"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 - AUR" - Number 496
E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, WEDNESDAY, June 1, 2005
------INDEX OF ARTICLES------
"Major International News Headlines and Articles"
1. UKRAINE'S BANKS: FROM PANIC TO STABILITY
By Jan Cienski, Financial Times
World Reports: Ukraine 2005
London, United Kingdom , Tue, May 31 2005
2. BLUE-COLLAR REGION SUSPICIOUS OF YUSHCHENKO REGIME
By Tom Warner, Financial Times
World Reports, Ukraine 2005
London, United Kingdom, Wed, June 1 2005
3. UKRAINE: MELODIES AND RHYTHMS OF GOVERNMENT REGULATION
Nation has yet to hear of any increase in foreign investment
in Ukraine's economy. A signal has been sent out to investors.
But it appears that it consists mostly of good wishes.
COMMENTARY: By Natalia Huzenko, The Day
The Day Weekly Digest in English, #18
Kyiv, Ukraine, Tuesday, May 31, 2005
4. CARGILL TO ACQUIRE CHUMAK'S SUNFLOWER SEED
CRUSHING FACILITY IN SOUTHERN UKRAINE
Interfax-Ukraine, Kyiv, Ukraine, Tue, May 31, 2005
5. JAPAN'S TENEO PARTNERS TO OFFER UKRAINIAN FUND
Asia Pulse, Tokyo, Japan, Wed, Jun 01, 2005
6. DEAD WATER
Ukrainian rivers are a threat to human health and life.
Every year 1.9 billion m3 of crude sewage are dumped into the Sea of Azov
By Olena Tkachenko, Luhansk
The Day Weekly Digest In English, #18
Kyiv, Ukraine, Tuesday, May 31, 2005
7. UKRAINIAN CARMAKER TO INVEST IN DOMESTIC PRODUCTION
Ukrainian News Service, Kyiv, Ukraine, Mon, May 30, 2005
8. IFC LAUNCHES BANKING CORPORATE GOVERNANCE PROJECT
International Finance Corporation (IFC), Kyiv, Ukraine, Tue, May 31, 2005
9. PM YULIA TYMOSHENKO MEETS WITH U.S. SENATORS MITCH
MCCONNELL, JIM DEMINT AND MIKE CRAPO
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, May 31, 2005
10. TELECOM MINISTRY TO TAKE CONTROL OVER UKRAINIAN INTERNET
ANALYSIS: Roman Bryl, Ukraine Analyst
IntelliNews - Ukraine This Week, Kyiv, Ukraine, Mon, May 30, 2005
11. RUSSIAN BUSINESSMAN PRAISES UKRAINE'S INVESTMENT CLIMATE
"To speak of capital belonging to a certain nation
is not correct, capital knows no borders."
Interview with Aleksandr Babakov by Valentyn Zemlyanskyy
Zerkalo Nedeli, Kiev, in Russian 21 May 05; p 10
BBC Monitoring Service, UK, in English, Saturday, May 28, 2005
12. PRESIDENT YUSHCHENKO SETS UP COMMISSION ON REFORM
OF THE UKRAINIAN JUDICIAL SYSTEM
Ukrainian News Agency, Kyiv, Ukraine, Tuesday, May 30, 2005
13. U.S. JUDGE SPEAKS ON INDEPENDENCE OF UKRAINIAN COURTS
New Europe, Athens, Greece, Monday, May 30, 2005
14. THE REVOLUTION'S MEDIA GUIDELINES
A New book: 'The Orange' Revolution: Versions, Chronicles, Documents'
By Natalia TROFIMOVA, The Day
The Day Weekly Digest in English, #17
Kyiv, Ukraine, Tuesday, May 24, 2005
15. TARGET STORES TO CARRY LIFEWAY'S KEFIR DRINK
Founded in 1986 by Ukrainian immigrant Michael Smolyansky
By Eric Herman, Business Reporter, Chicago Sun Times
Chicago, Illinois, Wednesday, May 25, 2005
16. UKRAINE'S ELECTION
The Role of One International NGO
By Celeste A. Wallander, Director
Russia and Eurasia Program and Trustee Fellow
Center for Strategic and International Studies (CSIS)
Washington, D.C., May, 2005
17. UKRAINE CABINET PROPOSES TO REGULATE VOLUNTEERS' ACTIVITY
Ukrainian News Agency, Kyiv, Ukraine, Tue, May 31, 2005
18. CANNES TRIUMPH
First time in Ukrainian filmmaking history, won the Palme d'Or
By Dmytro DESIATERYK, The Day
The Day Weekly Digest in English, #17
Kyiv, Ukraine, Tuesday, May 24, 2005
19. WHEN WILL THEY GET IT?
That there is a country called Ukraine.
Not to the Russians but to the French, Germans, and Brits.
By Dmytro Desiateryk, The Day
The Day Weekly Digest in English, #18
Kyiv, Ukraine, Tuesday, May 31, 2005
20. UKRAINE PARLIAMENT GRANTS AMNESTY TO 17,000+ PRISONERS
Ukrainian News Agency, Kyiv, Ukraine, Tue, May 31, 2005
21. PRESIDENT YUSHCHENKO PRESENTS SHEVCHENKO MUSEUM
IN KAZAKHSTAN NEARLY 70 ETCHINGS BY THE POET
UNIAN, Kyiv, Ukraine, Tuesday, May 31, 2005
22. EU ENLARGEMENT RISKS BEING BIGGEST CASUALTY OF FRENCH
VOTE INCLUDING TURKEY, THE BALKAN STATES AND UKRAINE
By Daniel Dombey in Brussels
Financial Times, London, UK, May 31 2005
23. U.S. EFFORTS TO DOMINATE THE WORLD COULD END IN DISASTER
SAYS MIKHAIL GORBACHEV SOVIET UNION'S LAST LEADER
By Robert Evans, Reuters, Geneva, Switzerland, Mon, May 30, 2005
===============================================================
1. UKRAINE'S BANKS: FROM PANIC TO STABILITY
By Jan Cienski, Financial Times
World Reports, Ukraine 2005
London, United Kingdom, Tue, May 31 2005
After surviving a panic and veering perilously close to collapse during last
year's Orange Revolution, Ukraine's banks have stabilised and expect to see
foreign competitors moving aggressively into the fast growing country. "By
the end of this year a large part of the business will be in foreign hands,"
says Boris Timonkin, chairman of Ukrsotsbank, Ukraine's third largest.
The banking crisis was set off in late November when Russian speaking
regions of eastern Ukraine threatened secession if Viktor Yushchenko, the
current president, defeated his rival Viktor Yanukovych. As a result people
rushed to withdraw their money.
The central bank first tried to bolster the system by spending $1bn of
Ukraine's currency reserves before deciding to bend the law and temporarily
banned withdrawals. This worked and the collapse of the banking system was
averted. Although the banks were saved their shareholders got a nasty scare
and are now keen to sell, says Mr Timonkin.
They are likely to find willing buyers. Most foreign banks fled Ukraine
after the 1998 Russian financial crisis and few thought of returning during
the corruption and insider dealing that was a hallmark of the rule of Leonid
Kuchma, the former president. But in recent months they are making a
reappearance, enticed by Ukraine's 12.1 per cent GDP growth last year and
a government prediction of 8.2 per cent growth for this year.
Russia's second largest bank, government owned Vneshtorgbank, opened
a subsidiary in March and others, brimming with funds from Russia's oil
fuelled boom, are circling. "The Russians are coming big time," says Elena
Voloshina, head of operations for the International Finance Corporation in
Ukraine.
Kazakhstan, which has probably the most modern banking sector in the former
Soviet Union barring the Baltics is also moving, with TuranAlem recently
buying a 10 per cent stake in Transbank, a small Ukrainian bank. Other
foreigners are also interested.
Austria's Raiffeisenbank-Ukraine began operations in Ukraine in 1998 and
is the largest foreign bank with assets of 4.4bn hryvnya ($870m, Euro 690m,
£470m). It is negotiating to take over Bank Aval, Ukraine's second largest
with assets of 13bn hryvnia. Poland's largest bank, PKO-BP, last year bought
a two-thirds share of Kredyt Bank, which it plans to turn into one of the
country's largest banks within three years.
The opportunities in Ukraine are enormous for those fast and aggressive
enough to capitalise on them. Two years ago Tymoteusz Fleiszar, who was
27 and working in financial services in Poland, took a closer look at
Ukraine and decided there was a fortune to be made in consumer credit -
a sector still in its infancy.
Together with a group of friends he came to an agreement with Nadra Bank,
Ukraine's ninth largest bank, and set up a company called Eurocredit. They
now have 15,000 shops linked to their network, issued 170m hryvnya in loans
last year and expect to pass 1bn hryvnia this year.
Ukrainian banks have also expanded consumer lending but have run into a
problem because most of their deposits are short term, while loans are for
five to 10 year periods. Banks are trying to get access to cheap, long term
capital. Ukrsotsbank is currently staging a road show to sell $150m worth of
three year bonds. But most Ukrainians are still nervous about holding their
funds in banks for longer periods and have to be lured by extremely high
interest rates.
Rates for hryvnya denominated deposits are about 14 per cent and can be as
high as 20 per cent at some weaker banks. Even dollar deposits get rates
close to 10 per cent. "Every bank has a problem of a mismatch between assets
and liabilities," says Ms Voloshina. Although Ukraine's leading banks have
adopted a lot of modern technology, and have a state of the art clearance
system, the sector as a whole is still fairly fragile.
There are 185 banks in the country and the 10 largest together control just
over half of the market. Most of the others are so-called pocket banks, used
by companies as in house piggy banks. The Ukrainian central bank has
worried that deposit and credit rates are too high.
Earlier this year Volodymyr Stelmakh, the bank's chairman, suggested that
lending rates should be about 9 per cent. Current rates are above 20 per
cent, keeping many Ukrainians out of the loan market.
Ukraine has a tiny stock exchange and venture capital has not yet played
much of a role, so high loan rates are affecting the ability of companies to
invest and expand. Pension and investment funds are also still very new.
The central bank hopes that the cost of credit can be lowered if the banking
sector begins to consolidate, something the European Bank for reconstruction
and Development has said it would be willing to assist. -30-
===============================================================
2. BLUE-COLLAR REGION SUSPICIOUS OF YUSHCHENKO REGIME
By Tom Warner, Financial Times
World Reports: Ukraine 2005
London, United Kingdom, Wed, June 1 2005
DONETSK - For Igor Prasolov, the chief executive of Ukraine's biggest
industrial group, the first months of Viktor Yushchenko's presidency have
been worrying times. Mr Prasolov is general director of System Capital
Management, the holding company that manages the assets of Ukraine's
richest tycoon, Rinat Akhmetov.
Based in the eastern industrial city of Donetsk, SCM is primarily a
vertically integrated steel producer and also an important player in
Ukraine's beer market, mobile telephony, banking and insurance. Another
of its assets is Donetsk's football team, Shakhtar, of which Mr Akhmetov is
president.
From its formation in 2000 until last year, SCM grew in parallel with the
rising career of the Donetsk region's former governor, Viktor Yanukovich,
who was prime minister in 2002-2004 and would have become president if not
for the Orange Revolution. Now Mr Akhmetov and his team are struggling to
distance themselves from old allies and adapt to a new government and new
conditions.
Mr Prasolov invited the Financial Times to SCM headquarters to deliver what
boiled down to an appeal to Mr Yushchenko not to allow any revenge taking
against his company and a promise that SCM would be a force for rapid
economic development and a model of corporate good behaviour.
"We want to move at maximum speed to make Ukraine a country where people
simply live happily, where Americans and Europeans will look at us and say,
'that's a country that became civilised in such a short period'. In that
respect our goals and the goals of the government fully coincide," Mr
Prasolov said.
Meanwhile he expressed confidence that SCM would win out in its battle with
Mr Yushchenko's government to remain the largest shareholder of
Kryvorizhstal, Ukraine's largest steel mill. SCM owns just under 50 per cent
of the consortium that paid $800m for the mill last year, a deal Mr
Yushchenko likens to theft and is determined to cancel the sale and
re-auction the mill to foreign firms.
"From the point of view of a market economy and European integration, the
institution of private property should be inviolable. Without that, there
won't be any market economy," Mr Prasolov said. Mr Prasalov said he was
sure accusations by local prosecutors against one of SCM's ore mines -
accused of making false claims for VAT refunds - "will be proven to be a
mistake."
Mr Prasolov was speaking before a ceremony where Donetsk business leaders
and the local government signed a joint declaration of co-operation and
mutual understanding. The ceremony, organised by SCM and Mr Yushchenko's
administration, demonstrated their common interest in keeping Ukraine's
industrial heartland running smoothly.
The Donetsk region accounts for one-tenth of Ukraine's population but about
one-fifth of the economy, reflecting a concentration of heavy industries
including coal, steel, chemicals and machine building.
The region is also the centre of popular opposition to Mr Yushchenko's
pro-western administration, with Mr Yanukovich and his Regions party drawing
overwhelming support. In a blue collar region where much of the population
was brought in from Russia during Soviet times to work in the coal mines and
factories, Mr Yushchenko's pro-western liberalism is regarded with deep
suspicion.
"Let's declare war on Russia - and surrender immediately!" says one of the
placards pinned up by the Ukraine Without Yushchenko campaign on Donetsk's
central square. Campaigner Malkhaz Yeresyuba says the appeal to be taken
over by Russia is "just a joke" but reflects the real sentiments of Donetsk
region residents, who he said would prefer to be in a union
The camp's main purpose, however, is to agitate for the release from prison
of Boris Kolesnikov, a prominent local politician and one of Mr Akhmetov's
business partners. Mr Kolesnikov was taken into custody in April and accused
by prosecutors of directing a campaign of threats and violence, including
two bombings and a spray of machine gun fire, that allegedly convinced the
former owners of a Donetsk department store to sell out cheaply.
Mr Kolesnikov is vice-president of the Shakhtar football team, chairman of
Donetsk's regional council and head of the local branch of Mr Yanukovich's
Regions party. Mr Kolesnikov is not involved in SCM but his company
Ukrinvest took part with SCM in the privatisation of Kryvorizhstal, taking a
6.5 per cent stake in the consortium that bought the mill. SCM controls just
under 50 per cent of the consortium and the rest is controlled by Viktor
Pinchuk, son-in-law of the former president, Leonid Kuchma.
Mr Akhmetov has defended the deal, in which his brother and other associates
figured as buyers, but he has distanced himself from Mr Kolesnikov, saying
he will accept the court's verdict.
Mr Prasolov said he was confident Mr Kolesnikov's arrest did not signal the
start of an all-out attack on Mr Akhmetov and that there would be "no
Kremlinesque tactics" used against his company.
In spite of some similarities, there are many things that make Mr Akhmetov's
story different from Mr Khodorkovsky's and likely to take a different
course. Ukraine's smaller economy gives relatively greater weight to tycoons
such as Mr Akhmetov, who have the capital resources Mr Yushchenko badly
needs to upgrade the economy.
The FT visited SCM's Donetsk brewery, a showcase of state of the art
technology and high productivity in a country plagued by inefficient
equipment and overstaffing.
Most importantly, Mr Akhmetov has a powerful local base in the Donetsk
region. While Mr Yanukovich and the Regions party distance themselves from
Mr Akhmetov and insist he gives them no support, they continue to speak up
for him and his interests.
Artem Yatsenko, a student who said he belonged to the "5 per cent" in
Donetsk who support Mr Yushchenko, said he was confident the new president
would learn to get along with Mr Akhmetov. "He's such an influential person,
not just for our region but for the whole country," Mr Yastenko said. -30-
===============================================================
3. UKRAINE: MELODIES AND RHYTHMS OF GOVERNMENT REGULATION
Nation has yet to hear of any increase in foreign investment
in Ukraine's economy. A signal has been sent out to investors.
But it appears that it consists mostly of good wishes.
COMMENTARY: By Natalia Huzenko, The Day
The Day Weekly Digest in English, #18
Kyiv, Ukraine, Tuesday, May 31, 2005
As per President Viktor Yushchenko's proposal, last week's economic forum,
which was held in the form of a dialogue between the government and the
business community, will be repeated on a quarterly basis. Round two will
address fiscal issues. "We will meet every quarter for as long as we do not
grow tired of each other," the president said.
He accepted the proposal from the head of Ukraine's tax authority to move
the forum venue to the more spacious assembly hall of the State Tax
Administration (the May 25 forum was held in the concert hall of Kyiv's
Ukrainian House). He further stressed that the reform of the nation's fiscal
system requires considerable time and effort, and that it is impossible to
reform it within a year's time.
Yushchenko expressed his support for the discussion of VAT problems in
particular and the taxation system in general. In addition to the ministers
of the economy and finance, the president suggested inviting economics
experts Oleksandr Paskhaver and Valeriy Heyets "in order to get a feel for
the fiscal problem in the country." Haven't they already?
Incidentally, on May 25 Minister of the Economy Serhiy Teriokhin apologized
to journalists for the apologies that First Deputy Prime Minister Anatoliy
Kinakh offered to Russian oil traders for the accusations made against them
in connection with the recent gasoline crisis in Ukraine.
With the second quarter coming to a close, the nation has yet to hear of any
increase in foreign investment in Ukraine's economy. While the government
keeps silent, unofficial sources point to a declining trend in foreign
investment dynamics.
Indirect proof of this may be a series of high-profile public events that
took place last week. After all, foreign investors are closely watching the
relationship between the Ukrainian government and the business community.
It appears, however, that last week the nation's leaders tried to drown out
the voices of businessmen, who came forward with serious complaints about
the government's policies.
Number one on the list of last week's events was a forum entitled
"Regulatory Policy as a Guarantee of Open and Transparent Government,"
attended by Ukraine's President Viktor Yushchenko, Prime Minister Yulia
Tymoshenko, and First Deputy Prime Minister Anatoliy Kinakh.
Planned as an adjunct to this forum was the report (already postponed once)
by economy minister Serhiy Teriokhin entitled "Government Efforts to Create
a Business Environment Conducive to Innovation and Investment." A
same-titled news conference organized by State Tax Administration chairman
Oleksandr Kyreyev and his deputies was scheduled to take place at the same
time.
The star speaker at the forum was the president. He threw some cold water
on the businessmen's expectations by inviting them to "get ready for a fresh
start." Could this mean that they will be expropriating everything? Of
course not. All joking aside, Yushchenko is not a complete stranger to
business, but he tried to show his toughest side.
As the overriding goal of the government and the business community, the
president identified bringing the economy into the open and stressed that
"neither private business nor the authorities may put up with the fact that
virtually half of our businesses are using shadow schemes. We will fight
this without mercy." Speaking about taxes, he pointed out that under the
current conditions it is much simpler to work "in the shadows" than reveal
one's cash receipts to the authorities.
The latter also received their fair share of criticism and lecturing from
the president, who said that the focus of the authorities should not be the
state, but businesses and specific individuals. At the same time he
recommended that they should also contribute to the "macroeconomic
culture."
The president identified the state budget as the primary component of this
culture: "We took over the reigns of power with a budget deficit of 32
billion. This is the deficit of a country at war! I dread to think what
would happen to the previous government a year from now, given their
approaches to pricing."
This rebuke directed at the former leadership was followed by a compliment
to the current government, which has minimized the budget deficit. "But no
one should be under the false impression that the 2005 budget is a horn of
plenty," Yushchenko said, adding that budget revenues are already
exceeding targets by 9%.
The president also expects inflation to decelerate: "The first quarter felt
the political repercussions from the fourth quarter of last year, which is
why inflation in the first three months reached 4.4% - a yellow card for
us." However, April inflation declined to 0.6%, while "July or August, or
perhaps even June, might see deflation."
Repeatedly returning to the question of investment, the president was
apparently implying that he views Russia as the primary source of
investments. Could this be the reason why he urged his team not to create
an illusory enemy, searching for would-be conspirators abroad?
"We have closed the book on the so-called energy crisis. Those with patience
and wisdom have stopped theorizing about conspiracies. I would like us to
stop toying with legends and myths so that we won't be the laughing stock of
the world. We got ourselves into it [the gasoline crisis] and climbed out of
it on our own. These are subtle things, and the whole world is watching how
our country is responding," Yushchenko said.
The president then donned the role of investment analyst and spoke
extensively on improvements in the country, such as the rising national
rating and open doors to foreign capital. As a result, by the end of 2005
the volume of direct foreign investment is expected to increase by 1.5
times from 2004.
How much hope can we hold out for this, given the "death" of free economic
zones this year? Yushchenko even expressed condolences to investors
affected by this move and said that he understood the discomfort this must
have caused them. He also promised to look further into this matter with an
ad hoc commission.
As if to atone for this, the president reminded those present that by June 1
all of Ukraine's customs offices should switch to one- stop service, and on
July 1 every region will have one-stop services for the registration of
businesses. He even threatened to dismiss the chiefs of regional tax
authorities and administrations if they fail to comply.
He further obliged all ministries and departments to work in the interests
of businesses. "I have a request, or even an order, for every department
and ministry to submit within 10 days their resolutions to revoke those
regulatory enactments, which parliament decided to strike down in its bill
on the system of permits," Yushchenko said.
He promised that if and when this bill passes in parliament, "over 1,000
regulatory documents will disappear immediately." According to the
president, if these enactments are eliminated, "the process of registering
businesses will be cut down threefold." He then displayed a heap of
documents required to register a startup business. "For two-thirds of
Ukrainian citizens this is a barrier they cannot overcome," Yushchenko
said.
The president ended his speech by stressing the need to reform the fiscal
system by introducing a single social tax and reviving the simplified
taxation system for small businesses. The president again urged the
government to "extend a hand to the business community."
Then Yushchenko passed the floor to Anatoliy Kinakh, bypassing Prime
Minister Tymoshenko, a move that is bound to cause some speculation,
especially since Kinakh immediately criticized the government for
"imposing VAT on the import of investment funds." "This mistake must be
remedied," Kinakh said, rightly emphasizing that the government must also
step up protection of ownership rights in the country.
Thus, a signal has been sent out to investors. But it appears that it
consists mostly of good wishes. -30-
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LINK: http://www.day.kiev.ua/137966
==============================================================
4. CARGILL TO ACQUIRE CHUMAK'S SUNFLOWER SEED
CRUSHING FACILITY IN SOUTHERN UKRAINE
Interfax-Ukraine, Kyiv, Ukraine, Tue, May 31, 2005
KYIV - The Cargill company is to acquire a sunflower seed crushing facility
in Ukraine from a Ukrainian-based foods producer, Chumak. "The deal is
subject to Ukrainian regulatory approval," reads a Cargill press release
distributed on Tuesday.
"The facility is located in Kahovka in southern Ukraine and has a capacity
of 1,200 thousand tonnes per day. The acquisition would complement
Cargill's existing oilseed crushing facility in Donetsk in eastern Ukraine,"
reads the press release.
"Our interest in acquiring the Kahovka sunflower seed crushing facility
marks the latest step in our strategy to strengthen our oilseed crushing
capabilities in Ukraine," said Andreas Rickmers, Cargill's country manager
in Ukraine. "The new facility has an excellent geographic location for both
the national and export markets.
"Together with our existing facility in Donetsk and our network of grain
elevators, this acquisition would provide a platform for future growth. It
would also support the national agricultural community as we would
source our sunflower seeds from farmers in Ukraine," Rickmers
stated.
The sunflower seed crushing facility in Kahovka is part of Chumak's
industrial complex that also includes an oil refinery and bottling plant.
Neither of these is included in the proposed acquisition.
"The long-term strategy for Chumak is to focus on the innovation and
branding of value-added products for the consumer market," said Carl
Sturén, managing director of Chumak. Cargill's international expertise in
oilseed crushing and extensive supply network in Ukraine will develop the
full potential of the Kahovka sunflower seed crushing facility and therefore
strengthen our branded bottled oil business and open up new opportunities
for our business operations." -30-
===============================================================
5. JAPAN'S TENEO PARTNERS TO OFFER UKRAINIAN FUND
Asia Pulse, Tokyo, Japan, Wed, Jun 01, 2005
TOKYO - Teneo Partners Ltd., a Tokyo-based investment advisory firm, plans
to start offering a fund this summer that invests in Ukrainian stocks and
bonds. With this move, Teneo aims to strengthen its lineup of funds focusing
on emerging markets such as Russia and Eastern Europe as well as expand
its customer base of institutional and other investors.
The Ukrainian fund will be managed by a London-based hedge fund
specializing in emerging market investments. The fund is a unit-type
investment trust with about 7-10 billion yen in assets.
It targets bonds, listed stocks and unlisted shares mainly in steel, metals
and other materials-related businesses, as well as in the retail,
pharmaceutical and consumer finance industries. The fund will initially
concentrate on bonds and unlisted stocks before gradually incorporating
listed companies.
Ukraine is rich in natural resources such as crude oil and gas, and it
enjoyed a more than 10 per cent increase in gross domestic product last
year. In recent years, direct foreign investments have expanded rapidly,
reaching roughly 160 billion yen last year. (Nikkei) e -30-
===============================================================
6. DEAD WATER
Ukrainian rivers are a threat to human health and life.
Every year 1.9 billion m3 of crude sewage are dumped into the Sea of Azov
By Olena Tkachenko, Luhansk
The Day Weekly Digest In English, #18
Kyiv, Ukraine, Tuesday, May 31, 2005
Ukrainian rivers are a threat to human health and life. This is not an
overstatement. According to Viktor Koshel, head of the state department
of ecology and natural resources in Luhansk oblast, 88 local rivers are
affected mostly by industry; there are 500 large industrial projects within
the boundaries of intake basins, along with 488 waste piles, and 87 solid
domestic waste dumps.
The situation is especially acute in the Siversky Donets and Mius river
basins, which receive up to 60% of all sewage. These rivers are connected to
the water arteries of Russia's Rostov oblast and the Sea of Azov. The sea
annually receives 4 billion m3 of sewage, including 1.9 m3 of crude waste.
Most of this waste water comes from industrial projects and sewers, and the
main reason is low capacities and obsolete sewage disposal plants. The
small river Krasna, a tributary of the region's main river Siversky Donets,
flows through three districts - Troyitske, Svatove, and Kreminna - of
Luhansk oblast. In keeping with a cabinet resolution, it is the industrial
section of a number of fisheries.
Oleksandr Poliakov, chief ichthyologist of the Luhansk regional fishing
control authority, the Krasna is inhabited by more than 22 species of fish.
Once crystal clear and beautiful, today it is a dying river that is being
slowly poisoned by regular waste discharges.
In 1999-2001 fish were dying en masse in the section of the river exposed
to these effluents, yet a file was submitted to the prosecutor's office only
in 2004, after facts relating to the destruction of fish stocks and
pollution of the river were duly put on record.
Local environmentalists and the regional fishing control authority have also
sounded the alarm. Experts at the SES chemical laboratory have taken water
samples in three Krasna sections and found that the ammonia content is
rising from 0.2 to 0.4%, with oxygen dropping from 4.5 to 1.4 mg/l.
"Such a sharp water oxygen decline is caused by sewage," explains Oleksandr
Poliakov, "and this sewage contains substances requiring lots of oxygen for
the biochemical oxidation process. This dramatic decline in oxygen is
killing fish en masse. Fish can live without oxygen between several minutes
and several hours, and river species are especially vulnerable.
The lowest allowable minimum of water oxygen content is 2-3 mg/l. So fish
are dying. Local villagers say they know when every waste discharge occurs
by watching the fish: they swim close to the surface and start gulping air.
In the section of the river between the villages of Miluvatka and
Novonikolske 639 perches, 218 breams, 238 roaches, 91 pikes, and 51
tenches have died. The fishing control authority estimates the damage at
over UAH 26,000.
Dying fish, however, is only one part of the problem. The small river has
turned into an enemy of the people living nearby.
"The local children have had nowhere to swim for several years," complains
pensioner Mykola Biloivanenko. "My grandson came to visit us from Rubizhne
and we didn't notice him running down to the river and taking a dip. His
body later broke out in a terrible rash. He was under treatment for a month
and nothing seemed to help. I once washed my feet in the river and then had
a rash up to the knees. So we are living next to a river but without river
water."
Local villages don't even use the river for watering their gardens.
Novomykilske's 100 cows drink from the river, and some cows die because
the ammonia-rich water burns out their stomachs.
It is now known that the sewage was coming from Svatove's sewers. Serhiy
Shumakov, head of the Svatove department of the Starobilsk regional
production directorate OKP Luhanskvoda, says that crude waste water was
received by the directorate's sewage disposal plants from Svatove's milk
processing factory, which also produces casein. Casein waste is causing
these problems.
The factory also has sewage disposal facilities, but for some reason they
stop functioning now and then, whereas local sewage disposal plants cannot
handle the high concentration of harmful substances because they need major
repairs. Svatove's fresh water suppliers estimate the damage inflicted by
the milk processing factory at around UAH 50,000. The case is being
investigated by the prosecutor's office.
The Svatove district authorities have given their assurance that repairs to
the sewage disposal plants will start this year, and Serhiy Shumakov has
even invited journalists to visit next year and taste the crystal clear
water at the sewage disposal plants. -30-
----------------------------------------------------------------------------------------------------------
LINK: http://www.day.kiev.ua
===============================================================
7. UKRAINIAN CARMAKER TO INVEST IN DOMESTIC PRODUCTION
Ukrainian News Service, Kyiv, Ukraine, Mon, May 30, 2005
KYIV - A Ukrainian automotive concern last Tuesday announced plans to
invest USD 240 million in domestic production, Interfax reported on May 24.
The Kiev-based capital management firm Ukrprominvest intends to use a
combination of company capital, foreign investment, and bank loans to
overhaul two major auto factories in the country, commented Oleh
Svinarchiuk, a company spokesman.
If put into effect the development plan would be the second largest capital
injection into Ukrainian automotive building in the country's history, after
a project financed by South Korean Daewoo in the city Zaporizhia, to the
tune of close to USD 500 million so far.
The Rotor automotive assembly plant in the central city Cherkasy and the
LuAZ bus factory in the western city Lutsk would be the main beneficiaries
of the Ukrpominvestment money, Svinarchiuk said. The goal of the
development programme would be to more than double Ukraine's vehicle
production to some 135,000 lorries and automobiles annually.
More than 3,800 jobs would be created by the investment, Svinarchiuk said.
The increase in car volumes produced would according to Svinarchiuk also
reduce the relatively high individual unit cost of cars sold in the country,
a common complaint of Ukrainian motorists.
Customers for the factories would be other Ukrainian automotive
manufacturers, as well as foreign car companies needing a low-cost source
of parts.
Negotiations for licensed assembly of Japanese Isuzu, Russian AvtoVAZ and
South Korean Hyundai vehicles in Ukraine were in progress, Svinarchiuk said.
Most foreign companies with the exception of South Korean Daewoo and Czech
Skoda have avoided setting up operations in Ukraine because of fears about
the country's stability. The Ukrainian market is reliable and demand for new
automobiles will increase six-fold by 2010, Svinarchiuk said. Besides
Ukrainian shareholders, South Korean KIA and Japanese Isuzu hold stock in
the Ukrprominvest project. -30-
===============================================================
8. IFC LAUNCHES UKRAINE BANKING CORPORATE GOVERNANCE PROJECT
International Finance Corporation (IFC), Kyiv, Ukraine, Tue, May 31, 2005
KYIV - Today the International Finance Corporation (IFC), the private sector
arm of the World Bank Group, launched its Ukraine Banking Corporate
Governance Project. The project is funded by the State Secretariat for
Economic Affairs of Switzerland (seco).
The project's goal is to improve the corporate governance practices in
Ukrainian banks. Better practices should raise the flow of investment and
improve access to capital for the banks. An enhanced capital structure is in
turn expected to stimulate business lending to the country's small and
medium enterprises.
The project will focus on enhancing the internal controls of Ukrainian banks
as well as on applying a standardized corporate governance approach to
assessing the creditworthiness of the banks' corporate clients. These
objectives will be accomplished through seminars and workshops, as well as
direct consultations with the banks on best practices in corporate
governance. In addition, the project will work with selected Ukrainian banks
to carry out a full corporate governance assessment, as well as provide
support in implementing the recommended changes.
To foster sustainability and promote self-regulatory initiatives within the
banks, the project will work with industry associations to strengthen their
activities and their client base. Public-private dialogue on banking reforms
is on the agenda as well. IFC will advise on the drafting of new domestic
legislation, drawing on international best practices. The main participants
in this undertaking are the National Bank of Ukraine, the Ukrainian
Securities and Stock Market State Commission, the Association of Ukrainian
Banks, and the First Securities Trading System.
Speaking at the project's launch ceremony, Christian Faessler, Switzerland's
ambassador to Ukraine, noted, "There is heightened interest in investing in
Ukraine following the Orange Revolution, and now is an ideal time for banks
to strengthen their international relations and integration into
international capital markets. To do this requires adherence to
international standards, and banks that raise their corporate governance
standards clearly have a better opportunity to raise international capital.
It is this access to capital that will determine the winners in the
Ukrainian banking sector."
Other speakers at the launch included Boris Timonkin, chairman of the board
of Ukrsotsbank, and Tatyana Vazhejievska, deputy chairman of Ukrsibbank.
Speaking on behalf of IFC were Elena Voloshina, head of operations in
Ukraine, and Desmond O'Maonaigh, the project manager. -30-
===============================================================
9. PM YULIA TYMOSHENKO MEETS WITH US SENATORS MITCH
MCCONNELL, JIM DEMINT AND MIKE CRAPO
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, May 31, 2005
KYIV - Ukraine pins hopes on cooperation with the US in its movement towards
democratic values, Prime Minister Yulia Tymoshenko says. "Now Ukraine has
every chance to become a powerful, truly independent, rich and democratic
country," Tymoshenko said in Kyiv Tuesday, while opening a meeting with
US Senators Mitch McConnell [R-KY], Jim DeMint [R-SC] and Mike Crapo
[CRAY-poh][R-ID].
Tymoshenko stressed that the new authority is taking a great effort to
justify the hopes of the Ukrainian people and the whole of the world linked
with democratic reforms in the state. In his turn, Senator McConnell voiced
hope that Ukrainian powers will follow the path of declared reforms, and
that the post-election enthusiasm will be transformed into real political
and economic reforms. -30-
==============================================================
10. TELECOM MINISTRY TO TAKE CONTROL OVER UKRAINIAN INTERNET
ANALYSIS: Roman Bryl, Ukraine Analyst
IntelliNews - Ukraine This Week, Monday, May 30, 2005
On May 29 Ukrainian EIRs were to come under state registration -----
The ministry of transport and communication caused deep resonance
in the Ukrainian society by issuing an order to register all electronic
informational resources (EIRs) in a state catalogue. The corresponding
order of the ministry "About ratifying procedure of state registration of
electronic resources" was approved on April 27 2005. The document
has been registered in the ministry of justice. On May 29 it was to step
in effect.
All registered EIRs to receive a special certificate,
to be listed in the National Register -----
The ministry explains that the order targets realization of the state
concept of forming the system of national electronic informational
resources. The government approved the concept in 2003. It is supposed
that every registered web-site will receive a special certificate.
Registration will be forbidden for EIRs with state secret content, for
resources with limited access, and for those, extending information
contradicting Ukrainian laws.
In particular, the registration is not allowed for web-sites calling to oust
state authorities, violently change the current constitutional regime, and
to break state boarders. Also web-sites with terrorism, racism, war,
violence, and porno propaganda cannot receive state registration. EIRs,
which potentially can harm business reputation and dignity of separate
persons, are also banned from registration.
Applications for receiving the state certificate will be examined by a
special commission. It has full authority to refuse or grant registration.
The commission is to be formed by Communication and Information State
Department, which is responsible for the EIRs registration procedure.
Draft was positively appraised by independent lawyers audit -----
Lawyers from legal protection and mass-media education program have
examined the order. They concluded that there is no threat to independent
mass-media in Ukraine.
Lawyers claim the order is realized in accordance with government resolution
?326 "About ratifying procedure of forming national register for electronic
informational resources" dated Mar 17, 2004. According to article 7 of the
resolution, listing in national register is necessary for state and local
authorities' EIRs, and other juridical persons, whose information resources
are transmitted by telecommunication networks of general use. Private EIRs
can be listed in the national register on voluntary basis.
Legal activists insist EIR state registration
poses potential threat to e-mass media -----
Nevertheless, all-Ukrainian independent organization "Ukrainian Internet
community" together with international organization "International league of
legal protection for Ukrainian citizens" demanded to repeal the order. They
sent a corresponding open letter to president Victor Yuschenko and PM
Yuliya Timoshenko. According to the letter, the telecom ministry order is
full of contradictions and impracticable conditions.
For example, organizations say the order obliges to give data concerning the
volume of electronic resources in bytes that is impossible for any dynamic
e-mass media. Also, organizations note the bill puts forward such
requirements, which are not specified by current Ukrainian laws. For
instance there is no legal interpretation of such provisions as "unquotable
language" or "information, discriminating a person on the basis of material
conditions".
Thus, the authors indicate that the regulation gives the possibility for
improper interpretation and should be regarded as a potential tool for
oppressing e-mass media. To remind you, there is no legislative definition
for e-mass media in Ukraine. Their activity is not regulated by a general
law about printed and other types of mass media. Current legislative
independence of e-mass media gives them the opportunity to spread the
information with elements of sharp criticism of state authorities.
"We think inadmissible and shameful for new Ukrainian authorities to issue
orders and resolutions which possess a potential threat to freedom of speech
and for free internet development in Ukraine", the open letter declares.
Legal activists predict the bill would destroy a positive tendency of
Internet development in Ukraine and exile of Ukrainian internet-centers
abroad.
The unique audience of Ukrainian Internet amounted to 6.414mm
persons in Mar 2005 -----
According to Sputnicmedia agency, the unique audience of the Ukrainian
Internet amounted to 6.414mn persons in Mar 2005, growing 13% from the
previous month. These are persons who at least once used the Internet. Kyiv
accounts for 53.63% of the total number of users. Users from other 1mm or
more inhabitant cities together make up of 32.16% Internet users in Ukraine.
Telecom ministry was forced to suspend the order for 10 days -----
Ministry of transport and communication responded rather quickly to legal
activists' protests. Minister Evgeny Chervonenko suspended the order for
10 days (until June 5). He explained this decision by the need to initiate
public hearings of the matter. The first roundtable devoted to the question
of EIRs registration is expected to take place on May 31.
Personally, Chervonenko does not see anything dangerous in the order, and
signed it to bring more transparency to the EIRs area. Peter Yatsuk, deputy
chairman of Communication and Information State Department, also shared
astonishment with the strong opposition in the society. He informed that a
draft was published on March 21, and since then nobody gave any remarks to
it.
We should note that the bill was not covered widely enough at first.
Government seemed to be trying to adopt a radically new law in a pretty
conniving fashion. The order indeed gives the authorities the right to close
down any media source for criticism of government. Criticism of specific
state officials can be deemed as defamatory or undermining state integrity.
While with TV and printed media, punishment for libelous statements is
defined by law, the measures for internet media might be of purely technical
nature, like shutting off electricity.
State registration aims to put in order governmental databases,
not more, ministry concludes -----
Despite defending its view, the ministry issued a special interpretation
of the draft with accurate definitions. In particular, it explains that
under definition "electronic and information resources" should be
understood not only web-sites but also different databases, registrars,
cadastres, electronic libraries, catalogues, and etc. Previously, many
state institutions spent a lot of public money and time to create various
databases, which in many cases duplicated each other. Thus, in this
respect the regulation is quite positive.
For example, state authorities have 2 different registrars of subjects of
economic activity instead of one complete register with open access to any
interested party. That is why government needs to create a system, designed
for registering, audit, processing and storing data about composition,
maintenance and EIRs access conditions to satisfy requirements of private
and juridical persons.
"National EIRs register is nothing more but an Internet-catalogue", the
ministry explains. In other words, this catalogue will include resources
structured by topic, mentioning their name, updating frequency, etc. The
catalogue is expected to be installed on the government's web-site. "The
existing of such catalogue helps any citizen or entrepreneur to receive
information in the most convenient way", the telecom ministry concludes.
As for the prospects of the bill, it is likely to be passed, given it has
found strong support in government. It would then step in effect after Jun
5.
The most likely option is passing of a special government committee handling
the database creation. Changing registration procedures for electronic mass
media would require a special law, which is unlikely to be worked out in the
nearest future. Control over implementation of the order would not be too
strict, at least until the beginning of next year, when the state registrar
is finalized. The law would definitely need clearer definitions of the
rights and responsibilities of mass media. -30-
===============================================================
11. RUSSIAN BUSINESSMAN PRAISES UKRAINE'S INVESTMENT CLIMATE
"To speak of capital belonging to a certain nation is
not correct, capital knows no borders."
Interview with Aleksandr Babakov by Valentyn Zemlyanskyy
Zerkalo Nedeli, Kiev, in Russian 21 May 05; p 10
BBC Monitoring Service, UK, in English, Saturday, May 28, 2005
Russian MP and businessman Aleksandr Babakov, known foremost in
Ukraine for his acquisitions in the energy sector, has said that business is
profitable in Ukraine and the authorities do not inhibit the entry of
Russian entrepreneurs into Ukraine. He said investing in the hotel business
is attractive in the regions as well as the capital.
He dismissed links to alleged criminals and said his investments in the
energy sector were "serious and long-term". He also denied promoting the
interests of Russian energy mogul Anatoliy Chubays in Ukraine.
The following is the text of Babakov's interview with Valentyn Zemlyanskyy,
entitled "Aleksandr Babakov: To speak of capital belonging to a certain
nation is not correct capital knows no borders", published in Zerkalo Nedeli
on 21 May, subheadings have been inserted editorially:
Not much is known in Ukraine about Russian entrepreneur and Russian State
Duma member Aleksandr Babakov. His name is most often linked to the
electricity business in the context of acquiring a number of Ukrainian power
utilities. However, it turns out that Aleksandr Mikhaylovich [Babakov] knows
quite a bit about our country and the principles of doing business in
Ukraine. In an interview with Zerkalo Nedeli, he shared his views on the
current situation and the more priority directions of Russian business
developing in Ukraine
[Zemlyanskyy] Aleksandr Mikhaylovich, how do you assess the situation in
Ukraine today? Have more favourable conditions been established for
conducting business, including Russian business?
[Babakov] Without question, the authorities in Ukraine plan to change the
conditions for doing business. The tendency towards more transparent
schemes will stimulate the development of entrepreneurship in Ukraine. It is
too early to give an evaluation of any specific steps. At the same time, we
count on conditions being created, including in the economy (in carrying out
privatization), under which so-called grey and black schemes will be absent.
In particular, [Ukrainian President] Viktor Yushchenko said during his
election campaign that when he was prime minister the privatization of part
of [Ukraine's] energy assets was carried out and he believed that to be the
most successful and transparent enterprise.
RUSSIANS FREE TO ENTER BUSINESS IN UKRAINE -----
[Babakov] It is incorrect to speak of capital belonging to a certain nation.
Capital knows no borders. In other words, the main criteria of victory after
meeting preliminary conditions, formed foremost by international structures,
is the sum of money offered by the investor. It is exactly this scheme which
is the most optimal, honest, and if you will, the most decent. It is another
matter if the state deems it necessary to implement some projectionist
measures in a number of sectors. But we should be speaking not of the
mark of nationality, but of fulfilling certain conditions for investment.
Overall, today's authorities are doing nothing to inhibit the entry of
Russian entrepreneurs into Ukraine. Now things lie with Russian business,
its readiness to come and work in Ukraine on these declared conditions,
and not to go into someone's office and make a deal for subsequent formal
participation in a tender.
[Zemlyanskyy] What did your business in Ukraine begin with?
[Babakov] We began to develop business in Ukraine in the mid 1990s by
acquiring sites in the hotel sector. It was rather a coincidence that we got
into the hotel business. The idea of buying the Ukrayina hotel (now Premier
Palace) came up, and that was carried out in March 1995. We plan to open the
entire complex by the end of the Eurovision song contest in May. And that is
290 room, two restaurants, a conference hall, night club and casino. In
essence, I am indebted to old, old economic connections which I made back
in the USSR for doing business in Ukraine.
Connections from when I worked in Russia representing one of the biggest
Ukrainian enterprises. Besides this one, the Oreanda hotel in Yalta is in
the hotel chain. We acquired it in 1998. By the way, I want to point out
that this acquisition is one of the examples of professionally harmonizing
the interests of the state and business.
After that we fully reconstructed Oreanda, something which today allows us
to speak of the presence of a hotel on the Black Sea coast which, despite
it's four-star ranking, provides services on the level of a five-star hotel.
The average occupancy for 10 months in 2004 rose 14 per cent on the same
period in 2003, which is a fairly high indicator for a hotel of such a level
and which has only 114 rooms. In the period since 1998, 32,800 people
have visited the hotel.
PROFIT IN HOTELS -----
[Zemlyanskyy] That is, you feel that investment in the hotel business means
good profits?
[Babakov] According to our estimates, the hotel business is fairly
prospective from the point of view of investing not only in hotels in the
capital, but hotels in the regions, too. In particular, we own the Dnistr
hotel in Lviv, and we are looking at a number of sites in other cities in
Ukraine. Yes, it is quite profitable business. But one must understand that
investing in the hotel business overall is strategic, since the return on
investment is about six to seven years. We have not regretted for a second
that we began to develop in this direction.
We think that making a high-class hotel is not just renovating to European
standards but a corresponding level of service, too. To this end, we have
used the services of a number of agencies with world-renowned names, who
are engaged in training our personnel. Today our own managers are already
training personnel in other hotels, and that is another direction for our
developing business in Ukraine. And overall, the hotel service is the
farthest business from the government, in contrast to say, oil or energy.
[Zemlyanskyy] Since we've mentioned the energy sector, let's get more
specific. People link you to the so-called Luzhniki group [which controlled
the Luzhniki flea market in Moscow in the mid 1990s], which allegedly
operates on the capital of dubious origin.
[Babakov] To begin with, I don't know what that is. I have a different name.
I am not linked to business tied to that name. More than likely, this
"canard" was sent out over the Internet. People once linked Moscow
representatives in Ukraine to [Moscow mayor Yuriy] Luzhkov. Sometimes,
we were called Luzhkov's men. Maybe it is just a mistake. Why that mistake
has been tied to my name, you'll have to ask the author, although it's not
likely to be easy to find the original source.
[Zemlyanskyy] And what about accusations of ties to the fairly well-known
Russian businessman, Maksim Kurochkin, who is now wanted by the
Ukrainian prosecutor-general?
[Babakov] As far as Maksim Kurochkin, I've always given a straight answer
to this question, but every time, for some reason, my words get distorted.
Kurochkin never had and does not have a single share in those assets of
which we are speaking. Yes, he was invited to manage two sites, but only in
the supervisory council, and for a number of reasons he was re-elected. The
"divorce" with him took place over a year ago and not only for professional
and political reasons, but for deeply personal reasons as well.
Investing is energy is long-term
[Zemlyanskyy] Please tell what assets you control in the Ukrainian energy
sector.
[Babakov] In order to bring full clarity to the issue of corporate
relations, I will recall that in May 2001 our business partner, the Slovak
state company VSE, bought 65 per cent of shares in Kherson regional energy
distribution company, 51 per cent in the Kirovohrad regional energy
distribution company and 70 per cent of shares in the Sevastopol energy
distribution company from the [Ukrainian] State Property Fun [SPF], paying
about 500m hryvnyas for them.
In spring 2002, VSE transferred the shares it owned in the four Ukrainian
energy utilities to a subsidiary of Dutch VS Energy, in which I am a
shareholder as well. If we are to talk of our recent acquisitions, then I
can note that VS Energy, registered in the Netherlands, bought 40 per cent
of shares in the Kirovohrad energy company from companies controlled by
Russian businessman Konstantin Grigorishin in exchange for minority stakes
in energy assets.
As a result VS Energy's stake in this energy utility company increased to 92
per cent of shares. We also acquired share packages in the Kherson and
Zhytomyr regional energy distribution companies, increasing our holdings in
these companies to 90 per cent.
[Zemlyanskyy] Are you not afraid to fall under the wave of reprivatization
in Ukraine?
[Babakov] Speaking of reprivatization, I would not like to comment on the
decisions of the Yuliya Tymoshenko government, as this could be interpreted
as meddling in the internal affairs of an independent state. At the present
time, it is quite difficult to speak of the essence of the process, since
the form is not yet determined. After all, it is known that even nationalism
can take place both in the form of a buy-out and in the form of
confiscation. And so we cannot yet say what form reprivatization will take.
We are not at all afraid of becoming the object of criticism, since the
results of our activities speak for themselves. For example, the gross
profit of the Kirovohrad regional energy distribution company last year was
138.4m hryvnyas, up 35.6 per cent on 2002 (102.1m hryvnyas). At the
Sevastopol energy distribution company, gross profit indicators were up by
47.2 per cent for the same period: from 36.9m hryvnyas in 2002 to 54.3m
hryvnyas last year.
PERFORMANCE IS UP -----
[Babakov] Besides, as a result of carrying out investment programmes for
the modernization of distribution networks, we see that unplanned losses are
lessening at all regional utilities which we manage, and the dynamics of
their lessening are being retained. For example, in 2002 unplanned losses
at the Sevastopol energy company were 10.06 per cent, and last year this
indicator was not above three per cent. At Odessa, 2002 losses were 15.5
per cent and at the end of 2004 they were 10.3 per cent.
I would like there to be understanding of the fact that we look at the
Ukrainian energy sector more like a strategic object for investment, since
operational profits there cannot be compared to the level of capitalization
of the enterprise. Our entering the market via the Slovak state company was
conditioned by our long-standing partnership ties with people in Slovak
energy. We came seriously and long-term.
[Zemlyanskyy] How would you comment on the scandal between Konstantin
Grigorishin and [MP] Hryhoriy Surkis surrounding "disputed" regional energy
utilities? Are you not afraid of coming under the fire of criticism?
[Babakov] We have a negative take on the information war currently under
way over the corporate rights at a number regional utilities, since they
inflict harm on the market and sector in general and not just on the sides
doing the fighting. At a time when we are directing effort to developing the
sector, some owners of electricity utilities are distracted by resolving
other tasks.
[Zemlyanskyy] Are you counting on the support of the Russian energy
monopolist, Unified Energy Systems [UES]?
[Babakov] We are quite often accused of defending the interests of UES in
Ukraine. I should point out that we are not a subdivision of this company
and we have received no business proposals from UES. And even if one
hypothetically supposed the participation of UES in the Ukrainian energy
business, then one should note that such attempts have already been made
twice. I cannot call them successful.
The visit of UES director Anatoliy Chubays to Ukraine at the end of 2003 and
his statements on the total privatization of Ukrainian energy (including our
enterprises) inflicted significant damage to Russian-Ukrainian relations,
including in the energy sphere. I think that a politician, even in the
conditions of an election campaign (wherever it was taking place), does not
have the right to make such irresponsible statements.
[Zemlyanskyy] Then how do you evaluate information that you are a front man
for the deputy head of the Russian Presidential Administration, Igor Sechin,
who has [allegedly] been pushing you forward for the post of deputy chair of
UES?
[Babakov] Even if that information was true, I do not see myself in Anatoliy
Chubays's team. Being Chubays's first deputy and being one of the managers
of UES are different in principle. -30-
===============================================================
12. PRESIDENT YUSHCHENKO SETS UP COMMISSION ON REFORM
OF THE UKRAINIAN JUDICIAL SYSTEM
Ukrainian News Agency, Kyiv, Ukraine, Tuesday, May 30, 2005
KYIV - President Viktor Yuschenko has set up a commission on reform
of the judicial system. This is stated in a presidential decree, a text of
which Ukrainian News obtained.
The main tasks of the commission is to identify the problems involving
development of the legislation on issues of the judicial system,
jurisprudence, the status of judges, and implementation of the
constitutional principle of protection of the rights and freedoms of
citizens by the courts, as well as to draft proposals on resolving issues
involving reform of the judicial system.
The commission is to submit a report on these proposals by December 31,
2005. Yuschenko appointed the National Security and Defense Council's
Secretary Petro Poroshenko as the chairman of the commission.
The other members of the 29-member commission include the Supreme
Council of Justice's Chairman Mykola Shelest, Justice Minister Roman
Zvarych, the head the Supreme Court's judicial chamber of civil cases,
Anatolii Dydkivskyi, the Supreme Court's Deputy President Petro Pylypchuk,
and Deputy Interior Affairs Minister Petro Koliada.
The staff of the National Security and Defense Council is to provide
technical and organizational support for the commission's operations.
As Ukrainian News earlier reported, Poroshenko said in a speech at the
13th international conference of judges that the reform of the judicial
system is presently unsystematic.
According to Poroshenko, the number of complaints about the actions or
inactions of the courts has increased 38-fold over the past year. The World
Bank has offered assistance to Ukraine in implementing of reforms of its
legal system, including judicial reform.
Justice Minister Roman Zvarych has said that adjustment of Ukrainian laws
to the requirements of the European Union is a priority for the Ministry of
Justice. Ukraine needs to bring approximately 300 legislative acts in 17
priority areas in accordance with the relevant European laws. -30-
===============================================================
13. U.S. JUDGE SPEAKS ON INDEPENDENCE OF UKRAINIAN COURTS
New Europe, Athens, Greece, Monday, May 30, 2005
KYIV - Judge Bohdan Futey of the US Court of Federal Claims said it would
be difficult for Ukrainian courts to be independent since the government and
parliament are used to giving them recommendations, Interfax reported last
Thursday.
Ukrainian judges' independence from the state authorities is very
conditional, Futey told a news conference in Kiev devoted to an
international congress of judges.
Futey asked how can a judge remain truly independent if he must remember
who has provided an apartment to him, especially if that provider is the
president or the regional authorities.
Only if politics are removed from justice can courts start passing
independent judgements, Futey said. -30-
===============================================================
14. THE REVOLUTION'S MEDIA GUIDELINES
A New book: 'The Orange' Revolution: Versions, Chronicles, Documents'
By Natalia TROFIMOVA, The Day
The Day Weekly Digest in English, #17
Kyiv, Ukraine, Tuesday, May 24, 2005
A lot of books have been quickly churned out about the Orange Revolution:
documentary publications and glossy illustrated books (Kyiv's Independence
Square was a real bonanza for photographers). The latest book cropped up
the other day. What is special about this one is that it was edited by
Mykhailo Pohrebynsky, director of the Kyiv- based Center for Political and
Conflict Studies. He is the political scientist whom the former opposition
blamed for drawing up the notorious temnyky (media guidelines) and
backing the pro-governmental candidate Viktor Yanukovych.
Until recently, Pohrebynsky frequently appeared on television programs,
criticizing the ex-oppositionists. After the elections, however, he dropped
out of sight. Now he is back in the public eye as the host of the roundtable
"Colored Revolutions in the Post-Soviet Space: Political Consequences,"
which saw the launch of a new book on the Orange Revolution. Among its
authors are Ukrainian, Russian, and German political scientists, including
both fervent supporters and opponents of the Orange Revolution, as well as
researchers who try their best to maintain a neutral and unbiased stance.
This is what the abstract says - and this is correct.
Incidentally, the list of authors includes some frequent contributors to
Den/The Day, such as Volodymyr Fesenko, Oleksandr Lytvynenko, and
Alexander Rahr, who were also invited to air their views on the "Orange
events" and their consequences at the roundtable but failed to show up, like
many others. The Day's correspondent, who has considerable experience
in covering this type of event, saw many unknown experts at the roundtable.
Besides Mr. Pohrebynsky, there was another better known expert - Volodymyr
Malynkovych - director of the Ukrainian branch of the International
Institute of Humanitarian and Political Research, who likes "neither the
former government nor the present one." He characterized the political
scientists in attendance as people "with a certain degree of opposition to
the new government, people who do not consider the Orange Revolution
ideal." He said this is the reverse side of the medal seen earlier, for the
conferences that were organized by the Razumkov Center were never
patronized by political scientists who cater to the government.
By all accounts, Mr. Pohrebynsky has not changed his views. He still takes a
dim view of the Orange Revolution. This oozes from almost every one of his
remarks about the Maidan, when he talks about "a square that gathered
2,000-3,000 people or maybe some 200,000-300,000." This political scientist
expects his book will trigger a reaction, especially a negative one, for he
admits that most of the materials are critical in nature. He claims he also
invited current government officials to write their own articles, for the
sake of balance, but they were too preoccupied with portfolio distribution
and other problems. The editor did manage to dig up at least one valuable
opinion of the book, which was printed on the back cover.
According to the blurb provided by Prime Minister Yuliya Tymoshenko,
"included among the authors of this book are both firm supporters and
relentless opponents of the Maidan. I am grateful to the former. As for the
latter, I would like to recall the well-known aphorism, 'Revolutions begin
to win respect when they present no more danger.' The hostility that is felt
in their words means only one thing: fear of the people, who rose from their
knees and demanded the implementation of their inalienable and undeniable
rights."
Mr. Pohrebynsky says that no one-neither society, experts, nor the
leadership-have a definite idea of what exactly happened at the end of last
year. He says, for example, that the Ukrainian Ministry of Foreign Affairs
recently dressed down a Russian official who remarked that unconstitutional
things had gone on during the Orange Revolution. "But if the leadership
claims that everything was constitutional, then what has it got to do with
revolution?" Mr. Pohrebynsky asks. "And what is the new government's
legitimacy based on: revolution or the constitution?"
Mr. Malynkovych tried to answer his colleague's question. "If by legitimacy
one means the level of public support, one can say that the opposition acted
legitimately because the government had already lost public support by that
time." At the same time, according to Mr. Malynkovych, "the previous
government had legal instruments to use force, but it would be naive to
think that Leonid Kuchma, bereft of public support, could have opted for
this simply owing to his own legality, especially since Yanukovych was not
his henchman - he represented the interests of the clan that already held
sway in the country."
This political scientist says that if he were Yushchenko, he would
immediately award Kuchma the "Order of the Orange Revolution No. 1."
The way things look, that's not such a remote possibility.
On the whole, the book 'The Orange' Revolution: Versions, Chronicles,
Documents' lives up to its title. Despite the proliferation of other
publications on this subject, this book should be read in order to
understand who has drawn lessons from the events of November-
December 2004 and who hasn't. -30-
---------------------------------------------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/137487
===============================================================
15. TARGET STORES TO CARRY LIFEWAY'S KEFIR DRINK
Founded in 1986 by Ukrainian immigrant Michael Smolyansky
By Eric Herman, Business Reporter, Chicago Sun Times
Chicago, Illinois, Wednesday, May 25, 2005
CHICAGO - Lifeway Foods Inc. gained entrance to the thriving world of
discount shopping Tuesday, signing a deal to sell its yogurt-like kefir
drink at Target stores. Investors cheered the distribution deal. Shares in
the Morton Grove-based company leapt $3.61 on the Nasdaq stock
exchange to close at $12 -- a 43 percent gain.
"It's important in terms of them just broadening their base of customers,"
said Howard Halpern, an analyst with Taglich Brothers Inc. in New York.
Under the terms of the deal, Minneapolis-based Target Corp. will sell
strawberry, banana, raspberry and cherry low-fat kefir in 100 to 200 of its
stores.
Lifeway President Julie Smolyansky said Target will sell the drink in stores
with expanded food sections, though the arrangement does not specify
geographic regions. Shipments have already begun. Target operates 1,330
stores nationwide. A representative did not return calls for comment.
Founded in 1986 by Ukrainian immigrant Michael Smolyansky, Lifeway
made a name for itself in the expanding health-drinks sector. Kefir is a
dietary staple in the former Soviet Union, said Julie Smolyansky, who took
over as CEO when her father died in 2002 at age 55.
A Lifeway press release asserts the drink contains 10 varieties of
"'friendly,' active, probiotic cultures." Yogurt also contains such
cultures.
Probiotics are bacteria that are considered healthful by medical experts.
Their presence in kefir gives the drink a wide range of benefits for the
stomach and gas-trointestinal tract, Smolyansky said.
All told, Lifeway sells 15 products through 1,200 local stores like Jewel,
Dominick's, Treasure Island and Whole Foods. Its products are also sold in
other parts of the country in grocery and health food stores. Lifeway now
has a market capitalization of $101 million. French food giant Groupe
Danone owns a 20 percent interest, while members of the Smolyansky
family own smaller stakes.
"This is pretty much our first entry into that club store-wholesale-
warehouse type store," Smolyansky said. "I'm really looking more at it like
a test, to see what goes on in this type of market. And Target is a great
store to test through, because they are going for the upscale shopper."
Market data support Smolyansky's claim that the market for kefir is growing.
The kefir-milk substitute-soymilk category grew 22 percent in the year ended
April 17, according to Information Resources Inc., a market research firm.
Total sales approached $394 million.
In that period, Lifeway's kefir sales jumped 40 percent, to $5.8 million,
according to IRI. Lifeway is the seventh-largest player in the sector, far
behind leader WhiteWave Foods, a division of Dean Foods.
Halpern, the Taglich Brothers analyst, said the Target deal could lead to
Lifeway's kefir being sold in other big-box stores."The potential with
Target [is] that other companies might come along and add to their
distribution channel over time. This could be the first domino," Halpern
said. -30- [The Action Ukraine Report Monitoring Service]
===============================================================
16. UKRAINE'S ELECTION
The Role of One International NGO
Celeste Wallander, CSIS Director of the Russia and Eurasia program,
recently released a report entitled "Ukraine's Election: The Role of One
International NGO." This report was originally published in Russian in
Mezhdunarodnaya Zhizn' in April 2005.
By Celeste A. Wallander, Director
Russia and Eurasia Program and Trustee Fellow
Center for Strategic and International Studies (CSIS)
Washington, D.C., May, 2005
Many tales of Ukraine's "Orange Revolution" are now being told. The drama
of mass demonstrations, East-West confrontation, poisoning of a political
candidate, great power diplomacy, and political deals has drawn and kept
the world's attention. This is a report on one part of this story, less high
profile, yet part of the reason why fraudulent elections did not stand in
the fall of 2004. It is one small, but perhaps not unimportant, part of the
historical accounting of the quiet work undertaken throughout 2004 to
support the conduct of free and fair presidential elections in Ukraine.
In May and October 2004, the Russia and Eurasia Program of the Center
for Strategic and International Studies (CSIS) conducted three high-level
delegation visits to Kyiv with the goal of supporting the conduct of free
and fair presidential elections in Ukraine. Three senior former U.S.
government officials-Zbigniew Brzezinski, Robert Hunter, and Thomas
Pickering-traveled to Kyiv to meet with Ukrainian leaders, politicians,
businesspeople, and scholars from universities and nongovernmental
organizations (NGOs).
The objective of the project was to engage with influential Ukrainians to
deliver the message that the conduct of the 2004 elections would have
a major effect on Ukraine's foreign relations and the opportunities for
constructive economic and political engagement with the United States
and that influential Americans were paying close attention.
As a private, nongovernmental, bipartisan public policy institution, CSIS
neither makes U.S. policy nor takes positions. It does, however, undertake
research and activities aimed at improving U.S. understanding of the
international system and improving understanding of U.S. policy abroad.
Because of the attention and high drama of much of the reporting and
commentary on the 2004 Ukrainian elections, it is important to set out at
the beginning what this account is not about as much as what it is about.
This is not an account of American intrigue to defeat Viktor Yanukovych and
install Viktor Yushchenko as president. It is not about U.S. government
money clandestinely funneled to Ukrainian political parties or NGOs. It is
not about a policy driven by Russophobia or neocontainment. It is also not
about a major U.S. foreign policy strategy focused on Ukraine as a high
priority.
Instead, it is the story of foreign policy and democracy promotion experts
inside and outside the U.S. government who believed that Ukraine is
important to U.S. national interests, that U.S. interests would best be
served by a democratic Ukraine with a market economy increasingly
integrated into global and European markets, that the conduct of free and
fair elections were vital to such a Ukraine regardless of which candidate
actually would win such elections, and that while the odds looked to be
stacked against free and fair elections, there was a chance that efforts by
NGOs as well as governments could make a difference.
It is also a story of how many of those experts and officials were as
concerned and committed to Russia's successful global and European
integration as they were to Ukraine's, and their assessment that a
prosperous and integrated Russia is more likely to be successful if Russia
is a geopolitical neighbor, major trading partner, and even strategic ally
of a democratic, transparent, and prosperous Ukraine.
"----------------------------------------------------------------------"
The entire paper is available in English, Ukrainian and Russian. Links
to PDF versions of the report can be found below. Please click on:
(1) English language version:
http://www.csis.org/ruseura/pubs/0503_UkrainesElection_English.pdf
(2) Russian language version:
http://www.csis.org/ruseura/pubs/0503_UkrainesElection_Russian.pdf
(3) Ukrainian version:
http://www.csis.org/ruseura/pubs/0503_UkrainesElection_Ukrainian.pdf
----------------------------------------------------------------------------------------------------------
About the Author: Celeste A. Wallander directs the CSIS Russia and Eurasia
Program and is CSIS Trustee Fellow. Before joining CSIS, she was senior
fellow at the Council on Foreign Relations in Washington, D.C., and
associate professor of government at Harvard University. She is the founder
and executive director of the Program on New Approaches to Russian Security.
Her recent projects include work on U.S.-Russian military cooperation, the
history of Russia and globalization, and the 2004 Ukrainian presidential
election.
Her books include Swords and Sustenance: The Economics of Security in
Belarus and Ukraine (MIT, 2003) and Mortal Friends, Best Enemies:
German-Russian Cooperation after the Cold War (Cornell, 1999). Wallander
received her B.A. from Northwestern University summa cum laude and her
Ph.D. from Yale University. She is a member of the Council on Foreign
Relations.
---------------------------------------------------------------------------------------------------------------
The views expressed in this paper are those of the author alone. They do not
represent the views of CSIS, the Charles Stewart Mott Foundation, or the
Smith Richardson Foundation.
===============================================================
17. UKRAINE CABINET PROPOSES TO REGULATE VOLUNTEERS' ACTIVITY
Ukrainian News Agency, Kyiv, Ukraine, Tue, May 31, 2005
KYIV - The Cabinet of Ministers proposes that Verkhovna Rada regulate
the activity of volunteers (natural persons who are engaged in social,
generally useful, systematic and motivated non-profitable activity by way of
doing work and providing services). This was announced in bill N7550 on
volunteer movement, which was registered in parliament on May 27.
Volunteers are people of minimum 16 years old, or 15 as an exception
(with the consent of one parent or tutor). Social or generally useful
non-profitable activity having one-time or occasional character, or based
on family or friendly relations is not considered to be volunteer.
The bill outlines organizational and legal grounds for the activity of
volunteers, those who use their services, as well as regulates the relations
forming in the course of volunteer activity. Particularly, the bill
determines the status of a volunteer and organization, their rights and
duties, principles of activity, its kinds and directions, as well as
financing sources.
Apart from this, the bill provides for the regulation of relations between
volunteer activity participants and the fundamentals of government policy in
this field. The explanatory note to the bill says that volunteer movement is
a new social phenomenon for this country, which unites ever more citizens
and needs a strict legal regulation. The proposed bill meets the demands
of the laws on social services, social work with children and youth.
Apart from this, this sphere is regulated by the law on the national program
of support for the youth in 2004-2008, the Cabinet of Ministers' resolution
on endorsement of the provisions of volunteer activity in the field of
providing public services (December 2003), the President's decree on
organization of the International Year of Volunteers in Ukraine in 2001, as
well as the Cabinet of Ministers' resolution on the creation of a
coordination council for the development and support of volunteer
movement (April 2004).
As Ukrainian News reported, in 2003 the Crimean Council of Ministers set
up the coordination council for the development and support of volunteer
movement. -30- [The Action Ukraine Report Monitoring Service]
==============================================================
18. CANNES TRIUMPH
First time in Ukrainian filmmaking history, won the Palme d'Or
By Dmytro DESIATERYK, The Day
The Day Weekly Digest in English, #17
Kyiv, Ukraine, Tuesday, May 24, 2005
Something has happened which no one has expected. For the first time in
Ukrainian filmmaking history a Ukrainian production has won the Palme d'Or
at the prestigious Cannes festival.
Ihor Strembitsky's 10 min. black and white Wayfarers was named the best
short film. The author is a 32-year-old student shortly to graduate from the
faculty of cinematography, Karpenko-Kary Cinema, Theater and Television
University. He studied under the able guidance of Serhiy Bukovsky currently
ranking with the best Ukrainian documentalists.
Strembitsky's road to this head-spinning success was perfectly trivial and
characteristic of Ukraine's anticinematographic environment. He worked on
the Wayfarers for three years, not only because he polished every scene,
every frame (he did, of course), but also because the alma mater couldn't
even supply him with a reel of adequate quality film. In the end, after
numerous requests, he received several short lengths of film, each with
different technological characteristics, meaning that putting them together
was very difficult.
To make things worse, he had problems getting a cameraman. Talent,
however, can find a way out of a most incredible situation. Ihor did the
cameraman's work and came up with a refined and philosophically saturated
picture. What followed can be best described as a Hollywood instant success
story. Ihor's wife who was his producer and script writer, took the film,
went to the central post office, had it packaged and paid UAH 20.00 for
sending it to Cannes.
Yet this was not the end of collisions. At the festival they discovered that
the film "generously" supplied by the university had a bad soundtrack. To
the organizers' credit, a team of technicians was assigned to cope with the
problem. They worked through the night and fixed the soundtrack. We all
know the spectacular result.
Journalism is a nasty profession... Somehow I'm reminded of a refrain from
a song done by the rock group Tartak: "I don't want to be a hero of Ukraine,
/My country doesn't praise heroes..." In other words, I can only hope that
Ihor will receive enough money and good film for the next production, and
that our numerous bureaucrats in charge of culture and philanthropists will
respond to his requests quickly and effectively. If they don't change their
habitual I-don't-give-a-damn attitude, then perhaps the European Union will
be kind enough to forward a grant or two. I really hope so.
But this will come later. Now is the time for congratulations. A great job,
Ihor! Thanks a lot.
PS. Our director's victory was marked with a most curious incident which had
been immediately highlighted by Russian media. Ihor delivered his acceptance
speech in his mother tongue. The interpreter refused to translate this
phrase, pleading the lack of knowledge of the Ukrainian language. Ihor
refused to do this, reasonably observing that, being a Ukrainian, he would
speak his native language. There is no need to quote the Russian media's
comments on this incident: nobody needs to repeat once again these
chauvinistic commonplaces. However, The Day will return this subject.
--------------------------------------------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/137478
=================================================================
19. WHEN WILL THEY GET IT?
That there is a country called Ukraine
Not to the Russians but to the French, Germans, and Brits.
By Dmytro Desiateryk, The Day
The Day Weekly Digest in English, #18
Kyiv, Ukraine, Tuesday, May 31, 2005
The Ukrainian short film Wayfarers has won the Palme d'Or in Cannes.
Of course, everybody knows this, but it feels great to say it again.
The film director Ihor Strembitsky turned out to be a principled individual.
When he appeared on stage to receive the award, he refused to speak
Russian, despite the interpreter's request, saying, "I'm Ukrainian and I
will speak my language."
This immediately made headlines in Russia. Some Russian media people
had advised Ihor to do some quick studying even before the awards
ceremony.
After the ceremony all hell broke loose. For some reason, even Moscow
film critics whom I know personally, all of them intellectual and stable
individuals, are very tense when they talk to me these days.
They ask me why the young film maker couldn't have said a few words in
French on stage. So he can't, so what? I can't either, nor can many other
winners in Cannes and Venice, and nothing ever happens. Besides, you
can always take language courses. In contrast, the situation with the
Russian channel NTV appears to be irreparable.
In conjunction with what happened in Cannes, this television company, after
reporting the Wayfarers' victory, offered what it believed was a sarcastic
commentary, saying that Ihor left the podium with his award but without
being understood. How about all those Russian film directors who are well
understood, year in and year out, but somehow never appear on stage to
receive any awards?
And do we really need understanding from NTV, this "world's most truthful"
channel, which last winter, at the peak of the Orange Revolution, thought
nothing of playing archival footage showing an empty Maidan in Kyiv, and
telling audiences that the people had long ago left the place?
Another question: When will they begin to understand things?
I address this question not to the Russians but to the French, Germans, and
Brits. When will they finally realize that there is a country called Ukraine
and that it wouldn't hurt to know the difference between Ukraine and Russia,
and to have interpreters who know Ukrainian? After all, they closely
followed the Orange Revolution, and they must have an aversion to all that
garbage on the air.
This isn't your average question, but it has an answer. They will get it
when we become fully aware that we are a class act, talented, and cool -
and by we I mean not all but some of us, because most of us, being many
and invincible, realized this in November (some did even in 1999).
They will get it when, for example, the members of the administration of the
Cinema, Theater and Television University, instead of supplying students
with defective film or telling them how underfunded they are, arm themselves
with chains and handcuffs, and chains themselves and the minister of culture
(who refused to help Ihor Strembitsky even with tickets to Cannes) to the
doors of the presidential secretariat and the cabinet, threatening to stay
there unless they are given funds to develop our cinema.
But if the university administration continues to place major emphasis on
creating wall newspapers, attending physical education courses, and staging
skits in the run-up to holidays, one is bound to ask what they are being
paid for out of the taxpayers' pockets.
They will get it when the government starts crawling before our celebrated
film director Kira Muratova, and then her productions will be promoted as
Ukrainian films, not Russian ones.
They will get it when our number-one "humanitarian millionaire," instead of
financing amateur videos made by professional screwups mistakenly
regarded as "artists," launches a cinematography relief fund and subsidizes
the next production by Muratova or Strembitsky, or Ihor's teacher, the
brilliant documentary film maker Bukovsky.
If this happens, there will be Ukrainian interpreters in Cannes for the
awarding of the Palme d'Or, or the Lion in Venice, or the Leopard in
Locarno, or the Bear in Berlin. -30-
---------------------------------------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/137974
===============================================================
20. UKRAINE PARLIAMENT GRANTS AMNESTY TO 17,000+ PRISONERS
Ukrainian News Agency, Kyiv, Ukraine, Tue, May 31, 2005
KYIV - The parliament has granted amnesty to over 17,000 prisoners. The
relevant draft law entitled "On Amnesty," which is registered as No. 5629-2
and was proposed by President Viktor Yuschenko, was approved by 286 votes.
Only 226 votes were required for its approval.
Yuschenko proposed granting amnesty to prisoners who were minors when they
committed their crimes, parents with minors or disabled children, pregnant
women, women over the age of 50 and men over the age of 55, war veterans,
group 1-3 invalids, prisoners with active tuberculosis, prisoners with
oncological illnesses, and those infected with AIDS.
The law provides for releasing people convicted of small crimes and crimes
of medium severity as well as those convicted of serious crimes if they have
served half of their prison terms. The amnesty also provides for reducing
the prison terms of prisoners.
According to the law, the amnesty does not apply to persons serving life
sentences, prisoners with two or more convictions, those who violated prison
regimes, and those whose crimes resulted in the deaths of two or more
people. No prisoners were amnestied in 2004.
As Ukrainian News earlier reported, the parliament approved a new version of
the law on amnesty that included proposals by former president Leonid Kuchma
in July 2003. According to the Ukrainian Constitution, amnesty is granted
through adoption of a law of Ukraine.
The law entitled "On Application of Amnesty in Ukraine" was approved in
October 1996. This law stipulates that the parliament has the right to adopt
a law on amnesty not more than once per year. -30-
===============================================================
21. PRESIDENT YUSHCHENKO PRESENTS SHEVCHENKO MUSEUM
IN KAZAKHSTAN NEARLY 70 ETCHINGS BY THE POET
UNIAN, Kyiv, Ukraine, Tuesday, May 31, 2005
KYIV - President of Ukraine Victor Yushchenko has paid a visit to that
museum complex of Taras Shevchenko in Fort-Shevchenko city of
Kazakhstan, where the Ukrainian poet spent almost 11 years in exile.
According to the official web site of the Ukrainian President, Victor
Yushchenko visited the exposition of the Taras Shevchenko museum.
Having visited the museum, Victor Yushchenko told journalists that he was
very excited, as his old dream came true - he visited the place, where the
great Ukrainian poet spent a significant part of his life. "For Ukraine it
is a saint place", said the Ukrainian President.
The Ukrainian delegation presented the museum nearly 70 etchings of
Shevchenko. Victor Yushchenko noted that it is a small contribution of
Ukraine into preserving the memory about T.Shevchenko. -30-
===============================================================
22. EU ENLARGEMENT RISKS BEING BIGGEST CASUALTY OF FRENCH
VOTE INCLUDING TURKEY, THE BALKAN STATES AND UKRAINE
By Daniel Dombey in Brussels
Financial Times, London, UK, May 31 2005
BRUSSELS - Future enlargement of the European Union to include Turkey, the
Balkan states and even Ukraine could become the highest-profile casualty of
France's No vote to the EU constitutional treaty, according to political and
diplomatic observers in several member states.
Doubts about the enlargement process emerged as a central theme fuelling
opposition to the treaty in both France and the Netherlands in recent weeks.
This included not only hostility to the prospect of Turkish membership, but
also criticism of the social and economic effects of last year's EU
enlargement from 15 to 25 members. As a result, the EU's plans for accession
talks with Croatia, Turkey, Albania and the rest of former Yugoslavia have
been thrown into varying degrees of doubt.
Bulgaria and Romania, which have already signed accession treaties to
join in 2007, still have strong hopes of entering, although officials
admitted yesterday they were facing "the most difficult phase of the
process" requiring ratification by all 25 present members.
Ukraine, which was biding its time before making a formal application to
join is in an even more tenuous position, as are long-shot hopefuls such as
Georgia and Moldova. During the referendum campaign, many French voters
expressed fears about central European workers with low wages taking
French workers' jobs and factories moving from France to eastern Europe.
Yesterday, the European Commission tried desperately to disentangle
worries about enlargement and the constitution. "The ratification of the
constitution and future steps in enlargement policy are two separate
procedures," said a spokeswoman for José Manuel Barroso, Commission
president. But officials acknowledge the prospects for the continued
expansion of the Union are looking poor.
Germany's Christian Democrats, favourites to win the federal election
expected in September, have already indicated they may try to block the
accession of Romania and Bulgaria, widely regarded as ill-prepared for the
burdens of membership. The Christian Democratic Union also opposes
Turkey's eventual membership.
Croatia, which was to have begun entry talks in March, is in a limbo of its
own, after the EU said it had not co-operated enough in finding Ante
Gotovina, an indicted war criminal. Nevertheless, Berlin and a group of
central European states champion Zagreb's cause.
Meanwhile, the countries of the western Balkans - Serbia, Bosnia,
Montenegro, Macedonia and Albania - risk becoming forgotten even though
their small size could make them easier to accommodate than Turkey or
Ukraine.
France's No vote creates particular problems for Poland, which is to keen
to promote stability in the former Soviet republics on its border. The
Polish concern is that failure of the constitution would leave Europe too
absorbed by its internal problems to use the lure of eventual membership
to influence its neighbours.
Marek Belka, Poland's prime minister, said it would be difficult in the near
future to conceive of any EU expansion: "That is so obvious you do not need
diplomatic language to say so."
Ukraine's government played down the importance of the French vote,
although Boris Tarasyuk, foreign minister, admitted it could delay further
EU expansion. "The situation shouldn't be over-dramatised," he said. "The
EU still exists and develops, and it hasn't become less attractive." -30-
------------------------------------------------------------------------------------------------------------
(Additional reporting by Jan Cienski in Warsaw, Quentin Peel in London
and Tom Warner in Kiev.)
===============================================================
23. U.S. EFFORTS TO DOMINATE THE WORLD COULD END IN DISASTER
SAYS MIKHAIL GORBACHEV SOVIET UNION'S LAST LEADER
By Robert Evans, Reuters
Geneva, Switzerland, Monday, May 30, 2005
GENEVA - U.S. efforts to dominate the world could end in disaster, Mikhail
Gorbachev, the Soviet Union's last leader who launched an era of
cooperation with the United States that ended the Cold War, said on
Monday.
A critic of the U.S. invasion of Iraq in 2003, Gorbachev called for the
rapid withdrawal of what he called occupation forces, warning: "The longer
they stay, the worse the situation will get.
"You cannot get anywhere ... by trying to dominate," he told a meeting
marking the 20th anniversary of his 1985 Geneva summit with U.S.
President Ronald Reagan, a turning point in then frigid East-West relations.
"That doesn't work with small countries nowadays, and even less with big
ones like Russia, Iran and -- heaven forbid -- China. That way lies
disaster," said Gorbachev, who lost his post as president when the Soviet
Union broke up in 1991.
"Trying to be a world gendarme today is an illusion. That is not the way
ahead, but a blind alley."
Insistence by the administration of U.S. President George W. Bush that it
had the right to use nuclear weaponry amounted to renunciation of the
course he charted with Reagan and Bush's father in the second half of the
1980s, he said.
If Washington pursued its efforts to put a defensive weapons system in
space, the 74-year-old Gorbachev told the meeting at the United Nations
European headquarters, "it will spark a new arms race, with all the
consequences....
"Surely it would be better if we worked together to eliminate nuclear
weapons entirely and to use the resources that freed to eradicate poverty
and misery around the globe?" he asked his audience, which included
U.S. diplomats.
Gorbachev, who during much of his time in power from 1985 to 1991 also
served as Communist Party chief, said he believed Russian President
Vladimir Putin was committed to social democratic form of government.
Suggestions often heard in the outside world that Putin, an agent of the
KGB security police in Soviet days, was trying to turn the clock back to
authoritarian rule showed a lack of understanding of what was happening
in the country, he said.
Putin, he said, "inherited from (first Russian president Boris) Yeltsin
total chaos, in the economic, financial, political, foreign policy and
every other area of national life. He had to bring it all under control.
"Is he succeeding? Perhaps not. Limiting democracy is a mistake.
But the people are on Putin's side because he is trying to solve social
problems, to put an end to the poverty in which many live." -30-
===============================================================
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Minneapolis, Minnesota
5. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
6. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX 77024; bill.hunter@volia-software.com.
7. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
8. UKRAINIAN FEDERATION OF AMERICA (UFA),
Zenia Chernyk, Chairperson; Vera M. Andryczyk, President;
Huntingdon Valley, Pennsylvania
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C., Van
Yeutter, Cargill Inc., Interim President; Jack Reed, ADM, Interim
Vice President; Morgan Williams, SigmaBleyzer, Interim Secretary-
Treasurer
10. UKRAINIAN AMERICAN COORDINATING COUNCIL,
(UACC), Ihor Gawdiak, President, Washington, D.C., New York, NY
11. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO, Washington,
D.C.; Markian Bilynskyj, VP/Director of Field Operations; Kyiv,
Ukraine. Web: http://www.USUkraine.org
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"WELCOME TO UKRAINE" & "NARODNE MYSTETSTVO" MAGAZINES
UKRAINIAN MAGAZINES: For information on how to subscribe to the
"Welcome to Ukraine" magazine in English, published four times a year
and/or to the Ukrainian Folk Art magazine "Narodne Mystetstvo" in
Ukrainian, published two times a year, please send an e-mail to:
ArtUkraine.com@starpower.net.
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"THE ACTION UKRAINE REPORT - AUR" is an in-depth, private, non-
profit news and analysis international newsletter, produced as a free
public service by the non-profit www.ArtUkraine.com Information Service
(ARTUIS) and The Action Ukraine Report Monitoring Service The
report is distributed in the public's interesting around the world FREE
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Additional readers are always welcome.
If you would like to read "THE ACTION UKRAINE REPORT- AUR"
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PUBLISHER AND EDITOR - AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
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Director, 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
& www.ArtUkraine Information Service (ARTUIS)
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