Friday, October 31, 2008

Alberta Approves Memorial Day For Ukrainian Genocide

EDMONTON, Canada -- Premier Ed Stelmach's voice cracked as he spoke about an Act introduced and passed unanimously Thursday that makes every fourth Saturday in November an official memorial day in Alberta for the Ukrainian famine and genocide, or Holodomor.

Premier Ed Stelmach

"I do this with a great range of personal emotion," said Stelmach, whose grandparents immigrated to Alberta from Ukraine a century ago.

In a speech heavily peppered with Ukrainian phrases and words, Stelmach called the famine forced upon Ukrainians in the early 20th century "one of the most heinous atrocities of modern history." He outlined how millions of people from his ancestral home were starved to death by Soviet policies that stripped grains from Europe's traditional "bread basket."

"My grandfather and grandmother were amongst those early pioneers who came to Alberta in the late 1890s," Stelmach said. "Marie and I still maintain the original farm that they settled on, till the same soil that they did and . . . "

The premier took a long pause before continuing, "And we also give thanks for the abundant crops that soil yielded."

Sadly, he said, the dark black soil of the Ukraine his own ancestors treasured could not offer the same happy yields through the early 1930s.

The Act was introduced by Aboriginal Affairs Minister Gene Zwozdesky - who is also of Ukrainian descent.

Source: Calgary Herald

Ukraine Cbank To Continue With Unlimited FX Action

KIEV, Ukraine -- Ukraine's central bank will continue to intervene in currency markets by buying and selling unlimited amounts of dollars, First Deputy Chairman Anatoly Shapovalov told Reuters on Friday.

Ukraine Central Bank

The central bank has been intervening every day for the past two weeks to try to prop up the hryvnia, which slipped on Wednesday to a historic low of 7.2 to the dollar. It has since bounced bank and was quoted 5.86-5.95 on Friday.

Shapovalov said a requirement for banks to sell the dollar at the rate they bought from the central bank would remain in force for several days. It offered to sell dollars at 5.95 hryvnias on Friday and at 6.05 on Thursday.

The bank is trying to bring interbank rates for the hryvnia back in line with the rates at which it intervenes, after market rates reached 7 to the dollar earlier this week when the bank was selling limited amounts of dollars at 5.7.

"We intervened yesterday, selling $500 million dollars. We therefore demand that if they bought from central bank reserves, they then meet client orders at that rate and their profit is the commission," he said.

"Today, we will send a letter saying that dollars bought today at 5.95 hryvnias have to be sold at 5.95 ... This is meant to calm the market. At the very least, this will happen today, tomorrow, and then we will see."

He said he expected the bank to sell fewer dollars on Friday than the $500 million on Thursday.

The office of President Viktor Yushchenko on Thursday criticised the bank's failure to stabilise the hryvnia despite selling $5 billion in the past three weeks.

Central bank reserves stood at $37.5 billion as of end-September. Officials have since then have said the reserves stood at $33-34 billion.

Source: Guardian UK

Thursday, October 30, 2008

Germany To Co-Host Euro 2012?

WARSAW, Poland -- Germany could co-host Euro 2012 with Poland should original co-organisers Ukraine prove unable, new Poland football federation president Grzegorz Lato said on Thursday.

Poland football federation president Grzegorz Lato.

Poland's legendary player Lato, the top scorer at the 1974 World Cup, has become his country's top official overseeing the run-up to Poland's first ever hosting of the European championships.

'Germany could join it (the plan to organise Euro 2012),' Lato told Polish television when asked him what could happen should Ukraine be unable to honour their original commitment.

Earlier on Thursday, Ukraine Euro 2012 tournament organiser Evgeny Villinsky said financial problems had meant Ukraine's preparations to host the tournament hade come to a halt.

Mr Villinsky added, according to the Interfax-Ukraine news agency, that the world-wide financial crisis and ill-advised management were the reasons for the stopping of work to prepare for the tournament.

Lato added however that Poland would be able to organise it by themselves though expressed his hope that 'Ukraine would be able to finish the preparations in time.'

Source: AFP

Ukraine Currency Strengthens On Hopes Of IMF Loan

KIEV, Ukraine -- Ukraine's battered currency rose Thursday, partly on hopes the country could secure a hefty International Monetary Fund loan to overcome a severe financial crisis.


The market responded to Parliament's approval Wednesday of a series of stabilization bills, required by the IMF to receive the $16.5 billion loan.

Parliament must still approve the bills in a final reading Friday, after which the IMF would have to approve the aid package.

The Ukrainian economy, which grew strongly over the past four years, has been one of hardest-hit by the global crisis among emerging markets, and experts predict a recession next year.

The global credit crunch, coupled with problems at a key bank prompted a run on banks that cleared the system of $3.4 billion this month.

The hryvna closed at 6.15-6.25 to the U.S. dollar on the foreign currency exchange, according to the Inter Business Consulting agency, after reaching a record low of 7.2 to the dollar the day before. The currency has lost about a quarter of its value since the beginning of the year.

Currency traders also reacted to the National Bank's offer to sell dollars to all players at close to the market rate. That, combined with a more transparent policy on the foreign currency market, had been a key demand of the IMF.

"This is a very positive dynamic," said Iryna Piontkivska, an analyst with Troika Dialog Ukraine. "The market has to believe that the National Bank is really doing this."

Source: AP

From Ukraine With Baggage

LONDON, England -- With all the seriousness that it can muster, the Commmunist Party of St Petersburg has accused the new Bond girl of treachery.

Daniel Craig and Olga Kurylenko in new James Bond saga.

Its argument rests on two claims: that Bond films are Western propaganda, and that Olga Kurylenko - for that is her real name - was raised and educated free of charge by the Soviet Union, which she now implicitly attacks by appearing alongside a British spy so influential that his real-world status as the embodiment of a thousand escapist fantasies is immaterial.

Kurylenko is 28 and from Ukraine.

This means that the Soviet Union actually relinquished her to free markets and democracy at the age of 11, having thoroughly oppressed, irradiated and impoverished her country first.

Still, the St Petersburg Communists have a point.

How would we feel if Daniel Craig defected to Moscow to star in the new wave of patriotic Russian films that the Prime Minister Vladimir Putin has promised to fund?

Or if John Cleese, nurtured and lionised by British audiences from the era of Monty Python to his accession to the mythic role of Q, signed on to the payroll of resurgent Russian nationalism and gloried in their gadgets?

Outraged, that's how. But the St Petersburgers' argument does have one serious catch. The Bond film franchise has never, in any of its forms, been anti-Russian.

Even in the depths of the Cold War its chief villains were freelancers. When Smersh fielded an assassin to take out 007 once and for all, he was an Irishman.

In another caper the KGB turned its top operative loose on him, but to little effect. Remember Agent XXX? Bond does. She was the spy who loved him.

Source: Times Online

Ukraine President's Office Slams Cbank On FX Policy

KIEV, Ukraine -- An aide to Ukraine's president attacked the central bank on Thursday, accusing it of failing to stabilise the hryvnia currency despite selling almost $5 billion in three weeks of financial crisis.

Ukraine's Central Bank Chairman Volodymyr Stelmakh.

The criticism by Oleksander Shlapak, President Viktor Yushchenko's top economic aide, followed a similar call to action by Prime Minister Yulia Tymoshenko on Wednesday urging the central bank to spend its reserves to stabilise the hryvnia.

Shlapak said the bank must introduce a transparent mechanism for intervention, amid bickering between the two political camps that again on Thursday put off debate on legislation needed to secure a $16.5 billion bailout deal with the IMF.

'Over three weeks (the central bank) has spent nearly $5 billion dollars of the country's reserves, but the market has felt no positive effect of this colossal intervention,' Shlapak said in a statement on the presidential Web site.

The currency has been falling against the dollar for several weeks and lost almost 15 percent of its value on Wednesday, hitting a historic low of 7.2 to the dollar. On Thursday, it bound back to trade at 5.9-6.07/$.

Ukraine has signed a preliminary deal with the International Monetary Fund for the loan, some of which could be used to prop up the central bank's reserves.

The central bank has been intervening every day for two weeks to try to halt the hryvnia's descent. It offered buy and sell rates of 5.95/6.05 hryvnias to the dollar for the first time on Thursday.

'Clearly, the central bank has been spending the money in a far from optimal way,' Shlapak said.

'Moreover, the criteria for distributing these considerable resources are incomprehensible not just to the public but to the market players themselves. This gives rise to justified suspicions of corrupt actions in the central bank's activities,' he said in the statement on the website.

Asked to comment on this part of Shlapak's statement, the central bank said: 'The very basis of that statement is not true.'

BLAME GAME

Some analysts saw the criticism as the start of a campaign to oust Central Bank Chairman Volodymyr Stelmakh. Under the constitution, only the president can sack and appoint the central bank head, subject to a vote in parliament.

A leader of Tymoshenko's bloc, Andriy Kozhemyakin, said Stelmakh should resign and that the party would vote for this in parliament. But the opposition Regions Party, led by former Prime Minister Viktor Yanukovich, disagreed.

Analysts said it might be convenient for Tymoshenko and Yushchenko to blame Stelmakh for Ukraine's financial woes as their parties face a snap parliamentary election.

'Stelmakh could be made into a scapegoat,' said Volodymyr Fesenko, director of the Penta think tank. He added that at 69, Stelmakh was at a pensionable age, an additional factor against him.

'The comments by the premier and the president's secretariat show they want to distance themselves from Stelmakh and the central bank. Neither Tymoshenko nor Yushchenko want to take responsibility for the problems, which can only worsen.'

Others disagreed.

'At the moment, when large financial groups are interested in receiving IMF money, I don't think it's possible to have a shake-up and Stelmakh will stay after all,' said Andriy Yermolayev of the Sofia think tank.

'People within the central bank are using the bank as an instrument to save specific financial groups. The talk should be not about changing the head, but changing all the managers of the bank.'

Stelmakh is a veteran of the central bank. Last year, many analysts and politicians believed he would quit after putting himself forward as a candidate in a parliamentary election and winning a seat.

He declined to take the seat and remained in his job.

Source: Forbes

Early Election Still In Doubt As Parliament Fights

KIEV, Ukraine -- The nation still wonders when, or if, an early poll will happen. The parliamentary election date remains unclear since President Victor Yushchenko suspended his decree on Oct. 20 dissolving parliament so that the lawmakers could vote for emergency measures to combat the economic crisis.

Can Ukraine afford another snap election?

What is clear is that the date Yushchenko insists on, Dec. 14, is unrealistically early.

“Elections won’t be held until Jan. 21, if they are held at all,” said Oleksandr Chernenko, analyst of Committee of Voters of Ukraine, a non-governmental organization.

A date during the prolonged Christmas and New Year holidays would be risky because the turnout could be much less than 50 percent, invalidating the vote.

The election will cost Hr 417 million, but Prime Minister Yulia Tymoshenko’s allies have blocked the vote.

The latest attempt to allocate cash on Oct. 29 ended up just four votes short of the 226-vote majority.

Some experts say Yushchenko will cancel elections because of dwindling support for his bloc.

Our Ukraine would get from 3 to 6 percent, according to recent polls, while its main competitors, Tymoshenko’s bloc and the Party of Regions – would get more than 25 percent, according to a recent Kyiv International Institute of Sociology poll.

Source: Kyiv Post

Victor Yushchenko Attacked With His Own Weapon

KIEV, Ukraine -- The scandal over Ukrainian arms sales to Georgia continues unabated in Kiev. Head of the Rada ad hoc investigation commission Valery Konovalyuk from the Party of Regions accused Ukraine’s Government of “pressurizing” his colleagues and him, but despite this fact, he promised to complete the investigation he started and ask President Yushchenko unpleasant questions.

Valery Konovalyuk

In addition, Russian President Dmitry Medvedev promised “not to forget” those who had armed the Mikhail Saakashvili regime. However, according to the information of Kommersant, Moscow doesn’t know yet how to punish Kiev for supporting Tbilisi.
Investigation mania

After a short period of lull, a scandal over Ukraine’s arms supplies to Georgia broke out anew, with Head of the Rada ad hoc investigation commission Valery Konovalyuk from the Party of Regions being the key newsmaker.

Yesterday Mr Konovalyuk held a press conference in Kiev, where he told reporters about the progress in investigating the country’s high-ranking officials’ power abuse. According to the MP, during its work, the commission managed to collect so much proof that it will be enough for making Ukraine’s top politicians answer. “We have enough evidence to raise the question of bureaucrats’ responsibility,” the head of the commission stated.

Saying that he doesn’t mean impeaching Mr Yushchenko yet, Mr Konovalyuk added that his investigation bodes ill for the President. “We are preparing a report to be delivered in the Parliament. We have coordinated it with several parties that, regardless of the political crisis in the country, we will present the report in the Rada.”

However, before making the collected data public, Valery Konovalyuk and his colleagues plan to tour Georgia and South Ossetia to collect extra information. “It will allow us to make preliminary conclusions, which will prompt the Ukrainian Prosecutor General’s Office and other law enforcement bodies to react to the irregularities the commission has found,” the MP said complaining that he has to work under the Government’s pressure. “The Government pressurizes us. We warned that various provocations will be carried out to impede the commission’s work, but we are determined to take the investigation to the end.”

Those Persecuted

Mr Konovalyuk’s commission was set up on September 2. By the way, this date is considered the outset of the current political crisis in Ukraine. On that day the “orange” coalition, formed by the Yuliya Tymoshenko Bloc (BYuT) and the pro-presidential bloc “Our Ukraine – People’s Self-defense”.

The democratic alliance collapsed after the BYuT and the Party of Regions, despite Our Ukraine’s resistance, took through the Parliament laws that significantly cut the head’s of state powers.

Victor Yushchenko was denied the right to participate in the Government’s meetings and legalized the impeachment procedure – it now requires 226 MPs’ signatures (there are 450 members of the Rada in total).

The Party of Regions intended to adopt a resolution to recognize Abkhazia and South Ossetia, but this idea was not endorsed by the majority, and it all ended with setting up a commission to investigate arms supplies to Georgia.

Within two months the commission made no revealing documents public, which would point to the Government’s power abuse when exporting Ukrainian weaponry. Nevertheless, the commission’s members often drop hints that it was President Yushchenko who sanctioned violating the law.

Valery Konovalyuk stated on several occasions that his commission has found facts of illegal arms supplies to Georgia, which was controlled by the President. Much speculation was caused by the commission head’s statement that the Ukrainian Government supplied a Buk-M1 missile system, which guarded Ukraine’s border.

Last time Mr Konovalyuk “agitated” the public on October 8, when he stated that the commission got information from the treasury that the lion’s share of the funds, raised from arms sales, was directed neither to the Ukrainian federal budget nor the Defense Ministry.

According to the MP, Ukraine has sold weaponry worth $2 billion since 2005, whereas the budget received only $160,000 of it. It need be said that no documents were then demonstrated to the public.

A crime Without Elements

Victor Yushchenko’s administration denies violating any international legal norms as far as military and technical cooperation with Georgia is concerned. Yesterday head of the Military Security Department of Ukraine’s Security Council Sergei Khimchenko stated that Kiev “cooperates with Tbilisi in accordance with its national interests and international law”.

According to him, the UN Security Council, the OSCE, the EU or any other IOs have never imposed any sanctions or embargoes on Georgia. Mr Khimchenko made no secret of the fact that Ukraine increased its military export volume to Georgia by third in 2007-2008, adding that the two countries cooperate according to an agreement of July 4, 1997. “Approximately to 40%,” he said when asked to what extent arms supplies grew.

Moreover, Mr Khimchenko stated that Ukraine will keep on supplying weaponry to Georgia in accordance with concluded agreements. “We are not supplying arms there now, but the agreements we signed before, are valid,” the official told Kommersant.

At the same time he denied accusations of supplying arms to Georgia during the military conflict and Ukrainian soldiers’ participation in hostilities. According to him, the latest arms delivery was according to a contract signed a year ago.

Mr Khimchenko’s statement was a response to Russian officials’ accusations of illegally arming Georgia. Early this month Russia’s Prime Minister Vladimir Putin called Ukraine’s arms supplies to Georgia a “crime” when receiving is Ukrainian counterpart Yuliya Tymoshenko in Moscow.

“I believe that there can be no worse crime than arms supplies to a conflict zone. Missile systems were used to kill soldiers, which can’t but worry us,” Mr Putin said after talks with Ms Tymoshenko. Speaking about Ukrainian military specialists’ participation in the August five-day war, the Russian Prime Minister cut it short, “It was a crime.”

Yesterday Russia’s officials once again brought up this issue. During a meeting of a commission on military and technical cooperation President Dmitry Medvedev stated that, in its foreign policy, Russia will consider the actions of the countries that supplied arms to the Mikhail Saakashvili regime.

Although Medvedev did not mention Ukraine, his statement implies that Moscow views Kiev as the main culprit. “We are aware that several states supplied arms to the Mikhail Saakashvili regime, which encouraged it to launch aggression, and now they are reloading the regime with extra weaponry,” Mr Medvedev said. “Unfortunately, several states that are friendly to Russia, took part in it. We won’t forget it. We will consider it in our foreign policy.”

Yesterday Russian Deputy Foreign Minister Sergei Ryabkov explained the essence of Moscow’s claims. According to the official, there are a lot of international documents regulating arms trade, which were signed by Ukraine’s officials.

“These include the OSCE document of 1993 about conventional weapons and small arms. But in Ukraine’s case heavy assault arms were delivered. Kiev doesn’t even deny that it supplied it to Georgia shortly before the military conflict,” Mr Ryabkov told Kommersant.

“We are going to raise this issue in all international formats, and we regret that the Ukrainian party is no even ashamed of its actions.” The diplomat complained that it is impossible to punish Ukraine with international sanctions, “Sanctions are the UN Security Council’s prerogative. All our attempts to impose embargo on arms supplies to Georgia were blocked by the countries conniving at the aggressor.”

Interestingly, Moscow has no own proof of the Ukrainian Government’s illegal arms trafficking. “I have no information that Russia is investigating the matter,” Igor Lyalkin-Frolov from the Russian Foreign Ministry Information and Press Department told Kommersant. “We’ll see what results Ukraine’s parliamentary commission reports.”

It is not ruled out that Russia will respond with concrete actions at the final stage of Ukraine’s electoral campaign – voting has been postponed.

Source: Kommersant

Conditions Still Poor, Unhealthy In Ukraine's Prisons

KIEV, Ukraine -- Ukraine’s draconian prisons breed disease, are overcrowded and inmates are treated inhumanely. Prisons, by design, aren’t supposed to be pleasant places. But they’re also not supposed to be deadly places, as they are all too often in Ukraine – a consequence of under-funding, overcrowding, brutality and poor medical care.

Nina Karpacheva, Ukraine’s human rights ombudsman.

“Those taken into custody and placed in SIZO [pretrial detention centers] should not be sent to the morgue afterwards,” said Nina Karpacheva, Ukraine’s human rights ombudsman.

But too many of them are.

The Ukrainian penal system consists of 183 institutions with 150,000 inmates. The mortality rate in prisons rose by 33 percent in the first seven months of the year, to 1.2 cases per 1,000 inmates, compared to the same period a year ago. The situation was worse in pre-trial detention facilities, according to the State Penitentiary Department. Mortality increased 47 percent, to 2.8 deaths per 1,000 inmates in the first seven months of 2008, compared to the same period a year ago.

Karpacheva has been investigating the situation and is calling for improvements.

“Unfortunately, the problem with Ukrainian prisons is principally one of a systematic and well-established nature, which can not be changed immediately. And only essential legislative and judicial reforms can solve the major problems of Ukrainian penitentiaries,” Karpacheva said.

Among her ideas are simply sending fewer people to prison or detention centers by setting higher standards for police who, she contends, are still making too many dubious arrests. Judges should also make more use of non-prison alternatives for punishment, especially for juveniles.

The lack of financing, certainly, is an issue. Karpacheva said that less than Hr 3 was spent in 2007 daily for the treatment of those ill with tuberculosis and notes that prison employees are still poorly paid.

Most deaths in confinement, she said, are a consequence of poor medical care, with people dying of untreated or undiagnosed illnesses. “Efficient diagnostic methods in Ukrainian penitentiary establishments should be the first step to solving tuberculosis, AIDS/HIV and high mortality rate problems,” Karpacheva said.

Among the deadliest places, Kyiv’s pre-trial detention center No. 13 stands out with 24 recorded unnatural deaths among 2,800 inmates in a four-month period in 2007 alone. Of the 24 deaths, two were classified as murders, while three were suicides.

The rest, Karpacheva said, “were the result of illnesses and the incapability of medical personnel to save a human life. An analysis of the illnesses that caused death showed that, among 17 inmates, only 6 could have been infected after arriving at the facility. The rest were when they were already ill, but their diseases were not diagnosed in time.”

And some cases are just tragic mysteries, such as the death in 2007 of Serhiy Karashchenko. According to Karpacheva, the 34-year-old Karashchenko was transferred on July 13, 2007, despite obvious symptoms of illness, from the temporary police jail in Bila Tserkva to a pre-trial detention center in Kyiv.

When he arrived, Karashchenko was diagnosed with an advanced stage of pulmonary tuberculosis and placed in quarantine. Within 34 days, he was dead.

Less than two months earlier, on May 24, 2007, a hospital in Bila Tserkva provided a medical certificate declaring Karashchenko to be in good physical shape – even though he weighed only 47 kilograms despite being 180 centimeters tall.

Untreated physical illnesses are not the only problem. Undiagnosed psychological problems can have deadly consequences, too. Such was the case involving an inmate who strangled a cellmate.

Court medical experts recognized the inmate, Serhiy Kulishev, a prisoner of Kyiv pre-trial detention facility No. 13, as mentally and emotionally unstable. He should have been sent to solitary confinement and been kept under constant observation by a psychiatrist. Instead, he was placed in a prison medical center with two men, one of whom he strangled.

Lack of proper psychological care is one of the major problems in penitentiaries, Vasyl Koshynets, head of State Penitentiary Department, told Channel 5 TV. He told the news program that there are 600 inmates for every psychologist, who work “for nothing.”

Self-inflicted injuries and other types of violence happen frequently.

According to the United States State Department, which gives annual human rights ratings, such incidents are often “a result of harsh treatment of prisoners by facility staff, who beat prisoners and destroyed their food during the year the media reported several incidents of prisoner-on-prisoner violence in pretrial detention facilities with fatalities.”

Indeed, human rights groups have been expressing their concerns. On March 27, for example, 40 inmates in a Kharkiv Oblast prison hurt themselves to protest the “horrible conditions and inhumane treatment from personnel,” according to the Helsinki Human Rights group, citing a Vinnytsya human rights group.

However, in Holos Ukrainy newspaper, Ukrainian General Prosecutor Oleksandr Medvedko denied many claims of abuse and abusive conditions. He said the accusations are “constantly supplemented by vivid and emotional, though, generally unproven description of pictures of mass torture, supposedly widely used against prisoners by the administration of [pre-trial detention centers] and penal institutions.”

Overall, the U.S. State Department – in its annual human rights assessment – still considers Ukrainian prisons and detention centers as not meeting international standards. Karpacheva said the worst place in Ukraine might be the Sevastopol temporary police holding facility.

“Stench, unsanitary conditions, lack of fresh air and daylight, concrete floors … Every second cell doesn’t have individual sleeping places — inmates (including women) are forced to take turns sleeping on a bed,” Karpacheva said. “Despite the established limit of 82 people, the facility hosts 112 people every day on average.” She also said 10 percent of inmates in a survey had been detained for more than 10 days, beyond the limits set by Ukrainian law for pre-detention confinement.

Despite the government's permission for visits by independent human rights monitors, Oleksandr Bukalov, leader of Donetsk Memorial, a rights group, said the public has little oversight over prisons. “The state penitentiary department demonstrates a strong unwillingness to promote public control in its establishments. Its administration is satisfied with the situation where declarations about public control are proclaimed, but in reality, do not exist,” Bukalov said.

Overall, conditions are improving slowly, according to the U.S. State Department. Even Karpacheva said that “conditions in many prisons and pre-trial facilities were essentially improved and now meet international standards.” But she also said most of the changes are “small improvements.”

Source: Kyiv Post

Wednesday, October 29, 2008

Faina Crew Still Waits For Rescue

KIEV, Ukraine -- The fate of the ship’s crew still unknown despite efforts on many fronts. “Tell them, I am alive.” That is the message that Yevgeniy Grigoriev, a Latvian hostage on the pirate-captured vessel MV Faina, wanted to pass on to his worried relatives. Grigoriev was speaking by telephone with Nina Karpacheva, Ukraine’s human rights ombudsman, who recently returned from a trip to Kenya.

A 20-man crew is being held hostage aboard the MV Faina.

At a press conference on Oct. 27 in Kyiv, Karpacheva gave an update on the state of negotiations to free the 20-member crew of mostly Ukrainians. The crew and their arms-laden vessel were taken hostage on Sept. 25 by Somalian pirates who are still demanding a multi-million-dollar ransom.

On Oct. 21, Karpacheva was able to speak from Kenya by telephone with other members of the crew, including Grigoriev. “The negotiation process to liberate the Faina crew is coming to a decisive stage,” Karpacheva told journalists.

At last word, 17 Ukrainians, 2 Russians and 1 Latvian were alive on board – a fact Karpacheva was able to confirm during her telephone conversation. Tragedy, however, struck soon after the seizure, when the Russian crew captain died of natural causes.

Karpacheva said she is hopeful the standoff will have a happy ending. Relatives of the crew, meanwhile, have reportedly been trying to raise money to free their loved ones.

In other meetings on her trip, Karpacheva said that Mohamed Ali Nur, Somalia’s ambassador to Kenya, assured her that “pirates never kill the crew.”

The ombudsman said negotiations, not force, should be used to end the stalemate. “Everything possible has to be done so that power is not applied under any circumstances,” she said.

She joined the rising chorus of international voices calling for stronger action against piracy at sea, including stronger patrols. She also said that she gained an understanding of the extent to which Somalia, which is caught up in an Islamic insurgency, has become a failed and lawless nation.

“The last two generations of Somalians were brought up without a school education,” Karpacheva said. “These youngsters know nothing but how to hold a gun and follow the orders of those who stand behind them. These are the type of people who captured the vessel. The youngest of them is only 14. It’s essential to find out who is really manipulating these boys and runs this black market if we want to fight the piracy.”

Karpacheva also called on the owner of the ship, Vadim Alperin, to pay compensation to the kidnapped crew. “I truly hope he will be guided by moral values as well,” Karpacheva said.

The ship contains a cargo of 33 battle tanks and heavy weaponry. Its seizure has focused international attention on the pirate menace off the Horn of Africa. Ships of the U.S. Navy’s 5th Fleet have surrounded the Faina for more than a month to be sure the cargo does not get into the hands of insurgent groups linked to al-Qaida.

According to the Associated Press, the pirates’ spokesman, Sugule Ali, said they received a fax on Oct. 17 from Viktor Murenko, head of ship operator Tomex Team, saying Kenya had declined to pay any ransom for the cargo it claims.

Source: Kyiv Post

A High-Ranking Smoker Keeps Cigarette Prices Low In Nation

KIEV, Ukraine -- Ukrainian Finance Minister Victor Pynzenyk can touch the clouds without opening the windows on the eighth floor of his government office.

Ukrainian Finance Minister Victor Pynzenyk.

He sits in his own cloud of dense cigarette smoke while drafting anti-crisis plans for the nation.

One of the best economists in Ukraine, he is also one of the most notorious chain smokers.

“During the five minutes that I was there, he had five cigarettes,” said parliamentarian Oleh Lyashko from Yulia Tymoshenko’s party, describing the minister’s vice.

Public health advocates blame Pynzenyk for some of the cheapest cigarettes and, consequently, one of the highest smoking rates in the world by resisting meaningful tax hikes on the deadly products.

About 40 percent of the nation’s adults light up regularly, while many popular brands still sell for $1 or less a pack. In Western nations that have cut smoking rates, cigarette taxes have pushed retail prices to $5 or more per pack.

“Enough cringing before tobacco giants,” said Hanna Hopko from the Washington, D.C.-based non-profit organization, Campaign for Tobacco-Free Kids.

Together with some 20 other anti-smoking activists, she picketed the Cabinet of Ministers earlier this week.

“The government has decided to raise taxes on virtually everything - alcohol, cars, gas and land in the face of a financial crisis. But cigarettes seem to be omitted on purpose,” said Hopko, referring to the latest economic plan drafted by Pynzenyk.

Based on World Health Organization (WHO) research, higher cigarette prices are the most effective way to get adults to quit smoking and to prevent children from starting.

The finance minister, however, is against the hike. “Raising excise taxes will result in smuggling from Russia, Belarus and Moldova,” Pynzenyk said. “Money from cigarette sales will go to these countries.”

Driven by budget needs for flood relief in western Ukraine this summer, Prime Minister Yulia Tymoshenko managed to push a 10 percent per pack tax hike through parliament. She wanted taxes on cigarettes increased much more.

But her ally Pynzenyk, together with President Victor Yushchenko opposed such an abrupt increase, echoing tobacco industry arguments that predict the black market would surge, raising even less for state coffers.

They failed, however, to suggest an alternative on how to reduce smoking today.

Tobacco ads still prevail over social campaigns in outdoor and print media and also find their way onto late-night television and radio.

A stricter, but still not complete, nationwide ban on advertising will only come into effect next year, when billboard ads will be removed.

The Kyiv City Council took a bold step and partially restricted smoking in public places like bus stops, schools and subways.

But a single trip through the underground passageway at Independence Square shows that people ignore the rule continuing to smoke even next to the “no smoking” signs.

Lawmakers went further and banned cigarettes from workplaces and government buildings altogether.

But many, including Pynzenyk, continue to smoke inside.

Parliament and other government toilets stink of tobacco fumes.

The fact that Ukraine is a smoker’s paradise is written even in travel guides. “You can expect a lot of second-hand smoke in just about any restaurant or bar, although under law they must offer no-smoking sections,” reads the latest edition of the Thomas Cook travel guide.

According to the WHO, more than 100,000 Ukrainians die of diseases caused by smoking annually.

Nevertheless, certain politicians insist that raising taxes will contribute to smuggling from the neighboring countries.

“Smuggling is a corruption problem. Stop telling us tales,” said Hopko of Tobacco-Free Kids. “Let’s fire customs officials or give them fair wages to avoid illicit trade, otherwise we’ll all go up in smoke.”

Health advocates agree that smuggling may become an issue if prices rise drastically above those in Russia or Moldova. A pack of Marlboro cigarettes in Ukraine, however, is still cheaper by a third compared to a Russian pack. So there is room for improvement.

“Moldova won’t feed Ukraine because Romania is closer and more profitable,” said Hopko, slamming Pynzenyk’s reasons for freezing excise taxes.

The finance minister, however, remains at odds not only with anti-smoking activists.

“Ukraine has the lowest taxes on cigarettes in the world, three to four times less than other countries,” Tymoshenko said in advocating for even higher duties. The first hike enforced in September generated an additional $200 million for Ukraine’s budget.

A further increase of Hr 1.50 per pack could bring another billion dollars to the budget, specifies a new bill registered in the parliament.

Why the measure failed to make it into Pynzenyk’s anti-crisis proposal is open for discussion. The finance minister, drawing up rescue plans for the nation, was too busy to comment.

Oleh Lyashko from Tymoshenko’s party suggested that Pynzenyk did not want to pay more for the cigarettes he smokes in large quantities.

“It’s impossible to stay long in his office, and he has really bad breath,” said Lyashko, who smoked for 15 years and quit recently.

“He told me that they raised taxes two months ago and did not want to do it so soon again,” he added, denying a link between the minister and the tobacco industry.

Source: Kyiv Post

Ukraine Factions Unite To Secure IMF Loan

KIEV, Ukraine -- Ukraine’s Parliament put aside weeks of political infighting on Wednesday to pass legislation aimed at securing an emergency loan from the International Monetary Fund as the country feels the effects of the global financial crisis.

Ukraine's Prime Minister Yulia Tymoshenko applauds as she attends a parliament session during a debate on anti-crisis measures in Kiev October 29, 2008. Ukraine will not receive billions of dollars in aid from the International Monetary Fund to stabilise its economy unless parliament acts quickly to approve enabling legislation, parliament's chairman said on Wednesday.

The party of the prime minister, Yulia V. Tymoshenko, had put forward its own legislation. But it said it was burying its differences with the president, Viktor A. Yushchenko, and would vote for his proposals in order to secure the funds, which are needed to prop up the country’s ailing markets and relieve pressure on the public finances.

“Now we have put our political ambitions off to the side,” said Nataliya Korolevskaya, a member of Ms. Tymoshenko’s party. “The health of the economy is now more important.”

Together, the two parties have 227 votes, enough to secure the passage of the legislation in the 450 seat Parliament.

Ukraine’s economy has been struggling, especially because of falling steel prices. The IMF is offering Ukraine a loan of as much as $15 billion to shore up the country’s finances as foreign investors flee, but requires a series of belt-tightening measures and spending cuts.

In recent weeks, a delegation from the fund has been meeting with representatives of Ukraine’s prime minister and president, seeking assurances that next year’s budget will be balanced,

However, the political differences between Mr. Yushchenko and Ms. Tymoshenko had threatened to derail agreement.

The two have alternately collaborated and competed since they rallied crowds together on Independence Square in Kiev during the protests known as the Orange Revolution in 2004. Most recently, Mr. Yushchenko’s Our Ukraine bloc was in a coalition with Ms. Tymoshenko’s party, an arrangement that gave her the prime minister’s post.

But the two split after the Russian invasion of Georgia in August. Mr. Yushchenko accused Ms. Tymoshenko of muting her criticism of the Russian military action to please the Kremlin. He has also been more vocal in his support of Ukrainian membership of NATO.

The political turmoil has coincided with a steep economic decline. The international agency Fitch Ratings downgraded Ukraine’s sovereign debt rating and issued a negative outlook for the country.

A Ukrainian shipping company, Industrial Carriers, has gone bankrupt. The government has frozen rail tariffs for steel companies, and as foreign investment dries up, speculators are betting on a decline in the national currency.

In response, Ukraine plans to nationalize some commercial banks, which have liquidity problems, a member of Parliament told the IMF delegation on Friday.

Source: The New York Times

Russia Accuses Kiev Of Using Holodomor To Divert Attention

UNTIED NATIONS, NY -- Ukraine is using the issue of the 1932-33 famine to divert the nation's attention from the ongoing political and economic crisis, Russia's envoy to the UN said on Tuesday.

Russian Ambassador to the UN, Vitaly Churkin.

Ukraine has been seeking international recognition for the Stalin-era famine, known as the Holodomor, as an act of genocide by the Soviet authorities following a similar move by Ukraine's Supreme Rada in late 2006.

The United Nations General Committee refused last Thursday to include the famine on its agenda, supporting Russia's recommendation to exclude the Holodomor from the UN session.

Said Vitaly Churkin: "The Ukrainian leadership is using this historical humanitarian tragedy for its own political ends, as well as to spread ethnic animosity... and divert the attention of its own people from the ongoing political and economic crisis in Ukraine."

He said the issue was being politicized, as was evident from, among other things, Ukraine's attempt to include the issue in the UN agenda.

A senior Ukrainian MP said on Friday that the UN's recognition of the Holodomor would give Kiev legal grounds to claim moral and financial damages from Russia.

The European Parliament adopted a resolution on Thursday declaring the famine of 1932-1933, that caused the deaths of millions of Ukrainians, a crime against humanity.

The European Parliament stopped short of using the word "genocide." Its resolution "recognizes the Holodomor (the artificial famine of 1932-1933 in Ukraine) as an appalling crime against the Ukrainian people, and against humanity."

According to the resolution, the Holodomor "was cynically and cruelly planned by [Soviet leader Joseph] Stalin's regime in order to force through the Soviet Union's policy of collectivization of agriculture against the will of the rural population in Ukraine."

Estimates vary widely as to the number of deaths in Ukraine in the early 1930s caused by the forced collectivization, along with the devastating purges of the Ukrainian intelligentsia, religious leaders and politicians under Stalin. Some sources cite figures of over 7 million.

The EU parliament also urged "the countries which emerged following the break-up of the Soviet Union to open up their archives on the Holodomor in Ukraine of 1932-1933 to comprehensive scrutiny so that all the causes and consequences can be revealed and fully investigated."

Russia has consistently rejected Ukraine's interpretation of the tragic events.

In July 2008, the Parliamentary Assembly of the Organization for Security and Cooperation in Europe adopted a resolution that condemned the famine but stopped short of recognizing it as an act of genocide

Source: RIA Novosti

Yatsenyuk: Parliament Will Adopt Unpopular Conditions In Exchange For IMF Aid

KIEV, Ukraine -- The International Monetary Fund won agreement Monday from the speaker of Ukraine's parliament to enact potentially unpopular conditions for a crucial $16.5 billion loan, as it grew clearer the IMF may have to help other emerging markets in Europe in the grip of the global financial crisis.

Uktaine's Nikopol's Ferroalloy Plant may have to shut down on Nov. 1 due to slumping export prices.

The IMF, which is also talking to Hungary and Belarus, is requiring that Ukraine adopt strict and likely unpopular measures in what could become a new dose of austerity for emerging economies in a region that had shown strong growth in recent years but now are suffering as investors and money flee.

Under the IMF's expected proposals, the fund will provide regular disbursements of dollars to Ukraine in return for tough domestic measures such as lowering inflation, reducing budget deficits and government spending.

The hope is that the availability of instant dollars will help Ukraine save its banking systems, support its faltering currency and avoid defaulting on its debt. The IMF hasn't made the conditions public, but provisions in draft legislation indicate they might include reducing government wages and pensions and subsidies for household utilities, as well as increasing taxes on gasoline, alcohol, tobacco and car imports, say experts.

It won't be an easy ride in Ukraine's crisis-hit parliament though. Prime Minister Yulia Tymoshenko is fighting an order by President Viktor Yushchenko to hold

early parliamentary elections in December. Each main parliamentary faction has put forward its own anti-crisis laws, some of which coincide with the IMF requirements and speaker Arseniy Yatsenyuk said he will try to work out a single package that all can agree on.

"Parliament will meet until the moment when the necessary package of economic legislation has been passed," Yatsenyuk told reporters Monday. "We have no choice. It is not a political issue, it is an issue of the country's vital activity."

Analysts say Ukraine is in for a painful economic downturn. Output in the steel industry, which accounts for 6 percent of the GDP and 40 percent of the country's exports, is down by 30 percent. Meanwhile the hryvna currency plunged to a historic low of 6.01 to the dollar last week as a run on banks stripped the banking sector of $3.4 billion.

Hungary has also faced currency difficulties, which also prompted its government to approach the IMF for emergency loans.

Though details of the Hungarian package will not emerge for a few days, the IMF said the European Union, individual governments and other institutions will be involved. On Oct. 16, the European Central Bank said it was ready to lend Hungary up to 5 billion euros ($6.2 billion) to support liquidity on its foreign exchange market.

The IMF said a "broad agreement" for a "substantial financing package" has been agreed with the Hungarian authorities.

The Hungarian and Ukrainian deal is unlikely to be the last. Belarus is expected to meet with an IMF delegation this week. The IMF has already agreed to loan Iceland $2.1 billion.

"The inescapable bottom line is that the IMF's work in emerging Europe has only just begun," said Neil Shearing, emerging Europe economist at Capital Economics.

Shearing says those countries with larger needs for foreign-currency financing than both Hungary and Uktraine may also have to go to the IMF for emergency assistance. He cites Turkey, which needs nearly $190 billion in foreign financing in 2008, as a likely candidate.

"A recent visit to Istanbul has convinced us that Turkey is much closer to calling on the Fund for financial assistance than many in the markets believe," said Shearing.

Shearing says other countries touted as possible IMF recipients include Romania, Estonia, Latvia and Bulgaria, especially if they continue to use up their foreign exchange reserves paying for imports, supporting their currencies and rolling over debts.

Neil Mellor, currency strategist at Bank of New York Mellon, thinks the Baltic countries and Bulgaria are particularly exposed to the turmoil in the global financial markets.

He said Latvia, Estonia and Lithuania have heavy foreign currency needs for things like funding trade deficits and debt repayments of 60 percent, 52 percent and 35 percent of gross domestic product, a factor that can weigh heavily on a country's currency. Bulgaria needs 55 percent of economic output.

"Moreover, these countries also have large gross external liabilities (short and long term debt), led by Latvia with 120 opercent of GDP, and followed by Estonia with 100 percent and Bulgaria with 97 percent," said Mellor.

Though the IMF only has around $200 billion to distribute, it is thought that Western governments may supplement the available pool. There was even speculation last week that the IMF was planning a $1 trillion injection into emerging markets to stave off defaults.

Analysts said the Ukraine and Hungary announcements suggest there's little or no chance that the IMF will sponsor a more lenient comprehensive approach to help countries seriously affected by the global financial crisis.

"This illustrates how the IMF isn't stepping away from its conditionality approach and therefore leave us rather doubtful about an IMF-led effort for emerging markets this week," said BNP Paribas currency strategist Elisabeth Gruie.

Source: AP

Ukraine: Concern About Russia

PARIS, France -- Foreign Minister Bernard Kouchner of France said Tuesday that Moscow had been issuing Russian passports in Crimea, a region in southern Ukraine where Russia’s Black Sea fleet is based.

French Foreign Minister Bernard Kouchner

“We all know that they are handing out Russian passports over there,” Mr. Kouchner said in an interview with Kommersant, a Russian online newspaper.

The government of Ukraine has said it wants the fleet to leave the Crimean base in Sevastopol when its lease runs out in 2017. But the Russian naval authorities have indicated that they want to retain the base.

Mr. Kouchner said Russia might try to make advances in Crimea after the success of its military operations in Georgia in August.

Source: The New York Times

Tuesday, October 28, 2008

Ukraine Political Crisis Blocks IMF Loan

KIEV, Ukraine -- Ukraine's efforts to receive an emergency loan from the International Monetary Fund were stalled Tuesday as a political standoff among ruling politicians blocked legislation to accept the rescue.

Members of Ukraine's Prime Minister Yulia Tymoshenko's bloc swarm around Speaker of the Ukrainian Parliament Arseniy Yatsenyuk (no jacket) as they try to disrupt debate on anti-crisis measures in Kiev October 28, 2008.

Ukraine is hoping the $16.5 billion loan will help it overcome a severe financial crisis, as it battles a drastic fall in exports, a weakened national currency and a shaken banking sector.

But a standoff between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko over a planned election is threatening to stall the deal. Tymoshenko is fighting Yushchenko's order to hold early parliamentary elections, in which she risks losing her job.

Parliament was to consider Tuesday a series of competing bills aimed at overcoming the financial crisis, but the pro-Tymoshenko lawmakers blocked Parliament's presidium in protest, stalling a vote on the IMF plan.

The IMF hasn't made its conditions public, but provisions in draft legislation indicate they might include reducing social spending and raising taxes to adopt a balanced budget and stem 16-percent inflation.

Ukraine is one of hardest-hit by the financial crisis among emerging markets. Output in the steel industry, which accounts for 6 percent of the GDP and 40 percent of the country's exports, is down by 30 percent on a fall of global demand.

That has widened the trade deficit to $12.5 billion so far this year. In the absence of foreign currency flowing into the country, the hryvna plunged to a historic low of $6.01 last week as a run on banks stripped the banking sector of $3.4 billion.

Lawmakers were to resume deliberations in the afternoon and there was hope they would muster the necessary votes. A Tymoshenko ally said his faction was ready to approve a bill submitted by the president.

Source: AP

Ukraine's IMF Loan Endangered By Feud

MOSCOW, Russia -- Ukraine's feuding president and prime minister welcomed a proposed emergency bailout by the International Monetary Fund on Monday, but a fresh round of finger-pointing by their aides left it unclear whether the two could agree on legislation needed to win the $16.5 billion loan.

Ukraine's 'odd couple' must set aside their differences, for the sake of their country.

As Ukraine's currency fell to a historic low and its critical steel industry urged global action to stop a devastating slide in prices, Prime Minister Yulia Tymoshenko scheduled a vote on the legislation for Tuesday and called on the nation's fractured political leadership to unite in the face of "global financial Armageddon."

Her former ally, President Viktor Yushchenko, also endorsed quick action on a legislative package that officials say includes unpopular spending cuts and other measures intended to strengthen Ukraine's wobbly banking sector.

But the outcome of the vote was uncertain Monday night, as each camp accused the other of trying to use the economic crisis to get its way in an extended political standoff over whether the country should hold early parliamentary elections.

Yushchenko and Tymoshenko were allies in the 2004 street protests known as the Orange Revolution, which brought Yushchenko to the presidency. He dissolved parliament this month after the collapse of his coalition with Tymoshenko and has called for elections in December that could oust her as prime minister. Tymoshenko opposes the elections and has blocked legislation needed to finance them.

In a statement Monday, Andriy Goncharuk, deputy chief of the president's secretariat, accused Tymoshenko of trying to use the economic crisis to "pursue an alternative foreign policy" and the IMF legislation to thwart the elections.

"Unfortunately, the position of the prime minister's office reduces the chances for the country to receive" the IMF loan, he said, adding that "mass unemployment" could result. He argued that elections were necessary to resolve the political stalemate in Kiev, which has increased investors' anxiety over the economy.

But Hryhoriy Nemyria, deputy prime minister for European integration, said it was Yushchenko who was putting the IMF bailout in jeopardy, accusing the president's allies of demanding a vote on funding for elections before they will consider the financial package.

"We cannot accept that," he said by telephone from Kiev. "It's a matter of priorities, and what can be a higher priority than dealing with the economic crisis?"

Nemyria added that it would be irresponsible for the government to spend $80 million on early elections during the crisis, especially given that Ukraine has had parliamentary elections in each of the past two years and that a presidential vote is scheduled for next year.

Elections would also make it more difficult for the government to implement the painful reforms requested by the IMF and needed to rescue the Ukrainian economy, he said. "There would be pressure on lawmakers to be populist, and they would criticize the government for agreeing with the IMF on policies that are very difficult and sensitive."

The largest party in the legislature, the opposition Party of Regions, has already come out against the IMF proposal, arguing that it is unnecessary and could further damage the economy. Its position makes it unlikely that the legislation would pass without some kind of truce between Yushchenko and Tymoshenko.

Ukraine's currency, the hryvna, has plunged more than 20 percent against the dollar, amid a run on banks that has drained more than $1 billion from deposits and a collapse in the price of steel, the nation's main export.

About 500,000 people are employed in Ukraine's steel industry, and layoffs of tens of thousands have already been announced. The government said Monday it was appealing to world metal producers to cut production and bolster prices.

Many analysts say the economy is fundamentally sound. But most of Ukraine's leaders agree that it makes sense to adopt the IMF legislation and get access to the loan in case it is needed, said Igor Borakovsky, director of the independent Institute for Economic Research and Policy Consulting. "The situation is not a full-fledged crisis, but everyone understands that externally and internally, the situation could radically worsen."

"In principle, the politicians are more or less very close in terms of the economics," he added. "But when it comes to the politics of the decision, it becomes very difficult. There is a very specific competition among them to take credit for the rescue, to be seen as the savior of the country, and right now, this competition is extremely detrimental."

Source: Washington Post

Monday, October 27, 2008

Hryvnia, Ukraine Stocks Fall Despite IMF Deal

KIEV, Ukraine -- News that the IMF and Ukraine had reached a preliminary deal on a $16.5 billion loan failed to lift spirits on the currency market on Monday, with the hryvnia hitting a new record low, dealers said.


They said a lack of dollars has pushed the currency to 6.2 for the dollar . Some suggested unresolved political disputes would prevent quick approval of measures needed to secure the loan.

Officials have said that they could use the loan to bolster central bank reserves, which have been depleted as it intervenes to prevent the hryvnia slipping further, and to prop up the banking sector.

"The market needs money, not announcements," said one dealer. "Even if they give the money, then it will be like before -- in tranches and every tranche will be debated for a long time."

The central bank sold dollars at 5.4 hryvnias, but dealers said not all demand was met.

Dealers and analysts said even the possible reintroduction of a rule requiring exporters to sell their dollars, as suggested by the central bank, would not help the hryvnia.

Steel exporters -- key force behind Ukraine's economy -- have cut output and sold little in recent months, analysts said.

"So far we're only falling, and a figure such as 7 (hryvnias to the dollar) is not so unrealistic as it seemed two weeks ago," the dealer said.

Credit default swaps -- an indication of risk that Ukraine could default on its debt -- rose further to 2,600 basis points from just 300 basis points in August, when sentiment for the region ebbed away after Russia's brief war with Georgia.

The tiny stock market .PFTSI <0#.pftsi> sank further. Since the start of the year, 80 percent of its value has been wiped out, 56 percent since early September. On Monday, it fell almost 4 percent.

The IMF loan is contingent on parliament passing measures to shore up the banking sector and balance the budget. But protesting members disrupted sittings last week and its chairman warned that Ukraine risked losing the credit if that continued.

Source: Telegraph UK

Over 80% Of Ukrainians Do Not Trust Yushchenko - Poll

KIEV, Ukraine -- - Ukrainians are rapidly losing trust in their president, Viktor Yushchenko, according to an opinion poll carried out by the Public Opinion-Ukraine foundation and published on Monday.

Ukrainian President Viktor Yushchenko is quickly losing the public trust.

A total of 81.7% of respondents said they do not trust their leader. In January, the figure was 55.6%. The number of those who trust the president has fallen to 10.4% from January's 34.8%.

The October poll showed that 67.6% of respondents did not approve of Yushchenko's recent decree to dismiss parliament and call early elections. The move was supported by 17% of those polled.

Yushchenko signed the decree on October 9 and called early elections for December 7. However, he later suspended his decree due to the worsening financial crisis.

When asked who they would vote for if presidential elections were to be held tomorrow, 23% of respondents said they would vote for the current prime minister, Yulia Tymoshenko. The opposition pro-Russian Party of Regions leader Viktor Yanukovych would gain 21.1%, and Yushchenko a mere 4.3%.

The nationwide survey was conducted from October 12-23. A total of 2,000 people were polled. The statistical margin of error is 2.

Source: RIA Novosti

What Kind Of Advice Would You Give the President?

KIEV, Ukraine -- What should a president do when he has 4.1% popularity and his political force, Our Ukraine, only 1.8? The Arseniy Yatseniuk and Leonid Chernovetsky blocs have only 2.3 and 0.2% respectively. These are the latest poll figures from the respected Kyiv International Institute for International Studies published in a weekly newspaper.

Yushchenko's rating and popularity are at an all-time low.

What advice would you give the president if you were a senior adviser or the head of the presidential secretariat?

Would you call upon him to resign and call early presidential elections because he had obviously lost the support of Ukrainians? Perhaps there is a need to revise the constitution so that if support for the president drops below 10% and remains there for more than one year that he should resign.

Would you advise the president to continue to press for early parliamentary elections believing that his allies will gain more seats in parliament than they currently have? Pro-Yushchenko forces will have fewer seats in a new parliament making the presidents support for early elections incomprehensible to everybody.

Why does the president believe that Vyacheslav Kyrylenko and Viktor Baloga, who head political projects (Our Ukraine and United Centre) that have 1.8 and 0.1% percent support, will save his presidency?

Would you advise the president to continue to not take the global financial crisis into account in his dealings with parliament, government and political forces? Would you advise the president that he can use his handling of the crisis through the National Security and Defence Council to improve his ratings in order to win a second term?

A senior US-based analyst and business consultant who works on Ukraine and has been a loyal Yushchenko supporter until recently told me, ‘Ukrainian voters have written him off and trying to revive one’s image at this late stage will not work as voters will ask ‘Where have you been in the last four years’’.

The consultant believed that, ‘there is nothing the president can do to be re-elected’ as at best he can only improve his ratings to 12-15%.

Would you advise the president to keep the same “manager” in place as the head of your secretariat whose strategy has reduced his support, undermined the orange coalition, produced Yushchenko fatigue in the West and destroyed his chances of being re-elected?

Would you advise the president that Viktor Baloga is undertaking a good or bad management of the secretariat over the last two years?

Would you congratulate the president on his success in pushing Ukraine closer to NATO membership?

Ukraine will not receive a Membership Action Plan (MAP) in December, because of pre-term elections, or in April 2009, as it will be unclear if a new government is in place by that time.

NATO membership will also not be raised by presidential candidates in the 2009 elections because it is unpopular among Ukrainians.

Would you have the courage to explain to the president that Ukraine’s progress towards NATO membership will therefore be dependent on that damned woman you seem to hate so much, Yulia Tymoshenko, and whether she achieves an election victory in January 2010.

If you have the courage to do so you should also inform the president that he has no possibility of being re-elected for a second term and that an election victory by Viktor Yanukovych would bury Ukraine’s NATO membership.

So, well done Mr. President! It will be your public enemy and the cause of so much of your sleepless nights - Tymoshenko - upon whom progress in Ukraine’s NATO membership will rest. Only she can win a second round election against Yanukovych.

At a recent government seminar on Ukraine that I attended Stephen Larrabee, chair in European Security at the RAND Corporation think tank, blamed, ‘Yushchenko for undermining Ukraine’s integration into the West’. Larrabee is a supporter of Ukraine’s NATO membership.

A former US Ambassador to Ukraine who did not ant to be quoted told the same seminar that, ‘Yushchenko made the Ukraine’s chance of achieving a NATO MAP in December zero on October 8’, that is the day he disbanded parliament.

A courageous and patriotic adviser needs to ask the president why he is determined to take Ukraine on a kamikaze flight over the edge and whether he has a moral right to play with the lives of 48 million Ukrainians?

What would you therefore advise him to do?

If I were a senior presidential adviser I would advise him that with only 4% support he should do the only honorable step a man can do; namely, resign.

Source: Taras Kuzio's Blog

Sunday, October 26, 2008

Volodymyr Klitschko's Fight Called Off

OLDENBURG, Germany -- Volodymyr Klitschko's planned defense of the International Boxing Federation heavyweight title against Alexander Povetkin of Russia on Dec. 13 in Mannheim has fallen through because of an injury to the challenger.

Volodymyr Klitschko

Povetkin damaged ligaments in his left ankle in training and will not be able to resume until the end of November, according to Heiko Mallwitz, a spokesman for Sauerland Promotions.

Povetkin, who was undefeated in 16 fights with 12 knockouts, was the mandatory IBF challenger. Klitschko has a 51-3 record.

The Ukrainian also holds the World Boxing Organization and International Boxing Organization heavyweight titles.

His older brother, Vitali Klitschko, beat Samuel Peter this month to win the World Boxing Council heavyweight title.

Source: AP

IMF, Ukraine Reach Agreement On $16.5 Billion Loan

WASHINGTON, DC -- The International Monetary Fund reached agreement with Ukraine on a $16.5 billion loan to help support the nation's financial system as turmoil in global credit markets and recession concerns roil the eastern European country.

International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn.

The 24-month stand-by loan will be conditional on parliamentary approval of legislation to support the country's banks, the Washington-based lender said in an e-mailed statement today without elaborating.

Ukraine will also need to balance the budget and address the current-account deficit, the Kiev-based Ukrainian central bank said in a separate statement.

The loan may ensure financial stability and rebuild confidence among investors, who've shunned riskier emerging- market assets in a flight to safety.

Ukraine is the least creditworthy of Europe's transition economies measured by the cost of credit-default swaps, which protect bondholders against default.

"This program is focused on the essential upfront measures needed to maintain confidence and economic and financial stability," IMF Managing Director Dominique Strauss-Kahn said in the statement. "The strength of the program justifies the high level of access, equivalent to 800 percent of Ukraine's quota in the Fund."

Fitch Ratings on Oct. 17 cut Ukraine's credit rating to B+, four steps below investment grade, citing the currency's weakness, instability in the banking system and risks to economic growth.

International credit rating companies say the threat to Ukrainian banks has intensified because of the seizing-up of global credit markets, the high inflation rate, a widening current-account deficit and political instability.

The central bank pledged to support the banks and has injected more than 16.25 billion hryvnia ($3.13 billion) into the banking system this month, almost three times the figure it loaned in September.

It also took control of Prominvestbank in recent weeks and promised an injection of 5 billion hryvnia to help the lender "renew its financial stability" after a run by depositors.

Source: Bloomberg

Ukraine Suffers From The Economic Crisis Along With The Rest Of Eastern Europe

KIEV, Ukraine -- After years of easy credit and a property boom that had turned the Ukrainian capital, Kiev into a Asia-style boom town, Eastern Europe's biggest country abandoned the defence of its currency in the dying hours of last week's market trading.

Supporters of Ukraine's Prime Minister Yulia Tymoshenko block the parliament's tribune to try to disrupt a debate on anti-crisis measures in Kiev October 24, 2008. Ukraine's talks to secure credit from the International Monetary Fund could be imperilled unless parliament acts to pass measures to ease the effects of the global financial crisis, the chamber's chairman said on Friday.

This week it hopes to enter the equivalent of receivership, but only if it can meet the terms of a $14 billion International Monetary Fund (IMF) bail-out.

It is a big if. The markets were torrid last week but the country's parliament was a melee. Prime Minister Julia Timoshenko's supporters sought to prevent a December general election being called at any cost. With strips of tinfoil, coins and paper clips, followers of the charismatic former gas trader caused an electronic sytem breakdown of the chamber's voting system.

The immediate aim was to prevent a vote on demands for a general election by President Victor Yushchenko, Mrs Timoshenko's great rival and one time Orange Revolution ally. But the scenes called into question the country's ability to adopt reforms demanded by the IMF to provide the financial lifeline desperately need to stave-off a punishing financial meltdown.

The head of Ukraine's central bank was forced to plead with the country's politicans to stop bickering. "It's like slow death," said Volodymyr Stelmakh. "The more we delay, the more problems will multiply."

Ukraine's currency, the hryvnia, has lost a fifth of its value in the last eight days. It now leads a host of former Soviet-controlled states in Eastern Europe that, severely exposed by the new mood of fiscal rectitude on the financial markets, have turned to the IMF to stave off collapse.

The Eastern bloc states, Hungary and Belarus, have joined Ukraine in making formal applications for IMF bailouts but others, including the Baltic States, all members of the EU, have entered secret consultations for international help.

With a range of continuing disputes with the Kremlin during an intractable domestic political dispute, economic collapse has rendered Ukraine vulnerable to a resurgence of Russian influence. Last week a Russian consortium was seen as a leading contender to take over the failed Ukrainian bank, Prominvest.

Ukraine's pro-Moscow opposition has spent months warning that the government had steered disastrously away from Russia, a path that jeopardised its economy. Last week Serhyi Taruta, the country's leading steel magnate, compounded its crisis by warning of mass lay-offs in the vital industry.

"Elections are coming, and the steel industry employs 500,000 people," said leading analyst, Peter Vanhecke, head of investment banking for Renaissance Capital in Ukraine. "If no supportive measures are taken by the government, the steel industry will most likely have to reduce its headcount substantially. Output has gone down due to the global economic slowdown."

The fallout from the crisis goes beyond the realms of the economic. Ukraine's efforts to join Nato and set up a close alliance with the EU is in Moscow's cross-hairs. The Kremlin last week formally renewed its requestion for an extension of the lease on the Crimean port of Sevastopol, home its Black Sea fleet.

"There's broad consensus that the aspiration for Ukraine to join Nato in the near future is now highly unlikely," said Mr Vanhecke. "The last thing you want to do is to start haggling with your energy suppliers at a time of economic downturn. My sense is that Ukraine will move closer to a more neutral, non-provocative position towards Russia."

The stakes in the second round of Lithuania's general election today could not be higher. The expected winner, Andrius Kubilius of the right-wing Homeland Union last week warned that he would be forced to grapple with an economic collapse if he takes office. "I see a serious crisis," he said. "In Lithuania's case, we have a double crisis: one that we've built up ourselves due to economic overheating. On top of that, we are also experiencing the impact of the global financial crisis."

It amounts to a double-whammy that jeopardises many of the gains made by the ex-Soviet satellites since the collapse of the Soviet Union. Some in the Baltic states are now blaming the EU for their woes. "The main effect on Latvia has been a dramatic fall in economic growth, from 12 per cent when we joined the EU to 1 per cent now," said MEP Rihard Piks, who was the Latvian foreign minister when the country joined the EU in 2004.

The crisis has seen the region cracking into spheres of influence. Estonia, which like the other Baltic nations has been a target of Russia's increasingly hostile foreign policy, has pleaded with Swedish banks not to pull the plug on its heavily indebted economy.

With more than 10 per cent of its domestic lending denominated in Swiss francs, Hungary has been forced to hike interest rates to double digits and give guarantees to lenders to staunch a run on the florint.

Belarus, a dictatorship that is widely seen as the "last dictatorship in Europe", has already borrowed heavily froom Moscow. Now it is so fearful that a currency collapse would grant Russia complete control of its economy that its mercurial president, Alexander Lukashenko, appealed for an unprecedented gesture of support from the West, through the IMF. "He is trying to avoid total dependence on Russia," said Fyodor Lukyanov, editor of Russia in Global Affairs. "He prefers to hang on to two ropes rather than one. Belarus is a very vulnerable country."

Source: Telegraph UK

Saturday, October 25, 2008

Bush Renews Support For Georgia, Ukraine NATO Entry

WASHINGTON, DC -- US President George W. Bush assured Georgia and Ukraine of US support for both former Soviet states to join the NATO alliance despite Russia's fierce opposition.

US President George W. Bush assured Georgia and Ukraine of US support for both former Soviet states to join the NATO alliance despite Russia's fierce opposition.

"Other nations seek a path to NATO membership, and they have the full support of the United States government," Bush said Friday as he signed NATO accession protocols for Albania and Croatia, bringing them one step closer to membership.

"Today I reiterate America's commitment to the NATO aspirations of Ukraine, Georgia, Bosnia-Hercegovina, and Montenegro," said the US president, who has made the alliance's eastward expansion a foreign policy priority.

Bush said the United States also looked forward to seeing all nations in the Balkans join NATO -- including Macedonia, whose admission into the alliance has stalled because of its name dispute with Greece.

"The great NATO alliance is holding a place for you at our table and we look forward to your admission as a full NATO member as soon as possible," the US president said to Macedonia's ambassador to the United States.

Bush said the Serbian people would be welcome into the alliance "should they choose that path."

Earlier, the White House said Bush still hopes that the North Atlantic Treaty Organization will launch the process of admitting Georgia and Ukraine as members when the alliance meets in December.

"We see no reason that they shouldn't get MAP status," spokeswoman Dana Perino said, referring to "membership action plan" that lays out conditions to be fulfilled for entry into NATO but does not guarantee a country full accession.

Perino said Washington had seen "growing support for Georgia and Ukraine given what happened this summer when Russia invaded Georgia" -- but France and Germany still oppose granting Tbilisi and Kiev MAP status in December.

Early next month, foreign ministers from the 26 NATO nations will meet to review whether to grant membership to the two former Soviet states.

NATO members are divided, however, because they see that while membership could stabilize Georgia and Ukraine, it may also raise tensions with Moscow, which considers the move a threat to its own security.

The United States is lobbying NATO to grant membership, but France and Germany are opposed, arguing that the early August conflict between Russia and Georgia shows how the move could exacerbate tensions in the Caucasus region.

Within Ukraine, the population itself remains divided on possible NATO membership, with public opinion split on the nation's allegiances.

NATO has already expanded to take in a number of eastern European countries that were once part of the Moscow-controlled Warsaw Pact, despite pledges in the early 1990s not to rush any approach toward Russian borders.

Source: AFP

Ukraine Says Russian Navy Must Get Ready To Leave Crimea

KIEV, Ukraine -- Russia should start preparing to withdraw its Black Sea Fleet from bases in the Crimea now, because the process could take up to six years, a Ukrainian diplomat said on Friday. (Russia's Black Sea Fleet - Image gallery)


Under bilateral agreements, Russia's Black Sea Fleet has the use of the Crimean Sevastopol base and other naval facilities until 2017. Ukrainian President Viktor Yushchenko announced in the summer that Ukraine would not extend the lease beyond that date.

"According to our estimates, the pullout and preparation of alternative facilities [for the Black Sea Fleet] may take a while. We expect this process to last five or six years," said Leonid Osavolyuk, director of the First Territorial Department at the Ukrainian Foreign Ministry.

"The Russian leadership must therefore start getting ready to withdraw its fleet as soon as possible," he told a news briefing at the ministry.

Although the agreement foresees a possible extension of the base lease, and Moscow has repeatedly said it wants negotiations on the issue, Ukraine reiterated its position on Thursday that it would not permit an extension of Russia's naval presence in the country after 2017.

Tensions between Russia and Ukraine heightened after several Black Sea Fleet warships dropped anchor off the Georgian coast during and after August's armed conflict with Tbilisi over breakaway South Ossetia.

President Yushchenko has called for the Russian Navy's early withdrawal from the Sevastopol base, as well as tougher deployment requirements and higher fees, demands that have not been backed by his former coalition ally, Prime Minister Yulia Tymoshenko.

Russia condemned Yushchenko's actions as a violation of the bilateral agreements on the presence of the Black Sea Fleet in Ukraine and said its fleet would continue carrying out its activities as usual.

Osavolyuk said on Friday that Russian combat ships frequently transport undeclared cargo and refuse to submit customs declarations while crossing Ukrainian territorial waters, in violation of a decree issued by the Ukrainian president.

Russia's naval base in the Crimea currently has 50 warships and patrol boats, along with around 80 aircraft, and employs coastal defense troops.

The next round of Russian-Ukrainian talks on the presence of the Black Sea Fleet in Ukraine has been tentatively scheduled for November.

Source: RIA Novosti

Ukraine To Raise Domestic Gas Prices By 35%

KIEV, Ukraine -- Ukraine's energy regulator announced on Saturday that gas prices for domestic consumers would go up by 35% from December 1.


The increase is part of steps to bring energy prices in the former Soviet republic up to European levels, in accordance with a presidential decree.

"Presidential decrees are not questioned, they are carried out," said Valery Kalchenko, the energy commission head.

He added that the 35% rise was approved because increasing prices to their economically realistic level would be very painful for most people in Ukraine.

Ukraine imports most of its gas from Russia and the two countries have agreed that wholesale prices will increase to European levels over the next three years.

Source: RIA Novosti

Ukrainian-Style Independence: What's Up Yushchenko's Sleeve?

MOSCOW, Ukraine -- After returning to Kiev last week from a business trip, I wrote an article about how today's Ukraine is surprisingly reminiscent of Georgia one year ago.

What is Viktor Yushchenko up to?

The rating of the president was quickly declining. He was infringing the Constitution and butting heads with the opposition. The only thing left in his power to do was to send the police onto the streets, and start spraying gas, like Saakashvili.

But the article was outdated before it even went to print. Ukraine did spray gas... but this time, the other way around. Last Saturday, Ukrainian nationalists marched through the center of Kiev to praise the Ukrainian insurgent army. The police took to the streets to control the masses, but the members of the march sprayed them with gas.

It's hard to get your head around this one without a few shots of vodka. Everything was so much simpler in Georgia. There was the president and the opposition. Everyone was screaming back and forth. Someone was calling Russia an aggressor, and the others said the Big Bear had loved the country and left...

But the political debate was far more harmonious than the cacophony streaming from Ukraine. In one ear, Kiev was screaming "Victory Day!" and in the other, "Glory to UPA!"

"Yushchenko, Ne Tak!"

And so, what do we really know about Ukraine today? We know Ukraine is Ukraine, and an independent state, which Russians seem to understand better than Ukrainians themselves. We know the country's president is Viktor Yushchenko, while the prime minister is Yuliya Timoshenko.

We also know another series of parliamentary elections are to be held on Dec. 14. It seems these elections are becoming an annual event in Ukraine, and they don't change the situation at all. Censuses in the media bear witness to this fact.

So whichever way you bend the stick, it looks like the general population thinks the next prime minister will again be Yuliya Timoshenko...

What else? We know that some Ukrainians want to join NATO. Other don't. Adverts and posters promoting the organization adorn street lanterns and building-sides in Kiev's residential district. We all thought President Yushchenko was Ukraine's biggest advocate of teaming up with NATO.

He seemed to want to anyway. But after causing the latest political crisis in Ukraine by once again dispersing parliament, he has inadvertently shut the door to NATO for Ukraine in the near future.

This seems like the most illogical step Yushchenko has taken since he came to office. It's hard to understand why he called for new elections if his rating has fallen from 67 percent in 2004 to around 5 percent in 2008.

Anyway that I looked at the situation, whether through the eyes of a cashier at Bessarabskiy Bazaar, or a taxi driver stationed off Kiev's main avenue, Khreshchatik, the state of the nation seemed as if it could easily be summed up as: "Yushchenko, Ne Tak!"

"Listen, your president isn't an idiot to call for new elections if he thinks he will lose," I told various people in Kiev — deputies, political scientists, and journalists.

In answer, they said in chorus: "What do you mean he's not an idiot?"

There are two options. The genuine state of affairs is being kept secret from Ukraine's president, and he doesn't actually know how people feel about him, or Yushchenko knows something that we all don't, and he's acting according to a plan developed by the U.S., where he has flown to twice over the last week.

Presidential Intrigue

In order to understand Yushchenko's actions, I turned to 6 experts from the country: one dissident, two politicians, and three political scientists. This is what I learned:

Andrey Ermolaev, Director of the Social Research Center, Sofiya:

"The president wound up in a very critical situation. His political course took several hits that were observed by both politicians and voters alike. What he's trying to do at the moment is make a quick and radical change of plans that will allow him to keep his post as president — or else he'll be left bankrupt, putting away pennies in the pension fund."

Oleg Tyagnibok, Head Ukrainian Nationalist and Leader of the Svoboda Party:

"He doesn't have any other choice. Otherwise, an impeachment process would begin in parliament. Maybe they would let him sit out his term, but he would be deprived of all his presidential authorities, and Yushchenko would be made an English queen. He'd only be able to attend banquets and hand out medals."

Mikhail Pogrebinskiy, Director of the Kiev Political and Conflict Research Center:

"Timoshenko is a bone stuck in his throat. He needs to get rid of her because her presidential rating is 25 percent and his is only 5 percent. For Yushchenko, the most important thing is to stay around a second term — not an invitation to join NATO. He explains this as follows: 'I'm the only one who can save Ukraine.' He thinks God elected him.

Vladimir Malinkovich, Dissident:

"He's not a dictator. He's worse. He's a beekeeper playing the messiah."

Aleksandr Golub, Chief Editor of Kommunist Newspaper:

"His actions can be explained by his personal idiosyncrasies. This man reacts radically to any negative information about himself. If people want to stay on his team, they have to kiss up to him. I'm sure he doesn't know what his real ratings are at the moment."

Vladimir Kornilov, Director of the Ukrainian Branch of the CIS Institute:

"Yushchenko is obviously planning something so he'll come out the savior of the nation. It's as if he needs to do something extraordinary to boost his ratings. For example, this could be provocation against the Black Sea Fleet. The local police in Sevastopol won't execute these kinds of commands, but he could always send in the police from Lvov."

Source: Komsommolskaya Pravda

Friday, October 24, 2008

IMF Talks In Danger Unless Ukraine Parliament Acts: Speaker

KIEV, Ukraine -- Ukraine's talks to secure credit from the International Monetary Fund could collapse unless parliament acts to pass measures to ease the effects of the global financial crisis, the chamber's chairman said on Friday.

Ukrainian Parliament Speaker Arseniy Yatsenyuk is one of the bright stars on the Ukrainian political scene.

A package proposed by the government calls for amendments to the 2008 budget, borrowing of $2 billion from unnamed international financial institutions, sovereign guarantees to firms seeking foreign credit and creating a stabilisation fund.

"It is very important for us to achieve results in a vote on the financial crisis," Arseniy Yatsenyuk told the chamber, which was deadlocked for the fourth day.

"Failure to get a result will have as a consequence the collapse of talks with international financial organisations."

An International Monetary Fund mission has been holding talks for more than a week in Kiev on extending credit that Ukrainian officials say could amount to up to $14 billion.

The Fund has offered no comment on the talks, but says the mission will remain in Kiev "as long as is required".

Yatsenyuk said no consensus could be reached on six draft laws to tackle the crisis, including the package proposed by Prime Minister Yulia Tymoshenko's government.

A working group was set up to draft a document able to command a majority. Debate would resume next Tuesday.

Tymoshenko, speaking later outside the chamber, said: "Getting assistance from international financial organisations in the next few days depends directly on passing this package of anti-crisis laws."

Credits, she said, "will not put Ukraine in difficulty. On the contrary, they allow us to invigorate the banking system."

GOVERNMENT PACKAGE

The crisis has put pressure on the hryvnia currency, which has lost 20 percent of its value in a week and was trading at record lows to the U.S. dollar. It has also placed in doubt the stability of banks to refinance debt.

The deputy head of the central bank, Anatoly Shapovalov, said the hryvnia had lost ground due to "panic" and saw no need for a devaluation. The bank, he said, could force exporters to sell dollars on the interbank market but only as a last resort.

Pressure grew to break deadlock over the package after a new downgrade of Ukraine's sovereign rating by agency Standard and Poor's.

The agency warned that new downgrades could be forthcoming "if there are significant delays in reaching agreement with the IMF or if the lack of an internal political consensus undermines the government's ability to implement an IMF programme".

Parliament has been thrown into disarray over proposals to combine debate on the crisis with measures to finance an early election called by President Viktor Yushchenko.

Tymoshenko, at odds for months with the president, opposes the election and members of her bloc have milled about the chairman's rostrum to curtail debate.

The president dissolved parliament this month and called a Dec. 7 election to the assembly after the collapse of a government team linked to the 2004 "Orange Revolution".

He lifted the dissolution order this week and said he was putting the election back for a week to Dec. 14. It remains unclear when the poll will take place.

A group of prominent Ukrainians, including scientists, politicians, soccer star Andriy Shevchenko and tennis player Andrei Medvedev, urged the president to call off the election.

The group urged politicians to "forget party allegiances and take on the consequences of the crisis rather than each other".

Source: Interactive Investor