Sunday, July 31, 2005

Ukraine Media Test Liberty, Irk President

KIEV, Ukraine -- Ukrainian media are testing the boundaries of their newly won freedoms with hard-hitting exposes on the allegedly extravagant lifestyle of President Viktor Yushchenko's son, sparking a feud with the president over what is fair game in this former Soviet republic.

Yushchenko says the press went too far in attacking his teenage son, while journalists are now questioning the president's commitment to freedom of the press.

"This is a test of what kind of relationship we are going to have in Ukraine between the government and the press, and it is difficult to say how it is going to develop," said Dmytro Krikun, development director at Internews, a non-profit group that aids the formation of a free press.

The muckraking Web site Ukrainskaya Pravda last week ran stories alleging Yushchenko's 19-year-old son, Andriy, drives a $160,000 BMW and frequently slaps down rolls of $100 bills at trendy restaurants.

Amid the controversy, the Interior Ministry said Thursday that police have ordered Yushchenko's son to pay a $3.36 fine for illegally driving the BMW, which is registered to another person. The fine was levied by Interior Minister Yuriy Lutsenko in a television broadcast late Wednesday.

The reports about Andriy's lavish spending were picked up by newspapers and have riveted readers in the impoverished nation, where the average monthly salary is $152.

Asked about them at a news conference this week, Yushchenko lashed out at the Web site's reporter, calling him a "hitman" and saying that he had advised his son to "find that restaurant check . . . shove this check under that journalist's snout and then sue."

Some 200 journalists responded by signing an open letter, reminding Yushchenko that he had vowed not only to end the intimidation and pressure that had plagued them during the previous decade under Leonid Kuchma but also that he--and his family--would be accountable for their actions. They accused him of "showing disdain for free speech."

"The president's words show that the president himself misunderstands free speech in general," said Ihor Kulia, an independent media expert. "The president has no right to offend a journalist and point out to the journalist what to write about and what not to write about."

Yushchenko sent a letter to the Web site, insisting that he highly values free speech.

"It is very good that we live in a country where there are no taboo themes and persons," wrote Yushchenko, who won a court-ordered presidential repeat vote last year after protests over fraud dubbed the Orange Revolution. He took office in January on a reformist, pro-Western platform.

"It is correct that the president's family lives under big media attention, but that isn't cause to remove his natural right to a private life," he said.

He also said at the news conference that his son, a university student, works at an unspecified consulting firm and earns enough to be able to rent such a costly car.

Andriy, who could not be reached for comment by The Associated Press, told a Ukrainian newspaper, Ukraina Moloda, that his father gave him a "tough talking to . . . probably the most difficult conversation of my life." He added that he felt responsible for his father's outburst at the news conference.

"To be honest, if I'd known that such attention would be focused on me, I would have given less occasion for discussion . . . behaved myself differently," he said.

Ukrainskaya Pravda, where the report on Yushchenko's son first appeared, once was run by Heorhiy Gongadze. He was abducted in 2000 and killed, reportedly in connection with his investigations into high-level corruption. A Kuchma bodyguard later released secretly made tape recordings in which the former president appeared to be ordering action against Gongadze.

Kuchma has not been charged in Gongadze's death and has denied involvement.

Source: Chicago Tribune

Ukrainian PM to Ally With President in Parliamentary Polls

KIEV, Ukraine -- Ukrainian Prime Minister Yulia Tymoshenko said Saturday that she will stand alongside President Viktor Yushchenko instead of being his rival in the parliamentary elections in 2006.

Tymoshenko told a press conference in the city of Simferopol that she is a member of the president's camp and has no intention to compete with him, according to the Interfax-Ukraine news agency.

Either her or the president's prestige will add to the prestige of the president's camp as a whole, and the enhancement of either's prestige will help propel the country's political reforms, she said.

"I want to compete against nobody. I know my position and know what I should do and how to do it," she said.

Ukraine plans to hold parliamentary elections in March 2006. Political parties are actively preparing for the polls and forming their own alliances.

Source: Xinhua

Saturday, July 30, 2005

Few Real Signs Of Crisis For Yushchenko And Orange Revolution

KIEV, Ukraine -- Western media reports are increasingly claiming that the Orange Revolution is floundering in Ukraine. The Independent asserted, "There is a growing consensus in Ukraine that Mr. Yushchenko and Ms. Tymoshenko have frittered away much of their political capital." The International Herald and Tribune focused on the policy divides in President Viktor Yushchenko's coalition and their alleged fear of undertaking tougher reforms.

Ukrainian President Viktor Yushchenko (R) listens to Prime Minister Yulia Tymoshenko

While these claims hold some truth, overall they misread the Yushchenko administration. Some economic policies in Yushchenko's first 100 days were undoubtedly misplaced, bordering more on socialist than free market economics. Nevertheless, Russian opposition politician Boris Nemtsov's description of Prime Minister Yulia Tymoshenko as "very left-wing, hugely populist, paternalistic, and also very charismatic" is a gross exaggeration.

Tymoshenko's penchant for state intervention in some areas is tempered by her support for free market economics in others. Tymoshenko is not an ideologically driven socialist, unlike the Socialist Party (SPU), which is allied to Yushchenko. Yet during the parliamentary debates over adopting WTO legislation, Tymoshenko backed the government while the SPU voted against them.

The government has not been given sufficient credit in three areas.

First, despite talk about re-privatization, Ukraine has not followed Russia in trumping up false charges against oligarchs to put them behind bars. No oligarch in Ukraine is set to go to prison just because he is an oligarch who supports the opposition.

Second, the Yushchenko government is sincerely committed to combating corruption, which must be curbed in order to attract foreign investment and to facilitate Ukrainian business.

Third, the government is more favorably disposed towards small- and medium-sized businesses, as many of those owners backed the Orange Revolution.

Critics of the Yushchenko government often make assumptions that are not relevant for Ukraine.

First, the average Ukrainian citizen does not take notice of reductions in GDP and vote accordingly. If this were the case, former prime minister Viktor Yanukovych would have won a landslide in the 2004 presidential election when Ukraine's economy was growing at record levels. But Ukrainian voters did not see high economic growth creating a higher standard of living. They instead feared unemployment (73%), rising prices (71%), unpaid wages (65%), and even famine (51%).

Second, the average Ukrainian citizen does not understand or take an interest in many issues that are strategically important for the country, such as WTO membership. Parliamentary Speaker Volodymyr Lytvyn complained that few parliamentary deputies fully understand the ramifications of the legislation required for WTO membership.

Instead, the real threat to the Orange Revolution rests in an area ignored in Western commentaries. The Orange Revolution and Yushchenko's election took place when a sizeable proportion of Ukrainian voters began to believe that Yushchenko was different from other politicians. As in many post-communist states, after a decade of "transition" Ukrainian voters believed that all politicians were corrupt and only wanted public office for personal gain.

The fate of the Orange Revolution and Yushchenko himself hinges upon whether or not Ukrainians continue to believe the new president is different, rather than lumping him with former presidents Leonid Kravchuk and Kuchma. So far, despite a number of crucial mistakes made by the Yushchenko administration, ratings for Yushchenko and Tymoshenko remain high.

The only exception is among eastern Ukrainians, who primarily voted for Yanukovych in 2004. The commonly heard view among them is: "At best…the Orange Revolution replaced one criminal clan, Mr. Yanukovych's, with a new one -- Mr. Yushchenko's".

Eastern Ukrainians, particularly in Yanukovych's home base of Donetsk, continue to remain cynical towards all politicians. Following this logic, better then the "lesser of two evils" and the election of "our own boys" into power rather than western Ukrainians.

A more complicated factor to deal with fairly is the question of double standards within the government. As the Wall Street Journal wrote, "Worst is the presence in the new government of Ms. Tymoshenko -- a former head of United Energy Systems of Ukraine who was prosecuted by the Kuchma government…" This is seen in eastern Ukraine as "evidence of a double standard in fighting corruption."

The questions of whether to review corrupt privatizations dominated much of the government's time and Prime Minister Tymoshenko's rhetoric during the first 100 days. Reviewing all privatizations would be impossible and undesirable. After all, the Yushchenko team includes many businessmen. Ukraine scholar Anders Aslund described the Orange Revolution as a "revolt by millionaires against billionaires."

Populist anti-oligarch feeling remains high, helping to change Tymoshenko's ratings from -50% under Kuchma to +50% under Yushchenko. Most Ukrainian citizens see privatization conducted in the 1990s in negative terms. Some 67% of Ukrainians believe that privatization was undertaken in an unjust manner, with only 9% believing the opposite. Consequently, some 71.3% of Ukrainians would support the re-privatization of large enterprises.

The highest support for re-privatization of large enterprises exists in western and central Ukraine (79.5 and 81.2% respectively), two regions where Yushchenko obtained his greatest support in the 2004 election. This high level could be explained by anti-oligarch feeling and by the fact that most large enterprises are based in eastern Ukraine. In eastern Ukraine support for re-privatization is lower at 53%.

The glow of the Orange Revolution is unlikely to fade before the 2006 parliamentary election. More radical policies this autumn will, if anything, increase its brightness.

Source: Eurasia Daily Monitor

Friday, July 29, 2005

That Kid Again

KIEV, Ukraine -- The controversy concerning President Viktor Yushchenko, his allegedly wayward son Andriy, and the media is a bit of a tempest in a teacup. The 19-year-old First Son’s alleged sins, while obnoxious, are venial in a Ukrainian context in which members of ruling-class clans have been known to steal whole industrial sectors from the commonwealth. At the same time, the fire around the controversy keeps getting stoked by a media that recognizes good copy when it sees it.

Andriy Yushchenko (4th from the left) with Viktor Yushchenko (C) During Orange Revolution

That said, the media has a point when it comes to one thing: President Yushchenko’s behavior during this uproar has left a bit to be desired.

If you’re not up on l’affaire Andriy Yushchenko, here’s the back story. Last week the popular Internet news site Ukrainska Pravda ran investigative pieces detailing the misbehavior of the president’s teenage son. The kid seems to be a bit fast. He drives a stunningly expensive BMW M6, lives in a huge apartment, uses a cell phone worth the price of a unit in a left bank high-rise, and is protected by private security guards who shoo away the police when they object to his alleged outrageous violations of traffic laws. The Beemer is reportedly borrowed. The apartment is paid for – depending on what story you believe – either by the Yushchenko family or by Andriy himself. He can afford it, the Yushchenkos claim, because the kid has a high-paying job at a consulting firm.

It’s worth separating what’s outrageous about the above from what isn’t. Listening to some of the journalistic rhetoric, you’d think young Andriy was an outrageous decadent in the mold of the Marquis de Sade, squandering the national wealth on ceaseless orgies. In fact, his lifestyle is not atypical of that of young people in positions analogous to his. It might be unfair, but the kids of powerful politicians tend to be showered with gifts and offered opportunities the rest of us don’t get. They get offered high-paying sinecures. When Ukrainska Pravda editor Olena Prytula says in a recent interview that Andriy’s lifestyle raises corruption issues, because Andriy’s unnamed benefactors might be trying to influence the president, she’s mistaken. There’s nothing that says a First Child has to take a vow of poverty, and there’s nothing illegal about a private citizen – which is what Andriy is – accepting gifts or a high salary for doing too little work. Without proof of a quid pro quo involving his father, what Andriy owns – or borrows or uses or accepts as a gift – is no one’s business but his own and his family’s. Unseemliness is no crime. This is a free country.

What is outrageous, however, is Andriy’s allegedly loutish behavior. No one should be able to park illegally in the middle of the street; no one’s bodyguards should be able to warn off the police. This speaks to an old Ukrainian problem: that there have been two sets of laws in this country, one for the guys in the black luxury sedans, and another for everybody else. If young Yushchenko gets to break the laws everyone else lives under, then this is absolutely a matter for a watchdog press.

This brings us back to President Yushchenko’s behavior throughout this hullabaloo. It hasn’t been good. When an Ukrainska Pravda reporter questioned him about his son at a press conference this week, Yushchenko exploded in dudgeon. In a rambling response, he insisted on his son’s flawless morality, weirdly brought up the specter of threats of violence against his family, adjured journalists not to disgrace their profession, offered conflicting versions of who’s paying for his son’s luxuries, and – most startling of all – told Ukrainska Pravda’s reporter not to be a “hired killer.” That’s a loaded thing to say in a country where journalists have indeed been long for hire, and where they’ve too often been killed.

If Yushchenko’s going to be the leader of a European country, he should try to sound like one. Do we believe Yushchenko has the same contempt for a free press that his predecessor in office did? No. But the trouble with this sort of ranting is that it sets a bad example for officials down the food chain. If a newspaper cameraman has his equipment smashed by an Interior Ministry cop next week, we’ll wonder whether Yushchenko’s effusion didn’t have something to do with it.

Instead of lashing out at the press, Yushchenko should have simply addressed the issues at hand. First, he should have affirmed his underage kids’ right to privacy. Second, he should have acknowledged the (yes) unseemliness of a spectacularly luxurious lifestyle for the young son of a reform politician in an impoverished country. Third, he should have pledged to look into his son’s allegedly illegal behavior, to punish it severely, and to punish moreover the policemen who let Andriy slide, if they can be identified.

Finally, he should have reiterated his respect for a free media. By doing this especially, he would have set the sort of example a good leader should set, and at the same time have disarmed his journalistic critics.

The president missed an excellent chance to strengthen democracy and the media environment here, and to affirm that the days of well-connected Ukrainians being above the law are over.

Source: Kyiv Post

100 Most Powerful Women in the World

NEW YORK, NY -- US Secretary of State Condoleezza Rice is the world's most powerful woman, beating out a host of presidents, celebrities and chief executives to top Forbes magazine's global ranking of feminine clout.

The annual list was Forbes' second ranking of the world's 100 most powerful women and left Rice two-for-two, having topped the 2004 version as US national security adviser.

Elizabeth MacDonald, senior editor at Forbes, cited Rice for "reinvigorating the role of Secretary of State with a form of diplomatic activism that we haven't seen in a while."

Chinese Vice Premier Wu Yi was runner-up for the second year in a row, but other prominent Asian women fared less well.

PM Tymoshenko - 3rd World's Most Powerful Woman

Ukraine's Prime Minister Yulia Tymoshenko, 44 came in third. Tymoshenko was one of the leaders of Ukraine's Orange Revolution last fall that toppled a stagnant, corrupt regime.

For her support, the country's new president, Victor Yushchenko, appointed her prime minister, a post she is using forcefully to shake up Ukrainian oligarchs.

Her bold moves to re-privatize industrial assets, allegedly bought on the cheap by billionaires like Rinat Akhmetov and Victor Pinchuk, have met with criticism both inside and outside Ukraine.

But Tymoshenko is used to controversy, having fallen out with the sitting government in 2001, leading to her arrest and later dismissal. Tymoshenko is also known for her fashion sense, appearing on the cover of the Ukrainian edition of Elle magazine earlier this year.

Source: Forbes

U.S. Administration Loves Ukraine More than Congress

WASHINGTON, DC -- Wednesday the U.S. Congress held a hearing about relations with Ukraine, which was organized by a subcommittee of European Countries Connections. The Congressmen were wondering why the U.S. is not in a hurry to fulfill the promises given to Ukrainian president Vladimir Yushenko during his visit to Washington in April.

U.S. President George W. Bush and Ukrainian President Viktor Yushchenko (L) shake hands at the end of their press conference in the East Room of the White House in Washington, April 4, 2005

During Yushenko’s visit to Washington, the administration and Congress promised him a lot: to recognize Ukraine as a country with a market economy and to provide it most favorable nation status in trade with U.S.; to lift the Jackson-Vanik Amendment; to help the country join WTO and NATO. However, from April there was no step made to fulfill the promises. The participants of the discussion were trying to understand the reason for the delay. The U.S. position on the hearings was presented by Deputy Secretary of State for Europe and Eurasian Daniel Frid, who recently returned from Kiev. Also, there were other active participants in the discussions such as the chairman of the Congressional subcommittee Elton Gallegly and professor for the Institute of European, Russian and Eurasian Research at George Washington University Taras Kuzio.

Gallegly stated the fire by admitting that “Congress is too slow with lifting the Jackson-Vanik Amendment and provision of most favorable status to Ukraine.” Answering Kommersant’s question of when he thinks Congress will start acting, Gallegly answered: “It doesn’t look like any changes are going to happen this year.”

Such a situation does not satisfy the U.S. administration. Daniel Frid directly stated that the White House expects Congress to lift the amendment and “to move in this direction ASAP.”

One of the reasons for the sluggishness of American lawmakers could be heard from the corridors. “Many, many people are unhappy with Yushenko’s decision to withdraw the troops from Iraq,” one of Kommersant’s sources in the Capitol said. “They think that the Ukrainian president should not give such a promise during the election campaign.” Knowing about such thoughts in the Congress, Frid tried to persuade the lawmakers that withdrawal of Ukrainian troops should not create a negative reaction—this process would be gradual and will be finished by the end of this year. “Besides, we and other allies agreed with this step,” Frid concluded.

The Deputy Secretary of State let it be understood that most favorable status and admitting Ukraine to the WTO are not in the too distant future. But, Kiev has to do its part as well. Frid positively appraised “the uneasy joint success of President Yushenko, Prime Minister Timoshenko and Speaker Litvin in adaptation by the Ukrainian parliament on July 6-7 of important laws that would help the country to join WTO.” One of the amendments to these laws was protection of intellectual property in Ukraine, which according to Frid is an important step. As a response, the White House might be able in the nearest time to delete Ukraine from the blacklist of countries that constantly break intellectual property laws.

Frid thinks that the issue of giving Ukraine most favorable nation status with market economy might be resolved in the middle of January 2006. However, to achieve it “Kiev would have to clarify some of its actions in front of Western investors.” The deputy secretary of state did not precise what he meant, however, Kommersant’s source in Congress said that he was talking about “Kiev’s reconsideration of some privatization results.”

All speakers were coming to the conclusion that “the situation in Ukraine remains pretty difficult.” “The opposition to reforms is still very strong,” Frid said. He explained that by the example describing how “anti-corruption campaign of Yushenko hurt interest of powerful groups.”

Frid confirmed that the U.S. supports Kiev’s intention to join NATO. However, the speed of joining the alliance, according to the deputy secretary of state, will depend on Ukraine’s desire and readiness to follow the standards of this organization. “The key to entering NATO for Ukraine will be completion of the political and economic military reforms as well as free and honest parliamentary elections in March 2006,” Freed stated.

When the Kommersant correspondent noted that Russia is not pleased with the possibility of Ukraine joining NATO, Frid expressed surprise. “I am really upset if it is really the case,” he said. “I think, NATO is not an incompatible organization with Russian.”

However, the participants of the hearing let it be understood that the date of Ukraine joining NATO will also depend on how fast it will be able to settle some sharp contradictions with Russia—from their point of view the alliance should not get entangled in the Russian-Ukrainian confrontation. Gallegly, for instance, thinks that “Kiev must settle with Moscow presence on Ukrainian territory of the Russian Black Sea Navy.”

Taras Kuzio did not quite agree with that point of view. According to him, Washington would not wait too long while Russia gives yes for Ukraine joining the alliance. “The attitude of the White House toward Moscow and Kiev drastically changed,” he said. “If during the first presidential term of Bush they thought about Putin well, and thought bad about Kuchma, now Putin is being considered an enemy of democracy and Yushenko is well received by Washington.”

Source: Kommersant

Thursday, July 28, 2005

Opinion: Yushchenko Looses His Orange Revolution Cool

MOSCOW, Russia -- Ukrainian President Viktor Yushchenko's acrimonious exchange with a journalist this week is a very telling reflection of Ukraine's troubled Orange Revolution.

When challenged on his son's spending habits and lifestyle, Yushchenko launched into a diatribe that was defiant, at times confused, and directionless.

We may never really know what Yushchenko was thinking when a journalist from Ukrainska Pravda said he wanted to ask a question that "has to do with a much-talked-about issue these days. It's about the president's son - what car he is driving, and other quite expensive items [is he using]? The question has to do with morality - is it moral to use such things in such a country?" Yushchenko could have and probably should have politely declined to answer, citing family privacy. Instead, his aggressive reply touched upon more than the defense of his son - it spoke volumes about the state of the Orange Revolution.

Yushchenko was once the darling of Ukraine's free media. Those days appear to be over. When asked a hard or awkward question, Yushchenko instructed the journalist to "act as an honest journalist and not as a contract killer" and said "let me tell you, friends, such...[questions] should be humiliating for an honest journalist." Some of his strongest supporters during last year's protracted presidential election were in media, particularly journalists at Ukrainska Pravda. Yushchenko now likens some journalists to retired thugs from the security forces.

Many journalists are irresponsible, but Yushchenko's contemptuous attitude only encourages the irresponsible ones and disappoints those who are professional. The Orange Revolution sought to open the government and make it accountable to the public. Yushchenko's comments prove he not up to standard. In fact, his behavior in this case was reminiscent of his predecessor Leonid Kuchma's arrogant treatment of the media.

Yushchenko has also demonstrated that he is touchy about the issue of corruption, particularly allegations of personal wrongdoing. When directly asked about his son's spending habits and lifestyle, Yushchenko proceeded to talk about himself first, "You know, I have lived my life witnessing how people would remain at their posts for half a year and then have to go to prison, usually because these people would steal. My professional life has been in this environment and in this system; many of my colleagues are not there any longer or are still in prison."

Yushchenko's comments amount to an admission of how little has been done to deal with corrupt state officials since the Orange Revolution. Yushchenko and his family may not be corrupt, but there is an acute public awareness that state officials continue to live well at the state's expense. Yet again, the Orange Revolution has not lived up to its promise.

While defending his son, Yushchenko rattled off a rant about personal safety. "Son, I can only help you with one [piece of] advice - learn to protect yourself! Learn to protect yourself!" Yushchenko also responded to rumors that his son is protected by private bodyguards. It is not surprising that Yushchenko is very sensitive about personal safety after being poisoned during last year's presidential campaign.

However, the warning says a lot about Yushchenko's current political predicament. Often at odds with Prime Minister Yulia Tymoshenko over administrative and economic policies, Yushchenko will soon cede to her many of his presidential powers. Tymoshenko is a political rival and with parliamentary elections slated for March 2006, Yushchenko is finding that he has poorly protected his political options, future ambitions and legacy.

Yushchenko's outburst released an enormous sense of frustration, the same frustration many Ukrainians feel demanding justice for murdered journalist Georgy Gongadze. At the World Economic Forum in Davos, Switzerland in January, Yushchenko promised that the Gongadze case would go to court by May. This has not happened yet and is very unlikely to happen any time soon given the collective resistance within the security forces to move on the case. The failure to finally close the Gongadze case will seriously damage the legitimacy of those who came to power through the Orange Revolution.

Maybe Yushchenko simply was having a bad day and being forced to defend his son in public sent him reeling. Nonetheless, he revealed in the most vivid way what frustrates him and what has become of the once glorious Orange Revolution.

Source: RIA Novosti

Ukraine Scraps Visas for Canadian, EU Citizens

KIEV, Ukraine -- Ukraine said Thursday it was scrapping visas for Canadians from Aug. 1 and extending visa-free travel for travelers from the European Union as part of President Viktor Yushchenko's plan to move closer to the West.

A presidential decree posted on his Web site said visas would no longer be required for Canadian visitors coming into Ukraine for less than 90 days.

Another decree on the same site said visa-free travel for citizens of the EU countries and Switzerland would be extended beyond the initial deadline of Sept. 1.

Ukraine canceled visas for EU travelers in March for a four-month trial period from May to September.

Foreign Minister Borys Tarasyuk has previously said the experiment was successful and the number of EU tourists to Ukraine has more than doubled since May 1 when the cancellation took effect.

Citizens of Japan have also been allowed to travel to Ukraine without visas. Visa requirements for U.S nationals have been considerably simplified.

Yushchenko, elected after a popular "Orange Revolution" against electoral fraud at the end of last year, wants to take his ex-Soviet country of 47 million people closer to the European mainstream and aims for EU membership.

Yushchenko, who has already made a dozen visits to Western countries since taking power in January, has also urged foreign governments to ease their visa regimes for Ukrainians.

But so far no country has said it will lift visa restrictions for Ukrainians in the near future.

Source: Reuters

Ukraine Probes Threat to Tymoshenko

KIEV, Ukraine -- Ukraine is investigating reports of an attempt to assassinate Prime Minister Yulia Tymoshenko, the Ukrainian Security Service, or SBU, said Thursday.

"The SBU is checking this information and is taking the necessary measures," SBU spokeswoman Marina Ostapenko said. She said the information was received from law enforcement agencies of Western countries.

Prime Minister Yulia Tymoshenko

She gave no information about who was behind the attack, or when or where it was supposed to have taken place. Tymoshenko's office was not immediately available for comment.

Tymoshenko, once dubbed the "gas princess" for her role in the energy industry, was appointed prime minister in February and won overwhelming parliamentary support. In her six months as prime minister, Tymoshenko has spearheaded a government fight against corruption and smuggling.

Source: Moscow Times

Son’s Car Lands Yushchenko in Media Hot Water

KIEV, Ukraine -- Six months ago Ukraine President Viktor Yushchenko was a media darling, hailed as a democratic reformer. Today he faces a hail of criticism amid warnings of creeping censorship.

What happened?

His son took a ride in a flashy car.

The car – a sleek BMW that reportedly has a price tag of well over 100,000 euros ($120,000) – peaked the interest of a muckraking Internet newspaper, Ukrainska Pravda.

Ukraine's President Viktor Yushchenko's son, Andriy

After poking around, it published a critical story that asked how Yushchenko’s oldest son Andriy, a 19-year-old university student, could afford luxuries like the posh BMW, a cell phone said to cost some 4,000 euros, and restaurant bills in the hundreds of dollars.

The story sparked a furious reaction from the president.

“Act like a polite journalist and not a hired killer,” Yushchenko told a Ukrainska Pravda reporter when the latter asked him to comment on the topic at a press conference late on Monday.

Then in a long-winded, somewhat rambling discourse, Yushchenko said that his son was a moral, well-brought up person who rented the luxury vehicle with earnings from a part-time job.

He also said that the reporter who wrote the story was paid to do so by his political opponents.

Yushchenko’s comments – directed at a reporter from a publication that staunchly supported him during last year’s “orange revolution” – shocked the journalism community, which openly cheered the election of the Ukrainian leader.

By late yesterday, more than 300 reporters had signed a letter that demanded Yushchenko publicly apologise for his remarks.

“You had sworn ... to uphold the freedom of speech,” it said.

“Today you disregard freedom of the press, which includes free access to information, including that of public figures. You have to realise that you and your family are objects of public attention. Society has the full right to know about the revenues, spending and lifestyle of your family.

“We are forced to talk about the country sliding into censorship, self-censorship and the lack of freedom of speech.”

Yushchenko has sought to soothe tensions

“It is right for the president’s family to live under the press spotlight,” Yushchenko said in a letter to Ukrainska Pravda late on Tuesday. “But it’s not a reason to deny my family the right to a personal life.”

But journalists say the conflict is the latest in a worrying trend by Yushchenko’s administration, which ran on pledges of transparency and a free press but has since sought to tighten control over Internet publications and often dismisses criticism as a result of a political order.

“Apparently the current Ukrainian president thinks that freedom of the press is when he reads flattering articles,” one journalist wrote in the Den daily yesterday.
Observers say the conflict is a test of whether Yushchenko’s administration will fulfil its campaign pledges now that it is in power.

“We’re not talking about invasion of privacy of the president or his son,” said Yevgen Bystritskiy, executive director of the non-governmental organisation Renaissance Fund, which monitors the Ukrainian media.

“This is a question of principle of how transparent are relations between the government and oligarchs,” he said.

Ukrainska Pravda said spending habits of Ukraine’s first family are fair game for reporters, since business interests under the previous regime often influenced policymakers by lavishing gifts on them and their families.

“This government differs little from the previous one in that it doesn’t like and it doesn’t handle criticism well,” Yelena Pritula, chief editor, told AFP.

“They haven’t found a way to react to it,” she said. “Yushchenko’s reaction differed little ... to what (previous president Leonid) Kuchma would have said in a similar situation.”

“Instead of dealing with the situation, the president decided to insult the journalist,” she said.

Source: AFP

Economic Reform Lags in Ukraine

KIEV, Ukraine -- President Viktor Yushchenko, who swept into power last January on promises that he would stamp out corruption and press ahead with economic reforms in Ukraine, is making so little headway that foreign investors are staying away and growth is falling sharply.

Economists and analysts say the delay is the result of government infighting as well as a shortage of competent personnel in state administration and the courts.

Ukraine's Prime Minister Yulia Tymoshenko, left, Ukraine's President Viktor Yushchenko, center, and Ukraine's Parliament Speaker Volodymyr Lytvyn durinfg a news conference in Kiev

Now with presidential powers due to be curbed in September under new constitutional amendments - and fresh parliamentary elections scheduled for next March - the fear among those hoping for a European-style free market in Ukraine is that Yushchenko has very little time left to exert his influence.

"We are a little behind from where we were a half a year ago," said Vladimir Litvin, the influential speaker of the Parliament.

"Our actions are often convulsive," he said Saturday at a conference organized by the Yalta Europe Strategy, a group that support's Ukraine's eventual membership in the European Union.

"We are not pro-active concerning the challenges. We don't have the concepts or programs for Ukraine's development over the next 10 years."

The biggest casualties so far, economists say, have been the process of privatization and efforts to clarify property rights and to make the banking system flexible and transparent.

Much of the problem, they say, is within the government and the courts, which are struggling with disputes over the privatization and renationalization of enterprises. Although a new, reform-minded elite has emerged - as evidenced by the burgeoning of independent research groups and economic and political institutes - this new generation so far is mostly remaining outside government, stepping forward only as advisers.

"There is a real lack of institutional capacity," said Alexander Sushko, director of the Center for Peace, Conversion and Foreign Policy of Ukraine. "There is simply not enough personnel around ministers who want to introduce reforms."

Yushchenko, who wants to integrate Ukraine into the world economy as soon as possible, defeated Viktor Yanukovich, his conservative archrival, amid huge protests demanding free and fair elections.

After taking office, Yushchenko said he would not pursue a witch hunt against those who bought enterprises under dubious circumstances from the former government.

Prime Minister Yulia Timoshenko, however, has started to renationalize some of the companies. Her aim, economists say, is to curb the powers of the oligarchs, most of whom supported Yanukovich in the presidential elections.

One recent renationalization was the profitable steel maker Kryvorizhstal.

It was sold in June 2004 to a consortium controlled by Viktor Pinchuk, one of the six oligarchs and a son-in-law of Leonid Kuchma, who resigned as president late last year. Pinchuk's $800 million bid beat out one of $1.5 billion from U.S. Steel and its Dutch partner, Mittal Steel.

Pinchuk, a member of Parliament and chairman of the giant Interpipe, declined to comment on the recent renationalization.

"I don't want to make a political issue out of it," he said.

He has been fighting in court to get the plant back but suffered another setback this week. A Ukrainian appeals court on Tuesday upheld a decision declaring the original auction illegal, The Associated Press reported.

The court ordered the controlling stake to be returned to the state and told the government to return his purchase price after the steel maker is resold. Timoshenko announced last month that it would be reprivatized.

This month, a plan to privatize Ukrtelecom was halted amid concerns it was not ready.

Timoshenko then announced last week that only 42 percent would be sold, leaving a controlling stake in state hands, according to the Prime-Tass news agency.

The latest forecasts by the Institute for Economic Research and Policy Consulting show that the uncertainty about privatization is already contributing to reduced investment and low growth. It said real growth in gross domestic product is forecast to be around 4 percent in 2005, well down from 12 percent last year. Forecasts for unemployment are not yet available, but the rate rose to 8.7 percent during the last quarter of 2004, compared with 8.1 percent in the previous quarter.

Efforts to clarify privatization and property issues have also become bogged down in ideological battles inside the coalition government. The government was hastily put together in January from the legislators who belonged to the previous Parliament.

The privatization agency, the property rights agency and the agricultural ministry are under the control of Timoshenko's Socialist Party. This partly explains why Yushchenko, head of the party Our Ukraine, has been unable to influence policy as much as he would have hoped.

With parliamentary elections scheduled for March, the government is also treading cautiously because it fears that nonreformers could regroup and form an alliance with supporters of Yanukovich and other leftist parties.

"We must not forget that 44 percent voted against Yushchenko in the presidential elections," said Alexander Rahr, director of Research at the German Council on Foreign Relations and who works closely with Ukrainian reformers.

Source: International Herald Tribune

An Assassination Attempt on Yushchenko Planned in Georgia?

KIEV, Ukraine -- President Viktor Yushchenko delayed his trip to Georgia because of available information about a terrorist act which was being prepared against him.

This was reported on Wednesday by Georgian newspaper "Rezonansy".

According to the paper, the attempt on the life of Ukrainian president was planned by the criminal Russian-Ossetian group. It was even preparing to shoot down the presidential plane.

Meanwhile, the press service of the Georgian president denies the information about a terrorist plot allegedly prepared against Yushchenko during his visit to Georgia, "Novyny-Ukrayina" reports.

"Everything that the "Rezonansy" newspaper published today about the terrorist plot against the president of Ukraine Viktor Yushchenko is a figment of the paper's imagination. Everything talked about in the paper is absolutely untrue," the head of information service of the presidential press service Teimuraz Grigalashvili said.

Viktor Yushchenko's visit was scheduled to start on July 26th, but on July 25th it was delayed to a later date.

The journalists were told by the State Chancellary of Georgia that the end of July was particularly busy for the Ukrainian president, and he decided to delay the trip towards the beginning of August, in order to stay in the country longer and to get to know it better.

Yushchenko was scheduled to take a six-day vacation in Georgia. The Georgian government was preparing intensively for his visit and developed a programme of his visit, including the Borjomi resort and the ancient capital of Georgia - Mtskheta, along with other notable destinations.

Source: Ukrayinska Pravda

Wednesday, July 27, 2005

New Ukrainian Leadership Embraces Soviet-Style Conspiracy Theories

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko sent an open letter to Ukrayinska pravda yesterday (July 26) following his public broadside against the publication at a press conference one day earlier. Yushchenko has accused Ukrayinska pravda of deliberately trying to discredit his son, Andriy, and his presidency.

Yushchenko was referring to a two-part article in Ukrayinska pravda provocatively entitled "Andriy Yushchenko: Son of God?" The article investigated Andriy's personal characteristics, portraying him as a spoiled brat. The author particularly wanted to know how a 19-year old could afford to drive around in an expensive BMW M6 (base price: 133,000 euro).

It is not unusual for Western leaders to occasionally be disturbed by media coverage that delves too deeply into their personal lives. But with Yushchenko it is unusual how much a pro-Western reformist leader has apparently embraced a political culture that regularly sees conspiracies. Former president Leonid Kuchma frequently resorted to such suspicions, a tactic that draws upon vestiges of Soviet political culture.

Since coming to power in January, the Yushchenko administration has frequently blamed conspiracies for its problems. Parliamentary Speaker Volodymyr Lytvyn claims the government regularly hurls "insinuations, accusations, intrigue, and lies". The oil crisis, caused by the government price ceiling, was blamed on Russia. The meat crisis was blamed on "speculators," while the sugar shortage and the failure to fully adopt legislation required by the WTO were blamed on parliament and Lytvyn personally.

Within the government, Minister of Justice Roman Zvarych has excelled at blaming conspiracies when unpleasant facts arise surrounding his alleged doctorate from Columbia University. Zvarych recently claimed that the attack on his credentials was staged by an organized conspiracy of persons he refused to reveal who had illegally hacked into the Columbia University database.

His penchant for conspiracy theories has ready-made supporters within the Yushchenko administration. National Security and Defense Council Petro Poroshenko blamed a conspiracy by former Kuchma loyalists when discrepancies first arose about Zvarych's credentials. Poroshenko claimed that public discussion about Zvarych's qualifications was planted by forces seeking to divide the Yushchenko camp.

Zvarych's attitude typifies the radical right of Ukrainian diaspora politics, where Russian-backed conspiracies are the norm. But by dwelling on intrigue, Zvarych and others in the Yushchenko administration ignore the right of media to investigate legitimate issues.

The Ukrainian opposition and its Russian allies also trade in conspiracy theories. Opposition leader Viktor Yanukovych and his Russian allies believe that the West, specifically the United States, orchestrated Yushchenko's victory in the 2004 presidential election. Regarding thee Orange Revolution, Yanukovych's website asks, "Where did the large sums of cash come from to finance the transportation of tens or more likely hundreds of thousands of people from Western Ukraine to Kyiv and their accommodation in tents, the printing of leaflets, preparation of large numbers of symbols, ensuring support, and a lot more?" The Yanukovych camp believes that these funds came from abroad.

Yanukovych voters take a similar view: 43% of them believe that "outside forces" organized the Orange Revolution. Only 14% of Yushchenko's voters agree.

As a result of these conspiracy theories, neither Russia nor Yanukovych accept Yushchenko as the legitimately elected president of Ukraine. Yanukovych refuses to acknowledge the massive evidence of election fraud on his behalf. Instead, Yanukovych claims, "We prepared for elections -- they [prepared] to grab power". Yanukovych believes Yushchenko staged a coup d'etat with U.S. help. "This is not a revolution," he claims, "but political technology with the involvement of special services".

The Yanukovych conspiracy theory goes further still, claiming that Kuchma, former presidential administration head Viktor Medvedchuk, and Yanukovych's own campaign chief, Serhiy Tyhipko, conspired against Yanukovych. Political analyst Volodymyr Kornilov claimed, "From the very beginning [Yanukovych] was not supposed to win".

Yanukovych's election press secretary, Anna Herman, blamed Tyhipko for "executing somebody's will". Yanukovych's main problem, she claimed, was not Yushchenko, but a "third person who did not abandon hopes of being the rescuer of the nation." Presumably she means Kuchma, as the Constitutional Court had ruled that Kuchma could stand in the 2004 election, as he had only served on full term since the 1996 constitution came into effect.

These views feed into the broader, Soviet-style revival of Western-backed conspiracies that is becoming popular in Russia. Western NGOs are accused of subverting Moscow, and the FSB is reviving KGB-style tactics and rhetoric to defeat this "conspiracy". FSB head Nikolai Patrushev, for example, linked U.S.-backed conspiracies to the democratic revolutions in the CIS. He warned the State Duma, "Our opponents are steadily and persistently trying to weaken Russian influence in the CIS and the international arena as a whole. The latest events in Georgia, Ukraine, and Kyrgyzstan unambiguously confirm this".

The majority of the Russian public and political elite is convinced that Washington put Yushchenko into power and that he is therefore a U.S. lackey. His American-born wife, Kateryna, and her past employment in the U.S. government, are touted as "proof" that she works for the CIA.

The Yushchenko administration unquestionably supports reform and Ukraine's Euro-Atlantic integration. It is therefore strange that they, like their opponents, draw on neo-Soviet political culture by frequently using conspiracy theories to explain their difficulties.

Source: Eurasia Daily Monitor

Yushchenko Angers Ukrainian Press

KIEV, Ukraine -- More than 100 Ukrainian journalists have written to President Viktor Yushchenko demanding he apologise for labelling a reporter a "hitman".

Serhiy Leshchenko had pressed the president to answer questions about his son's spending and lifestyle.


Andriy Yushchenko is a 19-year-old university student, but reportedly drives a BMW worth $120,000 (£70,000).

The row has strained relations between the president and the same press that supported his "orange revolution".

It suggests the honeymoon between President Yushchenko and the press may be over, says BBC world media correspondent Sebastian Usher.

Mr Leshchenko, a reporter with the widely read online newspaper Ukrayinska Pravda, has written articles questioning how Mr Yushchenko's son could support his apparently lavish lifestyle.


The president said his son had a job that allowed him to rent the BMW M6 sports car, and that an expensive mobile phone he uses was a present from a friend.

When the reporter asked on Monday where the boy worked, Mr Yushchenko told him to "act like a polite journalist and not like a hitman".

The response outraged journalists, who accused the president of returning Ukraine to the climate of censorship experienced under his predecessor, Leonid Kuchma.

"We don't think that the vocabulary and the tone that you used while answering a question about your son's lifestyle are worthy of a leader of a democratic European country," said a letter signed by more than 100 journalists and posted on the Ukrayinska Pravda site.

"You have to realise that you and your family are objects of public attention. Society has the full right to know about the revenues, spending and lifestyle of your family," it continued.

Mr Yushchenko replied with his own open letter, saying: "It's right for the president's family to live under the press spotlight.

"But it's not a reason to deny my family the right to a personal life."

Source: BBC News

Viktor Yushchenko's Son Drives Luxurious BMW for 130,000 Euros

KIEV, Ukraine -- Andrey Yushchenko, the son of Ukrainian President Viktor Yushchenko, has recently made headlines in Ukrainian press. It turns out that "children of the orange revolution" live in luxury. Viktor Yushchenko's 19-year-old son, Andrey Yushchenko, drives a BMW, which costs more than 130,000 euros. Eyewitnesses say that the young man ignores road laws and develops the speed of 100 km/h on Kiev's narrow streets.

Andrey Yushchenko

Until recently, Andrey was visiting his girlfriend driving her Mercedes CLS 500 (over $90,000). This week, however, the young man was spotted driving a BMW M6 with Czech numbers CZ3U1 0401. Andrey's girlfriend, Anna, owns an apartment near the building of the presidential administration in Kiev. One square meter of such an apartment is evaluated at more than $4,000.

The basic model of a BMW M6 costs 133,000 euros in Kiev car saloons. The magnificent car is available on the base of a customized delivery only. Reporters found out that there is only one car like that in Kiev; the vehicle belongs to the son of the Ukrainian president, who recently urged Ukrainians not to steal, the Ukrainian Pravda newspaper wrote.

In addition, Andrey Yushchenko has become a patron of Kiev's most expensive night clubs and restaurants. Ukrainian reporters have recently photographed Viktor Yushchenko's son near two most expensive restaurants in Kiev, which enjoy popularity with footballers of Kiev Dynamo team. Eyewitnesses say that Andrey orders extremely expensive champagne for 1,000 euros per bottle and leaves $300 for restaurant personnel as tips.

The son of the Ukrainian president obviously has a fondness for expensive equipment. Andrey owns a Vertu cellular phone, the cost of which fluctuates from 4,700 to 35,000 euros.

Yushchenko's son appears in public with escorting bodyguards, who defend the young man against reporters' curiosity. The press service of the Ukrainian president has recently distributed the following statement: "The car, which I drive, belongs to a friend of mine, whose name I would rather not expose. My parents hired a group of bodyguards for me during the election campaign. I realize the responsibility, which I carry on account of my last name, Yushchenko. I study and work in a commercial firm, trying to obtain financial independence. I do not own a collection of vehicles, but I can make money for my own life."

It is noteworthy that the Ukrainian president himself earns about $5,000 a month. This profit is five times less than the wages of Europe's highest-paid official, German Chancellor Gerhard Schroeder. Viktor Yushchenko should therefore work for 30 years to be able to afford a BMW M6.

Andrey Yushchenko is a student of the Kiev Institute of International Relations. The Ukrainian president rejected the information about the luxurious property of his son. Viktor Yushchenko stated as a press conference on Monday that his son was simply renting a prestigious foreign-made car.

Yushchenko emphasized that his son works in a consulting firm, the profit of which helps Andrey pay the car rent and bodyguards' services, RIA Novosti reports. "This is not a lot of money, but it is enough to pay for the rent of the vehicle and for the services of the private security firm," the president of Ukraine said.

According to Viktor Yushchenko, his family receives the income of several millions of hryvnas (the national currency of Ukraine, which corresponds to $400,000). The president urged Ukrainian reporters to leave "women and children" alone if they want to search for compromising and sensational materials. "Those who know my son can confirm that this is a well-bread, moral and religious guy," Ukrainian President Viktor Yushchenko said.

Source: Pravda

Tuesday, July 26, 2005

Belarus’ Lukashenko Accuses West of Intervention Plans

MINSK, Belarus -- Belarus President Alexander Lukashenko has accused Western countries of attempting to destabilize the situation in the country. He did not rule out the possibility of intervention.

“We are heading into a very serious confrontation,” RIA-Novosti news agency quoted the Belarus leader as saying. “Of course, the Americans, the West will aim to destabilize the situation here in any possible way. They have worked out certain tactics that may include even intervention in our country.”

Speaking at a meeting on foreign and interior politics, Lukashenko said the Western countries have created bases to influence the situation in Belarus, such as “media, control and tracking from Lithuania and Poland. Currently, they are trying to involve Ukraine into this activity.”

He added that the foreign countries have activated control and intelligence services in Belarus and are going to “create certain groups that will head for Minsk when needed and will make a revolution in the main square. Well-known organizations will be concentrated on the territory of Lithuania, Poland and Ukraine. They even try to create such detachments in Russia.” Lukashenko recalled the so-called “orange revolution” in Ukraine late last year that started from opposition protest rallies on the main square of the Ukrainian capital of Kiev.

“I want to warn that we are aware of it. And we know how to oppose the intervention. I am not threatening anyone, but everybody should understand that I, as an elected head of state, will defend my people in all accessible ways provided by the Constitution,” Lukashenko said.

The Belarusian leader added that he had earlier discussed the recent revolutions in former Soviet republics with his Russian counterpart, Vladimir Putin. “I cannot say that we are as worried about revolutionary changes in Belarus and Russia as media report. There will be no revolution either in Belarus, or in Russia, we have agreed about that.”

He added that Russia widely supports Belarus on foreign issues and would consider “a revolution in Belarus as a revolution in Moscow.”

Source: MosNews

Yushchenko Offers Upbeat Assessment of First Six Months in Power

KIEV, Ukraine -- President Viktor Yushchenko gave an upbeat assessment July 25 of his first six months in office but also sounded a warning to his often-feuding government not to abandon the unity that brought them to power.

"We must demonstrate that we have stayed the same as we were seven months ago on Independence Square," Yushchenko said after a marathon eight-hour, closed door session with his top ministers.

Viktor Yushchenko with Family at January Inauguration

Yushchenko came to power in January after last year's mass protests known as the Orange Revolution in which a divergent group of opposition leaders called their supports onto the streets to challenge a fraud-marred presidential vote.

The vote was re-held and Yushchenko convincingly won, going on to form a coalition government that brought together wealthy oligarchs, pro-business politicians and Socialists.

The team won popular support for their pledges to improve living standards and fight the corruption and cronyism that had marred the decade-long rule of former President Leonid Kuchma.

"All the immediate tasks that we put before us for the first half of the year, we solved them," Yushchenko said.

He claimed 489,500 new jobs had been created - halfway to the goal he set himself of one million new jobs every year. Yushchenko also praised the 4 percent growth in Ukraine's economy even though it represents a slowdown from last year, and the government's success at holding inflation at 6.4 percent.

"Today I can look in the eyes of those people who before this hadn't received pensions of a minimum living standard, of handicapped children and mothers who give birth to a kid," Yushchenko said, referring to new social benefits and the increase in pensions paid by his government.

Yushchenko called on the government and parliament to improve relations, asking them to "work as one team." This month, lawmakers refused to pass all the parts of the government's much-sought after package of legislation that is needed before Ukraine can join the World Trade Organization.

"You should be able to forgive and focus on the state," Yushchenko said, flanked by Parliament Speaker Volodymyr Lytvyn and Prime Minister Yulia Tymoshenko.

Yushchenko and his allies face parliamentary polls next spring, a major test at a time when political reforms will have transferred much of the presidency's powers to the prime minister, who will be chosen by the political forces that triumph in the legislative vote.

Yushchenko didn't address some of the thorniest issues to face the new government, such as the fuel crisis earlier this fall and rising food prices.

Notoriously late, Yushchenko kept journalists waiting on July 26 for almost three hours. At one point, he noted that he doesn't own a watch.

Source: AP

Monday, July 25, 2005

Rival Views Divide Top Leadership in Ukraine

YALTA, Ukraine -- Eight months after hundreds of thousands of demonstrators ousted a corrupt government, Ukraine's peaceful Orange Revolution is being undermined by personal rivalries, conflicting reform programs and lack of coordination between the two people who did most to lead the revolt, according to advisers and supporters in both camps.

Yushchenko-Timoshenko Team During Orange Revolution

They say the struggle between President Viktor Yushchenko, a former chief of Ukraine's National Bank, and Prime Minister Yulia Timoshenko, a former business tycoon, over shaping Ukraine's future is delaying much-needed reforms. It could even erode the popular support that put both leaders - who are very different - into power.

"Timoshenko is very left-wing, hugely populist, paternalistic and also very charismatic," said Boris Nemtsov, a former vice-prime minister of Russia, leading member of the liberal Union of Right Forces political party and now an adviser to Yushchenko. "Yushchenko is a liberal, democrat, European-oriented politician. Such ideological differences are very hard to overcome. There is jealousy and rivalry while reforms keep being delayed."

Yet, say their advisers and analysts, they depend on each other. Yushchenko needs Timoshenko's power, popularity and political guile to keep a fragile coalition of liberals, socialists and communists together before next March's parliamentary elections. Timoshenko likewise needs Yushchenko's support in order to retain the office of prime minister, who is appointed by the president.

Neither politician will admit publicly to clashing with the other. But the openness with which their advisers discussed the problem at a weekend conference in Yalta illustrates that the rivalry and clash of agendas are hampering change. This means that much-needed reforms proposed by the International Monetary Fund and the European Bank for Reconstruction and Development - including introduction of clear property rights, the rule of law and privatization - have not gotten very far.

"There is a question hanging over the Yushchenko-Timoshenko team," said Grigoriy Nemyrya, adviser to the prime minister and director of the Center for European and International Studies in Kiev.

"There is a lack of coordination and coherence inside the government. If last December's revolution was a managed revolution, then a managed counterrevolution is possible over the next eight months," he said. "It would be damaging for Europe and Ukraine. It would be catastrophic for the region."

Nemtsov and Nemyrya were among several top advisers and business people at the weekend conference held in the Livadia Palace, a favorite summer residence of the Russian czars perched above the southernmost tip of Ukraine's Crimean coast. It was here, early in 1945, that the United States, Britain and the Soviet Union decided the postwar fate of Germany and Eastern Europe. After Nazi Germany capitulated four months later, Eastern Europe soon came under Soviet domination.

Sixty years on, with the Soviet Union gone, Germany reunited and former Communist countries in the EU and NATO, there is another agenda. "This is about bringing Ukraine back to Europe," said Marek Siwiec, a Polish legislator in the European Parliament and board member of the Yalta European Strategy, a nongovernmental organization that organized the conference.

The aim of Yalta Ukraine Strategy is to muster international support for Ukraine's eventual membership into the European Union. It is headed by Steven Byers, a former British trade and industry minister in Prime Minister Tony Blair's government. But the driving force behind it is the oligarch Viktor Pinchuk, who is chairman of the giant Interpipe corporation and son-in-law of the former Ukrainian president, Leonid Kuchma.

Kuchma stepped down last December after Yushchenko was elected his successor in elections that were rerun because of massive protests at electoral fraud in an earlier November vote.

At the Livadia conference, Ukraine's staunchest supporters from inside and outside could not hide their disappointment over the slow pace of reforms.

"There is mounting anger in Western business circles over the lack of radical liberal reforms and the failure to establish a functioning legal system," said Alexander Rahr, a Russian expert and program director at the German Council for Foreign Relations in Berlin.

With parliamentary elections scheduled for next March, Rahr and other analysts said Ukraine's legislators will balk at any reforms that could damage their election chances.

This was clear two weeks ago, when the government tried to win parliamentary approval for new laws required for joining the World Trade Organization.

The debates literally ended in fistfights as Socialist Party legislators backed by the Ministry of Agriculture fought hard to prevent any lifting of the high tariffs on sugar imports in order to protect domestic farmers.

"The point is that useful reforms have to be unpopular," said Dmitriy Vydrin, director of the European Integration and Development Institute in Kiev. "Yet when you look at what is taking place in the Parliament, you see too many factions which are still being influenced by the big businesses. The government has not pushed through enough changes or reforms to break those links."

Some attribute the slow pace of reforms to the chaotic organization of the government as well as the resistance to change from state and local officials.

"There is no clarity over how instructions are issued," said Timoshenko's adviser, Nemyrya. "There is one set of instructions issued by the prime minister, another by the secretariat, another by the Security Council and another by the parliamentary factions."

The tension between the two leaders means they do not intervene effectively to clear up the confusion, according to their respective advisers. This is damaging Ukraine's image abroad - European foreign investors, for example, are staying away until the government passes a law on property rights, privatization and intellectual property rights.

"The delay in setting out clear property rights affects how the government will proceed with privatization," said Igor Burakovsky, director of the independent Institute for Economic Research in Kiev. "Timoshenko is pursuing populist measures ahead of the March elections," he added. Pensions have been increased for the third time since last autumn. The receipts earned from privatization were meant to finance the increases. But during the first six months of this year, only $100 million had been earned from privatization sales - well short of the target of $1.2 billion for all of 2005.

"We are losing time and we are losing good will from abroad," Burakovsky said.

Source: International Herald Tribune

Ex-Soviet Republics Unfriendly, Russians Complain

MOSCOW, Russia -- Russians are unhappy with a hostile policy pursued by most former Soviet republics, showed an opinion poll carried out by the All-Russian Public Opinion Research Center on July 16-17. The survey encompassed 1,600 people in 153 locations across Russia.

Alexander Lukashenko - Best Known by Russians

CIS leaders best known to Russians were Belarus leader Alexander Lukashenko and Ukrainian president Viktor Yushchenko: they were correctly identified by 85 and 76 percent of respondents, respectively. The least known were presidents of Moldova, Tajikistan and Kyrgyzstan (19, 16 and 14 percent).

Leaders of most former Soviet republics are pursuing an unfriendly policy towards Russia, most Russians think. Ukrainian president Viktor Yushchenko and Georgian head of state Mikhail Saakashvili were seen as the most active anti-Russian campaigners, with 55 and 53 percent of respondents describing their policy towards Russia as hostile.

Moldovan leader is next in this line, with 38 percent seeing him an anti-Russian leader and 11 percent – as pro-Russian. Turkmen and Tajik leaders were seen as anti-Russian by 24 and 25 percent, and as pro-Russian – by 19 and 20 percent, respectively. The only exceptions were Belarus and Kazakh leaders, who were seen as pro-Russian by 52 percent and 50 percent of respondents, and as anti-Russian – by 22 percent and 15 percent.

Fifteen percent think Russian authorities have something to learn from Lukashenko, and eight percent said Russian officials could learn something from the Kazakh head of state.

Source: Gateway to Russia

Ukraine to Expand Trade at Sevastopol

KIEV, Ukraine -- Ukraine is considering three new terminal projects for its Crimean Black Sea port of Sevastopol to boost its international maritime trade.

A $70 million, 5-million-ton capacity breakbulk terminal is being proposed for construction in Dock Bay. A second potential construction project is a 32-acre kaolin terminal capable of handling up to 700,000 tons per annum for Kamyshovaiia Bay, while DonetskStal Metal Works plans a 37-acre coke terminal in the Kamyshovaya Bay.


Environmentalists have already registered opposition to all three projects. The Sevastapol city council after the public hearings on August 3 will make its final decision.

Sevastopol is a Ukrainian port city on the Crimean peninsula with a population of 328,600. The port is the home of the former Soviet Black Sea Fleet and Russia still maintains naval forces there under a 1997 agreement. Under the agreement the Russian naval facility is defined as being "located in Sevastopol," for which the Kremlin pays rent.

Following the collapse of Communism in 1991 the Russian Federation initially refused to recognize Ukrainian sovereignty over Sevastopol and the surrounding Crimean province, arguing that city was never practically integrated into the Ukrianian SSR because of its military base status. The issue was only resolved in 2004 by the bilateral "Peace and Friendship" treaty between the Russian Federation and Ukraine, which stated that Sevastopol belongs to Ukraine.

While both nations are concerned about providing security against terrorists for the rising volumes of Caspian oil exported via the Black Sea, Ukraine would like to expand Sevastopol's use away from being a purely military base, as it is one of the finest deepwater habors on the Black Sea.

Source: UPI

Ukraine, Israel Ready for Aircraft and Tank Building Cooperation

TEL AVIV, Israel -- Ukraine and Israel are looking to cooperate in the aircraft and tank building industries, the Novosti-Ukraine agency quoted Ukrainian Defense Minister Anatoly Hritsenko, currently in Tel Aviv, as saying.

Hritsenko said the Ukrainian Armed Forces had many planes and helicopters in need of repair.

Defense Minister Anatoly Hritsenko

"Having considered the opportunities of the Israeli side, we should specify bilateral Ukrainian-Israeli issues and trilateral issues involving Russia," he said.

Hritsenko also said Ukraine and Israel had joint tank building interests and intended to create new destruction systems.

"A bilateral working group is tackling this issue," he said.

Source: RIA Novosti

Ammunition Stockpiles Explode Again in Ukraine

KIEV, Ukraine -- The Zaporozhsk Military Prosecutor's Office has started criminal investigations into a fire that caused an explosion in the Novobogdanovka military stockpiles in southwestern Ukraine.

According to Novosti-Ukraina, the General Prosecutor's Office said Monday that criminal investigations are underway into infringements of military code and the rules of handling military stockpiles and explosive substances.

The fire broke out at 5:00 p.m. on Saturday. A similar fire had occurred nearby on May 6 2004.

The 2004 fire caused an explosion of firearms. According to official data, 5 people died, 4 were seriously injured and another 81 were hospitalized. The fire was not fully extinguished until May 19.

The recent fire, although it caused no casualties, brought the Moskva-Simferopol railroad line to a standstill, delaying trains for more than 24 hours and redirecting them through Kiev.

Source: RIA Novosti

IFC Invests $25 Million in Leading Petroleum Retailer in Ukraine

KIEV, Ukraine -- The International Finance Corporation, the private sector arm of the World Bank Group, signed an agreement today to provide $25 million in loans to support an expansion and efficiency project at a leading petroleum retailer in western and central Ukraine. This is IFC's first investment in Ukraine's oil sector, Harold Doan and Associates reported.

Plan for OKKO Filling Stations

Gas station operator Galnaftogaz will use IFC's financing to expand its network of service stations and improve the quality of its products and services. IFC has advised the company on implementing one of the country's first corporate governance codes, which positions Galnaftogaz as a national leader in conducting business in a transparent and responsible way.

Ukrainian drivers will profit from the expansion, as Galnaftogaz will modernize the domestic petroleum retail sector, which has a legacy of old, uneconomic gas stations. The firm wills more than double the number of service stations operating under the "OKKO" brand, from 103 today to more than 260 by 2008. The new stations will be providing high-quality fuels using modern equipment and will offer such complementary services as convenience stores, car washes, and cafeterias.

Rashad Kaldany, IFC's Director for Oil, Gas, Mining, and Chemicals, said, "We believe the expansion will help Galnaftogaz gain economies of scale, improve operating efficiencies, raise quality standards, and ultimately increase competition in the petroleum retail market. IFC is delighted to provide the necessary long-term financing to support a local company with good growth prospects."

Yuriy Kuchabskiy, General Director of Galnaftogaz, said, "We operate one of Ukraine's new and fastest-growing networks of service stations, and IFC's investment will enable us to expand into other regions of the country. This will significantly increase our sales and profitability. In addition to financing, we appreciate IFC's assistance in corporate governance and in environmental and social issues. We look forward to continued support from IFC in the future."

Ukraine became a shareholder of IFC in 1993. As of June 30, 2005, IFC has invested $355 million across 18 projects in the country. IFC significantly expanded its investment program in Ukraine in FY04, committing $87 million, and again in FY05, committing $255 million in the agribusiness, financial, and general manufacturing sectors. IFC has also been conducting an extensive advisory program in Ukraine since 1992. Current donor-funded programs offer advice on corporate governance to companies and banks, seek to improve the business environment, and promote leasing, development of the agribusiness sector, and the growth of small and medium enterprises.

Source: ForUm

Sunday, July 24, 2005

Russian Church Against Ukraine-Style Uprising

MOSCOW: Russia’s church said yesterday that a Ukraine-style revolution would rip the country apart – the latest top institution to warn Russians against an uprising.

Last year’s “Orange Revolution” in Ukraine and 2003’s “Rose Revolution” in Georgia have worried many Russian officials, who say pro-democracy movements in ex-Soviet states are a Western plot to undermine Moscow’s influence.

“Russia has already lived through a coloured revolution – a red one ... Russia will not survive another revolution,” Interfax news agency quoted Orthodox church spokesman Vsevolod Chaplin as telling members of the pro-Kremlin youth group Nashi. “If our country falls apart, it will not become a group of little Switzerlands but one big Yugoslavia pulled apart by bloody chaos, which no foreign peace-keepers could deal with.”

The bloodless revolutions in Georgia and Ukraine were sparked by government attempts to rig elections, and some Russian officials have mobilised to prevent such an uprising in Russia.

The main KGB successor agencies of the ex-Soviet states have met to co-ordinate steps to stop the pro-democracy movement spreading, and Russia’s FSB has demanded tighter controls on non-governmental organisations (NGOs).

President Vladimir Putin said on Wednesday that foreigners were meddling in Russia’s politics by financing NGOs, and offered to fund them himself from Kremlin coffers.

“We understand that he who pays the piper calls the tune,” Putin told NGO leaders.

“The defence of the country’s unity, its independence and its spiritual freedom must be the business of all society and every one of us,” Chaplin told the camp.

The Orthodox church was oppressed under the Soviet Union, with many churches demolished or used as factories and warehouses.

Since 1991, it has established a cosy relationship with the Kremlin and former KGB spy Putin frequently attends major religious events.

Source: Reuters

Resolution of Gongadze Murder Blocked

KIEV, Ukraine -- Despite hopes to the contrary, the election of a new president of Ukraine has not sped the investigation into the murder of opposition journalist Heorhiy Gongadze. At the Davos World Economic Summit in January, President Viktor Yushchenko promised that the Gongadze case would be submitted to court by May.

In fact, there is little progress beyond the arrest of two Interior Ministry officers and the release of a third on bail. All three were involved in Gongadze's kidnapping in fall 2000.

Opposition Journalist Heorhiy Gongadze

Prosecutor-General Sviatyslav Piskun visited the United States in the second week of July where he had planned to meet Mykola Melnychenko, the former presidential guard who had bugged President Leonid Kuchma's office. A fragment of one tape recording with Kuchma's voice ordering violence against Gongadze was played in parliament on November 28, 2000, sparking the Kuchmagate crisis.

For still-unclear reasons, Piskun did not meet Melnychenko. Instead, he discussed other issues with the United States, such as signing an extradition treaty, the deportation of former prime minister Pavlo Lazarenko (on trial in California since 2004), and the extradition of former Kuchma officials wanted in Ukraine but now living in the United States.

Melnychenko blamed Piskun for changing the time and place of the planned meeting. Piskun was to have taken Melnychenko's affidavit and hoped to take the original recordings back to Ukraine. But observers are now wondering if the "scheduling error" is really a smokescreen covering both Piskun and Melnychenko.

First, both Melnychenko and Gongadze's widow, Myroslava, have long argued that Yushchenko was mistaken in retaining Piskun as prosecutor. Yushchenko may belatedly be coming round to that same conclusion. At a meeting of central and regional prosecutors, Yushchenko accused the Prosecutor's Office of taking bribes to block investigations ordered by the Interior Ministry (MVS) and Security Service (SBU).

Yushchenko noted that top Kuchma-era officials all seem to get advance warnings to flee Ukraine ahead of their imminent arrest. For example, General Oleksiy Pukach, who was in the car alongside three other MVS officers accused of kidnapping Gongadze, fled to Israel in 2004. When the SBU and Israeli security service jointly located Pukach in Israel and passed this information through Interpol to the Ukrainian Prosecutor's Office, somebody leaked this information to Segodnya, allowing Pukach to go into hiding. As Zerkalo Nedeli/Tyzhnia put it, "In a word, it all looks professional and smells bad."

Second, Melnychenko's reputation has been tarnished. Semen Shevchuk leaked information to Ukrayinska Pravda that detailed meetings in Berlin (February), August (Moscow), and September 2004 (Moscow) between Melnychenko and Kuchma officials, with Russia's SVR acting as intermediaries. The Russian side was interested in protecting Kuchma as well as ensuring that fragments of Melnychenko's tapes relating to corruption by Russia's leaders in cahoots with Kuchma did not go public.

Melnychenko and Oleksandr Yeliashkevych, another political refugee from Ukraine, both demanded and received $1 million each from the Kuchma authorities. The funds were organized by Viktor Medvedchuk, then head of the Presidential Administration, and negotiated in Moscow by Ihor Bakay, then head of the Directorate for State Affairs. Bakay is now living in Moscow and wanted by the current Ukrainian authorities on charges of stealing $300 million. This explains why so little of the Melnychenko tapes were released during the 2004 election and his reluctance to assist the Gongadze investigation since Yushchenko came to power. His silence was agreed in Moscow as part of the monetary arrangement.

Third, the latest tapes to be released make top Yushchenko officials look guilty. Newly released tapes from 2000 incriminate National Security and Defense Council Secretary Petro Poroshenko, portraying him as a Kuchma lackey hostile to then First Deputy Prime Minister, now Prime Minister, Yulia Tymoshenko. Zerkalo Nedeli/Tyzhnia described this development as the recordings' "transformation from a heroic deed into something absolutely different. And a national tragedy has been transformed into a farce."

However, the Kuchma camp is not the only faction that has sought to buy off people involved in the Gongadze case. The Ministry of Justice attempted to bribe Myroslava Gongadze with 100,000 Euros in exchange for her withdrawing all future claims against the government. She described this offer as "an absolutely vulgar proposal by the Ukrainian government to shut me up". Unlike Melnychenko, Myroslava Gongadze refused the offer and demanded that the Ukrainian authorities punish the "organizers," and not just the MVS officers who carried out the murder of her husband.

Two further suspicions have also arisen. The first rests with the death of former Interior Minister Yuriy Kravchenko, whose voice is heard on the Melnychenko tape dealing with Gongadze. MVS Minister Yuriy Lutsenko and former SBU chairman Ihor Smeshko do not believe Kravchenko committed suicide -- especially as he was found with two bullets to his head -- after Prosecutor Piskun publicly called him to give testimony. Smeshko said, "I am inclined not to believe that he committed suicide. The information I have at the moment poses huge questions as to why the murder version was not pursued".

The second suspicion rests with efforts to bring Kuchma to justice. First Deputy Prime Minister Mykola Tomenko believes that any investigation of the Gongadze affair should begin with Kuchma and parliamentary speaker Volodymyr Lytvyn. Lytvyn, who was head of the Presidential Administration from 1996-2002, has never been called in for questioning and will be a coalition partner with Yushchenko in the 2006 parliamentary election.

Deputy Prosecutor Viktor Skokin is now stating that Kuchma did not issue the order to "deal with" Gongadze. Shokin was deputy prosecutor in October 2003, when the Presidential Administration responded to pressure and released Pukach from a brief imprisonment.

Failure to proceed on the Gongadze affair will seriously damage the legitimacy of those who came to power through the Orange Revolution. As SBU Chairman Oleksandr Turchynov admitted, "the death of this person [Gongadze] really shook up and changed the country". Without Kuchmagate, there likely would have never been an Orange Revolution exactly four years later.

Source: Eurasia Daily Monitor

Saturday, July 23, 2005

Yushchenko Backs Japan Bid for UNSC

TOKYO, Japan -- Japan is qualified to secure a permanent seat on the U.N. Security Council, in view of the political and economic role it has played within the organization, visiting Ukrainian President Viktor Yushchenko said Thursday.

Ukraine is among the 23 nations that jointly submitted a resolution to expand the UNSC, in conjunction with the so-called Group of Four nations that aspire to become permanent members of the council -- Japan, Germany, India and Brazil.

Ukrainian President Viktor Yushchenko places a wreath in front of a cenotaph for the atomic bomb victims at the Peace Memorial Park in Hiroshima, Japan

During a lecture in Tokyo, Yushchenko thanked Japan for expressing support for granting a rotating UNSC seat to an Eastern European nation, such as Ukraine.

"It will not be permissible to ignore the position of these countries in forming the history of the modern world," he said.

Yushchenko added that Ukraine had in the 1990s abandoned its nuclear weapons program, a legacy of Soviet rule, as a means of boosting democracy. European countries, as well as Japan, provided financial support for Kiev's efforts to dismantle its nuclear arms.

The president, who is on a four-day visit to Japan, met with Prime Minister Junichiro Koizumi later Thursday and is scheduled to leave Japan on Saturday.

Ukrainian President Viktor Yushchenko visited the Tokyo Stock Exchange, saying he wants to foster cooperation with TSE officials as a means of bolstering the infrastructure of the securities market in Ukraine.

Yushchenko told reporters "technical cooperation and advice from Japan" would be essential to improve the Ukrainian stock market environment.

Source: The Japan Times

IKEA Goes to Ukraine from Moscow

MOSCOW, Ukraine -- Ramstore retail chain has sealed an agreement with IKEA to become a major operating company in Kyiv’s MEGA shopping mall. The project proves that the Ukrainian capital is an undisputed leader on the volume of Russian retail investment among the CIS cities (excluding Moscow). However, experts predict a forthcoming sharp decline in the attractiveness of Ukrainian projects Ramstore's Ukrainian expansion will copy the retailer’s triumphal entry of the Moscow market in 1997. Ramstore in Kyiv will also be the biggest food store in the country with the total area of 12,000 sq. km.

Ramstore in Moscow

Ukrainian projects are now highly popular with Russian businessmen, as nearly all top Moscow retailers have their shops in Ukraine. Russian retailers do not pay that much attention to any other Russian regions, except for Moscow. The volume of the retail market is estimated to have risen 28 percent. The city is relatively close to Moscow – 800 km, compared to several thousand kilometers to Russian million-populated cities. What is more, many retailers view Ukrainians as weak rivals.

However, experts predict the Ukrainian retail a short life. The Russian expansion may die out in a year or a year and a half, as the rent on commercial premises has soared due to the entry of Russian retailers, the rates approaching Moscow ones. In these conditions it is easier to go developing Russian cities with the population of 500,000 – 700,000.

Source: Kommersant

Friday, July 22, 2005

Georgia's Strategic Partnership With Ukraine

TBILISI, Georgia -- Ukrainian President Victor Yushchenko will be vacationing in Georgia from July 26-30, and although the Georgian president's administration stresses that this is an unofficial visit, it nevertheless underlines the close ties between the two countries, as well as offers an opportunity for the further deepening of relations.

The Ukrainian president is slated to visit many of Georgia's tourism highlights, including Tbilisi and Mtskheta, Borjomi and Bakuriani, Vardzia, Svaneti and a vineyard in Kakheti. President Mikheil Saakashvili is reportedly cutting short his stay in Holland, where he is visiting his wife Sandra Roelofs who is pregnant with the couple's second child, in order to accompany Yushchenko. During the trip meetings are also scheduled for Prime Minister Zurab Noghaideli and Speaker of Parliament Nino Burjanadze.

The visit symbolizes not only the strategic partnership developing between Georgia and Ukraine but also the close personal relationship between the presidents of the two countries. Saakashvili was vocal in his support of Yushchenko in the run-up to the Orange revolution and ensuing presidential elections, and the two men have met a number of times since, including spending their New Year holidays together in Ukraine.

Their relationship has been central to the development of ever closer relations between Georgia and Ukraine. The two countries, along with fellow GUAM member Moldova, share similar goals and difficulties. Most obviously, both have expressed their strong desire to become members of NATO and the European Union, and this has entailed a cooling in relations with the Kremlin.

Russia is duly taking measures against both countries, by raising the price of Russian gas exports, for example, and this in turn means the strategic partnership between the countries is of even greater importance. While Georgia has much to gain from close ties with Ukraine, which is after Russia the most powerful post-Soviet country, Georgia's strategic position between Ukraine and Caspian gas and oil fields means Ukraine too has much to gain from the partnership.

The two countries are currently planning deeper economic integration, and this is of particular importance for Georgia, whose biggest trade partner is currently Russia. The Ukrainian market offers great potential as a recipient of Georgian products, and with relations with Moscow currently so strained, Tbilisi is eager to diversify not only its energy sources but trade partners as well.

Georgia could also potentially benefit from closer ties with Ukraine with regard to its ongoing efforts to resolve its internal conflicts. Russia is obviously the country best placed to intervene in the Ossetian and Abkhaz conflicts to pressurize the separatist regimes to come to the negotiating table, but it seems highly unlikely that this is a route Moscow will take. Kiev, on the other hand, is keen to play a role in resolving these conflicts, as well as the Moldovan-Transdnestrian conflict, which it is admittedly in a stronger position to influence.

It is arguably in Kiev's interests to see an end to ethnic conflicts in the region, as Ukraine could potentially be threatened by a similar conflict with the eastern part of the country, which is predominantly populated by ethnic Russians, seeking to break from the western part. It goes without saying that an increase in the role played by Ukraine in resolving regional conflicts would be in the interests of Moldova and Georgia.

The Ukrainian Ministry of Foreign Affairs of Ukraine has published a statement recently declaring Ukrainian support for the Georgian government's initiatives to peacefully resolve the South Ossetian conflict. The statement reads that the recent Batumi international conference to discuss the proposals was an important step towards conflict settlement, and that the initiatives provide a real base for dialogue between Tskhinvali and Tbilisi.

Western countries and organizations have also praised the Saakashvili peace initiatives but past experience suggests that this verbal support is unlikely to translate into genuine efforts to get involved in the peace process. It remains to be seen whether Ukraine will make this move from statements of support to active involvement, but the people of Georgia hope that Yushchenko's visit will lead to just that, and there is no doubt that this would be a positive step.

Source: The Messenger