"THE ACTION UKRAINE REPORT - AUR"
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DEVELOPMENTS IN THE AFTERMATH OF THE ORANGE REVOLUTION
HEARING: Committee on International Relations
Subcommittee on Europe and Emerging Threats
United States House of Representatives
Washington, D.C. , Wednesday, July 27, 2005

"THE ACTION UKRAINE REPORT - AUR" - Number 532
Mr. E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, THURSDAY, July 28, 2005

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

1. DEVELOPMENTS IN THE AFTERMATH OF THE ORANGE REVOLUTION
TESTIMONY: By Taras Kuzio, Ph D, Visiting Professor
Institute for European Russian and Eurasian Studies,
Elliott School of International Affairs, George Washington University,
HEARING: Committee on International Relations
Subcommittee on Europe and Emerging Threats
United States House of Representatives
Washington, D.C. , Wednesday, July 27, 2005
The Action Ukraine Report (AUR), Number 532, Article One
Washington, D.C., Thursday, July 28, 2005

2. DEVELOPMENTS IN THE AFTERMATH OF THE ORANGE REVOLUTION
TESTIMONY: By Stephen B. Nix, Esq.
Director, Eurasia Programs
International Republican Institute (IRI)
HEARING: Committee on International Relations
Subcommittee on Europe and Emerging Threats
United States House of Representatives
Washington, D.C. , Wednesday, July 27, 2005
The Action Ukraine Report (AUR), Number 532, Article Two
Washington, D.C., Thursday, July 28, 2005

3. THE SPECTER OF "STAGLUTION' IN THE FORMER SOVIET UNION
Post-revolution staglution, a revolution stagnating
By Peter Lavelle, Russia Profile's Weekly Experts Panel
Moscow, Russia, Friday, July 22, 2005
=============================================================
1. DEVELOPMENTS IN THE AFTERMATH OF THE ORANGE REVOLUTION

TESTIMONY: By Taras Kuzio, Ph D, Visiting Professor
Institute for European Russian and Eurasian Studies,
Elliott School of International Affairs, George Washington University,
HEARING: Committee on International Relations

Subcommittee on Europe and Emerging Threats
United States House of Representatives
Washington, D.C. , Wednesday, July 27, 2005

The Action Ukraine Report (AUR), Number 532, Article One
Washington, D.C., Thursday, July 28, 2005

TESTIMONY -----

Viktor Yushchenko's election as Ukraine's third president was made possible
by the Orange Revolution, the third democratic revolution that followed
Serbia in 2000 and Georgia in 2003. Ukraine's democratic revolution has
influenced successful revolutions in Kyrgyzstan and Lebanon. The Orange
Revolution is continuing to give sustenance to democratic reformers in
Armenia, Azerbaijan, Kazakhstan, Belarus and, most importantly, to Russia.

In comparison to the Serbian and Georgian democratic revolutions, Ukraine
has a stronger starting position to succeed in its reforms. Unlike Serbia
and Georgia, Ukraine is not a failed state. Ukraine's economy, unlike
Serbia's and Georgia's, was also growing at a record 12% in 2004, the
highest growth rate in Europe. Ukraine also differs from Serbia in that the
old guard, who are now in opposition, are demoralized and cannot mobilize
voters using extreme nationalism.

Ukraine differs from Serbia and Georgia in that no portion of its territory
is beyond central control. Kosovo remains beyond Serbian government control
and Belgrade continues to have conflicts with Montenegro over the continued
usefulness of any Union. Georgian President Mikhail Saakashvili inherited a
country with three regions beyond central control: South Ossetia, Abkhazia,
Ajaria, of which only the latter has been returned to Georgian
sovereignty.

Ukraine's stronger starting base for reforms gives greater grounds for
optimism in the success of the reform drive under Viktor Yushchenko.
Yushchenko's clean personal record as National Bank Chairman and Prime
Minister, his relative youth and the limited Soviet influence upon his
career path, gives little doubt that Yushchenko is personally committed to
Ukraine's democratic path.

At the same time, we should not under-estimate the difficulties that lie
ahead. Ukraine's regional divisions gave Yushchenko only 52% of the vote
after the Orange Revolution, far less than the 96% received by Saakashvili.

These realities forced Yushchenko into undertaking three compromises. The
first with the Socialists to include them in the Yushchenko alliance, the
second with Parliamentary Speaker Volodymyr Lytvyn to keep parliament open
and the third with President Leonid Kuchma in round-table negotiations to
permit a re-run of round two of the election on December 26, 2004.

Yushchenko also inherited a Kuchma-era parliament with which he has to deal
until the March 2006 election. These compromises and inheritances impacted
upon the policies and strategies undertaken by President Yushchenko his
first year in office.

Ukraine's Orange Revolution inevitably led to over-inflated expectations,
some of which will not be met. Through 2005 many of these expectations
continue to be fulfilled by the Yushchenko administration, Yushchenko and
Tymoshenko continue to have high popularity rates ranging between 55-65%.

The Orange Revolution took place because many Ukrainians changed their
view of Ukrainian politics from one of "A plague on all of your houses"
where all politicians were viewed are corrupt. Yushchenko changed this
widespread view by convincing a majority of Ukrainians that he and his
political allies were different.

The continued salience of this view that Yushchenko is different from
politicians in the Kuchma camp is central to the success of the Orange
Revolution. This continued salience will determine whether voters continue
to believe Yushchenko is different. Or, they instead, become disillusioned
and begin to see Yushchenko as little different to these politicians he
replaced.

After severe domestic and Western criticism of government economic
policies during Yushchenko's first 100 days important corrections were
introduced in May-June 2005. In contrast, the Yushchenko administration's
policies in democratization, media freedom, reducing the power of oligarchs
and battling corruption have been positively received by the USA.

Changes in economic policies, coupled with continued successes in
democratization and battling corruption, will move Ukraine in a positive
direction during the remainder of the transitional revolutionary
administration until the 2006 parliamentary election. This overall positive
trend, coupled with the victory of reformist forces in the 2006 election,
will be important in preparing Ukraine for 4 years of reforms that will not
be interrupted by elections.[1]

Ukraine's reform path under Yushchenko will gather speed after the March
2006 parliamentary election. With control over the executive, government
and parliament, Ukraine will, for the first time, have a leader committed to
reform that is also in control of Ukraine's three key institutions.

There is little debate that democratic progress will take place under
Yushchenko. But, democratic progress will be at a medium pace. Ukraine's
democratic progress will be slower than that experienced in central Europe
because of the negative legacy of Soviet totalitarian-imperial rule, and 12
years of misrule under post-Soviet leaders. Other factors include weak
administrative capacity (i.e. the ability of the leadership to implement
policies on the ground) and Yushchenko's leadership style.

The success - or failure - of Ukraine's Euro-Atlantic drive and if
Yushchenko is re-elected for a second term in October 2009 will be not
decided by the revolutionary transition of 2005-2006. Yushchenko's and
Ukraine's successful democratic consolidation will take place in the
period between elections in 2006-2009/11. The USA can, and should, play
a strategically important role in ensuring the success of Ukraine's
democratic consolidation during this period.

ELECTION COALITIONS

Ukraine's politics are influenced by the broad coalition that came to power
under Yushchenko and the need to build new coalitions to win a parliamentary
majority in the 2006 parliamentary election. Our Ukraine is being
transformed into a new ruling party, the People's Union-Our Ukraine. Opinion
polls suggest that the new party will obtain one-third of the vote in the
2006 elections, up 10% on Our Ukraine's vote in 2002.

The inability of People's Union-"Our Ukraine" to obtain more than 50%
popularity single handedly, forces Yushchenko to compromise to ensure
the creation of a pro-presidential parliamentary majority. A three party
coalition is being prepared for the 2006 election that will consist of
People's Union-Our Ukraine, the Tymoshenko bloc and parliamentary
Speaker Volodymyr Lytvyn's People's Party. The latter unites moderates
from the Kuchma camp who did not readily support Viktor Yanukovych's
candidacy in the 2004 presidential elections.

Other likely members of this election coalition include First Deputy Prime
Minister Anatoliy Kinakh's Party Industrialists and Entrepreneurs, Yuri
Kostenko's Ukrainian People's Party, Finance Minister Viktor Pynzenyk's
Reforms and Order party and Foreign Minister Borys Tarasiuk's Rukh party.
This pro-Yushchenko alliance is slated to win 50-60% of the vote, giving it
a sufficient number of deputies to form a parliamentary majority.

WEAK OPPOSITION

Divisions within the governing coalition will not be capitalized upon by the
former pro-Leonid Kuchma camp. As former ruling parties, centrist parties
are finding it difficult to adjust to acting as a united and coherent
opposition. Ukraine will only have a real political opposition after the
2006 election.

The decline of the Kuchma camp can be seen in changes in parliamentary
factions since the Orange Revolution. The former pro-Kuchma camp has
shrunk in size from 240 to 110 deputies. Key pro-Kuchma parliamentary
factions have lost over half of their parliamentary deputies, some of whom
have defected to Yushchenko and Tymoshenko.

Centrist, former pro-Kuchma 'opposition' parties - Viktor Yanukovych's
Regions of Ukraine and Medvedchuk's Social Democratic united Party -
are devoid of any ideology that could form the basis of an ideological
opposition to the Yushchenko coalition. During the Kuchma era his centrist
allies were ideologically amorphous.

Defeated candidate Yanukovych Regions of Ukraine Party is the most
ideologically amorphous of Ukraine's centrists. Its ratings, together with
those of Yanukovych's in the 2004 election, were high because Communist
voters defected to them. This was seen in the low vote for Communist leader
Petro Symonenko in round one of the 2004 election (4.5%) and in the
continued low popular ratings for the Communist Party of 5-6% (compared
to a 20% vote in the 2002 election).

Yanukovych will be unable to mobilize the 44% of voters who backed him in
the December 2004 election. The hard-line anti-Yushchenko opposition
commands a maximum of 25% of the vote. Many of the remaining 20% who
voted for Yanukovych will vote for Yushchenko's 2006 election alliance.

Ukraine's centrists were created as ruling parties and therefore are finding
it difficult to adjust to being in 'opposition'. As ruling parties they
survived only as political roofs for oligarch, regional, business and
criminal interests. For example, in Trans-Carpathia the Social Democratic
United Party extorted funds from businesses for a charity which it
controlled. 90% of the charity's funds then went to finance the local branch
of the Social Democratic United Party.

Regions of Ukraine and the Social Democratic United Party are both led by
discredited leaders. Regions of Ukraine leader Viktor Yanukovych, Social
Democratic United Party leader Viktor Medvedchuk and Communist Party
leader Petro Symonenko all have -50% ratings.

Many senior Regions of Ukraine leaders do not favor the Regions of Ukraine's
'opposition' stance because it is bad for business. Many business supporters
of former pro-Kuchma parties do not want confrontational relations with the
authorities.

Since the Orange Revolution the former Kuchma camp has divided into two
groups:

Moderates in the Ascendancy Willing to Work With Yushchenko
· Kinakh's Party of Industrialists and Entrepreneurs
(defected in second round of the 2004 election);
· Lytvyn's People's Party (sat on the fence in the 2004
election);
· Democratic Ukraine parliamentary faction;
· United Ukraine parliamentary faction;
· Remnants of the People's Democratic Party;
· Labor Ukraine party (formerly the political
representation of the Dnipropetrovsk clan);

Hard-Line Opposition Hostile to Yushchenko
· Social Democratic United Party;
· Regions of Ukraine.

These many factors that debilitate the 'opposition' camp are also hampered
by their inability to mobilize the population. This is a consequence of how
civil society is weaker in eastern-southern Ukraine than in areas that voted
for Yushchenko in 2004.

The spontaneity of citizens joining the Orange Revolution from
western-central Ukraine is very different from the 'managed democracy'
model of civil society found in oligarch-controlled eastern-southern
Ukraine.

The difference can be found in the attitudes of Yushchenko voters, who tend
to be younger and better educated, while Yanukovych voters tend to be over
55 and less educated.

62% of Yushchenko voters believe that NGO's are necessary while only 35%
of Yanukovych voters do so. 30% of Yushchenko voters would take action to
protect their rights compared to only 10% of Yanukovych voters[2].

Yanukovych rallies during the 2004 election were organized by forcing or
paying people to attend them. People were paid to travel to Kyiv to support
Yanukovych in the Orange Revolution. The same is true of rallies against
Yushchenko since he was elected. As ideologically amorphous parties,
centrists do not have real members (as opposed to fictitious members on
paper) who would defend their candidate or party in rallies, meetings, and
protests.

The Communist Party remains adamantly hostile to the Yushchenko
presidency. Nevertheless, Ukraine (and Russia) have changed since the
1990s when Communists could command large followings and block reform.
The Communist Party is in terminal decline from its 20% support in the 2002
parliamentary election to only 4.5% for the Communist Party leader in the
2004 presidential election.

Its current ratings give the Communists only 5-6% support meaning that their
presence in next years parliament will be reduced from its current 55
deputies to only 36. At its height, the Communists had 120 deputies in the
1998 parliament.

The new opposition has been unable to convince Ukrainians or international
organizations (EU, Council of Europe, OSCE) that law enforcement activities
against them are tantamount to 'political repression'. Only 30% of
Ukrainians believe that the actions of the authorities amount to 'political
repression'.

POLICY UNITY AND DIVISIONS

President Viktor Yushchenko's election victory in 2004 came about as a
consequence of a broad political alliance that includes left and right-wing
populists -- the Socialist Party and Yulia Tymoshenko Bloc -- alongside
free-market liberals and centre-right national democrats -- the Party of
Industrialists and Entrepreneurs and Yushchenko's Our Ukraine.

There are few divisions in this alliance over political and institutional
aims. Populists, liberals and national democrats all broadly agree on the
need to:
· democratize political life;
· build respect for the rule of law;
· media freedom;
· reform the judiciary and court system;
· fight corruption and organized crime;
· remove the power of the oligarchs;
· bring to trial members of the former regime implicated
in corruption and election fraud.

CONSTITUTIONAL REFORM

The only policy in the policy domain that could seriously strain the
coalition in the political/institutional field relates to the constitutional
reforms agreed in December 2004 as part of a compromise package to
break the deadlock and hold repeat elections. However, only the Socialist
Party support constitutional reforms; the Tymoshenko bloc and the Party
Industrialists and Entrepreneurs are opposed, while Our Ukraine is evenly
divided, fearing both to weaken the presidency's ability to push through
reforms and advantage the Left. The reforms could be challenged in the
Constitutional Court, over procedural irregularities in their initial
passage.

PERSONAL RIVALRIES

Other divisions in the coalition are personal -- the product of competition
for top jobs after the 2004 election. For example, the broad remit given to
Petro Poroshenko, who had hoped to become prime minister, as head of
the National Security Council creates the potential for 'turf wars' with
Tymoshenko, and friction between the two is likely to persist.

Tymoshenko will remain as prime minister at least until parliamentary
elections in March 2006. Leaving the coalition at this stage would threaten
her political future, and she is protected from votes of no confidence by a
period of 18-months' grace after becoming Prime Minister, which extends to
the elections in 2006. Her more populist impulses will continue to jar with
Yushchenko's more reformist approach, but Yushchenko has reined her in
over misguided economic policies.

CORRUPTION

The Yushchenko administration inherited high levels of, and deeply
entrenched, corruption. Some important steps have been undertaken to
combat corruption, but much more needs to be undertaken. Criminal
charges have only reached as far as the middle level of former Kuchma
officials.

Many former Kuchma officials have fled to Moscow where they have been
asylum. Interior Minister Yuriy Lutsenko describes this group of former
Kuchma officials as a 'government-in-exile'. Russia has not only given
asylum to criminals on the run; it has also lobbied in the Parliamentary
Assembly of the OSCE for this organization to denounce alleged 'political
repression' in Ukraine.

Russia's ruling Unified Russia party has signed an agreement of cooperation
with defeated candidate Yanukovych's Regions of Ukraine, continuing
Russia's official support for Yanukovych in the 2004 election.

GONGADZE MURDER

Little progress has been made in resolving the murder of opposition
journalist Heorhiy Gongadze in fall 2000. 3 of the 4 policemen who murdered
Gongadze have been arrested. But, the head of the murder group, General
Oleksiy Pukach, has fled abroad, reportedly to Israel. Former Interior
Minister Yuriy Krawchenko committed suicide or was murdered.

The key suspects in the Gongadze case, former President Kuchma and
Parliamentary Speaker Volodymyr Lytvyn[3], have not been charged. There
is strong suspicion that Kuchma was given immunity during round-table
negotiations in December 2004, after lobbying by EU Xavier Solana and
Polish President Aleksandr Kwasniewski.

Progress in the Gongadze case is also hampered by the exiled presidential
guard Mykola Melnychenko. Melnychenko's tapes made illicitly in Kuchma's
office recorded a voice resembling Kuchma's ordering Interior Minister
Krawchenko 'to deal' with Gongadze. Melnychenko has been unwilling to
cooperate with the Ukrainian Prosecutor's office or hand over the original
tapes.

ECONOMIC REFORM

On economic policies, the coalition is divided between state
interventionists (Socialists and Tymoszhenko bloc) and free-market liberals
(Party Industrialists and Entrepreneurs, Our Ukraine), who have clashed over
key issues:

[1] Regulating food and fuel prices. The government's decision to impose
price caps after an oil price hike in April 2005, alongside Tymoshenko's
decision to confront directly the Russian oil companies that supply most of
Ukraine's oil, arguably only succeeded in creating a petrol shortage.
Yushchenko and certain figures in the cabinet, notably First Deputy Prime
Minister Anatoliy Kinakh, criticized the government's handling of the
crisis, in particular the departure from allowing market forces to determine
pricing. Yushchenko suggested in a meeting with Russian oil executives that
Tymoshenko should resign, although he later stepped back from this step.

[2] Re-privatization. Tymoshenko has voiced support for investigating
3,000 privatizations undertaken since 1992, while Yushchenko and Kinakh
supported a list of 29 companies. After the min-Davos World Economic
Forum summit in Kyiv in June, it was decided to not draw up any lists of
companies slated for re-privatization.

Tymoshenko's statist views are supported by the new head of the State
Property Fund, Valentyna Semeniuk (Socialist Party). Left and right-wing
populists support maintaining state control over large 'strategic'
enterprises if they are re-privatized; Yushchenko supports their submission
to new, transparent tenders or asking the current owners to pay the market
price. Yushchenko's more pro-market views will dominate government policy.

One area of economic policy that the coalition has not disagreed on is a
socially oriented budget. Pensions and state salaries were increased ahead
of the 2004 elections by then Prime Minister and presidential candidate
Viktor Yanukovych. The new government had to continue these commitments,
but has added new spending of its own.

Higher pensions and state salaries risk higher inflation and slower growth.
Nevertheless, they are supported by both strands in the coalition, partly to
reduce the need for corruption by making state salaries sufficient to permit
a reasonable standard of living for state officials, but also to increase
support for the coalition in the 2006 parliamentary election, especially in
eastern and southern Ukraine.

CONCLUSION

Ukraine's progress towards reform under Yushchenko will progressively
move forward and become faster after the 2006 parliamentary election.
Yushchenko's election coalition will win a parliamentary majority, giving it
control over the government.

The speed of reforms will be at a medium pace, compared to their rapid
progress in central Europe and the Baltic states. The reasons for this are
inherited legacies from Soviet rule and mismanagement and corruption since
1992. A faster reform pace is also constrained by two other factors.

First, regional divisions, with support for reform lower in eastern Ukraine.
Second, the need to build up administrative capacity to permit Yushchenko's
policies to be implemented at the local level.

Yushchenko's reform program is being undertaken in a more benign
environment than that of the 1990s. First, the opposition is in decline
(Communist Party) or lacks legitimacy (former pro-Kuchma centrists).
Second, the worst aspects of reform, - shock therapy - have already taken
place. Third, since 2000 the economy is growing. -30-
--------------------------------------------------------------------------------------------------------------------
[1] After 2006, elections are not due until October 2009 (presidential) and
March 2011 (parliamentary).
[2] Karen Buerkle, Lisa Kammerud and Rakesh Sharma, Public Opinion in
Ukraine After the Orange Revolution (Washington DC: International Foundation
Electoral Systems, April 2005).
[3] Lytvyn was head of the Presidential Administration in 2000 when Gongadze
was murdered.
-----------------------------------------------------------------------------------------------------------
By Taras Kuzio, PhD, Visiting Professor, Institute for European Russian
and Eurasian Studies, Elliott School of International Affairs, George
Washington University, Washington, D.C.
tkuzio@gwu.edu; www.ieres.org; www.taraskuzio.net
-----------------------------------------------------------------------------------------------------------
[Format Edits by The Action Ukraine Report Monitoring Service]
=============================================================
2. DEVELOPMENTS IN THE AFTERMATH OF THE ORANGE REVOLUTION

TESTIMONY: By Stephen B. Nix, Esq.
Director, Eurasia Programs
International Republican Institute (IRI)

HEARING: Committee on International Relations
Subcommittee on Europe and Emerging Threats
United States House of Representatives
Washington, D.C. , Wednesday, July 27, 2005

The Action Ukraine Report (AUR), Number 532, Article Two
Washington, D.C., Thursday, July 28, 2005

TESTIMONY -----

Mr. Chairman, I wish to thank you for the opportunity to testify before this
Subcommittee today. I would like to request that my statement be submitted
to the record. This hearing in itself is testimony to the strategic
importance of Ukraine's democratic and economic development as it relates
to the interests of the United States.

Mr. Chairman, the world watched with admiration as the citizens of Ukraine
took to the streets last winter to demand that their right to vote be
respected. The Orange Revolution not only brought about a peaceful and
legitimate transfer of power, it also ushered in a new era of hope for the
people of Ukraine and their desire for integration into the Euro-Atlantic
Alliance.

In the wake of the Orange Revolution, Viktor Yushchenko and his team
face an equally daunting challenge: to achieve full political and economic
transformation and integration into Euro-Atlantic structures. In order to
achieve those goals, President Yushchenko and his government must
implement numerous reforms and face many challenges.

It should be the policy of the United States to continue to assist in the
democratic and economic development and integration of Ukraine, because
of its vitally important geopolitical location, and for its commitment to
freedom and democracy as evidenced by the Orange Revolution.

The Yushchenko government has made significant achievements in its first
six months. First, it has improved the state of civil liberties in Ukraine.
Religious pluralism is flourishing in Ukraine, unlike in Russia. Second,
press freedoms have significantly improved since the Orange Revolution.
Prior to it, the Ukrainian government, and specifically the presidential
administration, routinely practiced censorship through sending "temniki" -
or theme lists - to the press, indicating what topics should be covered and
how these topics should be covered.

Following the change of power in Ukraine, print and electronic media are
finally reporting events without censorship; journalists are able to
practice their profession freely; and the media are independent.

Third, commitment to democracy has been evident not only in the internal
policies of the Yushchenko government but has also become a new focus of
Ukrainian foreign policy, as has been declared by Ukraine's Foreign Minister
Borys Tarasiuk. President Yushchenko made a commitment to supporting
democracy worldwide during his working visit to the United States in early
April.

In a statement issued jointly with President Bush, Yushchenko pledged that
Ukraine will work together with the United States "to back reform,
democracy, tolerance and respect for all communities, and peaceful
resolution of conflicts in Georgia and Moldova, and to support the advance
of freedom in countries such as Belarus and Cuba." Later in April,
Ukraine's representative to the United Nations supported the U.N.
Resolution on Human Rights in Cuba.

The Ukrainian government has intensified its involvement in the
Transdnistria region of Moldova, assisting the Moldovan government in
negotiations with the parties concerned towards reaching a political
resolution. The conflict in Transdnistria is an all-European, rather than
regional issue, since this militarized zone serves as a smuggling corridor
to Europe for arms, drugs and trafficking of women. Therefore, Ukraine's
contribution towards the resolution of this conflict should be noted and
commended.

After the Orange Revolution, Ukraine took on a leadership role in reviving
the Georgia-Ukraine-Azerbaijan-Moldova organization (GUAM) with the goal
of it becoming a full-value regional organization for democracy and economic
development. All these countries occupy favorable geographic positions as
potential transporters of Caspian oil and participate in this organization
with the goal of achieving European Union (EU) and North Atlantic Treaty
Organization (NATO) membership.

GUAM has allowed Ukraine to become a regional leader in the sphere of
promoting democracy and human rights. The Ukrainian government hopes
that future cooperation within GUAM will include a free trade area among its
members.

Despite early and significant progress in these important areas, the
Yushchenko government faces major constitutional, political, legal, and
economic issues. And part of my message here today is to affirm to you that
the International Republican Institute remains committed to supporting the
growth of reforms and democratic initiatives in Ukraine, just as we have
since 1994.

In the midst of the Orange Revolution, the Ukrainian parliament adopted a
package of legislation, consisting of an amendment to the existing election
law to prevent fraud in the repeat run-off of the vote and a bill on
constitutional reform. The constitutional reform reduces some of the powers
that are currently enjoyed by the president of Ukraine and awards them to
the parliament and the prime minister.

The most important of these powers is the right to appoint and to discharge
the prime minister as well as several key ministers, such as defense and
foreign ministers. The prime minister is awarded the right to create reform
and eliminate ministries.

The constitutional reform was scheduled to take effect on September 1, 2005,
provided that the parliament would adopt a law on the improvement of local
self-governance. Since this law has not yet been passed and it is unlikely
that it will be by the September 1st deadline, the constitutional reform
will come into effect on January 1, 2006. Therefore, starting next year,
the authority of the president of Ukraine will be decreased, and the
parliament and the prime minister will enjoy expanded powers.

Critics of the constitutional reform argue that these changes are not timely
because a strong office of the president would ensure that the much-needed
radical reforms are implemented, and awarding key powers to the parliament
through weakening the executive decreases the potential for change.

Several members of the Yushchenko team, such as the Secretary of the
National Security Council Petro Poroshenko and Head of Presidential
Administration Oleksandr Zinchenko, as well as Prime Minister Yulia
Tymoshenko and Deputy Prime Minister Anatoli Kinakh, publicly criticized
the reform and have promised to challenge it by putting it up for national
referendum.

The law is also subject to challenge in the Constitutional Court, since
procedural violations allegedly took place in the voting process,
specifically adopting a change to the Constitution together with another
piece of legislation. In short, President Yushchenko must either challenge
the constitutional amendments in court, or must be willing to surrender
certain powers to the parliament and the prime minister. In any event, this
separation of power issue must ultimately be clarified.

Parliamentary elections in Ukraine are scheduled for March 2006. They also
pose a significant test to the Yushchenko team. This will be the first
election since the Orange Revolution and, therefore, will present a test to
the new Ukrainian leadership to demonstrate the consolidation of democracy
in Ukraine by conducting a free and fair election. The United States should
therefore monitor the election process closely by delegating election
observers to Ukraine.

This will also be an opportunity for the Ukrainian citizens to send a signal
to their new leadership evaluating its progress. IRI recently conducted
focus group research, which revealed that the Ukrainian people are becoming
increasingly frustrated with the fact that while many reforms have been
happening at the highest levels of government, their everyday lives have not
changed.

While reforms take time to be implemented, much more could be done in
terms of economic, political, and bureaucratic reforms. If not, the people
in the IRI focus groups have indicated that they, while they are patient,
are willing to consider voting for other forces in the parliamentary
election.

IRI will continue to conduct polling during the campaign to help candidates
focus on relevant issues and potential reforms just as we did in the run-up
to the 2004 presidential election. IRI will also offer training to all
parties which will compete in the election.

Currently, Viktor Yushchenko's party still enjoys the highest rating amongst
political parties in Ukraine. President Yushchenko established his
"People's Union Our Ukraine" political party in March 2005. It represents
an ongoing attempt to consolidate center-right political forces and unite
them in a single party.

However, individual party leaders that supported Yushchenko in the past were
reluctant to dissolve their individual parties and to merge into a new one.
Only 3 of the 10 parties that formed Yushchenko's Our Ukraine bloc in 2002
agreed to join the new party. Currently, People's Union Our Ukraine is
proposing to consolidate its efforts with the Bloc of Yulia Tymoshenko,
Ukraine's Prime Minister as well as People's Party of Ukraine, represented
by Volodymyr Lytvyn, the Speaker of Ukrainian parliament, and uniting into a
coalition for the parliamentary ballot.

In addition, for the first time, all of Ukraine's 450 parliamentary seats
will be elected via proportional - or party list - system. This should
prove to be a vast improvement for Ukraine, as a number of businessmen
currently hold single-mandate seats, which provide them with immunity from
criminal prosecution.

Judicial reform is also a critical challenge to the Ukrainian government.
Ukraine's Supreme Court should be congratulated for its contribution toward
the triumph of democracy in Ukraine. On December 3, 2004, based upon
evidence of massive fraud and violations of the election law, it nullified
the official results and ordered the Central Election Commission to conduct
a repeat of the second round of the election.

In this ruling, the Supreme Court signaled judicial concern for election
fraud, and underlined the Court's constitutional role as an independent,
co-equal branch of government.

It is now necessary to build upon the solid foundation laid by the Supreme
Court and further strengthen democracy through reforming the judicial system
of Ukraine. For this purpose, Secretary of the National Security Council
Petro Poroshenko is heading a working group to advise President
Yushchenko on judicial reform. The United States should provide support for
this effort and should encourage the working group to be open and
transparent in its undertakings.

Currently, Ukrainian courts lack administrative and financial independence
from the executive branch, proper organization and adequate mechanisms
to enforce their decisions. This is compounded by a non-existent bar
association to internally regulate lawyers and judges. These structural
problems combine to make the rule of law difficult to understand, apply and
enforce.

Beyond the structural reforms necessary to create a functioning legal
framework for Ukraine, procedural reforms are necessary to enhance
transparency, independence and confidence in the rule of law. Clear
guidelines must be established to standardize issues of jurisdiction and
venue in electoral disputes, make court decisions promptly available to the
public, and to end ex parte communications in an effort to avoid appearance
of impropriety.

The Civil and Commercial Codes also need to be harmonized. These
reforms are a critical piece of democratization, since it would be difficult
for Ukraine to cement recent democratic gains without these structural and
procedural changes. The United States should aid Ukraine's judicial reform
by providing expert assistance and consultation on these necessary
structural and procedural changes.

IRI is prepared to assist the Yushchenko government in the area of legal and
judicial reform and we encourage the United States Agency for International
Development to fund such efforts.

The Yushchenko government has declared membership in NATO as an
important strategic priority. Ukraine has been cooperating with NATO since
2002 in the framework of the action plan. Under the government of Leonid
Kuchma, who was alleged to have approved of the sale of radar systems to
Saddam Hussein's government, as well as numerous violations of democratic
principles domestically, the best NATO could offer was the NATO-Ukraine
Action Plan and annual target plans.

Despite this, Ukraine has an excellent record of cooperation with NATO.
Ukraine participates in the Partnership for Peace Planning and Review
Process (PARP), which supports implementation of Ukraine's State Plan for
Reform of the Armed Forces. Ukraine contributed peacekeeping forces in
the Balkans and other international peacekeeping efforts under the PARP.

In April of 2005, at the NATO summit in Vilnius, Lithuania, Ukraine and NATO
started an Intensified Dialogue (ID), a step toward the Membership Action
Plan (MAP). Ukraine and NATO expect to move to a MAP following a free
and fair parliamentary election in March 2006, which would demonstrate the
progress of democracy in the country. The Ukrainian government will need
to implement the reforms outlined by the MAP in order to achieve NATO
membership.

Unlike NATO, the European Union (EU) has not opened its door to Ukraine's
membership, even though the events of the Orange Revolution clearly
demonstrate that Ukraine is a truly European nation. The Yushchenko
government has repeatedly declared EU membership as the top priority of its
government.

Though Ukraine should be considered for membership solely on the basis of
merit and the success of its government's implementation of the necessary
reforms, the EU should declare its commitment to accepting Ukrainian
membership if Ukraine meets the qualifications. The United States should
use its influence with its European allies to press for such a commitment -
this is the most effective way to encourage democratic, structural, and
legislative progress within Ukraine.

The Yushchenko government also declared Ukraine's accession to the World
Trade Organization among its top priorities. Indeed, joining the WTO would
lead to an additional annual growth of GDP, additional exports, and the
opening up of new markets to Ukrainian goods. It is also a key component of
Ukraine's Euro-Atlantic integration plan.

The United States should actively support Ukraine's membership. Ukraine has
made important steps towards reforming its trade laws and legal system by
recently adopting six out of 14 legislative acts needed for WTO membership.
Passage of these laws should allow Ukraine to be considered for membership
at the WTO biannual conference in December of this year.

On July 6, the Ukrainian parliament also passed bill #7032 "On Incorporating
Amendments into Some Laws of Ukraine Concerning the Harmonization of
National Legislation with Requirements of Multilateral WTO Agreement on
Trade-related Aspects of Intellectual Property Rights (TRIPS)." This bill
is commonly known as the law on laser disks and is significant, since
Ukraine has long been a major player in the worldwide market of pirated CDs.
Adoption of this law was not required for WTO membership, but was seen as
critical by the United States.

Considering Ukraine's cooperation on the adoption of laws protecting
intellectual property rights, it is crucial that the U.S. remove outdated
trade barriers with Ukraine. The Congress should lift the Jackson-Vanik
amendment. It has been in force since 1974 to punish the Soviet Union for
limiting the immigration of its religious minorities. This no longer
pertains to Ukraine.

Consequently, this provision that bans normal trade relations between
Ukraine and the United States should be lifted, which will allow Ukraine to
gain most favored nation status and will stimulate its economy by increasing
trade with the United States. This would bring economic benefits to the
people of Ukraine and give them more confidence in the current government.

With its focus on Euro-Atlantic integration and gaining access to world
markets, the new Ukrainian government has at the same time repeatedly
stated that a fully-developed, close and friendly relationship with Russia
is its top foreign policy priority. Ukraine has traditionally had very
close ties to Russia, a nation with which it shares much history and
culture.

In the 2004 presidential race, President Putin openly backed Viktor
Yushchenko's opponent - then-Prime Minister Viktor Yanukovych - and traveled
to Ukraine several times in the course of the election campaign to rally
support for the government's candidate. Despite this, Yushchenko made a
commitment to the development of Ukraine-Russia relations and traveled to
Moscow on his first foreign trip as president of Ukraine, just a few days
after his inauguration.

However, mending the relationship with Russia has been challenging for
Ukrainian authorities. Russia has become a safe haven for former government
officials currently under investigation in Ukraine. The former head of the
management of the presidential administration of Ukraine Igor Bakai is
wanted in Ukraine on charges of abuse of office and causing material loss to
the state. Those offenses are punishable by a prison term of seven to ten
years in Ukraine.

To avoid prosecution, Mr. Bakai, sought internationally, fled to Russia,
where he was arrested, but then released for unknown reasons. Former
Interior Minister Mykola Bilokon is also wanted for questioning in Ukraine
on suspicion of abuse of office. He fled to Moscow, where he has frequent
contacts with Mr. Bakai.

Ruslan Bodelan, who was ousted as Odessa mayor in April 2005, is also
wanted in Ukraine on charges of abuse of power. Bodelan underwent a heart
operation at the Russian Defense Ministry's Vishnevskiy hospital outside
Moscow, where he is residing now with no plans to return to Ukraine.
Russian authorities have provided no assistance in detaining and extraditing
these individuals.

In September 2004, during the presidential election campaign period in
Ukraine, Russian authorities filed criminal charges against Yulia
Tymoshenko, then an opposition leader and a member of the Ukrainian
parliament, accusing her of bribing military officials while she headed a
gas trading company in the mid-1990s. These charges are denied by Ms.
Tymoshenko. Russian authorities refused to close the case after
Tymoshenko's appointment to the post of prime minister.

Ukraine hosts the Russian Federation's Black Sea Fleet on its territory.
Russia leases hundreds of acres of land in Crimea under the terms of an
agreement that is set to expire in 2017. At that time, in line with the
Ukrainian Constitution, no foreign troops are allowed on its territory.

Russia is interested in extending this agreement, but the Ukrainian side is
not expected to comply in light of its goals of NATO membership and
considering that the Russian fleet has violated the lease agreement numerous
times by using the land and premises it occupies for commercial purposes,
and establishing military prosecution offices on the territory of Ukraine.

Another outstanding issue with Russia is border demarcation between Ukraine
and the Russian Federation in the Black and Azov Seas, specifically the
jurisdiction over the Kerch Strait, a key shipping gateway between the two
seas, and the island of Tuzla. Ukraine is intent on keeping the boarders
that were marked during the soviet times as administrative boundaries
between the Russian and Ukrainian Soviet Republics.

Russia, on the other hand, is arguing that there were no marine boundaries
among the republics. If this issue is not resolved between the two parties,
it may have to be decided by the international court.

Overall, despite the efforts of the Ukrainian government to mend the
relationship with Russia after the Orange Revolution, it remains strained.
Russian leadership is threatened by the democratic developments in Ukraine
and its western orientation following the change of power. It is also
displeased by the Ukrainian government's attempt to diversify its sources
for energy following a sharp rise in oil prices on the Ukrainian market by
the Russian traders.

The Russian pro-Putin party Yedinaya Rosiya recently openly endorsed the
Party of Regions of the former Prime Minister Yanukovych, Viktor
Yushchenko's opponent in the contested presidential race, and wished the
party victory in the coming parliamentary vote. The Russian leadership is
clearly hoping a more favorable leader will come to power in Ukraine soon.

Despite strained relations between the two countries, Viktor Yushchenko
has reached out to the Russian business community to attract investment.
In fact, the new leadership has been working hard to demonstrate the
investment attractiveness of Ukraine to foreign entrepreneurs.

President Yushchenko and Prime Minister Tymoshenko have been meeting
with the business community leaders from Europe and the United States, and
in mid-June Ukraine hosted a mini-Davos, an offshoot of the famous Davos
World Economic Forum, which attracted nearly 250 prominent guests and
decision-makers.

However, investors have been slow to move into Ukraine due to an uncertain
business environment. Viktor Yushchenko made a promise during his
campaign to take back large enterprises that have been sold by the previous
leadership for considerably less than its market value and to auction them
off under fairer circumstances.

The most prominent reprivatization case is that of the largest steel maker
in Ukraine, Kryvorizhstal, which courts have now declared was illegally sold
for 3.59 billion hryvni (approximately $720 million) under the Kuchma
government to a company controlled by his son-in-law and Renat Akhmetov,
an oligarch from the eastern region of Donetsk and Ukraine's richest man.
Recently a court ordered the shares of Kryvorizhstal to be returned.

The government expects that its re-sale would bring up to 10 to 12 billion
hryvni ($2-2.4 billion). However, lack of clarity with respect to
re-privatization and what other enterprise sales will be re-visited has had
the most negative impact on foreign investors. The United States should
assist Ukraine in its efforts to stabilize the business environment and
attracting investment by establishing a dialogue between U.S. and Ukrainian
business, economic and finance leaders.

Helping Ukraine prosper would serve to ensure its population that the path
of freedom, democracy, and market economy that they chose is the right one.

The United States should further assist Ukraine's development by including
Ukraine as an eligible country to compete for the Millennium Challenge
Account (MCA) assistance. The MCA was established in 2002 as a vehicle
for providing developmental assistance to nations that "govern justly,
invest in their citizens, and encourage economic reform."

After the Orange Revolution, Ukraine is a precise example of a country that
is qualified under these provisions. Ukraine also qualifies as a candidate
based on the country's per capita income level. With the assistance of the
MCA funds, Ukraine could implement programs for fighting corruption,
reforming its bureaucracy and developing its economy.

In conclusion, Ukraine has had a long and brutal history. Having suffered
under decades of communism, which oppressed Ukrainian national identity
and basic human freedoms and murdered millions of Ukraine's population
by starvation in a synthetic famine, Ukraine was not able to fulfill the
promise of independence after the fall of the Iron Curtain.

Ukraine's first decade of independence was marked by government
corruption and infringements on human rights and media freedoms. It was
not until the Ukrainian people stood up in the unprecedented mass peaceful
protests against the government's attempt to steal the 2004 presidential
election that Ukraine became truly free.

Ukraine's path to democracy has been a long and challenging one and it will
take time for its new leadership to implement the changes necessary to
reforms Ukraine's economic and political systems. Mr. Chairman, IRI stands
ready to continue its role is assisting Ukraine in developing and
implementing those critical reforms.

The United States should take steps to fulfill President Bush's promise,
made during his second inauguration speech, to support "the expansion of
freedom in all the world" and "the growth of democratic movements and
institutions in every nation and culture," and assist the Yushchenko
administration in overcoming the significant challenges it faces.

With such assistance, I am hopeful that President Yushchenko will succeed in
implementing the reforms long awaited by the Ukrainian people that will lead
this strategically important country toward a democratic and prosperous
future. -30-
----------------------------------------------------------------------------------------------------------
By Stephen B. Nix, Esq., Director, Eurasia Programs
International Republican Institute (IRI), Washington, D.C.
202 408 9462, http://www.iri.org
---------------------------------------------------------------------------------------------------------
[Format edits by The Action Ukraine Report Monitoring Service]
=============================================================
3. THE SPECTER OF "STAGLUTION' IN THE FORMER SOVIET UNION
Post-revolution staglution, a revolution stagnating

By Peter Lavelle, Russia Profile's Weekly Experts Panel
Moscow, Russia, Friday, July 22, 2005

Contributors: Vladimir Frolov, Janusz Bugajski, Patrick Armstrong, Ira
Straus, Ethan S. Burger & Marc Greenfield, Gordon Hahn, and Dale
Herspring

Peter Lavelle: Western punditry can't accept that a so-called "colored
revolution" in Russia is very unlikely. This is probably partly due to the
fact there is a general built-in media bias against Russia and a very
specific bias against Vladimir Putin's Kremlin, as well as the fact that
local Russian spin-doctors and journalists weave the most incredible
scenarios of gloom and doom.

Should there be more focus on the prospect that a "colored revolution" or
Western-styled "rent-a-crowd" regime changes have run their course in the
countries of the former Soviet Union? This is not to claim that many people
there have abandoned the hope for a more democratic future, but because a
number of regimes have taken precautions against outside funding, training,
and agitation, as well as the possible disillusionment with the results
Georgia, Ukraine, and - to some extent - Kyrgyzstan have achieved after
their "colored revolutions."

More to the point: Are Georgia and Ukraine experiencing post-revolution
"staglution" (a revolution stagnating)? Georgia, the first darling of
spinning a people's revolution in the post-Soviet territory, has lost much
of its luster. Mikheil Saakashvili is not longer considered the icon of
democratic ideals and reform many once considered him to be.

By most accounts, there has only been a change in leadership in Georgia,
without significantly dealing with corruption or improving the lot of the
average citizen.

In Ukraine, the "Orange Revolution" appeared to have completely squeezed
of its once inspiring appeal. Once political allies, President Viktor
Yushchenko and Prime Minister Yulia Tymoshenko appear to be in deadly
political embrace, each waiting for the other to submit or to be defeated.

Recent events in Kyrgyzstan, a successful presidential election, are
difficult to assess. However, suffice it to say again there has been only a
major change at the top and not a revolution in any meaningful sense.

How much does the "staglution" in the aftermath of the "colored revolutions"
influence Kremlin perceptions and, importantly, how the Russian public
understands of change in the post-Soviet space?

[1] Vladimir Frolov, Fund for Effective Politics, Moscow:

It is still too early to tell whether a colored revolution is a likely
scenario in Russia. As things stand now, it is not much of a threat. But
attempts at it will be made and there are serious public expectations that
could be tapped to make a go of it.

Several factors currently point away from such a revolution in Russia.

Putin's regime has not been discredited, and still enjoys considerable
public trust. Putin beats all possible opponents by a factor of twenty,
although ratings in his performance in office are falling. People do not
want him to stay for the third term, but see no viable replacement among
likely alternative candidates.

For the revolution to succeed, the regime has to be totally discredited and
be perceived as corrupt and inept. Such was the case in Ukraine where
Kuchma' regime (and Yanukovich as its successor) lost legitimacy long
before the elections. The same goes for Georgia and Kyrgyzstan.

Then there is the issue of opposition leadership. Unlike Ukraine, Georgia
and Kyrgyzstan, in Russia there is no strong political force, leader, or a
broad-based civic movement around which all opposition to the regime might
coalesce. Something tells me such a force or a leader would not come from
the liberal camp. It more likely it would have a strong nationalist
character. All colored revolutions were nationalist in nature.

Neither is there a regional opposition stronghold in Russia, like Western
Ukraine or Southern Kyrgyzstan, where the regime's opponents could gather
strength, train their supporters and receive Western aid.

The Kremlin has clearly drawn the lesson from "colored revolutions" that
Western "funding to promote democracy" for NGOs and political parties
should be blocked and the activities of Western democracy missionaries
closely monitored and checked. The Kremlin will simply not tolerate a NED,
NDI, or IRI funded free-for-all in Russia.

But all this might quickly change. There are some deep undercurrents within
the Russian society that do not bode well for the Kremlin. Opinion polls
register increasing public dissatisfaction with the direction the country is
going (44 percent, according to the latest FOM poll, say it's going in the
wrong direction, while only about one-third think otherwise).

But the danger for the Kremlin is that this discontent is of a dramatically
new kind that is much more difficult to address than the social protests
over unpaid wages and pensions of the late 1990s and even the more
recent protests over the replacement of social benefits with cash payments.

There you could solve the problem by simply throwing money at it. Not any
more. Now, people are growing restless not over a lack of money and basic
necessities, but over a lack of opportunities to succeed.

It turns out the economic and political system in Russia is not providing
enough upward mobility to accommodate all or most socially active and
ambitious people. The system is rejecting outsiders, not accommodating
them to strengthen itself. All state property and lucrative government jobs
have been divided between a relatively small number of people.

[Deputy Head of the Presidential Administration Vladislav Surkov recently
put a finger on the problem by saying that the time of quick money and fast
careers is over and people need to get used to it. The problem is that they
won't, and Surkov knows it.

This also happened in Ukraine, where all avenues of upward mobility had
been blocked by a small group of government-appointed oligarchs and
corrupt officials. The "Orange Revolution" was driven by, among other
forces, millionaires who desperately wanted to become billionaires, but
were not allowed to by the old regime (they are now enjoying this hard-won
opportunity).

Although only 3 to 4 percent of Russians today are actively prepared to take
part in massive street protests, about one-third think demonstration bring
more good than harm, and 38 percent would not rule out joining the
protesters, a potentially large pool of supporters.

In absolute figures, even 3 percent in Russia is more than 4 million people,
a huge crowd. And 42 percent think there are forces in Russia that could
lead a colored revolution like that in Ukraine.

The figures were about the same in Ukraine eight months before the election.
In October 2004 - three weeks before the vote - about 25 percent - up to 10
million people - were prepared to take to the streets or march on Kiev if
the election were stolen.

The latter is also bad news for the Kremlin - 55 percent of Russians believe
the elections do not reflect the will of the people and most expect the
upcoming Duma and presidential elections to be unfair (51 percent and 44
percent accordingly).

Does that mean the Russians will rise en masse if the elections are stolen?
No one really knows. Were it to happen today, the answer would probably be
"No". But by 2007 it could be an entirely different ballgame. The elections
to the Moscow City Duma in December will give us a taste of things to come.

[2] Janusz Bugajski, director of the East Europe Project at the Center for
Strategic and International Studies in Washington:

We must come up with a more catchy word than "staglution" or even
"revatigue" ("revolutionary fatigue") for post-revolutionary deflation.
There are two distinct issues raised in the introduction and they should be
considered separately. First, what is the condition of the states that have
experienced "colored revolutions," and can we expect major reversals in the
near future?

Second, will Russia undergo a popular revolt against centralized rule, or
will it continue to stagnate politically amidst widespread public
indifference?

Roses and Oranges aside, revolutions are defined by a change of system, and
not simply a change of government. In the case of Georgia, Ukraine, and
other post-Soviet states, this would mean dismantling the repressive and
corrupt systems that were first imposed by Moscow and then nurtured by
Moscow after Communism and Sovietism collapsed.

The peaceful and popular revolts that launched this process in Tbilisi and
Kiev were not media "spins" or Western engineered coups, as the Kremlin
Chekists want us to believe, but were generated by public frustration and
elite competition intended to transform these countries into more open
pro-Western systems.

But the problem with any political revolution is the expectations that it
unleashes and the limited time the new leadership has to deliver on its
promises. Unfortunately, neither Ukraine nor Georgia have the resources,
experience, time, or Western support that the Central Europeans benefited
from when they launched their own "refolutions" in the early 1990s.

Not surprisingly, shortcomings are being registered in the slow pace of
economic reform, the persistence of corruption and patronage, the limited
volume of foreign investment, and the intensive political infighting.
Meanwhile, Putin's Chekists and their trusted partners in Ukraine and
Georgia rub their hands in glee while seeking to pressure or undermine the
incumbent governments.

The future of both revolutions cannot be predicted, but any major reversal
or restoration of the old regime would constitute a setback not only for the
state in question, but also for the spread of democracy worldwide.

Regarding the Russian scenario, and according to Peter's definition, I am
evidently not a voting member of the "commentariat," as I seriously doubt
that Russia will experience a popular upsurge or a political revolution.
Russia is far more likely to undergo a struggle for power and wealth among
Putin's sectoral magnates and security chiefs, in combination with a slow
descent into federal fragmentation generated by economic disparities and
regional ambitions.

Unfortunately, instead of demanding higher standards from their rulers, the
Russian public has been conditioned to be apathetic and tolerant of
virtually anything the Kremlin decides.

Paradoxically, a Russian "cabbage revolution" could provide much needed
fuel to propel the country toward a more sustainable system. It could
mobilize broad sectors of the public, make leaders more accountable to the
electorate, expose the perverted nature of the Russian election process,
highlight the ambitions of the Putinists, and involve citizens more directly
in the development and rejuvenation of their state.

Instead, while Kremlin strategists boast that Russia is immune to "Western
inspired revolutions" they may ultimately be digging their own political
graves.

[3] Patrick Armstrong, defense analyst for the Canadian government:

A "velvet revolution" needs five things all at once:
The first is an unpopular and ineffective government, as we saw in Georgia
and Ukraine.
Second, there has to be a clearly recognized opposition leader, like
Saakashvili in Georgia or Yushchenko in Ukraine.
Third, the population must be willing to create the massive moral pressure
that we saw in Georgia and Ukraine (and Lebanon).
Fourth is the organization - all those flags, yellow scarves, tents and soup
kitchens just don't appear out of thin air - it is through these things that
foreign involvement is most apparent.
Finally the authorities must not shoot the protesters down - and neither
Shevardnadze nor Kuchma, greatly to their credit, was prepared to kill
people to reverse the outcome.

Few of these conditions exist in Russia - the government is reasonably
popular and does look efficient (whatever the columnists of Moscow News or
the Berezovsky press may say), there certainly is no one opposition leader
(indeed there are too many opposition leaders) ,and I really don't see
thousands of Russians camping out in the Aleksandr Gardens or Red
Square waving scarves.

Nor do I see the government shooting them down. But, once the new guy
settles into the palace, all the old problems are still there, looking
through the windows at him.

Georgia is a very good example. Saakashvili arrested a lot of people for
corruption and that gave a good first impression, but it won't necessarily
stop the new bunch from stealing or get at the underlying problems, which,
in Georgia, are considerable.

Stalin (who, as a Georgian, had a certain Georgian agenda) created its
borders (it never existed in its present form before) incorporating a number
of non-Kartevelian peoples who didn't - and don't - necessarily want to be
in it. The Georgian SSR's prosperity thrived in the cracks of the Soviet
economy: One could fly from Tbilisi to Moscow and back again and make a
profit on selling a few suitcases of flowers.

As soon as the entrepreneur had to pay what an airplane ticket really cost,
that business disappeared. So the Georgian economy collapsed, the
minorities wanted out (just as they had in 1919 to 1921) and things went
from bad to worse very quickly.

Although people now seem to have forgotten it, Shevardnadze also came to
power after a miserable period, following a coup d'tat, and was welcomed in
much the same was as Saakashvili has been. But he was eventually brought
down by the long-standing problems, even though he left the place in much
better state than his predecessors had.

"Staglution" is a good word to describe what happens when the new team
has to chew away at the intractable difficulties that brought down its
predecessor.

[4] Ira Straus, U.S. coordinator of the Committee on Eastern Europe and
Russia in NATO:

The West always viewed the Rose and Orange revolutions through rose-
colored glasses - as democratic miracles. It overestimated the revolutions;
it underestimated the importance and difficulty of their aftermath. Russia
more realistically estimated the aftermath, knowing how deep is the morass
of the post-Communist inheritance, but underestimated the revolution itself
by dismissing it as a Western manipulation.

Now, Russian elites are getting their hopes up that the revolutions will
peter out and, in the next stage, Russia will regain its positions of
influence. Some are hoping for a counter-revolutionary wave to replace the
revolutionary wave. This seems just as overoptimistic on the Russian side
as was the original fairy-tale on the Western side.

Revolutions did occur, including a transformation in mass consciousness.
The people felt part of a regime change in which their majority will finally
came to power. The fact that old elites were included was what made it a
revolution, not merely a popular rebellion; as in all true revolutions, the
elite split and half of it merged its identity with a new popularly based
power source.

These revolutions will inevitably hit snags and disappoint many of their
followers, but few if any of them will be undone. The fact that Russia put
itself on the wrong side of the majority is something that will count
against it for a long time; it showed the people and elites of these
nations - even the minority with which it sided - that it intended to thwart
their democratic will, and gave the impression of trying to re-impose
imperial domination through a symbiotic alliance with the regimes against
the people.

The counter-revolutionary wave is bound to disappoint no less than the
revolutionary. In the tug and pull between Russia and the West for influence
in the CIS, neither side can even win a final victory. The countries are
inevitably split by this tug of war; the victories of either side are bound
to remain unsatisfying and unconsolidated. Any counter-revolution will be
more unstable than the revolutions.

The only way to change this would be for Russia and the West to start
pulling on the same side, putting forward their values of reform and
stability jointly, instead of picking opposite sides on values and
emphasizing one against the other. That would be a truly revolutionary
step. It would finally enable consolidation and cumulative progress.

For Russia itself, the West long ago dismissed the likelihood of a "color
revolution;" yet the state-owned polling agency VTsIOM finds Russians
viewing it as a possibility by a margin of 42 percent to 32 percent. It
seems that far more Russians expect it than the Westerners who are
supposedly buying off people to bring it about.

The natural descent of the other color revolutions into the
post-revolutionary morass is, meanwhile, taking away their mystical,
inspirational appeal. The enchanted moment is long over when the erotic
linkages of the masses in the streets could be viewed, whether with hope
or trepidation, as contagious.

Like all revolutions, they have fallen away from the high point of mass
assembly in the street, when almost orgasmic feelings of unity run through
the crowds. Nevertheless, the revolutions already have accomplishments that
should not be underestimated. They will continue to exert an attractive pull
in the CIS - and to scare its authoritarian regimes, which are reaching for
counter-revolutionary antidotes.

Counter-revolution has a sorry history of failure in modern Europe. The
attractive pull of the revolutions will continue, even if mostly in the
limited, gradual way that is the nature of ordinary political life; and in
the end it have great significance.

[5] Ethan S. Burger, Scholar-in-Residence, School of International Service,
American University & Marc Greenfield, Institute of War & Peace Reporting:

If Western policy makers were less focused on short-term results and crisis
management, they might have discerned the Kremlin's effort to consolidate
its old sphere of influence. U.S. success in the Cold War and failure in
Viet Nam suggest that a hunkering down for the long-term - as Churchill did
in 1940 - is a better approach to foreign policy, and one that Moscow seems
to have adopted.

No one can deny that the "colored" revolutions made for great television.
Unfortunately, real political and economic change takes time. Coups d'etats
take many forms, including seemingly democratic elections. Pro-Western
democratic governments do not appear spontaneously; they must be nurtured,
and in the best of cases such governments survive only if they enjoy
widespread popular support.

As recent events in Iran illustrate all too clearly, the mere holding of
presidential elections is no guarantee of a favorable outcome (particularly
from Washington's perspective).

Having completed the first stages of a political and economic
recentralization, the government of Russia is gradually employing its
principal foreign-policy leverage over the "near abroad," its legacy from
the Soviet Union: the former Soviet sphere's inescapable industrial
integration, the satellites' almost total dependency upon Russian energy
supplies, and the predominantly apathetic and fatalistic populations of the
local populations. (Just as elsewhere, more people turn out for sporting
events in these successor states than for political demonstrations.)

On the one hand, we are dealing with extremely short periods of time, less
than 15 years since the collapse of the Soviet Union. It is far too early to
evaluate the long-term significance of the recent regime changes in Georgia,
Kyrgyzstan and Ukraine. One needn't travel far to find examples.

Let's not forget that after the Tsarist regime fell in February 1917,
Aleksandr Kerensky's "democratic regime" was supplanted by the
authoritarian Bolsheviks and supporters a short nine months later.

On the other hand, things aren't looking too good for democracy advocates.
Recently, the call of the Shanghai Cooperation Organization's member states
(Russia, China, Kazakhstan, Kyrgyzstan, and Tajikistan), followed by
individual statements from Uzbekistan and Kyrgyzstan, seems to indicate a
concerted effort by Russia and China to remove the U.S. military presence in
the region.

While this could be nothing more than a ploy to extract higher "rents" (both
tangible and intangible) from the United States, it certainly appears to
support the hypothesis that Russia has adopted a more active, assertive
regional policy.

We believe that supporters of the view that Russia will continue to
disintegrate territorially are too confident, at least for the foreseeable
future. Although a superficial examination of the situation, especially the
events in Chechnya, Dagestan and the Baltic States, would seem to support
this prevailing view, it disregards Russia's resolve and the enormous
economic and political resources that it has only just begun to bring to
bear on the issues.

With respect to the northern Caucuses, Russia can keep this situation
brewing indefinitely by the continued use of force, especially if one is
willing to bear the human, public relations and financial costs, as the
Putin government seems willing to do. Estonia may be the one Baltic state to
have become largely free of Russian hegemony (in part thanks to a heavy
Finnish and German presence in the country).

It is very unclear what will happen with Latvia, with its ethnic Russian
minority and Russian "business" presence, and Lithuania, with its struggling
economy and growing economic dependence upon Russia. Recent
coordinated Russian government efforts to gain control of the Mazeikiai oil
complex (the Baltic States' oil refinery, the Butinge oil maritime terminal,
the Birzai pipeline and certain retail gas stations) only serves to
emphasize this dependency and highlight the Kremlin's understanding that
control over energy is more deployable as a tool of policy than brute
military force.

In the southern Caucuses, the situation is no more encouraging. Russia's UES
already is a major owner of Armenian power plants, and it appears that the
Armenian government has allowed the sale of the national power grid to UES.

Kazakhstan may be better able to ward off Russian forays. Thanks to its rich
oil and gas deposits many foreign companies are involved there. That
includes, we should add, Gazprom and numerous Russian private and state
energy concerns. The country's close ties and susceptibility to Russian
influence are natural.

After all, not only is Russia the giant trading partner to the north, the
country's ruling elite is a particularly apt and efficient example of the
plutocratic, ex-Soviet, Communist Party ruling elite that emerged from the
ruins of the empire.

Central Asia's other independent states are even less encouraging. All
appear to be marching to a completely different tune, one that leads back to
highly centralized, authoritarian statehood. The problem with this, in the
context of regional integration, is quite straightforward - if they were
more pluralistic societies it would be harder for an outside government to
supplant the leadership with friendly faces.

Unquestionably, the entire region represents a region of Russia's vital
national interests, both from security and economic perspectives. In
addition, as Chinese demand for and dependency upon Russian energy
supplies grows, these countries will find themselves right at the center of
one of the world's new strategic axes.

As far as any dissolution of Russia's regions is concerned, the Kremlin has
put these fears to rest through its establishment of single party
"discipline" and the elimination of independent governors.

Finally, many observers, including us, have been warning for a number of
years that the Russian public at large never had anything more than a vague
notion of what democracy involved and has longed for the restoration of a
strong central authority virtually from the outset of the reforms.

More significantly, and less noted, is the nostalgia for empire, evinced in
virtually every poll and personal account of regret over the loss of the
Soviet Union's status in the world a superpower. Regardless of the Russian
public's understanding of what is occurring, it will greet the restoration
of a sphere of influence enthusiastically.

[6] Gordon Hahn, independent Russian studies scholar:

We need to distinguish between this second wave of revolutions and "great
revolutions." The latter are truly world transmogrifying events. The world
is turned upside down (at least for a while) with the revolutionary
leadership that has come to power having grand designs for changing the
society and even the world radically in virtually all of its spheres.

We can understand this by looking at the ambitions of the French (18th
century.), Russian (early 19th century.), Chinese (mid-19th century.),
Iranian Revolutions (late 20th century.), among others following on the
heels of the Soviet regime's demise at the hands of Russia's revolution from
above.

Lesser order revolutions that seek to radically transform only their own
societies and are perhaps still worthy of the nomenclature 'great', include
revolutions from above like the Japanese (late 19th century.), Turkish
(early 20th century.), and Soviet (late 20th century) revolutions, as well
as some revolutions from below such as the Philippines (1980s) and Eastern
Europe 1989 (though some of the latter were as much imposed or negotiated
transitions as revolutions).

The so-called 'colored revolutions' were really limited to completing and
correcting the processes begun during the fall of the Soviet regime
precipitated largely by the Russian revolution from above, without which
there would obviously have been another outcome (revolution from below,
transition, or authoritarian or totalitarian restoration).

The limited nature of revolution from above (the planned dismantling but
ultimate retention of many state and social institutions and the old elite,
along with the discarding of some of the old regime's key state and social
institutions) created a tenuous equilibrium based on half-reformed,
ineffective institutions ill-suited for the present era.

Either some authoritarian or democratic revolution from below or some form
of transition had to come in the mid- to long-term, and to the extent the
'mini-revolutions' fail to establish some viable order based on the better
use of coercion or the consolidation of democratic and market institutions,
they may occur again.

In some ways, these colored revolutions, once they are fully researched, may
be shown to have been considerably or mostly second-wave revolutions from
above - changes of power that would not have occurred without a major role
being played by opposition figures already holding office and using state
resources to organize and finance their revolutions (along with some foreign
assistance).

The activity of the revolutionaries as state leaders now in power, not in
opposition, shows the limited commitment they may have had to
democratization and rule of law, evidenced by weak efforts at fighting
corruption, anti-democratic measures such as Saakashvili's abandonment
of elections for the mayor of Tbilisi, and possible property grabs in the
form of renationalization in Ukraine.

[7] Dale Herspring, professor of political science at Kansas State
University [Manhattan, Kansas]:

The problem the West faces in thinking that "colored" revolutions will break
out in all 15 former Soviet republics is that we assume that everyone in the
world wants a polity just like our own and that all that has to happen is a
revolution - and behold, the country in question is now democratic.

However, the situation is more complex. For example, it is hard for the
Western media to understand that when the Russians - for example - use the
term "demokratizatsia" it does not mean what we refer to as democracy.

One may translate it that way, but it does not follow that the Russians (or
many others) understand that to refer to a participatory political culture.
In effect, in Russia, it means much more of a subject culture.

Russians want the right to have an impact, to vote on their leaders, but
many in the West cannot get it through their heads that they do not
necessarily want the oppositional type government that we enjoy. Leaders
should lead, but not be totalitarian. Authoritarian is OK to a point, but a
strong leader is expected.

Will this kind of a subject culture remain forever? Of course not. Political
culture changes all the time and it will change in the case of Russia too.
Furthermore, one of the problems with the colored revolutions is that, if
they are going to be democratic as the West understands the term, then
attitudes supporting a participatory political culture must exist.

They clearly do not exist in either Ukraine or Georgia. This does not mean
that the country may not be more or less democratic.

What impact do events in Georgia or Ukraine have on the Russian
populace? My suspicion is probably very little. It is important to elites,
but I think Ivan Ivanovich is concerned about other, more important
matters - like putting something on the table for dinner tonight. -30-
---------------------------------------------------------------------------------------------------------
By Peter Lavelle, plavelle@untimely-thoughts.com, July 22, 2005
Untimely Thoughts, http://www.untimely-thoughts.com/?art=1833
Vol 3, no 123 (346) Experts on "staglution" & Western NGOs
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