreed "to work together on missile defense, including beginning
negotiations on a framework to facilitate such cooperation and closer
industry-to-industry collaboration."

Missile defense may appear tangential to U.S.-Ukrainian military
cooperation, but high-level advocacy exists on both sides. This is not
surprising, because significant commercial, military, and political
interests are at stake for both sides in the missile business. The United
States hopes to glean useful ballistic missile technology and hardware and
tie Ukraine to Western export control norms. Ukraine is looking to boost a
key industry and improve its prospects for joining NATO.

Missile defense cooperation has been rising steadily over the past year.
The Ukrainian parliament ratified a "General Security of Defense Information
Agreement" with the United States in June 2004. This agreement established
guidelines for handling and protecting classified material -- an important
preliminary step for increasing cooperation and information flows. Ukraine
is the only CIS member to have concluded such an agreement with the United
States. According to U.S. government sources, that same month, Department
of Defense officials visited Ukraine and met with representatives from the
National Space Agency of Ukraine, the National Security and Defense Council,
and Yuzhnoye, Ukraine's missile design bureau.

Pentagon officials also stated that, in February 2005, senior executives
from Yuzhnoye met with the Department of Defense to describe possible
cooperative opportunities. Then in March, senior Pentagon officials
consulted with their Ukrainian counterparts in Kyiv to prepare for the April
state visit and to discuss missile defense cooperation. In addition,
according to one official in the U.S. Missile Defense Agency, the Agency
plans to conduct a U.S.-Ukraine missile-defense workshop with Ukrainian
experts in June to explore operational concepts in missile defense.

These cooperative efforts seek to capitalize on Ukraine's long-standing
missile expertise and its newer sea-launch capabilities. Yuzhnoye has
historically been the primary producer of Moscow's strategic missiles and
the major supplier of space-launch vehicles, such as the Cyclone and Zenit
systems. While this industry lagged after the Soviet collapse, Ukraine's
military and space-launch industries remain a high priority for the country.
One Ukrainian official noted that since 2002 more than 70 launches of
Ukrainian-produced space launch vehicles have placed more than 150
satellites from nine countries in orbit.

More recently, international joint ventures, such as Yuzhnoye's
participation in the Sea Launch Project using the Zenit 3SL space launch
vehicle, have also proven profitable. One U.S. industry representative close
to the program stated that since the initial release of the Sea Launch
platform in 1999, the platform has successfully launched 15 large commercial
payloads. Such activities provide a commercially viable outlet for what was
once a highly militarized industry.

Most importantly for the United States, many proliferators and emerging
missile states today base their missile programs on Soviet-era designs.
Yuzhnoye and Yuzmash (Ukraine's missile manufacturing plant) could provide
unique insight into these missile threats. From the Pentagon's perspective,
this expertise is attractive for testing its ballistic missile defense
system.

As the Defense Department focuses on more realistic and strenuous testing
of its ballistic missile defense system in the future, Ukraine would be a
good partner. In the past, Pentagon officials revealed that Ukrainian
specialists have proposed the use of the Cyclone-3 rocket for testing the
ballistic missile defense system. The three-stage liquid-fuel launch
vehicle resembles North Korean intercontinental ballistic missiles, which
provides opportunities to test against targets more representative of real
world threats. Moreover, Ukrainian expertise could be leveraged as NATO
moves forward on potential development and testing of a theater ballistic
missile system. Such cooperation could also provide a tangible boost to
President Viktor Yushchenko's NATO's aspirations.

Expanding U.S. involvement in the Ukrainian defense sector also could curb
long-standing proliferation concerns over Ukrainian military exports. More
specifically, Ukraine's missile technology and robust industry is attractive
to proliferators and emerging missile states - a concern not without
precedent. The alleged sale of the Kolchuga radar system to Iraq added to
the unsavory character of the Leonid Kuchma regime. More recent revelations
that Ukraine sold 18 unarmed nuclear-capable X-55 cruise missiles to Iran
and China in 2001 are equally alarming (EDM, March 23). Tying the Ukrainian
defense sector more closely to the Euro-Atlantic community could
increasingly influence this industry to embrace Western norms of export
control and mitigate proliferation issues.

In this regard, Yushchenko's attitude is encouraging. On March 28 he stated
that Ukrspetsexport (Ukraine's state-owned arms trading company) "must
operate transparently with clean hands and within the law. We do not
need.deals that would later spark scandals, because of [these] scandals we
are losing customers" (UNIAN, March 28).

But even Yushchenko has pointed out that Ukraine will remain a key player in
the arms business. Ukraine "should not be satisfied that it earns some $500
million in weapons exports" to about a dozen countries. "I expect a new,
aggressive business approach.that would focus more on manufacturing of
weapons, instead of simple trade and overhauling [of Soviet-designed surplus
arms]." Thus, even in the post-Kuchma era, Ukraine's missile industry could
emerge as a concern. However, by increasing defense cooperation, the United
States could provide Ukrainian industry with brighter prospects and a real
reason not to be tempted to tread along the proliferation path. -30-
---------------------------------------------------------------------------------------------------------
LINK: http://www.jamestown.org
=============================================================
6. THE GREAT TERROR - STALIN'S LEGACY OF CRUELTY
Soviet History - Death and the Dictator

Two New Books Reviewed by Leon Aron
BOOK WORLD: This Week, April 17-23, 2005
The Washington Post, Washington, D.C., Sunday, April 17, 2005

STALIN
A Biography
by Robert Service, Belknap/Harvard Univ. 715 pp. $29.95

STALIN AND HIS HANGMEN
The Tyrant and Those Who Killed for Him
By Donald Rayfield. Random House. 541 pp. $29.95

Villains fascinate, and mass murderers doubly so. From Herod to Pol Pot,
Genghis Khan to Hitler, Ivan the Terrible to Saddam Hussein, we have been
drawn to the edge of the abyss for a glance into the bottomless and cold
darkness of Great Evil. What for? To confirm our own humanity? To learn, and
guard against, the warning signs of advancing savagery?

Even in this gallery of mega-rogues, Joseph Stalin stands apart. Although
second to his imitator Mao Zedong in the absolute numbers of the compatriots
killed (shot, tortured to death in prisons, starved in villages, murdered in
concentration camps) and to Pol Pot in the proportion of the country's
population exterminated, Stalin may be unmatched, at least in modern times,
in the number of people his policies affected -- in his impact on the
contemporary world.

Had it not been for those policies, promulgated and enforced by a Comintern
completely subservient to Moscow, Weimar Germany's left would not have been
split by the Communists' relentless attacks on the Social Democrats ("social
fascists," Stalin called them). The two parties, which together commanded
far more votes than Hitler's National Socialists (and initially more muscle
as well), could have almost certainly prevented Hitler's rise to power and,
with it, World War II. Built to strict ideological specifications, the
totalitarian state -- whose construction Stalin completed and perfected and
which took almost four decades after his death to dismantle -- could not but
be aggressive and expansionist in its struggle to the bitter end with "world
capitalism." Hence, the forced and violent Sovietization of Eastern and
Central Europe, with its own tsunami of death, destruction, suffering and
daily indignities; the nuclear arms race; the global Cold War; and more
death in local hot wars from Korea and Vietnam to Afghanistan and Nicaragua.

Given the subject, then, one hesitates to call Robert Service's biography a
labor of love, but the expression seem to fit the years (perhaps decades)
this massive book must have taken to produce, filled with the relentless and
arduous search for facts. A fellow of the British Academy and St. Antony's
College at Oxford and the author of an earlier biography of Lenin, Service
has written an unhurried, richly detailed and rigorously researched book,
anchored in hundreds of sources -- a vast but cleanly structured text,
polished, fluent and brisk.

As fine biographies of political leaders so often are, this one too is an
inside version (as it were) of grand history, a new perspective on
well-known facts and larger themes. In the case of Stalin, these touchstones
comprise many of the 20th century's defining moments: the rise of
Bolshevism; the 1917 October Revolution, the Civil War and the foundation of
the Soviet state and the world communist movement; the 1928-32 "revolution
from above," which completed the construction of the world's first modern,
industrialized and militarized totalitarian state by robbing and enslaving
the peasants who made up 80 percent of the Soviet Union's population; and
the Great Terror of 1936-39, which left Stalin in possession of probably the
most -- and surely the least challenged -- power of anyone in modern
history.

Following his declared goal of eschewing stereotypes and looking at his
subject afresh, Service gives us a portrait of a paranoid and murderous
despot, not a one-dimensional, cartoonish baddie. In villainies of such a
scale, there is never a single smoking gun. Yet while falling short of the
impossible -- a complete explanation for the behavior of the man at the root
of one of the greatest humanitarian catastrophes in history -- Service
greatly advances our understanding by deftly fusing the tale of the man with
that of the doctrine to which he was fanatically beholden and the ethos and
practices of the tiny underground party.

Iosif Dzhughashvili became editor of Pravda in 1912 and changed his party
alias from the Georgian "Koba" (after the legendary 19th-century robber whom
young Iosif emulated) to "Stalin," or "man of steel," a translation of his
last name into Russian (dzhuga is steel in Georgian and stal its Russian
counterpart). He was a difficult loner, crude and vulgar, increasingly
unbalanced and suspicious, but also strong, determined, capable and
effective, thirsting for knowledge and widely read. The only surviving child
of a doting mother and a drunken cobbler father who beat them both
mercilessly, Iosif grew up in a sleepy Georgian town named Gori. Resentful
of his deformity (his left arm was permanently damaged in an accident), he
was vengeful, never forgetting (let alone forgiving) a slight. According to
his boyhood friends, Iosif "coddled grievances for years," and, in Service's
words, saw "malevolent human agency in every personal or political problem
he encountered." He joined the fledgling party at the age of 20, having left
the Tiflis (Tbilisi) Theological Seminary a few months before graduation in
1899. His first wife, Ketevan Svanidze, died in 1907, a year and four months
after they were married. His second, Nadezhda Allilueva, committed suicide
in 1932. He was never close to his three children.

What we learn from Service about the man plausibly explains the young
Stalin's easy and unwavering choice of Bolshevism from among at least half a
dozen leftist parties and movements in the anti-czarist underground. He was
drawn to the party's conspiratorial zeal, intolerance of dissent, obsession
with control, and its mix of doctrinal dogmatism and tactical flexibility.

Stalin seems to have internalized, then embodied and built on the most
truculent, pitiless and aggressive components of Lenin's credo. The
connection between Bolshevism and Stalinism and between Lenin and Stalin --
the nature and extent of which used to be hotly debated by scholars and the
world's left -- emerges here as something natural and organic. The only man
other than Lenin whom Stalin was ever reported to have genuinely admired was
Hitler. "What a great fellow!" Stalin told a fellow Politburo member after
learning of the 1934 purge of the Nazi brownshirts known as the Night of the
Long Knives: "How well he pulled this off!" (When we both were college
students in Moscow in the 1970s, Khrushchev's grandson Alexei Adzhubei told
me of his grandfather's reminiscences about a high-level Nazi delegation
arriving in Moscow in the late 1930s to learn more about setting up and
running concentration camps.) Three years later, after painstaking
preparation, Stalin launched his own vastly wider and bloodier internal war
for total supremacy. Within the two years of what would be called the Great
Terror, at least 1.5 million people were arrested and at least half of them
executed -- mostly party and state leaders, engineers, intellectuals and
military officers down to the regiment level.

This rate of elite extermination was not to be repeated, but the systematic
mass terror that started with the birth of the Soviet state would continue
unabated until Stalin's death. Millions more were arrested, imprisoned,
tormented in the gulag or shot. Nor was the Great Terror the single most
intense slaughter in Soviet history, as Donald Rayfield estimates in Stalin
and His Hangmen, his searing and beautifully written chronicle of
state-sponsored murder. That grisly distinction belongs to the 1929-33
"peasant Holocaust," when between 7.2 million and 10.8 million villagers
died during "collectivization," or the elimination of personal ownership of
land, tools and livestock and the forcible pooling of these into a
"collective" property held de facto by the state -- a process aimed in
particular at the class of formerly well-off farmers known as kulaks.
(Stalin later told Churchill that collectivization cost 10 million lives.)
Families were arrested, herded into cattle cars, driven for days without
food or water, then unloaded in the frozen tundra or swamps and left to die
without food or shelter. Other kulaks were simply evicted from their homes
in the middle of winter -- men, women, nursing babies -- and wandered until
they froze or starved to death, with everyone else forbidden, on pain of
sharing their fate, to give them a blanket or a crust of bread. Most victims
perished in the famine that followed the requisition of grain for sale
abroad.

The stages of this gruesome period are known: the "red terror" unleashed
after an attempt on Lenin's life in 1918; the Civil War killings, when
captured "White" officers who fought the "Red" Bolsheviks were loaded on
barges and drowned; the "pacification" of villages suspected of giving
support to the Whites; the killing of "class enemies" chosen from the Moscow
phone book (including all the Boy Scouts and the Lawn Tennis Club); the show
trials of "wreckers" of the new society, including engineers, agronomists,
veterinarians and historians; the extermination of peasants; the arrests,
executions and mass exiles from Leningrad following the murder of the
Leningrad party boss (and Stalin's potential rival) Sergei Kirov in 1934;
the Great Terror; the 1940 killing of some 22,000 Polish officers in Katyn
forest; the genocidal exile of the "traitor nations" (including the
Chechens) after World War II; and, in the last months of Stalin's life, the
"Doctor's Plot," which was rumored to be the prelude to public hangings on
Red Square and a country-wide anti-Semitic pogrom, to be followed by the
exile of more than 2 million Soviet Jews to the Far East.

Yet as he gives us stomach-wrenching details of these torments and portraits
of the men who engineered them (beginning with first-rate essays on Stalin
and the founder of the Cheka secret police, Feliks Dzierzynski, the son of a
Polish nobleman, a fanatical Bolshevik and hollow-cheeked ascetic who
subsisted on the diet of tea and bread to which he became accustomed as a
prisoner in czarist jails), Rayfield, a professor of Russian and Georgian at
the University of London and the author of a very fine biography of Chekhov,
manages to make this abstract and often unimaginable evil feel close and
real. Layered with subplots and striking vignettes and filled with voices
(both the victims' cries for help and the commissars' orders for more
killing), the horrid saga acquires texture, color and an immediacy that will
mesmerize readers almost despite themselves. One marvels at the sheer
mastery of craftsmanship that has made this relentlessly depressing, often
repugnant material into such a compelling tale. -30-
---------------------------------------------------------------------------------------------
Leon Aron is director of Russian studies at the American Enterprise
Institute (AEI), Washington, D.C.
http://www.washingtonpost.com/wp-dyn/articles/A54997-2005Apr14.html
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