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Action Ukraine Report

                     "THE ACTION UKRAINE REPORT - AUR"
                                   An International Newsletter
                                    The Latest, Up-To-Date
                In-Depth Ukrainian News, Analysis, and Commentary

                "Ukrainian History, Culture, Arts, Business, Religion,
    Sports, Government, and Politics, in Ukraine and Around the World"

"THE ACTION UKRAINE REPORT - AUR" - Number 589
Mr. E. Morgan Williams, Publisher and Editor
Washington, D.C., Kyiv, Ukraine, MONDAY, October 24, 2005

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

1.                    UKRAINE GIRDS FOR STEEL AUCTION
A Wall Street Journal News Roundup
New York, New York, Saturday, Oct 22, 2005; Page B13

2. BACKGROUND: UKRAINE PRIVATIZES KRYVORIZHSTAL
BBC Monitoring Service, UK, Sun October 23, 2005

3.                      UKRAINE STEEL AUCTION A FIRST
        World's two largest steel producers are expected to participate
Associated Press (AP), Kiev, Ukraine, Sunday, October 23, 2005

4.                              A KEY TEST IN UKRAINE
Bid to "reprivatize" a big steel company will show whether President
Viktor Yushchenko's pledge of business transparency is working
NEWS ANALYSIS: By Jason Bush
Business Week Online, NY, NY, Monday, Oct 25, 2005

5. UKRAINIAN PRIME MINISTER YEKHANUROV INTERVIEWED
                       ON PRIVATIZATION, WTO, CABINET
Era, Kiev, in Ukrainian 0610 gmt 21 Oct 05
BBC Monitoring Service, UK, in English, Fri, October 21, 2005

6.  OFF COLOUR: A REGION'S DRAMATIC DREAMS DEPEND
               ON RIGHTING THE ORANGE REVOLUTION
COMMENT AND ANALYSIS: By Stefan Wagstyl and Tom Warner
Financial Times, London, UK, Monday, October 23, 2005

7. WORLD TRADE ORGANIZATION (WTO) CHIEF ONCE AGAIN
       SAYS  "I DON'T THINK IT IS GOING TO HAPPEN." ABOUT
                     UKRAINE JOINING THE WTO THIS YEAR
Reuters, Helsinki, Finland, Sunday, October 23, 2005

8.       U.S. STEPS UP SUPPORT FOR UKRAINE TO JOIN NATO
By Patrick McLoughlin, Reuters, Vilnius, Lithuania, Sun Oct 23, 2005

9.     NATO FOCUS ON UKRAINE MILITARY IN MEMBERSHIP BID
Associated Press (AP), Vilnius, Lithuania, Sunday, Oct 23, 2005

10. UKRAINE DOESN'T EXPECT MOSCOW TO BLOCK ITS NATO BID
By Thom Shanker, The New York Times, NY, NY, Sun, October 23, 2005

11.                   "ORANGE REVOLUTION TURNS TO ROT"
COMMENTARY: By Oles M. Smolansky and Rajan Menon
Los Angeles Times, Los Angeles, California, Sun, Oct 23, 2005

12. 2,000 PROTESTING NEAR ODESA LAW ACADEMY TO DEMAND
                    RECTOR SERHII KIVALOV'S RESIGNATION
Protesters claim he discredited himself during the 2004 presidential
elections as chair of the Central Electoral Commission, Feb to Dec 2004
Ukrainian News Agency, Kyiv, Ukraine, Sat, October 22, 2005

13.  UKRAINIAN EX-PRIME MINISTER TYMOSHENKO'S PARTY
         SETS UP YOUTH WING CALLED "YOUNG FATHERLAND"
UNIAN news agency, Kiev, in Ukrainian 1722 gmt 22 Oct 05
BBC Monitoring Service, UK, in English, October 22, 2005

14. UKRAINIAN PRESIDENT'S PARTY SETS UP YOUTH BRANCH
             A Member of Cabinet of Ministers manages the process
TV 5 Kanal, Kiev, in Ukrainian 1500 gmt 22 Oct 05
BBC Monitoring Service, UK, in English, October 22, 2005

15.      UKRAINE BUSINESS GIANT TO SEEK LONDON FLOAT
By Richard Orange, The Business Online
London, United Kingdom, October 23, 2005

16. INTERNATIONAL AGRIBUSINESS COMPANY LOUIS DREYFUS
     TO BUY GRAIN ELEVATOR COMPLEX IN CHERKASY REGION
Ukrainian News Agency, Kyiv, Ukraine, October 21, 2005

17.  UKRAINE: CONCORDE CAPITAL BANK FORUM PLACEMENT
PRNewswire, Kiev, Ukraine, Friday, Oct. 21, 2005

18.    NEW MINERAL WATER BOTTLING PLANT STARTED AT
      LVIV REGION BASED OSKAR MINERAL WATER FACTORY
Ukrainian News Agency, Kyiv, Ukraine, Fri, October 21, 2005

19. PARLIAMENT PLANS TO REGULATE MARKET OF BABY FOOD
Ukrainian News Agency, Kyiv, Ukraine, Fri, Oct 21, 2005

20. PARLIAMENT OUTLINES STATE FARMING POLICY PRINCIPLES
Dmytro Horshkov, Ukrainian News Agency, Kyiv, Ukraine, Oct 18, 2005

21.   UKRAINIAN PRESIDENT YUSHCHENKO TO GIVE SAMPLES
                             FOR NEW TESTS ON POISONING
Associated Press (AP), Kiev, Ukraine, Fri, Oct 21, 2005

22.   U.S. COURT REFUSES TO FREE SUMY REGION'S FORMER
                          GOVERNOR SCHERBAN ON BAIL
Ukrainian News Agency, Kyiv, Ukraine, Friday, October 21, 2005

23.    POPE BENEDICT REAFFIRMS PRIESTLY CELIBACY AND
                           PROCLAIMS FIVE NEW SAINTS
               New saints: two Italians, a Chilean and two Poles who
                               worked in what is now Ukraine
By Philip Pullella, Reuters, Vatican City, Sun Oct 23, 2005

24.  WITH RESISTANCE, BELARUS REVIVES ITS POISONED LANDS
By Steven Lee Myers, The New York Times
International Herald Tribune, Europe, Thursday, October 20, 2005
=====================================================
1.                     UKRAINE GIRDS FOR STEEL AUCTION

A Wall Street Journal News Roundup
New York, New York, Saturday, October 22, 2005; Page B13

As Ukraine prepares for Monday's long-awaited privatization, the auction of
steel producer OJSC Kryvorizhstal is being seen as a key test for President
Viktor Yushchenko, who has pledged to pursue economic reform and fight
corruption.

The world's two largest steelmakers -- Mittal Steel Co. NV, of Rotterdam,
and Arcelor SA, of Luxembourg -- are among the bidders that could walk
away with a large steelmaking asset in a growing steel market. The auction
of a 93.02% stake in Kryvorizhstal, which accounts for approximately
20% of the country's steel production and had sales of $1.9 billion last
year, is being watched by economic and political observers.

"I think the government understands very clearly that it will need to secure
maximum transparency," said Faig Bayramov, a Kiev-based analyst with
Russian investment bank Renaissance Capital.

Already well-established on international steel markets, Kryvorizhstal
benefits from low-cost raw materials, fuel and labor, making it highly
profitable and attractive to potential buyers.

Ukraine's State Property Fund said that three companies have made the
necessary $200 million deposit to take part in the auction: Mittal Steel
Germany; Ukraine's LLC Smart Group; and the Industrial Group, an
investment vehicle for Arcelor SA and the Industrial Union of Donbass,
a Ukrainian industrial conglomerate.

For Mittal and Arcelor -- respectively No. 1 and No. 2 in steel
production -- Kryvorizhstal would not only add volume and cement their
positions in the global market but also provide an opportunity to expand
eastward. The other bidder, Dniepropetrovsk-based Smart Group, has
interests in metals trading and ore production in Ukraine. It is reportedly
backed by Russian capital.  -30-
====================================================
2.    BACKGROUND: UKRAINE PRIVATIZES KRYVORIZHSTAL

BBC Monitoring Service, UK, Sun October 23, 2005

Several national TV channels in Ukraine have promised to break their normal
programming on 24 October to carry a live relay of the auction for
Kryvorizhstal, the country's biggest steel plant.

This unprecedented media attention to a privatization deal, albeit Ukraine's
largest to date, shows what a sensitive political issue the sale of
Kryvorizhstal has become.

The plant's previous owners say the legal battle with the government is far
from over. They have also pushed a bill through parliament recommending
a ban on the plant's repeat sale.

But President Yushchenko says the auction will go ahead as planned no
matter what in order to keep this showcase privatization project from
falling through.

He insists that the plant will be sold at an open and honest auction, and
broadcast to the whole country to demonstrate that the time of murky
privatization deals in Ukraine is over.
                                        MATTER OF PRICE
A highly profitable enterprise, Kryvorizhstal was sold in June 2004, when
President Leonid Kuchma was still in office, to a consortium led by Kuchma's
son-in-law Viktor Pinchuk and eastern Ukrainian tycoon Rinat Akhmetov.

Several big multinationals, who were excluded from the competition for
Kryvorizhstal, said they had been prepared to offer almost double the 800m
dollars price paid by Pinchuk and Akhmetov.

The Ukrainian opposition, then led by Viktor Yushchenko, vehemently opposed
the deal, saying it epitomized the corruption and cronyism flourishing under
the Kuchma administration.

Yushchenko made reversing the deal and selling Kryvorizhstal to the highest
bidder one of his central campaign promises.
After a protracted legal battle and several conflicting decisions in various
Ukrainian courts, the government finally secured a high court ruling
declaring the original sale of Kryvorizhstal illegal.

On 18 October, parliament voted by a small majority to suspend
Kryvorizhstal's privatization. But President Yushchenko dismissed the
resolution, which does not appear to be binding, as an attempt by the
previous owners to derail the repeat sale.
                        INVESTMENT CLIMATE SUFFERING
The world's biggest steel company, Mittal Steel, a consortium led by the
European giant Arcelor and the eastern Ukrainian LLC Smart-Group are the
three companies left in the race after several prospective bidders dropped
out.

The government hopes it will get at least 2bn dollars for the 93-per-cent
stake in the plant, allowing it to fund a massive increase in social
spending since Yushchenko came to power.

But experts say the uncertainty over ownership rights created by the
attempts to reprivatize Kryvorizhstal and several other big companies has
scared off investors and led to a sharp slowdown in economic growth.

The investment boom expected after the Orange Revolution has failed to
materialize, and the price paid for Kryvorizhstal itself is likely to be
affected by the controversy surrounding the sale.

After sacking the government led by his erstwhile ally Yuliya Tymoshenko
in September, Yushchenko vowed to restore Ukraine's relations with big
business.

His new prime minister, Yuriy Yekhanurov, said the word "reprivatization"
would be excluded from the government's vocabulary, and all ownership
disputes would from now on be resolved through talks and amicable
settlements.

As Kryvorizhstal has become a household name in Ukraine, making good
on the promise to reprivatize it is a matter of principle for the Yushchenko
administration.

But after Kryvorizhstal, few analysts expect the government to try to pick
any more fights over reprivatization, if only to soothe the rattled nerves
of foreign investors.  -30-
====================================================
      Send in names and e-mail addresses for the AUR distribution list.
====================================================
3.                    UKRAINE STEEL AUCTION A FIRST
        World's two largest steel producers are expected to participate

Associated Press (AP), Kiev, Ukraine, Sunday, October 23, 2005

KIEV, Ukraine - For the first time in this ex-Soviet republic's history,
a major industrial enterprise is slated to go under the hammer live
on television.

Ukrainian President Viktor Yushchenko has staked his reputation on the
auction to privatize the Kryvorizhstal steel mill, Ukraine's biggest. His
opponents are determined to block it.

Parliamentary critics twice last week mustered enough votes to press the
government to halt Monday's sale of the 93.02 percent stake in the mill, but
Yushchenko shrugged off their nonbinding appeal, just as he has the legal
challenges waged by the mill's former owners.

"There won't even be talk of reconsidering the decision," Yushchenko said
Friday, adding that a repeat auction was necessary "first of all, morally
and politically." "We want the repeat sale to show one thing: breaches in
the law ... will be corrected," Yushchenko said.

Kryvorizhstal, which produces 20 percent of Ukraine's entire metal output,
was sold last June by the state for $800 million (euro 665 million) in a
privatization widely condemned as rigged. The buyers: Former President
Leonid Kuchma's son-in-law, Viktor Pinchuk, and coal-and-steel-magnate
Rinat Akhmetov.

During last year's Orange Revolution, Yushchenko called the sale a "theft"
and pledged it would be reversed. Oleh Rybachuk, Yushchenko's
chief-of-staff, said that "if (the auction) is successful, it will show that
you can trust what the Ukrainian government says."

The world's two largest steel producers, Mittal Steel and Arcelor, are
expected to participate. The opening price is 10 billion hryvna ($2 billion)
but analysts expect the price could be driven as high as 17.7 billion hryvna
($3.5 billion).

The sale could generate 10 percent of the country's annual budget
revenues -- a huge cash influx that Yushchenko's government desperately
needs.

But the 450-member parliament is determined to put the brakes on. This week,
it passed repeated appeals to the government to stop the auction and hold on
to what is considered Ukraine's flagship mill.

Even the head of the State Property Fund, which is conducting the auction,
has made little secret of her displeasure at having to surrender this
valuable state enterprise.

"I stood for and I still stand by the position that such profitable
factories must remain in the hands of the state," said State Property Fund
head Valentyna Semenyuk, a member of the Socialist Party, which has led the
parliamentary challenge to Monday's sale.

The mill, which produces 8 million tonnes of steel a year, was returned to
the state in June after former Prime Minister Yulia Tymoshenko's government
successfully challenged its privatization under Kuchma.

Legal appeals by the Pinchuk-Akhmetov consortium were rejected, but one
appeal is still pending before Ukraine's Supreme Court. The two tycoons have
also launched a challenge before the European Court of Human Rights.

Last week, a U.S.-based investment group, acting on behalf of the former
owners, sued in a U.S. District Court in Manhattan in a bid to stop the
resale.

"The investors must stop and think," Pinchuk was quoted as telling Ukraine's
Ukrayinska Pravda Web site. "Say you want to buy an apartment but you are
told this apartment is the subject of a court case. Will you risk buying
this apartment? I don't think so."

His lawyers have dispatched letters to the potential bidders warning them of
the situation, Pinchuk said.
                                     'A MATTER OF HONOR'
The three confirmed bidders, however, do not seem scared. Mittal Steel, the
world's largest steel producer, had been blocked from participating in last
summer's auction for what it claimed were dubious reasons.

This time, Mittal will be competing against the Industrial Group consortium,
which brings together the Industrial Union of Donbass, Ukraine, and the
world's second-largest steel producer, Arcelor.

The third bidder is the Dnipropetrovsk, Ukraine-registered LLCSmart-Group,
reportedly linked to a Russian steel magnate.

Originally, the Ukrainian government had hoped for at least 10 bidders, but
analysts said the smaller number isn't much of a disappointment.

"Mittal and Arcelor were considered the favorites anyway and the government
would like to sell it to a multinational Western-based company," said Tomas
Fiala, managing director of the Kiev-based investment bank, Dragon Capital.

The government's post-Orange Revolution re-privatization policy, spearheaded
by Tymoshenko, was canceled last month, but Kryvorizhstal's resale never was
put in question. Yushchenko has said it is a matter of honor.

Government officials have already begun salivating over the extra funds the
mill's sale will bring. Security Council head Anatoliy Kinakh promised that
the money would go toward social programs, while other officials have
bandied about ideas such as redeeming some domestic debt and boosting the
share capital of the two state-owned banks.  -30-
======================================================
4.                                 A KEY TEST IN UKRAINE
Bid to "reprivatize" a big steel company will show whether President
Viktor Yushchenko's pledge of business transparency is working

NEWS ANALYSIS: By Jason Bush
Business Week Online, NY, NY, Monday, Oct 25, 2005

At 11 a.m. on Oct. 24, officials at the Ukrainian State Property Fund in
Kiev will open three envelopes to decide the winning bidder for a 93% stake
in Kryvorizhstal, the largest steel plant in the country. The sale is a key
test of President Viktor Yushchenko's resolve to clean up Ukraine's murky
business practices and open the country to much-needed foreign investment.

With annual production of 7 million tons of crude steel -- 20% of all
Ukrainian steel production -- and 2004 earnings of $400 million,
Kryvorizhstal is one of the largest and most profitable enterprises in the
country. And the steel mill has become an important political symbol: A
transparent privatization was a key election pledge made by Yushchenko
during last year's turbulent election campaign.

OBVIOUSLY RIGGED.  Kryvorizhstal became notorious because of the way
in which it was first privatized in June of last year. Two local tycoons,
Viktor Pinchuk and Rinat Akhmetov, acquired the plant for $800 million -- a
sum much lower than potential bids from well-known international companies
participating in the tender.

The largest offer, by LNM Holdings and US Steel (X ), came to $1.5 billion.
Yet all the foreign bidders were disqualified on an absurd technicality,
sparking an uproar. The tender had obviously been rigged to exclude
foreigners and favor local businesspeople allied to then-President Leonid
Kuchma.

In February, following Yushchenko's election, a Ukrainian court annulled the
original deal, paving the way for a second one this year. This time,
Yushchenko has promised no monkey business. The starting price is $2
billion, and analysts believe the plant may go for close to $3 billion.

GOOD PRICE. That will make the sale of Kryvorizhstal the largest
privatization ever seen in the former Soviet Union in terms of cash
raised -- a stark contrast to the days when valuable state assets in Ukraine
typically went for a song in dubious insider deals (see BW, 11/8/2004,
"Will the Boom Last in Ukraine?").

Another crucial difference this time is that the bidding is open to foreign
investors. The three final bidders include the world's largest steelmaker,
Rotterdam-based Mittal Steel (MT ); the largest European steelmaker,
Arcelor, based in France (bidding in conjunction with Ukraine's Industrial
Union of Donbas); and Smart Group, a Ukrainian company representing
Russian interests (see BW, 3/7/05, "Steel: The Mergers Aren't Over Yet").

The suitors should be happy to fork out a good price. "It's one of the last
big steel mills to go for sale in Central and Eastern Europe, and it would
be a strategic acquisition for any of them," says Andriy Dmitrenko, an
analyst at Kiev brokerage Dragon Capital.

NO EASY MATTER.  Rob Edwards, a metals analyst at Renaissance Capital
in Moscow, also says the plant is a good buy: "Ukraine has inherently low
costs, so for that reason it's attractive for a major. And it's
well-positioned for exports to the Commonwealth of Independent States [most
nations of the former Soviet Union] and Middle East markets". Analysts tip
Arcelor as the favorite to win, though Mittal is also expected to bid high.

Whoever wins, a fair sale to a foreign investor will be a coup for
Yushchenko in his efforts to attract investment. The money raised will be
as much as all the rest of Ukraine's foreign direct investment put together.
And getting this far has been no easy matter.

Even after Yushchenko's election last December, the reprivatization of
Kryvorizhstal has been fraught with difficulties. The existing owners have
lobbied hard to keep their property and tried to halt the sale with
lawsuits. Opposition to a new deal has also come from left-wingers, who
oppose privatization in principle.

LOST LUSTER.  Just a few days before the auction, the Ukrainian
Parliament passed a resolution calling for it to be halted. The resolution
is nonbinding, however, and Yushchenko has in any case vowed to use
his presidential powers to make sure the deal goes ahead as planned.

A successful sale will be important, because it comes at a time when
Yushchenko's Orange Revolution has lost much of its luster.

Last month the President sacked his Prime Minister and former close ally,
Yulia Tymoshenko, dramatically exposing political tensions which explain
why reform progress has been much slower than many had hoped (see
BW, 9/9/05, T"In the Ukraine, Freedom's Bitter Fruit.").

"It's going to be the first test of the government's determination to plow
through all the political noise and come out with a result that's obviously
positive for the investment climate," says Edwards from Renaissance
Capital.

That's why when Kryvorizhstal goes under the hammer for the second time,
it's not just Ukrainians who will be eagerly watching the result.  -30-
======================================================
5.  UKRAINIAN PRIME MINISTER YEKHANUROV INTERVIEWED
                       ON PRIVATIZATION, WTO, CABINET

Era, Kiev, in Ukrainian 0610 gmt 21 Oct 05
BBC Monitoring Service, UK, in English, October 21, 2005

KYIV - Ukrainian Prime Minister Yuriy Yekhanurov has reiterated that the
privatization of Ukraine's biggest Kryvorizhstal steelworks will proceed
despite parliament's decision to ban it. Yekhanurov appeared on the live
morning talk show "Morning Test" on the Ukrainian private Radio Era FM
on 21 October.

"This is not an ordinary privatization bid. This is a real demand of Maydan
[the venue of the Orange Revolution]. We should tell the people clearly:
through the judiciary the state has reclaimed what was stolen and now it is
selling it.

The people will receive funds, the difference between the unfair
privatization which took place earlier and the current privatization. These
funds will go to the state budget and effectively to the people," Yekhanurov
said.

Yekhanurov said that the bidding would be broadcast live by Ukrainian TV
and urged the parliamentarians not to try to get into the bidding room:
"There is the only thing I would like to ask. There are members of
parliament and high-ranking people who suddenly decided to be there to
be shown on TV, as it were.

I mean that only the members of the bidding commission and two TV cameras
will be allowed to be present in the room where the bidding is to be held."

Yekhanurov admitted that the 2006 draft state budget, which parliament
rejected on 20 October, was imperfect.

"The new cabinet faced a dilemma: to say that the budget drafted by the
previous cabinet should be discarded and to start from scratch, which would
take another two months to prepare a new draft budget, or to follow the
schedule. We decided to take another path and to follow the schedule,"
Yekhanurov said.

"Indeed, the [current] draft budget does not suit either the
parliamentarians or the cabinet. We will work to improve it,"

Yekhanurov said. "We are interested in two points: the budget deficit should
not exceed 2 per cent, and secondly we should continue the course of the
cabinet and the president to relieve the tax pressure on businesses.

Since these things did not happen, there was no coordinated action, and the
parliamentarians made their decision," Yekhanurov said.

Asked about the possible implications of Ukraine's accession to the WTO,
Yekhanurov said: "At the moment, I cannot see any serious problems, save
for the only one. I can see some lobbyist groups losing out.

But the ordinary peasant and farmer are not losing out. But there are people
who are used to working in comfortable conditions of, simply speaking,
embezzling the state budget.

So transparent mechanisms will not allow them to do so, and therefore it
will be easier for us to join the WTO. So this is the matter of
transparency."

Yekhanurov stressed a need to create appropriate conditions for foreign
investors: "The foreign investor will feel comfortable in Ukraine if the
domestic businessman feels comfortable in his homeland. First, we should
think of our own investors, introduce the rules of the game which
effectively will suit foreigners as well."

Yekhanurov praised the performance of the new economics minister, Arseniy
Yatsenyuk: "The first thing he has introduced is conferences with his
deputies and work with his staff. People were relaxed, no-one briefed them
or worked with them. Everything was in the dire state of neglect.

Currently, let me put it this way, there are fewer news conferences but the
job is being done, the normal operation is being maintained. I am very happy
about the new economics minister. I think this gifted young man will have a
say in future."

Speaking about the performance of his cabinet as a whole, Yekhanurov said:
"I am trying to ensure that at least there is no much noise if one minister
says one thing and another something else. There is still a little bit of
this now.

I know what is going on. I am closely following news reports. I am given
comprehensive information about how the members of the cabinet behave. I
want to make a team of them but this takes time.

Let me put it this way: I say many things at cabinet meetings behind closed
doors. Perhaps, I sometimes recall my work as a construction manager when I
use strong words. But this happens only behind closed doors. Publicly, I say
that my ministers are the best."

At the end of the talk show the presenter asked Yekhanurov to say what he
wants to say. "I enjoy working in the morning. I hold the theory that God
gives to those who get up early.

God gives me from five in the morning. I open up my computer and begin to
work. You know, I have already been working for five hours, and this makes
my life easier," Yekhanurov said.  -30-
======================================================
6.     FORMER SOVIET UNION; OFF COLOUR: A REGION'S
              DRAMATIC DREAMS DEPEND ON RIGHTING
                            THE ORANGE REVOLUTION
As a spate of elections looom in its backyard, Russia is anxiously eyeing
the progress of pro-western political groupings write Stefan Wagstyl and
Tom Warner.

COMMENT AND ANALYSIS: By Stefan Wagstyl and Tom Warner
Financial Times, London, UK, Monday, October 23, 2005

For a moment last week, Viktor Yushchenko relived the glory of the Orange
Revolution when he appeared in the Mansion House in London to receive an
international relations award from Queen Elizabeth II.

As the Ukrainian leader accepted the honour, a smile crossed his
poison-ravaged face. His wife Katya stood nearby wiping tears of pride and
happiness from her eyes. It all seemed a world away from Kiev and the harsh
reality of post-revolution politics.

Nearly a year after orange-clad demonstrators filled that city's
Independence Square to support his bid for the presidency, Mr Yushchenko
faces daunting challenges in consolidating his victory. Much has been done.
But much remains to be done.

There is no reversing last winter's events when Mr Yushchenko forced Leonid
Kuchma, the authoritarian former president, and Viktor Yanukovich, Mr
Kuchma's Russian-backed would-be successor, to concede defeat.

The fear that stalked Ukraine in the Kuchma era has evaporated, allowing
Ukrainians to live in political freedom. Despite hostility from the Kremlin,
which blamed the west for the Orange Revolution, Ukraine has rejuvenated
ties with the US and the European Union.

Ukraine's example has also given hope to opposition parties challenging
authoritarian rulers in Russia and elsewhere on former Soviet soil -
including Azerbaijan, which holds parliamentary elections next month, and
Kazakhstan, with presidential polls in December.

In a recent FT interview, Mr Yushchenko said that after the Orange
Revolution, "millions of people began to think differently about freedom,
about democracy, in the whole terrain of the former Soviet Union".

However, already some of the energy created in Ukraine by the popular revolt
has been dissipated, notably in a split between the cautious Mr Yushchenko
and Yulia Tymoshenko, his firebrand Orange Revolution ally.

Allegations of corruption among some of the president's closest allies -
mostly businessmen who helped fund his campaign - have put Mr
Yushchenko on the defensive.

Trying to shore up his political base, the president has sought compromise
with the survivors of the old regime, especially Kuchma-era ­business
oligarchs.

Many young people who filled Independence Square a year ago feel
disappointed. But for Mr Yushchenko the priority is the economy. He
understands democracy can be secure only if it leads to less corruption,
better government and higher ­living standards.

Just as they followed the Orange Revolution, people in other former Soviet
states are keeping a close eye on the latest developments. For many, this is
the real test of Ukraine's new rulers.

The same is true for the popular revolt in Georgia in 2003 and this year's
upheaval in Kyrgyzstan. But Ukraine matters most because it is the largest
and the most modern of the three.

Mr Yushchenko is no radical reformer but a mild-mannered former central
banker who served Mr Kuchma as prime minister before going into opposition.
He is hampered by the compromise he struck to end last year's crisis.

In return for giving up power peacefully, Mr Kuchma forced on his successor
constitutional reforms that will transfer much of the president's powers to
parliament. The changes will mostly take effect in March, immediately after
parliamentary elections.

Mr Yushchenko admits opportunities to capitalise on the Orange Revolution
have been wasted in the conflict with Ms Tymoshenko, who was finally sacked
last month and replaced as prime minister by Yuri Yekhanurov, a technocrat
loyal to the president. Mr Yushchenko and Ms Tymoshenko fell out over the
handling of untransparent privatisations of the Kuchma era.

At meetings with business leaders, he has promised to settle disputed
privatisations through negotiations, not court action, with the exception of
the ­egregious case of Kryvorizhstal, the flagship steel mill (see right).

Much depends on the March elections. A move to full proportional
representation means the competing parties will almost certainly have to
form a coalition government. Ms Tymoshenko's supporters, and many of Mr
Yushchenko's, hope the elections will force them to reunite.

But Mr Yushchenko has been extending olive branches to his former enemy, Mr
Yanukovich, and courting Volodymyr Lytvyn, the parliamentary speaker, who
enjoys big business backing. Whatever happens, none of the combinations
seems likely to produce a coherent team of liberal reformers.

All this jockeying makes for lively democratic politics. But, as a result,
Ukraine has been long on debate and short on practical progress.

Economic growth has slowed from 12 per cent last year to just 2.8 per cent
in the first nine months, investors hesitate, corruption remains rife and
citizens have little confidence in public services.

Even in foreign policy, where Mr Yushchenko has invested much effort
improving ties with the international community, implementation is slow.
Parliament has still to complete the modest legal changes required for
joining the World Trade Organisation.

Without membership, Ukraine cannot get the most out of its EU co-operation
agreement. Without that, Kiev cannot realise its biggest ambition - a
promise of eventual EU membership.

The conflicts also open doors for renewed involvement from Russia. President
Vladimir Putin, who saw the Orange Revolution as his country's biggest
defeat since the collapse of the Soviet Union, has expressed quiet
satisfaction at the arguments between Mr Yushchenko and Ms Tymoshenko.

Meanwhile, Russia's hand is strengthened by rising energy prices. Its
advantage has been tempered by its reliance on Ukraine's pipelines to export
oil and gas to the west. But Moscow is expanding other export routes.

In Georgia, the situation is different. Far from reaching out to potential
partners, Mikheil Saakashvili, the president, has consolidated power in an
increasingly narrow circle of his close allies within his National Movement,
which has a large majority in parliament.

Mr Saakashvili's team has made strides in making government more effective -
a change from his predecessor, Eduard Shevardnadze, who brought Georgia to
the brink of collapse. The economy is growing at a respectable pace of
nearly 7 per cent this year. The separatist province of Adjara has been
brought under control.

Mr Saakashvili's greatest success has been building warm ties with US
President George W. Bush, who visited in May. The support helped Georgia
secure Russian agreement to vacate two military bases.

US support could play an even bigger role as Mr Saakashvili tries to
negotiate with the Kremlin over two separatist ethnic enclaves, Abkhazia and
South Ossetia, which have received protection from Russia since they split
from Georgia.

However, Mr Saakashvili's brashness has irritated EU leaders. Corruption
remains pervasive, foreign investors have shied away and some former
Saakashvili supporters are afraid the country could be sliding back into
authoritarianism.

Among them is Salome Zourabichvili, a French ex-diplomat of Georgian
descent, who was sacked last week as foreign minister. She told a rally not
to lose faith in Georgia's Rose Revolution even though many of its leaders
had "strayed from the road".

In Kyrgyzstan, the revolt that forced former president Askar Akayev to flee
the country in March has been followed by political turmoil.

Despite ­winning a landslide victory in presidential elections in July,
Kurmanbek Bakiyev has failed to restore order, with three members of
parliament killed since the spring. There is no sign of a re-run of the
parliamentary elections that sparked the original protests against Mr
Akayev.

Even though the outcome of these three revolts is unclear, they have had a
profound effect on the rest of the former Soviet Union. Opponents of
authoritarian rulers from Belarus to central Asia have taken heart from the
protesters, imitating their methods, slogans and colours.

Mr Yushchenko says: "There is a new way of doing things: the Orange
Revolution way."

Authoritarian regimes have had to review their positions. Nurbulat Masanov,
a political scientist in Kazakhstan, says: "There is now a discussion about
what to do. One way will be to promote popularity by offering what people
want - political stability and economic modernisation."

An example is Mol­dova, Ukraine's poor southern neighbour, where president
Vladimir Voronin, a veteran communist, is weakening ties with Moscow and
making overtures to the EU.

There are other, more controversial, options, including resorting to
nationalism or, in central Asia, Islamism. At the extreme, regimes can
respond with violence, as happened this year in Uzbekistan where president
Islam ­Karimov's forces massacred mostly peaceful demonstrators in the
eastern city of Andijan. Mr Masanov says that, while this damaged Mr
Karimov's legitimacy in the west, it strengthened it within his own regime.

In Russia, the Kremlin's main concern is to preserve the dominance of the
current elite after the 2008 presidential election. Given Russians' respect
for authority, rapid economic growth and state control of television, the
defeat of the Kremlin's candidate seems unlikely.

But officials worry because they failed to predict Mr Yanukovich's defeat in
Ukraine. Mr Putin, who is personally popular among voters, with support
ratings of about 70 per cent, cannot stand for a third term unless the
constitution is revised.

So the search is on for a candidate who can secure genuine public support.
Manipulation alone is not enough. Real appeal is required.

Three other post-Soviet regimes face more immediate electoral tests -
Azerbaijan, Kazakhstan and Belarus. Oil-rich Azerbaijan goes first on
November 6 with parliamentary polls, in which the ruling party is defending
an overwhelming majority.

Ilham Aliyev, who took over as president in 2003 from his late father,
Heydar Aliyev, a former KGB boss, is trying to assert his authority. Last
week he made a pre-emptive strike.

Two powerful insiders - Farhad Aliyev, the liberal economy minister, and Ali
Insanov, the hardline health minister - were sacked, arrested and accused of
plotting a coup.

Most opposition parties there have joined forces in a bloc named Freedom.
They wear orange in imitation of Ukraine and hold rallies in defiance of
government bans and rough police tactics.

Mr Aliyev, who faces presidential elections only in 2008, does not seem in
imminent political danger and could grow stronger as the country's oil
revenues are set to soar. But last week's arrests were a clear sign of
growing dissent within the ruling elite, which might not be easily stifled.

In Kazakhstan, president Nursultan Nazarbayev, who has held power since
communist times, is expected to be voted back into office in the December
poll. He has successfully combined authoritarian politics with sound
economic policies.

If fair ­elections were held, Mr Nazarbayev would almost certainly do well.
But he is taking no chances, arresting ­opposition activists and raiding
their homes and offices.

In Belarus, dictatorial president Alek­sander Lukashenko is also determined
to retain power in the September 2006 election. Inspired partly by the
Ukrainian example, the opposition recently chose a single presidential
candidate - Alexander Milinkevich. But pressure from the secret police is
relentless, with arrests of activists and independent journalists.

None of this happens in a vacuum. Russia, in particular, watches its
backyard carefully and is in a better position to intervene today, with its
coffers flush with oil money, than it was a decade ago.

In practice, it mostly supports incumbent rulers and sees opposition groups
as pro-west. With its 2008 election on the horizon, it does not want more
revolts setting precedents.

The US has been increasingly outspoken in supporting democracy in the
former Soviet Union, setting aside earlier concerns about upsetting allies
in the war against terrorism, including Mr Putin. The EU, mindful of
Russia's role as an energy supplier, has been less assertive.

But the east European new member states are pulling the union deeper into
the post-Soviet space. Having intervened successfully in last year's
Ukrainian crisis, the EU is developing a louder pro-democratic voice,
especially on its borders.

Next month sees the start of EU-funded radio and internet news
programmes for Belarus. Television follows next year.

Russian, US and EU diplomats insist they are not doomed to clash over
democracy in the region. But they clashed resoundingly in Ukraine and it
seems likely they will clash again.
------------------------------------------------------------------------------------------
STEEL AUCTION MAY BE THE FIRST AND LAST OF ITS KIND

Financial Times, London, UK, Monday, October 24, 2005

At 11am on Monday, bidding is due to start in Ukraine's first televised
privatisation auction. On offer, with a starting price of nearly $2bn but
likely to sell for much more, is Kryvorizhstal, the country's biggest steel
mill.

Among the bidders are Mittal Steel, the world's biggest producer, and
Luxembourg-based Arcelor, which has joined forces with Industrial Union
of the Donbass, a Ukrainian company, in a 60-40 joint venture.

There is also a dark horse in the race: Smart Group, a smaller Ukrainian
steel company controlled by Vadim Novinsky, a Russian businessman. He
has connections with Alisher Usmanov, a Russian steel baron, although other
backers, Russian or Ukrainian, may be involved.

If the auction succeeds, as expected, it will bring Ukraine's government
much-needed money and an even more necessary morale boost. It is about
more than just selling a steel mill. President Viktor Yushchenko told the FT
recently: "We really want to hold a showcase tender, to convince business
and Ukrainian citizens of the nation's potential."

Attracting foreign investment has been harder than Mr Yushchenko
anticipated. He came to power amid western support and enthusiasm from
western companies, which have long coveted Ukraine's market of 47m people.

But investors have had to wait longer than they expected for Mr Yushchenko
to deliver economic reform and assurance that the rule of law would prevail.

They were disappointed with the disputes in the government of Yulia
Tymoshenko, sacked as prime minister last month. Foreign direct investment
in the first half of this year came to just over $700m, about the same as in
2004.

Business people, including Russians, have higher hopes for the
administration of Yuri Yekhanurov, who replaced Ms Tymoshenko. An
advisory committee of foreign investors met the president last week and
got the impression that he understood the mistakes of his first nine months
in office.

Jorge Zukoski, president of Kiev's American Chamber of Commerce, says:
"For the first time, we were dealing with a very cohesive team who were all
talking from the same page."

Mr Yushchenko's goal is to show that everything has changed since June 2004,
when Mr Kuchma arranged an auction of Kryvorizhstal with such restrictive
conditions that only favoured oligarchs could bid.

Viktor Pinchuk, Mr Kuchma's son-in-law, and two businessmen linked to
Viktor Yanukovich, the then prime minister, bought Kryvorizhstal for just
$800m.

Mr Pinchuk and his partners say the new government illegally confiscated
their shares and have vowed to challenge today's auction in any court that
will give them a hearing.

The auction comes just days after Raiffeisen International, the eastern
European arm of the Austrian banking group, completed its $1.03bn
acquisition of Aval, Ukraine's second-biggest bank.

Other European banking groups are in advanced talks with targets including
Ukrsotsbank and Ukrsibbank, the third- and fourth-largest Ukrainian banks.

After receiving only $9bn in FDI since independence in 1991, Mr Yushchenko's
government appears likely to bring in several billion dollars more within a
few months.

But outside steel and banking, the investment picture has improved only a
little from the Kuchma era. Investors face demands for bribes and some
officials still serve the interests of particular businessmen.

The auction is likely to be the first and last of its kind. Mr Yushchenko
originally intended to recover and resell more companies but now pledges
that privatisation disputes will be settled by negotiation with owners, not
in the courts. Where necessary, the shareholders will be asked to pay extra.
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7. WORLD TRADE ORGANIZATION (WTO) CHIEF ONCE AGAIN
       SAYS  "I DON'T THINK IT IS GOING TO HAPPEN." ABOUT
                    UKRAINE JOINING THE WTO THIS YEAR

Reuters, Helsinki, Finland, Sunday, October 23, 2005

HELSINKI - World Trade Organisation (WTO) chief Pascal Lamy said on
Saturday Saudi Arabia could be admitted to the Geneva-based group this year,
but appeared to rule out Ukraine joining by the end of 2005. Both countries
have said they aim to join the 148-nation world trade body this year.

"Saudi Arabia could still join this year if the final rush which is taking
place next week, does bring the agreement," Lamy told an international
conference in Helsinki via videolink.

WTO sources told Reuters earlier this month the world's largest oil producer
had moved close to entry this year after completing a package of documents
setting out the terms of its membership. These would be submitted to a key
meeting on October 28, the sources added.

On Ukraine, which has been pushing for membership by the end of 2005,
Lamy said:

"I know Ukraine's objective ... I don't think it is going to happen. What I
know from the stage of negotiations, is that it will not happen. Not least
because for procedural reasons we won't have time."

Ukraine's Foreign Minister Boris Tarasyuk told Reuters this week he was
optimistic about completing all bilateral negotiations and legislation in
time to join WTO in 2005, although sources close to WTO have said it was
unlikely.

Lamy also said Russia was still negotiating about membership, with talks
due to take place in early 2006, but he did not specify a timeframe for
admitting the country.

The WTO chief reiterated that the European Union and the United States
needed to make concessions on agriculture to achieve a breakthrough at
global trade talks.

The EU came under pressure from the United States and Australia on Thursday
to offer more farm concessions at the negotiations, which major players say
now risk collapse before a key WTO meeting in Hong Kong in December.

"The main thing in the negotiations is now this market access part, and it
has to move very rapidly if we want to keep any chance for Hong Kong to
succeed," Lamy said.

"If Hong Kong fails then the odds that the round will be finished in 2006
will become very slim. There are very few days left," he added. -30-
====================================================
8.      U.S. STEPS UP SUPPORT FOR UKRAINE TO JOIN NATO

By Patrick McLoughlin, Reuters, Vilnius, Lithuania, Sun Oct 23, 2005

VILNIUS - The United States on Sunday stepped up its support for
Ukraine to join  NATO, noting the former Soviet state's progress in
political and military reform.

U.S. defense officials, attending a NATO conference in Lithuania, said that
while Ukraine had a long way to go on the path of reform and that NATO's
entry standards must be met, there was full support from Washington for
membership.

"Progress (on reform) has been made and we encourage it and are available to
be of assistance in various ways," U.S. Defense Secretary Donald Rumsfeld
told a press conference.

Ukraine is looking to join the alliance around 2008, during a tentatively
scheduled NATO summit. Rumsfeld declined to give a timing on when
Ukraine could join, saying: "That's a decision to be made by NATO."

A senior U.S. official told Reuters Rumsfeld arrived in Lithuania on
Saturday -- a full day earlier than scheduled -- to help underline his
support for Ukraine with the European defense ministers.

"It's notable that we have 10 defense ministers here. Secretary Rumsfeld
made a point of staying around the extra 24 hours ... because he feels so
strong about the strategic importance of Ukraine," the official said.

The message from the U.S. side contrasts with the more measured message
which has come recently from Europe and will provide an obvious boost to
Ukraine ambitions.

After the euphoria of the Orange Revolution last year that overturned a
rigged election and swept pro-Western democratic President Viktor
Yushchenko to victory, there is disappointment in Europe at the reformers'
slow progress toward reform and establishing the rule of law.

NATO Secretary General Jaap de Hoop Scheffer has refused to forecast in
public when Kiev might be offered an invitation to join the alliance.

Earlier in October, de Hoop Scheffer told reporters after talks with new
Ukrainian Prime Minister Yuri Yekhanurov, he wanted to see more reform
first. "The key message this morning was: 'Actions speak louder than
words'," he said.

Ukraine, however, has strong backers within NATO such as Poland and the
United States, which is keen to reward Kiev for sending around 1,000 troops
to help fight the insurgency in Iraq.

American officials on Sunday would not be pinned down on whether
Washington was pushing for Ukraine to get a membership action plan (MAP),
a set of conditions regarded as one step short of an invitation to join
NATO.

But they said Ukraine was making rapid progress by increasing its defense
budget and reducing the country's reliance on conscription, leading to a
professional army.

But there is still concern over how the former Soviet state will manage
relations with Moscow as it strengthens ties with NATO, and how it will
handle the social impact of plans to turn its army into a smaller,
professional force.

However Ukraine's Defense Minister Anatoly Hrytsenko, who had talks with
Rumsfeld earlier on Sunday, played down the problem.

"I don't see it as a really serious issue because Russia and many wise
people in Russia see Poland or the Baltic states in NATO as no threat," he
told journalists.  -30-  [The Action Ukraine Report Monitoring Service]
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9.  NATO FOCUS ON UKRAINE MILITARY IN MEMBERSHIP BID

Associated Press (AP), Vilnius, Lithuania, Sunday, Oct 23, 2005

VILNIUS, Lithuania - U.S. Defense Secretary Donald H. Rumsfeld joins
European colleagues Monday to examine how they can help Ukraine
overhaul its oversized military - a key condition of the former-Soviet
republic's joining the NATO alliance.

Ukrainian Defense Minister Anatoly Gritsenko will join the talks with his
NATO counterparts. NATO has been working to build closer ties with
Ukraine since last year's "orange revolution" that brought pro-Western
President Viktor Yushchenko to power.

Rumsfeld said Ukraine was making strong strides toward reform. "Progress
has been made and we encourage it," Rumsfeld said at a news conference
with Lithuanian President Valdas Adamkus, who also expressed optimism
that Ukraine eventually would join NATO.

Washington is pushing hard to help Ukraine, but enthusiasm seems weaker
among NATO's other members. Fewer than half of the 26 member countries
have sent their defense ministers to Vilnius for the conference, which is
the fourth in a series of annual meetings.

After meeting with Rumsfeld, Gritsenko told reporters that he was confident
his government can overcome two other major obstacles to NATO membership:
the low opinion that most Ukrainians have of NATO and opposition in Moscow.
"I don't see it as a really serious issue," Gritsenko said, referring to
Russian objections.

He said the Russians have seen that the Baltic states, which joined NATO in
2004 over Moscow's strong objections, do not present the kind of security
threat that the Russians had once feared. Lithuania, Latvia and Estonia were
part of the Soviet Union until it crumbled in 1991.

In a separate news conference with Rumsfeld, Lithuanian Defense Minister
Gediminas Kirkilas said his country's success in raising the level of
domestic public support for NATO could provide lessons for Ukraine.

"Right now in the Ukraine public opinion, unfortunately, supporting NATO is
very, very low, about 20%-25%," he said. "They have to make a lot of effort"
to overcome that, he added.

NATO has been working to build closer ties with Ukraine since last year's
"orange revolution" that brought in Yushchenko.

However, the alliance has stopped short of giving Ukraine a date for
starting membership talks, saying the timetable depends on the pace of
reforms to modernize the military, tackle corruption and underpin democracy.

Yushchenko has made membership in NATO a key goal, but many Ukrainians,
particularly in the Russian-speaking east, are less happy about joining
their former Cold War foe.

A small group of protesters shouting "NATO Out!" greeted NATO
Secretary-General Jaap de Hoop Scheffer in the eastern city of Donetsk on
Thursday when he led an alliance delegation on a visit to Ukraine.

During the trip, de Hoop Scheffer repeated his promise that NATO's doors
will remain open for Ukraine if it completes the necessary reforms.

Yushchenko last week expressed hope that membership talks could begin next
spring and some Ukrainians are hopeful it could be included when NATO
nations are expected to decide on the alliance's expansion at a summit
meeting in 2008.

However, de Hoop Scheffer refused to discuss a timeline. NATO is anxious to
balance Ukraine's push for membership with Russia's concern about the entry
of another neighbor into the expanding Western alliance.

Gritsenko has tried to allay such concerns, saying NATO would not deploy
nuclear weapons in Ukraine and that Russia's Black Sea Fleet would remain in
the southern Ukrainian port of Sevastopol, where it has permission to stay
until at least 2017.

Several Balkan nations, headed by Macedonia, Albania and Croatia, are also
seeking to join NATO. The alliance has already opened up to 10 new members
from the former communist bloc, including Lithuania which hosts the meeting.

Gritsenko, a key ally to Yushchenko, is seeking to cut Ukraine's armed
forces by half over the next six years to create a more effective and mobile
army, and scrap outdated structures inherited from the USSR so the military
can operate more closely with NATO.

His plans would reduce the force from 285,000 to 143,000 by 2011. The
military has already fired tens of thousands of servicemen over the past
decade, and Gritsenko said 12,000 to 18,000 personnel would be dismissed
annually.

Monday's talks will be the fourth high-level meeting at which NATO meets
with the Ukrainian authorities to offer advice on pushing through the
reforms, using its experience in helping other former East bloc nations such
as Poland and Romania who are now full NATO members.  -30-
=====================================================
10. UKRAINE DOESN'T EXPECT MOSCOW TO BLOCK ITS NATO BID

By Thom Shanker, The New York Times, NY, NY, Sun, October 23, 2005

VILNIUS, Lithuania, Oct. 23 - The defense minister of Ukraine expressed
confidence today that Russia would not block his nation's efforts to join
NATO, and he said the greater hurdle might be convincing a population that
for decades was bathed in Soviet propaganda criticizing the Atlantic
alliance.

At a brief news conference here with Defense Secretary Donald H. Rumsfeld,
the Ukrainian defense minister, Anatoliy Hrytsenko, said potential NATO
membership for Ukraine "is no threat for the Russian Republic."

Asked whether he anticipated Moscow's objecting to Ukraine's moves toward
NATO membership, he said, "I don't see it as a really serious issue."

The comments came as NATO defense ministers gathered here for their fourth
meeting in four years dedicated to assessing, and assisting, Ukraine's
desire for membership.

No timetable was set for Ukraine's entry into the Atlantic alliance;
instead, NATO defense ministers arrived here in Lithuania, a former Soviet
republic that is one of NATO's newest members, to review Ukraine's plans
for military reform to meet alliance criteria.

Ukraine already has moved to increase military spending while considering
ways to end its draft to create an all-volunteer, professional armed force.
The government in Kiev is drawing up plans to retire a number of Soviet-era
weapons systems, in particular large tanks, to create lighter and more
deployable units.

To polish its military image by casting itself as an exporter of security
forces, Ukraine has sent troops to Iraq and Kosovo and has supplied cargo
aircraft for relief missions in Pakistan and Darfur, and even for Hurricane
Katrina.

Although the session here focuses on Ukraine's military reform, NATO defense
ministers in attendance noted recent political turmoil in Kiev and its next
national election in March. This session, though, was planned long in
advance of recent political events in Kiev.

Russia is not a NATO member, but its shadow has fallen over past alliance
debates on membership for formerly communist nations in Central and Eastern
Europe.

From Moscow's perspective, Ukraine's NATO membership may be viewed
in a far more negative light than former Warsaw Pact members that entered
the alliance or than the three Baltic states, which were former Soviet
republics, that also joined NATO.

Ukraine was for decades the Soviet Union's breadbasket, and a center of
heavy industry and mining; as a Slavic nation, it has deep historic and
religious ties to Russia.

A lack of public support in Ukraine for NATO membership is understandable,
Mr. Hrytsenko said, because many citizens of his nation suffer from a "lack
of knowledge" about NATO and carry Soviet-era stereotypes of the alliance,
and its mission.

He predicted that as the government in Kiev succeeds in its promise of
political reform and economic growth, the public will trust its leadership
and support NATO membership.

Mr. Rumsfeld said his Ukrainian counterpart had told him that "as some of
the myths and misunderstandings and misinformation was dispelled, that he
had no doubt but that, as was the case in other countries, including Poland,
there would be a substantial movement in terms of support for NATO."
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11.                   "ORANGE REVOLUTION TURNS TO ROT"

COMMENTARY: By Oles M. Smolansky and Rajan Menon
Los Angeles Times, Los Angeles, California, Sun, Oct 23, 2005

No bad deed, it seems, goes unrewarded. Ukraine President Viktor
Yushchenko recently received the Philadelphia Medal of Liberty and a
prize from Britain's Royal Institute of International Affairs, both honors
bestowed for his efforts to advance democracy.

Ukrainians can be forgiven their puzzlement. Not long ago, they were
ecstatic. Their Orange Revolution in the winter of 2004-2005 quashed an
attempt by apparatchiks and oligarchs to preserve the corrupt status quo by
rigging the presidential election.

The revolution forced a new, closely monitored election, won by Yushchenko
with his promises of democracy, economic reform and an end to cronyism and
corruption.

But today, despite Yushchenko's continuing accolades outside Ukraine, hopes
inside the country have been dashed. To survive a burgeoning corruption
scandal and a major political fight between two of his top appointees,
Yushchenko made a Faustian bargain.

He joined in an alliance with Viktor Yanukovich, the Russian-backed
candidate whose rigged victory in 2004 had touched off the revolution.

On one level, the disarray in Ukraine is not terribly surprising. Leaders of
the Orange Revolution had little in common except their determination to
scuttle the odious system erected by then-President Leonid Kuchma, who
had chosen Yanukovich to succeed him.

But few supporters expected that less than a year after Yushchenko's
election, his inner circle would be accused by his own chief of staff,
Oleksandr Zinchenko, of massive corruption. Zinchenko resigned, but his
charges triggered a barrage of mutual accusations and recriminations.

Yushchenko tried to contain the damage last month with a housecleaning that
included the removal of his two most powerful lieutenants. He fired the
telegenic and popular prime minister, Yulia Tymoshenko, and accepted the
resignation of Petro Poroshenko, secretary of the Security and Defense
Council.

The two had been locked in a struggle to advance their political power and
their own economic interests.

Tymoshenko's camp retaliated, accusing Yushchenko of accepting millions
of dollars to finance his presidential campaign from the exiled Russian
oligarch Boris Berezovsky.

The president's acolytes accused Tymoshenko of incompetence and corruption,
even though Yushchenko had consistently praised her and the Cabinet's
performance. The accusations sullied the reputations of both the president
and the ex-premier.

Yushchenko ordered the state prosecutor's office to look into the corruption
allegations, but he quickly undermined the investigation by insisting that
members of his administration -though not his Cabinet - were above reproach.

When the prosecutor agreed, finding no wrongdoing by administration
officials, the public reacted with broad skepticism, just at a time when the
government needed public trust above all.

In an effort to salvage the situation, Yushchenko appointed Yuri Yekhanurov
as prime minister. Honest, pragmatic and nonpartisan, Yekhanurov had
previously headed the Ministry of Economics and was widely seen as perfect
man for the job.

However, with Tymoshenko's bloc voting against him, he failed by three votes
to win parliamentary approval.

Yushchenko then turned to his nemesis in the 2004 election, Yanukovich. The
two men cut a deal. On a second parliamentary vote, Yanukovich's Party of
Regions, which had abstained in the first vote, cast 50 votes to approve the
new prime minister.

Yushchenko supporters were incensed. They had demonstrated for countless
hours in the dead of winter to overturn Yanukovich's victory. Now their
leader had not only bargained with him but agreed to halt any punishment of
officials who rigged the first presidential election.

Yushchenko gave an across-the-board amnesty to officials involved in
falsifying the results of that election or who had since been accused of
criminal misconduct.

This is tantamount to legitimizing criminal activity of the
Kuchma-Yanukovich clan, and it further erodes Yushchenko's popularity and
effectiveness.

We won't know what this means for Ukraine until the March 2006 parliamentary
elections. Most likely, no party will win a majority. Yanukovich may then be
courted by both Yushchenko and Tymoshenko.

Should this happen, Yanukovich will rise from the ashes, imperiling
Ukraine's reform, spooking foreign investors and increasing Russia's
influence.

Ukrainians did not demonstrate in freezing weather to see this happen. -30-
-------------------------------------------------------------------------------------------------
NOTE: Oles M. Smolansky is university professor emeritus of international
relations at Lehigh University, Bethlehem, Pennsylvania (omsO@lehigh.edu).
Rajan Menon is the Monroe J. Rathbone professor of international relations
at Lehigh and a fellow at the New America Foundation (rm04@lehigh.edu).
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12. 2,000 PROTESTING NEAR ODESA LAW ACADEMY TO DEMAND
                  RECTOR SERHII KIVALOV'S RESIGNATION
Protesters claim he discredited himself during the 2004 presidential
elections as chair of the Central Electoral Commission, Feb to Dec 2004
Ukrainian News Agency, Kyiv, Ukraine, Sat, October 22, 2005

ODESA - Over 2,000 people are demonstrating near the Odesa National Law
Academy to demand dismissal of the Central Electoral Commission's former
chairman Serhii Kivalov from the post of rector of the academy.

The Odesa regional chapter of the Our Ukraine People's Union party initiated
the demonstration. The demonstration started at 12:00.The demonstrators
carry placards with the slogan, "Kivalov, Leave!"

According to the organizers of the demonstration, Kivalov should be
dismissed and punished for violating the Constitution during the 2004
presidential elections.

"We are calling on the law enforcement agencies, the Prosecutor-General's
Office, to immediately evaluate the activities of Kivalov in the post of
chairman of the CEC as well as his involvement in the fraudulent takeover of
several municipal and departmental land and buildings and organization of
corruption schemes," said the press service of the regional chapter of the
party.

According to the head of the press service, Kivalov has no moral right to
bring up future jurists, lawyers, prosecutors, and judges and hold the title
of Honorary Citizen of Odesa.

As Ukrainian News earlier reported, the Odesa regional chapter of the Pora
political party called on the Science and Education Ministry in September to
relieve Kivalov of the post of rector of the Odesa National Law Academy
because he discredited himself during the 2004 presidential elections.

Kivalov has held the post of academy rector from December 2004. He occupied
it before from December 1997 to April 1998, the year he was elected into the
third Ukrainian parliament. He was elected into the fourth parliament in
2002.

Kivalov was the president of the Odesa National Law Academy from 1998
to 2004. He chaired the Central Electoral Commission from February to
December 2004.  -30-  [The Action Ukraine Report Monitoring Service]
=====================================================
13. UKRAINIAN EX-PRIME MINISTER TYMOSHENKO'S PARTY
       SETS UP YOUTH WING CALLED "YOUNG FATHERLAND"

UNIAN news agency, Kiev, in Ukrainian 1722 gmt 22 Oct 05
BBC Monitoring Service, UK, in English, October 22, 2005

KIEV - An all-Ukrainian youth organization called "Young Fatherland", a
youth wing of the Fatherland party, was set up today, on 22 October.

Delegates from all regions of Ukraine and Crimea attended the congress,
representing activists of the Fatherland party, the party's press service
said.

[Former prime minister] Yuliya Tymoshenko was elected honorary head
of Young Fatherland, and Viktor Taran was elected head of its coordination
council. [Passage omitted: details of the congress]  -30-
=====================================================
14. UKRAINIAN PRESIDENT'S PARTY SETS UP YOUTH BRANCH
               A Member of Cabinet of Ministers manages the process

TV 5 Kanal, Kiev, in Ukrainian 1500 gmt 22 Oct 05
BBC Monitoring Service, UK, in English, October 22, 2005

KYIV - [Presenter] The [propresidential] Our Ukraine People's Union
political party has set up its youth branch. The Orange Komsomol of the
party of power was named Our Ukraine Youth Union.

This organization held its founding congress at the Polytechnical Institute
in Kiev. About 1,500 delegates from all Ukrainian regions voted for the
creation of the youth branch, listening to the half-forgotten "Together we
are many" [Orange Revolution song].

The process was managed by Minister of Family, Children and Youth Affairs
Yuriy Pavlenko, who is a member of the party of power at the same time.

Our Ukraine People's Union views the newly created organization as its
personnel reserve and as a tool for making young people politically more
active.

[MP Mykola Katerynchuk, captioned as head of the executive committee
of Our Ukraine People's Union] The youth branch of Our Ukraine People's
Union will be our party's personnel potential.

We will involve these people in political processes. We will make them
politicians. And the main thing is that we want to involve them in the
creation of a powerful, realistic and meaningful programme of the Our
Ukraine People's Union party, with which we will stand for parliament.
----------------------------------------------------------------------------------------------
FOOTNOTE:  The direct involvement of Ukrainian government officials
in political party activities should be stopped immediately by the
Yushchenko government.  One of the goals of the Orange Revolution
was to get rid of, to stop, the gross conflicts of interest found in many
places in the Ukrainian government.

The direct involvement of a member of Yushchenko's Cabinet of Ministers,
as explained in the news story above, in setting up a political youth
organization, Our Ukraine Youth Union, is just not acceptable or desirable
under the guidelines and principles recognized by modern democratic
societies and as stated by the President himself.

The Yushchenko government also should stop members of the
Cabinet and other top government officials from holding positions in
political parties.  This is still being practiced at the present time by
the Minister of Foreign Affairs and others in the government.  EDITOR
=====================================================
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=====================================================
15.     UKRAINE BUSINESS GIANT TO SEEK LONDON FLOAT

By Richard Orange, The Business Online
London, United Kingdom, October 23, 2005

SYSTEM Capital Management (SCM), the Ukrainian industrial conglomerate,
is planning to list on the London Stock Exchange. A float could value the
company at tens of billions of dollars, The Business has learned. The
group's annual turnover is in excess of $15bn (£8.5bn, e12.5bn).

The company has hired accountant Pricewaterhouse-Coopers to bring its
financial reporting to international standards, while management consultant
McKinsey has been hired to restructure the group.

SCM owns and operates steel plants, iron-ore mines, coal mines, energy
assets, banking and insurance companies, as well as hospitality and leisure
assets.

Andrey Dmitrienko, an analyst at Dragon Capital, one of Ukraine's leading
investment banks, said: "They're trying to reconstruct their company,
improve their IFRS reporting, then there will be a strategic decision on how
much they float."

He said the most likely option was to merge some assets into an integrated
steel company, controlling the whole chain from iron ore and coal mining to
finished products, a stake in which would be floated. A spokesman for the
company confirmed the company was looking at listing in 2007.

SCM's dominant shareholder Rinat Akhmetov, Ukraine's richest man, has
come under fire this year after former president Leonid Kuchma was swept
from power. On Monday, Mittal Steel, Arcelor and the mysterious Smart
Group will bid in the $2bn reprivatisation of Kryvorizhstal, which SCM
bought for just $800m last year.  -30-
--------------------------------------------------------------------------------------------
Have your say e-mail: letters@thebusiness.press.net
http://www.thebusinessonline.com
=====================================================
16. INTERNATIONAL AGRIBUSINESS COMPANY LOUIS DREYFUS
     TO BUY GRAIN ELEVATOR COMPLEX IN CHERKASY REGION

Ukrainian News Agency, Kyiv, Ukraine, October 21, 2005 (11:26)

KYIV - The Antimonopoly Committee of Ukraine (AMCU) has given the
green light to Louis Dreyfus Ukraine Ltd. (Kyiv), a limited liability
company, to buy the integral property complex of OJSC Serdiukivske
Grain Reception Enterprise (Smila district, Cherkasy region). Ukrainian
News has learned this from the committee's statement.

Louis Dreyfus Ukraine Ltd. operates on the market of wholesale and retail
trade in sugar, sugar beet, wheat, sunflower, sunflower-seed oil. The
integral property complex of Serdiukivske Grain Reception Enterprise
includes one elevator.

As Ukrainian News reported, in April the Antimonopoly Committee authorized
the Louis Dreyfus Ukraine Ltd. to buy assets of the Khlibna Havan (Mykolaiv)
and Agroexport (Shevchenkove, Mykolaiv region) companies.

In June, AMCU issued a permit to Louis Dreyfus Ukraine Ltd. for the
purchase of assets of Zhytnytsia Firm Ltd. (Bar, Vinnytsia region) and over
50% of shares in the open joint-stock company Fisakivske grain reception
plant (Komyshuvakha, Zaporizhia region).  -30-
------------------------------------------------------------------------------------------------
FOOTNOTE:  A major part of the grain operations of the Louis Dreyfus
company (French) were in Ukraine before the communists from Moscow
and the Red Army took over Ukraine after WWI.  All of the major assets
held in Ukraine by Louis Dreyfus were stolen and made into state property.
One can still faintly see the name Louis Dreyfus on some of the grain
elevators in Ukraine that were built before WWI.  EDITOR
=====================================================
          Power Corrupts and Absolute Power Corrupts Absolutely.
=====================================================
17. UKRAINE: CONCORDE CAPITAL BANK FORUM PLACEMENT
                             Ukraine Real Estate Fund Next

PRNewswire, Kiev, Ukraine, Friday, Oct. 21, 2005

KIEV, Ukraine - Concorde Capital, a leading provider of financial services
in Ukraine, completed its placement of a 10% stake in Bank Forum valued
at USD $20 million on Thursday, October 20.

The deal, which values Ukraine's 12th largest bank at USD $200 million,
was over-subscribed by 1.8 times. P/BV ratio as a result reached 2,9.

The placement will be conducted through a GDR program facilitated by the
Bank of New York. The bank's shares are listed on the local stock exchange
(PFTS) and the GDR's will be registered on Freiverkehr of the Frankfurt
Stock Exchange by the end of October 2005. Over 10 large USA and
Western Europe institutional investment funds have become interested in
the bank's shares.

The Bank Forum deal has enhanced Concorde's placement of Ukrainian and
CIS blue chips. The company has already placed: 5% of AvtoKraz ($4.5mln),
10% of Bank of Georgia ($4.5mln), 7.5% of DniproAzot ($7.3mln) and 10%
of Galnaftogaz ($14mln).

Concorde Capital also plans to raise USD $100 million through its imminent
launch of the "Colliers-Concorde Ukraine Real Estate Fund." The Fund, the
first institutional product dedicated solely to the Ukrainian real estate
market, will be co-managed by Colliers International, which is also the
property advisor for the Fleming Family & Partners Russia Fund. The Fund
will invest mainly in development projects in the commercial sector of the
Ukrainian real estate market. The placement for the Fund is planned to close
in early December 2005. -30-
-----------------------------------------------------------------------------------------------
For additional information contact: John Suggitt, Concorde Capital.
Tel. +380 (44) 206-83-67; fax +380 (44) 206-83-66;
e-mail: js@con-cap.com; This press release distributed by PRWEB
(http://www.prwebdirect.com/), a service of eMediaWire.
SOURCE Concorde Capital; Web Site: http://www.con-cap.com
=====================================================
18.   NEW MINERAL WATER BOTTLING PLANT STARTED AT
       LVIV REGION BASED OSKAR MINERAL WATER FACTORY

Ukrainian News Agency, Kyiv, Ukraine, Fri, October 21, 2005

KYIV - The International Distribution Systems Group holding has started
construction of a plant for bottling mineral water at the Morshyn-based
Oskar Mineral Water Factory (Morshyn, Lviv region). The holding's press
service disclosed this to Ukrainian News. According to the report, the
project costs USD 15 million.

The new workshop will be equipped with a carbonated-water bottling line
purchased from the German Krones company, and another line for bottling
non-carbonated water bought from the Sipa company (Italy).

According to the business plan, the company is planning to start production
at the new workshop in May 2006 and repay the investment in eighteen months.

Within three years, it is planned to triple volumes of the Morshynska water
production, up to 30 million decaliters per annum.

As Ukrainian News earlier reported, the IDS Group is a mineral water holding
founded in December 2004 as a result of the merger of four companies: CJSC
Industrial and Distribution Systems (Kyiv), OJSC Nova company (Morshyn,
Lviv region), CJSC Myrhorod mineral water plant (Poltava region), and OJSC
Morshyn-based Oskar Mineral Water Factory.

The Morshyn-based Oskar Mineral Water Factory was founded in 1995. It
produces the Morshynska mineral water and has a 7% share of the domestic
market.

The Industrial Distribution Systems became part of Georgian Glass & Mineral
Water (GG & MW), the producer of the Borjomi mineral-water brand in
Georgia, in 2003.

International Distribution Systems Limited (British Virgin Islands) owns
100% of the shares in Oskar and Nova, 99.2% of the shares in Industrial and
Distribution Systems, and 97.29% of the shares in the Myrhorod mineral
water plant.  -30-
=====================================================
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=====================================================
19. PARLIAMENT PLANS TO REGULATE MARKET OF BABY FOOD

Ukrainian News Agency, Kyiv, Ukraine, Fri, Oct 21, 2005

KYIV - The Verkhovna Rada (parliament) intends to regulate importation
and production of baby food by adopting the relevant law.

The first reading of the relevant draft law No. 1260, which is entitled "On
Baby Food," was approved by 272 votes. Only 226 votes were required for
its approval.

The draft law provides for introduction of free provision of baby food to
infants as well as children aged 2 and 3 who were born and are living on
territories affected by the Chornobyl nuclear accident and the children of
low-income families.

The draft law also provides for introduction of state regulation in the area
of production and sale of baby food; introduction of state stimulation of
domestic production of baby food and raw materials for its production
(including abolition of the import duty on equipment for production of
baby food) through the use of loan, pricing, customs, and tariff-regulation
mechanisms as well as the tax legislation; tightening the basic requirements
for and control over the quality and production of raw material, baby food,
and their sale.

As Ukrainian News earlier reported, the Health Ministry introduced state
regulation of special food products (biologically active additives, baby
food, food for athletes, and diet food) on January 1. -30-
---------------------------------------------------------------------------------------------
FOOTNOTE: There were many who thought Ukraine would be supporting
the development of an economic system dominated by private enterprise
after the Orange Revolution.  Actions like the one above continue to leave
serious doubts in the minds of potential investors. Who would want to
invest in the production of baby food given the above stated intentions
of the Ukrainian parliament?  This is only one of many such actions
found in the news recently from Ukraine.  EDITOR
=====================================================
20. PARLIAMENT OUTLINES STATE FARMING POLICY PRINCIPLES

 Dmytro Horshkov, Ukrainian News Agency, Kyiv, Ukraine, Oct 18, 2005

KYIV - The Verkhovna Rada has outlined the principles of the state
agricultural policy. Bill No. 5080 on the fundamentals of the state farming
policy was supported by 271 deputies, with 226 votes needed for its
adoption.

In keeping with the bill, the chief priorities of the state farming policy
are the creation of favorable conditions for implementation and protection
of peasants' rights to land, the formation of free market land relations,
land protection, etc.

The bill envisages that the development of land tenure will proceed through
enlargement and improvement of legal support, the formation of relevant
institutional grounds, a strengthening of government support for land
reform.

Criteria for the assessment of implementation of the state agrarian policy
are: to ensure that by 2007 the employment of able-bodied rural residents
be at the level not lower than the country's average, and the average in the
European Union by 2015; consumption of foods per capita be at the level
of norms of the living wage law by 2007 and at the level of rational
consumption norms by 2015; a rise in the profits of rural population and the
average monthly wage of farmers be at the level not lower than the average
in industry by 2015.

As Ukrainian News reported, in February 2004 the Cabinet of Viktor
Yanukovych submitted the fundamentals of the state agricultural policy
for parliament's consideration.   -30-
--------------------------------------------------------------------------------------------
FOOTNOTE:  With laws like the one above no wonder very few
international investors want to invest in the agricultural production
sector of Ukraine's economy even though such investments are
badly needed. There is a majority in Parliament who seem, to many
observers, to be totally out of step with the principles and spirit of
the Orange Revolution.  EDITOR
=====================================================
21.   UKRAINIAN PRESIDENT YUSHCHENKO TO GIVE SAMPLES
                             FOR NEW TESTS ON POISONING

Associated Press (AP), Kiev, Ukraine, Fri, Oct 21, 2005

KIEV - Ukrainian President Viktor Yushchenko has agreed to provide samples
of hair, blood and fat for new tests into the dioxin poisoning he suffered
during last year's presidential campaign, his chief-of-staff said Friday.

Oleh Rybachuk said that prosecutors asked Yushchenko Thursday to provide
all the necessary samples, and the president agreed.

Last month, former Security Service head Oleksandr Turchinov charged that
Yushchenko's poisoning had not been proven because the president kept
putting off tests in Ukraine.

Under Ukrainian law, tests must be conducted in Ukraine or overseen by
Ukrainian investigators to be considered valid.

Rybachuk defended the president, saying Yushchenko had never refused
to have any tests, and blamed Turchinov and former Prosecutor General
Svyatoslav Piskun for not informing the president.

Ukrainian laboratories are incapable of conducting the examinations, so
Ukrainian investigators are now negotiating with foreign laboratories for
help. Rybachuk said the tests would likely be carried out at the beginning
of December.

Yushchenko fell ill last year during the hotly contested presidential
election, and was later diagnosed as having suffered massive dioxin
poisoning. He has called the poisoning an assassination attempt. It knocked
him off the campaign trail for weeks, and left his face severely pockmarked.

No one has been charged in connection with the poisoning, though
Yushchenko continues to maintain that those responsible will face justice
and that the investigation is proceeding.  -30-
=======================================================
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=====================================================
22.   U.S. COURT REFUSES TO FREE SUMY REGION'S FORMER
                         GOVERNOR SCHERBAN ON BAIL

Ukrainian News Agency, Kyiv, Ukraine, Friday, October 21, 2005

KYIV - A court in the city of Tampa (Florida, United States) refused to free
the Sumy region's former governor Volodymyr Scherban on bail on October
20. The head of the Ukrainian national bureau of the Interpol, Kyrylo
Kulykov, announced this to journalists.

According to him, Scherban and his lawyers asked the court to free Scherban
on bail but the court decided not to free him until it makes a final
decision on his deportation from the United States. Kulykov said that the
court's final decision was expected in the October 24-30 period.

As Ukrainian News earlier reported, a division of the United States'
National Security Agency arrested Scherban on October 12 for violating the
terms of his stay in the country. Scherban entered the United States on
April 9 on a business visa that expired on October 8.

The Internal Affairs Ministry put Scherban on the international wanted list
in early May. The agencies of the prosecutor's office and tax police are
investigating five criminal cases launched against Scherban. He is accused
of extortion, misuse of funds, violation of citizens' election rights, abuse
of office and tax evasion.  -30-
=====================================================
23.   POPE BENEDICT REAFFIRMS PRIESTLY CELIBACY AND
                          PROCLAIMS FIVE NEW SAINTS
               New saints: two Italians, a Chilean and two Poles who
                              worked in what is now Ukraine

By Philip Pullella, Reuters, Vatican City, Sun Oct 23, 2005

Pope Benedict reaffirmed the Roman Catholic rule of priestly celibacy on
Sunday, rejecting suggestions that the way to confront the Church's shortage
of priests was to allow them to marry.

Speaking at the first canonisation ceremony of his six-month pontificate, he
also expressed solidarity with the Church in China, where the communist
government does not allow Catholics to openly recognize the Pope and the
Vatican.

The new saints of the Church proclaimed by the Pope on Sunday at an
open-air mass in an unusually fog-shrouded Peter's Square included two
Italians, a Chilean and two Poles.

In his homily, the Pope pulled no punches on the issue of priestly celibacy,
one of the main themes of a three-week synod that closed with Sunday's mass.

"The celibacy that priests received as a precious gift and the sign of the
undivided love toward God and neighbor is founded upon the Eucharistic
Mystery, celebrated and adored," he told tens of thousands of people.

The shortage of priests to serve the 1.1 billion-member Church dominated the
synod, whose more than 250 participants drafted proposals for the Pope on a
number of Church matters.

Liberals such as the "We Are Church" dissident group have said the long-term
solution to the shortage was making celibacy optional for new priests by
allowing them to marry.

Some bishops suggested the Church ordain "viri probati," the Latin term for
older, married men with families who are known to lead exemplary personal
lives in their communities and have a solid background in Church doctrine.

The Pope said lay Catholics had to show their faith clearly, saying "no
dichotomy is admissible between faith and life." One question in the synod
was how to deal with Catholic politicians who back abortion, which the
Church considers killing.
                            SUFFERING CHINESE CHURCH
In his homily, the Pope also sent "a fraternal greeting" to the Church in
China, saying its suffering would not be in vain.

"With deep sadness we felt the lack of their representatives," Benedict
said, referring to the four bishops who were prevented from attending the
synod.

"I would like to assure all the Chinese prelates that we are close with
prayer to them and to their priests and their faithful," he said.

"The suffering path of the communities, entrusted to their pastoral care, is
present in our hearts. This will not remain fruitless ..."

China refuses to allow the Vatican to appoint bishops, saying this would be
interference in its internal affairs, and it refuses to allow Catholics to
recognize the authority of the Pope. Instead, they must belong to a
state-backed church known as the Catholic Patriotic Association.

The Vatican estimates it has about 8 million followers in China who worship
in the "underground Church," compared with some 5 million who follow the
state-backed association.

China has had no diplomatic ties with the Vatican since 1951, two years
after the Communist takeover.

The five new saints of the Church were Jozef Bilczewski (1860-1923), a
Polish archbishop who worked in Ukraine; Gaetano Catanoso (1879-1963), an
Italian priest who dedicated his life to helping the poor in southern Italy;
Zygmunt Gorazdowski (1845-1920), a Polish priest who worked in Ukraine;
Alberto Hurtado Cruchaga (1901-1952), a Chilean priest who helped the poor,
and Felice Da Nicosia (1715-1787), an Italian monk who had a reputation for
holiness despite his illiteracy.  -30-
=====================================================
24. WITH RESISTANCE, BELARUS REVIVES ITS POISONED LANDS

By Steven Lee Myers The New York Times
International Herald Tribune, Europe, Thursday, October 20, 2005

The winter rye is already sprouting green in the undulating fields of the
state cooperative farm here. The summer's crop - rye, barley and rape -
amounted to 1,400 tons. Best of all, said Vladimir Pryzhenkov, the farm's
director, none of it tested radioactive.

This is progress. The farm's 1,618 hectares, or 4,000 acres, are nestled
among some of the most contaminated spots on earth, the poisoned legacy of
the worst nuclear accident in history: the explosion at Chernobyl's Reactor
No. 4 on April 26, 1986.

Almost a quarter of all of Belarus - including some of its prime farmland -
remains radioactive, to varying degrees, but two decades after the
catastrophe, Pryzhenkov's farm represents a part of the government's effort
to put the country's contaminated land to good use.

In 2002 the checkpoints that once restricted access to this region near the
Russian border - some 240 kilometers, or 150 miles, from Chernobyl -
disappeared. Families began returning; some had never left; all needed jobs.

And so the farm here in Viduitsy - no longer known as the Karl Marx
collective, but still state-owned - reopened two years ago, with millions of
dollars worth of new harvesters and other equipment provided by the
government of President Aleksander Lukashenko.

Pryzhenkov, assigned here from another farm in what he called "a promotion,"
has also begun breeding horses and cattle for beef - though not milk. Milk
produced here would be far too dangerous for human consumption.

"This was all falling apart," he said as he drove a battered UAZ jeep over
the farm's muddy, rutted roads. "There was nothing to for the people to do
here." Lukashenko, a former collective-farm boss, declared last year that it
was time to revive contaminated regions.

He outlined an improbably hopeful vision of new homes and villages, of new
industry, of rejuvenated farms growing peas, onions and potatoes. "Land
should work for the country," he said.

Lukashenko's authoritarian decrees - on this and other topics - have
prompted fear and even ridicule, but a scientific study released last month
by seven United Nations agencies and the World Bank more or less agreed.

The study concluded that the aftereffects on health and the environment had
not proved as dire as first predicted. It recommended that the authorities
in Russia, Ukraine and Belarus take steps to reverse the psychological
trauma caused by Chernobyl by encouraging investment and redevelopment.

Lands where agriculture was banned or severely restricted could be safe for
growing crops again, though using techniques to minimize the absorption of
radionuclides in food.

"It is desirable to identify sustainable ways to make use of the most
affected areas that reflect the radiation hazard," the report recommended,
"but also revive the economic potential for the benefit of the community."

The report's conclusions have stirred controversy. Greenpeace International
denounced it as a whitewash intended to support the expansion of nuclear
energy. Even a member of Lukashenko's government, Valery Gurachevsky, the
scientific director of Belarus's committee on Chernobyl, called parts of the
report "too optimistic."

But here in the contaminated countryside, where entire villages were left to
rot amid an invisible scourge, the underlying principle is a welcome one.

Gennady Kruzhayev, 38, had just begun working on the Karl Marx collective
farm when the accident occurred. He has since drifted from job to job. He
drove a taxi. He pumped gas. On this day he was atop a tractor, plowing the
rich black earth in preparation for next spring's sowing. "The main thing,"
he said, "is to have jobs."

The Chernobyl disaster spewed radioactive materials over all of Europe, but
naturally the areas closest - Russia, Ukraine and Belarus, then republics of
the Soviet Union - suffered the worst.

The Soviet authorities declared an emergency exclusion zone within 30
kilometers of the reactor, a circle straddling the border between Ukraine
and Belarus. The zone remains closed - except to the workers overseeing the
reactor's decontamination and safety, a few pensioners who have drifted back
and, increasingly on the Ukrainian side, curious tourists on macabre day
trips.

The contamination - particularly from caesium 137, as well as the more
deadly strontium and plutonium - hardly remained within that circle, though.
Areas that, to this day, are as radioactive as parts of the exclusion zone
appear on maps of Belarus as irregular splashes of red across much of the
eastern part of the country.

Those areas - with radiation levels exceeding 40 curies per square
kilometer - remain off-limits. At least in theory, they do. All around the
red spots are areas with lower levels, creating a confusing patchwork of go-
and no-go zones that, by all appearances are routinely ignored.

Signs nailed to trees mark some areas. Some areas become apparent only when
one notices that everything around is deserted and silent. The authorities
distributed hand-held radiometers, but few people use them.

More than 130,000 Belarussians were relocated in the years after Chernobyl,
but only to areas with lower levels of contamination, often only a few
kilometers away. About 1.3 million Belarussians - more than a tenth of the
population - live in contaminated areas, though officials say that, with
certain precautions, they face little health risk.

In these areas, which suffered economic collapse, farming never stopped
entirely. Instead, the state's farms adopted measures - like using
calcium-based fertilizers - to minimize contamination of crops. Some crops
absorb less anyway. Some that do not are used only for fodder.

Since Lukashenko came to power, the government has tried to expand
agriculture in the region, removing restrictions and bans on less
contaminated areas. Gennady Antsipov, who oversees reclamation for the
country's Chernobyl committee, said the process was complicated and,
despite Lukashenko's urgings, deliberate.

Of 2,600 square kilometers of contaminated land, only 140 square kilometers
have so far been returned to active agricultural use, though in a periodic
survey last year the government identified still more land that could be
reclassified as less dangerous and reclaimed.

"Why should we rush this issue?" Antsipov said in an interview in the
capital, Minsk. "It is like sending someone to the moon just to prove we can
colonize it."

Lukashenko's government, despite its diplomatic isolation, has also worked
closely with international agencies, including a program with the UN
Development Fund, to improve crop yields and limit contamination of food
products.

All are intended to promote livelihoods in a place that, according to the
recent study, suffered more from the psychological trauma of upheaval and
fear than from exposure to radiation.

"We are trying to provide people a fishing rod, not a fish as we did
before," Valery Shevchuk, the Chernobyl committee's deputy chairman, said.

Over time, the radioactive materials, especially caesium 137, with a
half-life of 30 years, will decay, but living and working in the
contaminated parts of Belarus will not soon be normal.

In Viduitsy, Pryzhenkov pointed to fields that remain too hot to grow even
fodder for animals. With precautions, he says, the food grown here is safe.
The government claims to strictly check all produce; without a certificate,
farmers cannot sell what they grow.

Other risks lurk in the forests and fields. Kitchen gardens - used, as in
Soviet times, for subsistence - are basically unregulated. Mushrooms and
berries, as well as wild game, absorb high levels of radiation. Keeping bees
for honey is not considered a good idea. Government advisories warn people
not to eat these delicacies, but they do.

Vera Brausova, 73, who lives in the village Krasny Kukhani, picks mushrooms
despite the warnings. Living on a pension, what choice does she have? Asked
about health concerns, she said that she lived through World War II,
Chernobyl and a fire that burned down the first house she was evacuated to.
"What health are you talking about?" he said.

Gennady Bakhanov, the region's director of agriculture, said a healthy life
in Chernobyl's shadow, as it were, depended on education and a basic
precautions. "This is the trouble," he said. "It is invisible. There is no
smell. This is why people act as they did before."

He drove into his native village, Samotevichy. It was abandoned. Most of its
wooden homes were buried, lest they catch fire and send radioactive
particles back into the air. It is not recommended to spend prolonged
periods there.

He spoke wistfully of the time when the villagers might thrive again. "Maybe
in 20 or 50 years," he said, "they will come back."

Along the village's road, two men appeared. Nikolai Makarov and Vladimir
Nesterenko, both in their 40s, moved back to this forsaken place a few years
ago. They had been picking apples in orchards long ago abandoned.

"After a glass of moonshine," Nesterenko said, "you can eat anything."
-----------------------------------------------------------------------------------------------
LINK: http://www.iht.com/articles/2005/10/19/news/belarus.php
=====================================================
                   "THE ACTION UKRAINE REPORT - AUR"
                                        An Agent Of Change
        A Free, Not-for-profit, Independent, Public Service Newsletter
  ARTICLES ARE FOR PERSONAL AND ACADEMIC USE ONLY
        Articles are Distributed For Information, Research, Education
                       Discussion and Personal Purposes Only
=====================================================
NOTE:  The new book, " Day and Eternity of James Mace"
published by The Day in Kyiv, in English or in Ukrainian, is available
from the www.ArtUkraine.com Information Service.  If you are
interesting in finding out how to order the new book please send an
e-mail to ArtUkraine.com@starpower.net.   EDITOR
-------------------------------------------------------------------------------------------------
NOTE:  The Ukrainian Federation of America (UFA) will be assisting
in the famine/holodomor/genocide commemorations in Kyiv during
November of this year.  The Federation needs to raise several thousand
dollars for expenses related to the Holodomor Exhibition to be held in
the Ukrainian House. Donations can be made out to the Ukrainian
Federation of America and sent to the Federation at 930 Henrietta
Avenue, Huntingdon Valley, PA 19006.  Please designate your donation
for the Dr. James Mace Memorial Holodomor Fund.    EDITOR
=======================================================
  UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
=======================================================
                   SigmaBleyzer/Bleyzer Foundation Economic Reports
                       "SigmaBleyzer - Where Opportunities Emerge"
The SigmaBleyzer Private Equity Investment Group offers a comprehensive
collection of documents, reports and presentations presented by its business
units and organizations. All downloads are grouped by categories:
Marketing; Economic Country Reports; Presentations; Ukrainian Equity Guide;
Monthly Macroeconomic Situation Reports (Romania, Bulgaria, Ukraine).
     LINK: http://www.sigmableyzer.com/index.php?action=downloads
             "UKRAINE - A COUNTY OF NEW OPPORTUNITIES"
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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" - SPONSORS
            "Working to Secure & Enhance Ukraine's Democratic Future"
1. THE BLEYZER FOUNDATION, Dr. Edilberto Segura, Chairman;
Victor Gekker, Executive Director, Kyiv, Ukraine; Washington, D.C.,
http://www.bleyzerfoundation.com.
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Chairperson; Vera M. Andryczyk, President; Huntingdon Valley,
Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
4.  ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
5. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili, President;
Kiev and Washington, general@rulg.com, www.rulg.com.
6. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
7. 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.
8. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Dr. Susanne Lotarski, President/CEO; E. Morgan Williams,
SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
11. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
12. WJ Grain, Kyiv, Ukraine, David Holpert, Chief Financial Officer,
Chicago, Illinois.
=====================================================
 "THE ACTION UKRAINE REPORT - AUR" is an in-depth, private,
independent, not-for- 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 of charge. 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
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
---------------------------------------------------------------------------------------------
Director, Ukrainian Federation of America (UFA)
Coordinator, Action Ukraine Coalition (AUC)
Senior Advisor, U.S.-Ukraine Foundation (USUF)
Chairman, Executive Committee, Ukraine-U.S. Business Council
Publisher, Ukraine Information Website, www.ArtUkraine.com
Member, International Ukrainian Holodomor Committee
=====================================================
          Power Corrupts and Absolute Power Corrupts Absolutely.
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