Thursday, April 30, 2009

Dynamo And Shakhtar Fight For Ukraine Supremacy On European Stage

KIEV, Ukraine -- Certain fixtures transcend their immediate context. A UEFA Cup semi-final, of course, is a significant occasion whoever the opposition, but tonight's meeting of Dynamo Kyiv and Shakhtar Donetsk has added spice.

Head coach of Dynamo Kiev Yurii Semin, looks on during press conference at the Koncha Zaspa training base near Kiev, Ukraine, Wednesday, April 29, 2009. Dynamo Kiev will face Ukraine's Shakhtar Doneck in an UEFA Cup semifinal first leg soccer match in Kiev, Thursday, April 30, 2009.

It's not just that whoever wins over two legs will be Ukraine's first representatives in a European final since the fragmentation of the USSR; it's that whoever loses will have to endure their closest rivals claiming to be Ukraine's pre-eminent team.

The story of Dynamo's rivalry with Shakhtar is the story of modern Ukrainian football; to an extent, it is the story of modern Ukraine, as the regions have risen to challenge the capital.

Thanks to the patronage of the Ukrainian Communist Party, Dynamo were always the dominant Ukrainian side in the USSR. "In those days," the former Dynamo player and coach Josef Szabo said, "it was like a pyramid, with Dynamo at the top.

The patron of the club was [the late leader of the Ukrainian Communist Party] Volodymyr Scherbytskyi. He was a big football fan, and if there was a great player at Shakhtar or Dnipro or some other Ukrainian club, he made one phone call and the player would be in Kyiv – no money or anything like that."

Accordingly, after Tavriya Simferapol had won the first league title after independence, Dynamo won the next nine. They were starting with the best squad and they were wealthier than anybody else, having attracted backers keen to take advantage of tax breaks enjoyed by sporting institutions.

At the end of the 1993-94 season, for instance, after being pushed hard by Dnipro, they signed four of their players.

They also enjoyed the fruits of the best state-run academy. The last generation to pass through it was highly gifted, featuring the likes of Andriy Shevchenko, Serhiy Rebrov, Oleh Luzhny and Vladyslav Vashchuk, and Valeriy Lobanovskyi lead them to the semi-final of the Champions League in 1999, in which they at one stage led Bayern Munich 3-1. Bayern, though, came back to win, and that was as good as it got for Lobanovskyi's third great Dynamo side.

Shakhtar, meanwhile, were building. Their president Oleksandr Bragin was killed in a bomb attack at the ground in 1996, and was eventually succeeded by his right-hand man, Rinat Akhmetov, who had missed the bombing after being held up in traffic.

He invested heavily, both in players and in a superb training complex which, with its luxurious rooms, aviary and fishing lake, provides an understandable lure for players who may otherwise be reluctant to move to an industrial city in the heart of Ukraine's coal-mining region.

For all Akhmetov's wealth – a study in 2007 named him as Europe's richest man, although he has almost certainly slipped back since then – that mining heritage is still central to Shakhtar's self-image.

The word Shakhtar itself means "Miner". The new crest, adopted last year, features a flame and a pair of crossed hammers. Their combination of orange shirt and black shorts supposedly represents the experience of a miner leaving the dark of the pit for the bright of the day.

Like many industrial areas, the Donbass has an intense regional pride, and Shakhtar plays a key part in that identity. They regularly had the highest average attendances in Soviet times, and still average more than Dynamo.

"The people work very hard and they need football," said their coach, Mircea Lucescu. "It has a social role beyond sport. Akhmetov is spending his money for all the people." The new stadium, which should be ready for the start of next season, will be set in an extensive park to provide recreational space for all of Donetsk.

As Shakhtar invested in the late nineties, so Dynamo began to resent them. Their vice-president, Serhiy Polkhovskyi, compared them to Rastignac, the ambitious youth created by Balzac who first appears in Pere Goriot.

When I relayed that description to his Shakhtar counterpart, Mark Levytsky, he snorted. "Let them read Balzac," he said with a dismissive waft of his arm. "We will concentrate on football." Typical Kyivans, he seemed to be suggesting, with their laboratories and their computer-modelled training programmes, always over-intellectualising.

Even the club song, after eulogising miners leaving the pits to watch the team, contains a snide reference to the fact that "not only students with books are waiting for Shakhtar's victory".

As Shakhtar rose, so Dynamo stumbled. After the defeat to Bayern Munich, Shevchenko and numerous others left. Without state funding, it turned out, the academy was no longer churning out gifted players who conformed to the Lobanovskyi template.

Dynamo, like many others in eastern Europe, brought in foreigners to fill the gap, only to find them unwilling to submit to Lobanovskyi's demands. Local players, benefiting from a new freedom of movement, similarly grew resistant to Lobanovskyi's authoritarian method. "He had internal torments," said Polkhosvkyi.

"Previously a word, a glance, was enough to assert his authority and explain what he wanted. Maybe it was typical of the Communist system, but now players have a greater freedom and an individuality. They become stars and so they do not put the team first."

Lobanovskyi didn't live to see Shakhtar lift the title, but it was only a month away when he collapsed in the dug-out at Zaporyzhzhya, suffering a stroke from which he never recovered. Lobanovskyi's assistant, Oleksiy Mykhailychenko, replaced him and went on to win two titles, but the sense of invincibility was gone and Shakhtar have won three of the last four titles.

Dynamo, it seemed, were stuck in an endless cycle of trying to replicate Lobanovskyi's success. Mykhailychenko was dismissed early in the 2004-05 season following a 2-0 home defeat to Shakhtar – their first home defeat by two goals since fragmentation – after which a succession of other former Lobaonvskyi players - Szabo, Leonid Buryak, Anatoliy Demyanenko and Oleh Luzhny – succeeded him.

All seemed terrified of deviating from Lobanovskyi's model, as though they were always asking themselves, as Szabo openly admitted doing, "What would Valeriy Vasylyovich have done?"

The problem – even leaving aside the problems Lobanovskyi had in the final months - was that he had always evolved. It's impossible to know what – if any – solutions he may have come up with, but what is sure is that he wouldn't have kept trying to apply the 2002 model.

Last year, at last, came a break with the appointment of the Muscovite Yuri Semin, who had no direct connection to either Dynamo or Lobanovskyi. Dynamo currently lie 12 points clear at the top of the table.

In four meetings since Semin took charge, though, Dynamo are yet to beat Shakhtar: they lost 2-0 in the cup final, 1-0 in the league, and drew in both the Super Cup and the Channel One Cup, losing the former and winning the latter on penalties. "We don't have to prove we're the best team in Ukraine," said the Dynamo president Ihor Surkis. "We've proved that already in the league." Well, yes they have, but he must know that this game, whatever happens, will be etched into history, standing bold as another league title fades in the memory.

It is easy to be cynical about oligarchal involvement in clubs, but in this case at least it is clear that both Akhmetov and Surkis care. Akhmetov may not have been much of a fan when he took over, but these days he becomes so nervous during big games that he regularly leaves the stadium. Surkis has his own way of coping with the tension.

"The team has risen so high that I had to start smoking again," he said. "It destroys my health." It's a sign of how comfortable they were against PSG in the quarter-final that Surkis claims not to have touched a cigarette in the second half of the second leg.

It's hard to believe, though, that he will not be puffing away tonight, as Akhmetov paces the car-park. This is Dynamo's biggest game in a decade; it's probably Shakhtar's biggest ever.

Source: Guardian News

Wednesday, April 29, 2009

Russia, Ukraine Move To Ease Energy Tensions

MOSCOW, Russia -- Russia and Ukraine moved Wednesday to repair their strained relations, pledging cooperation on energy and a range of other issues that have plagued ties between the two ex-Soviet neighbours.

Russian Prime Minister Vladimir Putin (R) exchanges documents with Ukrainian Prime Minister Yulia Tymoshchenko (L) in Moscow. Ukraine's and Russia's prime ministers on Wednesday voiced cautious optimism that their countries' energy disputes were being resolved, after past gas cut-offs caused alarm in the European Union.

Ukrainian Prime Minister Yulia Tymoshenko said her country had asked Russia to help upgrade its gas transit system, after Moscow complained of being left out of a deal between Kiev and the EU on upgrading Ukraine's ageing pipelines.

"We have invited Russia as one of the main partners to modernise the Ukrainian gas transportation system," Tymoshenko said at a joint press conference with her Russian counterpart, Vladimir Putin.

Putin said Moscow deserved a role in upgrading Ukraine's pipeline network, which handles the majority of Russian natural gas exports to Europe.

"We are not seeking to manage, but we are the main and only supplier to the Ukrainian pipeline system," he said, following talks with Tymoshenko.

Putin added that Russia would not demand billions of dollars in fines from Kiev -- a possibility that had been raised after Ukraine, hit hard by the economic crisis, purchased less gas from Russia than required by contract.

"These sanctions are not being applied," Putin said, estimating that the possible fine could have been as much as two billion dollars.

Apart from any specifics Putin and Tymoshenko discussed, however, it was the sight of the two of them sitting side by side and holding forth calmly before a packed press conference that carried at least as much weight as their words.

Putin afterwards described his daylong discussions with Tymoshenko as "businesslike and open."

In January relations between Moscow and Kiev plummeted to such a low that gas supplies to and through Ukraine were cut off, leaving a string of European countries temporarily without gas in the middle of winter.

"It is good that our cooperation is being fine-tuned.... The times when a certain confrontation was felt are becoming a thing of the past," Tymoshenko said.

"The system of gas supplies in Ukraine has fully stabilized," she said.

For his part, Putin said: "What very much pleases me is that cooperation between certain rather sensitive and important industries and enterprises is not being destroyed but deepened."

Despite the friendly atmospherics, Putin made clear however that Russia had not yet agreed to a request from Ukraine for a five billion-dollar loan.

"We don't have a final decision today," Putin said.

Tymoshenko also sent a Moscow-friendly signal on another issue that hugely angered Russia last year: Ukrainian arms sales to Georgia, which fought a brief war with Russia last summer.

"There are no arms sales to Georgia, nor will there be in the future," Tymoshenko said in response to a reporter's question about whether Kiev was still selling arms to Tbilisi.

Tymoshenko also offered Ukraine's help in setting up an international centre for uranium enrichment, a project led by Kazakhstan and Russia with the aim of supplying third countries with enriched uranium for civilian nuclear power.

Following the talks with Putin, Tymoshenko said Ukraine would by July 15 prepare a long-term contract with Russia on nuclear energy cooperation.

Putin and Tymoshenko were initially due to meet in early April, but Russia postponed the visit after the Ukraine-EU deal on gas infrastructure cooperation sparked an angry reaction from Moscow.

Tymoshenko's visit comes as European Union Energy Commissioner Andris Piebalgs is also due in Moscow for talks on the bloc's gas trade with Russia.

Source: AFP

Poland Fears Losing Influence In Ukraine

WARSAW, Poland -- Ukrainian Secretary of the National Security Council Raisa Bohatyriova will visit Poland today to meet with President Lech Kaczynski, head of the National Security Office, Foreign Minister and Minister of Defense.

As Ukrainian Secretary of the National Security Council, Raisa Bohatyriova visits Poland, Warsaw fears it might be losing a close ally in Kiev sooner than expected.

The politicians will discuss security strategies drawn up at the NATO Summit in Strasbourg, the European Union’s European Partnership that Poland and Sweden have initiated and prospects of integrating energy security policies.

Meanwhile, former political rivals, President Lech Kaczynski and former president Aleksander Kwasniewski met two weeks ago to discuss current political crisis in Ukraine, Dziennik reveals.

Ukrainian President Viktor Yushchenko, strongly supported by Polish political elites during the so called Orange revolution in 2004, will soon step down. The parliament in Kiev has set the next presidential election for October.

Yushchenko has declared, however, that he is ready to resign even sooner, if early parliamentary elections were held simultaneously.

Opinion polls show clearly that both Yushchenko and his party has little chance to win a ballot held in the near future.. Polish politicians are worried, because Ukraine led by a new government will probably be more pro-Russian and less pro-European.

The meeting between Kaczynski and Kwasniewski took place on 14 April, just a day before Kwasniewski’s visit to Kiev. The former president was invited by the Open Ukraine Foundation of Arseniy Yatsenyuk, a former Ukrainian head of diplomacy.

Kwasniewski made a speech on strategic perspectives of Ukraine and met with leading Ukrainian politicians, Dziennik reports.

Source: News PL

Tuesday, April 28, 2009

Ukraine Airport Arrivals To Walk Mats Soaked With Disinfectant

KIEV, Ukraine -- Air travelers arriving in Ukraine from countries hit by the swine flu virus must exit their plane across mats saturated with disinfectants, according to Health Ministry instructions going into effect on Tuesday. The anti-virus pathways are to be at the exits of aircraft arriving from Mexico and the US, government officials said.

European health commissoner Androulla Vassiliou answers questions as she arrives for a General Affairs Council meeting in Luxembourg. Fears of swine flu spreading to Europe grew Tuesday as the number of confirmed cases here rose to four, while travel firms cancelled flights to Mexico and began repatriating tourists already there.

All plane arriving on Ukrainian soil from Central and North America will receive "intensified health inspections," government spokesman Mykola Kornienko said, according to Fakty newspaper.

Ukraine's leading airline Aerosvit on Tuesday issued medical masks and gloves to air crew traveling on routes linking with the US and Mexico, to be used in assisting passengers showing signs of flu infection.

Air crew working Aerosvit's popular New York-Kiev route by government order must indentify to authorities at Kiev's main airport Boryspil the names of all passengers aboard displaying symptoms including fever or chronic cough, Kornienko said.

Similar measures will go into effect in other Ukrainian airports servicing international routes, said Vasyl Kniazevich, Ukraine's Health Minister, at a Kiev press conference.

A total ban on import into Ukraine of live pigs from any country and of raw pork products from Mexico, New Zealand, Canada, and some US states also was in effect, Sehodnia newspaper reported.

Ukraine's government had no supplies of swine flu vaccine, and so was recommending increased vitamin C intake, non-consumption of imported pork products, and avoiding crowds, as the best ways for Ukrainians to avoid infection, said Oleh Nazar, a Kiev city health official.

Source: DPA

Milan Striker Shevchenko In London To Sort Out Future

LONDON, England -- Ukraine international's lack of contribution means he will potentially be saying farewell to both the Rossoneri and the Blues during the summer.

Andriy Shevchenko (R) celebrates as he grabs the equaliser against England for Ukraine, but the Three Lions went on to win 2-1.

On-loan at AC Milan, striker Andriy Shevchenko has returned to London to resolve his future with parent club Chelsea.

The 2004 Ballon d'Or winner left the Rossoneri and moved to Chelsea for £30 million in 2006, but flopped at the English club and secured a loan move back to Milan this season.

Fans were hoping he would be able to repeat his past feats with the Rossoneri, but that has not been the case and he has made 17 appearances in Serie A without scoring a single goal in league play.

Despite his recent declarations that he would like to stay with the Milanese giants, it now seems certain that he will return to London at the end of the season and be transferred elsewhere after his disappointing form over the past three years.

The press have speculated that the 32-year-old is likely to look for a mid-size club where he could obtain more playing time. There is also the possibility he could return to Ukraine, where he started his career with Dynamo Kyiv.

Source: Goal

EU Studying Mission To Ukraine, Steinmeier Says

BERLIN, Germany -- The European Union could send a mission to Ukraine to help the country deal with a political deadlock hindering the country’s response to the economic crisis, German Foreign Minister Frank-Walter Steinmeier has said.

German Foreign Minister Frank-Walter Steinmeier says Ukraine needs Europe's help to avoid further crisis.

The fact-finding mission would be aimed at establishing how the 27-nation bloc can help the country from sliding further into political and financial instability, Steinmeier told journalists after talks with EU counterparts in Luxembourg on Monday.

"Developments there are worrying ... We must try such a mission to help find the national consensus needed to overcome the crisis in Ukraine," he said.

He said there was "a broad consensus" among EU states for such a move, which was proposed jointly by Germany and Poland, and that EU foreign policy chief Javier Solana would now discuss the idea with Kiev.

"It is timely to explore how we can best assist the country in tackling its current difficulties," Steinmeier said.

Earlier, the top adviser to President Viktor Yushchenko said Ukraine's economy would likely shrink by 8-10 percent ths year, rather than the 0.4 percent growth forecast by his government, Reuters news agency reported.

Divided Ukraine

Sweden's foreign minister, former premier Carl Bildt, said the EU was deeply concerned by the ongoing feud between Ukraine's president and prime minister, which has blocked the country's bid to bring in reforms demanded by the International Monetary Fund in return for a massive bail-out.

"There's every reason to be worried. They have a very major economic crisis ... On top of that, we've got the political divisions in the country," he said.

The country's inability to agree on IMF-mandated reforms is "more than regrettable, that is bordering on the dangerous for the country," he said.

Ukraine is one of six former-Soviet states that the EU has invited to join its "Eastern Partnership" cooperation group, which will be launched at a summit in Prague on May 7.

Ahead of the launch, concerns in Europe have grown over the threat of instability in Ukraine and Moldova, the state of democracy in Belarus and unresolved conflicts in Georgia, Armenia and Azerbaijan.

Bildt said that those problems make the partnership "more needed than ever."

"I don't think anyone (in the EU) is under the illusion that we are entering into relations with a couple of Switzerlands," he said.

Source: Deutsche Welle

Monday, April 27, 2009

Ukraine Bans Pig Imports From Mexico, Canada, U.S.

KIEV, Ukraine -- The deputy head of Ukraine's state veterinary committee said on Monday the country had banned the import of live pigs and pork from Mexico, Canada, the U.S. and New Zealand as fears grew of a swine flu pandemic.

People cover their faces to protect themselves from swine flu in Mexico City. Mexico City shut down museums and schools Friday, and sick people were urged to stay home from work.

He said the ban concerned all products imported from these states since April 21.

"Such shipments will not be received or unloaded on Ukrainian territory," Yuriy Satvary said.

Ukrainian Prime Minister Yulia Tymoshenko said on Monday a special group had been established in the former Soviet republic to study issues connected with swine flu. There have so far been no reported cases in Ukraine.

The virus is suspected to have killed over a hundred people in Mexico, although only 20 cases have been confirmed. Over a 1,000 people have been infected with the virus in the Latin American country.

Forty cases of swine flu have been confirmed in the United States and six in Canada, although there have been no fatalities. The United States has declared a public health emergency. One case of swine flu has also been confirmed in Spain. A number of cases of possible swine flu have also been reported in the U.K.

World Health Organization director general Margaret Chan warned on Sunday that the outbreak had "pandemic potential", and urged governments to improve measures to monitor the virus.

Source: RIA Novosti

Ukraine Marks Battle Between Liberation Army, Soviets

RIVNE, Ukraine -- Ukrainians have marked the 65th anniversary of the largest battle between the Ukrainian Liberation Army (UPA) and Soviet troops during World War II, RFE/RL's Ukrainian Service reports.

Ceremonies were held in Rivne to mark the 65th anniversary of the battle.

At a place called Hurbi, near the town of Rivne, 5,000 UPA fighters from the Bohun division clashed with 30,000 Soviet Red Army and Interior Ministry troops (NKVD) from April 22-25, 1944.

A special commemoration ceremony was held in Hurbi on April 21.

UPA veteran Dmitro Avdeev told RFE/RL that thousands of soldiers from both sides were killed during the fighting, including his two brothers and several friends.

He was wounded and was later sentenced to 25 years in jail by the Soviets.

The UPA fought against Nazi German forces, the Polish underground army, and Soviet forces. It was disbanded in 1949 but some units continued operations until 1956.

Source: Radio Free Europe

Sunday, April 26, 2009

Despite Dismal Standings In The Polls, Yushchenko Keeps Fighting

KIEV, Ukraine -- President Viktor Yushchenko is aiming to remain in office, despite facing the lowest approval rating in the country's history.

Viktor Yushchenko

“I will run. It's so clear and obvious,” the Ukrainian president announced, while calling for early presidential elections in October if they are held at the same time as the parliamentary elections. “It is not important how many months earlier they [the elections] will be held, in October or in September.”

Earlier, he insisted the elections be delayed until January 2010. But now he believes early elections would help Ukraine overcome political and economic crisis that has been tearing the country apart. Then, Yushchenko evoked the ‘reset’ word that has become a catchphrase of US-Russian relations.

"We also need a reset. It should be done by re-electing the parliament and forming a new majority and the government," he said.

Yushchenko quickly dismissed Prime Minister Yulia Timoshenko's proposal to empower the parliament with the ability to appoint the president, claiming that this might lead Ukraine to some form of tyranny.

The opposition has already labeled the president’s announcements “completely predictable.”

Close margin of error

“He [Yushchenko] wants to make sure the orange line would be prolonged and he wants to do it himself,” says political expert Vadim Karasyov. “This announcement was his inauguration for running the campaign.”

Yushchenko is about to run for a new term with the worst approval rating recorded for the president at any time in Ukraine’s history, with only 2.9 percent of the people expressing support in him, according to Kiev's International Institute of Sociology research.

His popularity sharply decreased following the financial and political crisis, which started five years ago. Yet the political theater doesn't expect any big changes of the main characters, even though their popularity has dramatically suffered as a result of the crisis.

This time around, Yushchenko’s habitual contender, Viktor Yanukovich, who enjoys the support of 37.9 the respondents, according to the research, seems to be the most favored politician.

Ukrainians think he has the most positive effect on the domestic situation. Meanwhile, Timoshenko's rating is at 21.3 percent and pro-Western Front for Change leader, Arseny Yatsenyuk, has the support of 20.1 percent of the voters.

Early elections

Ex-president of Poland Aleksander Kwasiewski thinks the whole design of the Ukrainian political elite should be changed and mistakes admitted.

“Only when the failings in the architecture of the Ukrainian state are adequately addressed will Ukrainians enjoy the full benefits of the Orange Revolution. That architecture is making a bad economic situation even worse and is jeopardizing Ukraine’s integration into the European family. The design of the Ukrainian state must be corrected and strengthened, now,” he said.

In the fall of 2008, Yushchenko dissolved The Ukrainian Rada and announced early parliamentary, but his decisions was rejected two weeks later.

There have been a total of five presidential elections in Ukraine since its independence from the Soviet Union in 1991, while three of its five parliamentary elections have taken place in the last five years.

Orange history

Yushchenko took part in Leonid Kuchma's successful presidential campaign in 1999 and became Ukrainian prime minister the same year. But after several years of conflict with the president, Yushchenko was forced to resign in 2001. Some experts argue that was due to Yushchenko's growing popularity and political influence on the domestic situation.

In 2005, Yushchenko gained the support of Yulia Timoshenko, thus being elected president after a fierce contest against Yanukovich.

Meanwhile, Timoshenko has served as the country's prime minister on several occasions. Her first appointment came in January 2005, but she was ousted in September. She served in the post again in December 2007.

“Ukraine has made a great deal of political progress. The Orange Revolution made Ukrainians free. They can say and read and watch what they like. Elections are fair and reflect the popular will. But even Ukraine`s closest friends cannot pretend that its politics as usual,” Alexander Kwasiewski wrote.

Yushchenko's policy is generally described as pro-Western, as he mostly supports the EU and welcomes U.S. support. Today, most of the support is associated with the political and economic crisis in the Ukraine.

Yushchenko continues to express hope for the results of the future elections, but the polls show many people are disappointed with the direction of the country and the fruit of the so-called Orange revolution that dramatically brought him to power in January 2005.

Source: Russia Today

Ukraine Marks Chernobyl's 23rd Anniversary

KIEV, Ukraine -- Ukraine paid homage to victims of the Chernobyl catastrophe 23 years after the worst nuclear accident in history.

Women hold candles and pictures of their dead husbands during a commemorative ceremony at the Chernobyl memorial in Donetsk. Ukraine paid homage to victims of the Chernobyl catastrophe 23 years after the worst nuclear accident in history.

"Today we remember with profound sadness those heroes who fought against the nuclear storm and sacrificed themselves for us and our children," President Viktor Yushchenko said in an address published by his press service.

Some 100 Ukrainians, including Yushchenko and other top officials, laid wreaths overnight before the monument to Chernobyl's victims in Kiev and lit candles during a religious service dedicated to the tragedy, an AFP photographer reported.

The "liquidators" -- men who took part in cleaning the site after the catastrophe -- in their turn wound a long fir-tree wreath around the monument, many unable to keep back tears.

In Slavutich, a small town 50 kilometers (30 miles) away from the accident's site where many of the power station's personnel used to live, the night vigil gathered many hundreds who brought flowers and candles to the Chernobyl victims' monument, according to another AFP photographer.

The disaster occurred on April 26, 1986 at 1:23 a.m., when one of the reactors exploded -- contaminating the Soviet states of Ukraine, Russia and Belarus with the fallout also spreading to other parts of Europe.

Over 25,000 people known as "liquidators" -- most of them Ukrainians, Russians and Belarussians -- died getting the accident under control and constructing a concrete shield over the wreckage, according to Ukrainian official figures.

A United Nations toll published in September 2005 set the number of victims at just 4,000, a figure challenged by non-governmental organisations.

In Ukraine alone, 2.3 million people are designated officially as "having suffered from the catastrophe."

Some 4,400 Ukrainians, children or adolescents at the time of the accident, have undergone operations for thyroid cancer, the most common consequence of radiation, the health ministry says.

Chernobyl nuclear power station was finally closed in 2000 after one reactor had continued producing electricity.

But the dead power station remains a threat because the concrete cover laid over 200 tonnes of magma, consisting of radioactive fuel, is cracking.

A new steel sarcophagus is due to cover the seal hurriedly flung over the reactor in the immediate aftermath of the disaster.

Internationally funded construction of the new steel cover is due to be launched this year or early next year and completed by 2012 by the Novarka consortium including France's Bouygues and Vinci companies.

Source: AFP

Saturday, April 25, 2009

Ukraine's Yushchenko Demands Poland Ease Border Lorry Delays

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko on Friday demanded Poland's government act to reduce massive lorry queues on their border, the Interfax news agency reported.

Yushchenko, in a message to Poland's Foreign Ministry, called the current waits of more than 24 hours for lorry drivers attempting to enter Poland due to customs formalities 'unacceptable.'

Ukraine's border police will monitor the situation and will report to the president 'personally,' according to the report.

Queues at heavily-trafficked crossing sites such as along the Warsaw-Kiev highway often extend two or more kilometres, according to Ukrainian television reports.

Frequent vehicle searches, and the small number of Polish customs staff, are the main cause of the delays, Ukraine's 1+1 television said.

Lorry traffic jams on the Polish-Ukrainian border during the summer of 2007 caused difficulties in Ukrainian frontier, as lorry drivers ran out of food and water, while waiting for inspections.

Polish officials at the time said they were processing the Ukrainian vehicles as quickly as possible, but were not capable of handling large volumes of lorries each needing detailed inspections as per EU rules.

Source: DPA

Sunday Marks 23-Year Anniversary Of Chernobyl Nuclear Accident

WASHINGTON, DC -- On April 26, 1986, the world's worst nuclear power disaster took place at the Chernobyl electrical generating plant in Ukraine. Radiation from a reactor explosion there spread over a broad area of northern and central Europe.

Vehicle graveyard near Chernobyl.

The accident caused the creation of a 30-kilometer-wide "no-entry" zone around Chernobyl, sealing off a city built to house plant workers and their families. Despite the concrete entombment of the destroyed reactor, on the 23rd anniversary of the disaster, the plant remains a radiation hazard today.

Pripyat, Ukraine. A dead city. Homes, schoolrooms, playgrounds, and other places are crumbling as wild nature reclaims the land.

Pripyat once had some 50,000 residents. Now they are gone, perhaps forever. Only the artifacts of their lives remain behind, rotting to dust.

Pripyat died because of the deadliest nuclear power accident in world history. Chernobyl.

Early on April 26, 1986, reactor Unit Four at Chernobyl was put through an experimental test of its cooling system. The reactor overheated and exploded from steam pressure, ripping the roof off the power plant. Nuclear radiation spewed into the night sky. And, as people slept, it spread throughout Pripyat, just north of Chernobyl.

In reactor four, the nuclear fuel and the graphite surrounding it were on fire. Authorities sent helicopters to fly over the reactor to dump sand and other materials to try to stop the fire. But, it burned for days.

The wind carried radioactive particles from the fire over a wide area. Ukraine, Belarus, Russia. Then, Scandanavia, Britain, and other parts of Europe. As the wind shifted direction, so did the radiation.

Finally, a day and a half after the explosion, an evacuation of Pripyat was ordered. People were told they would only be gone for several days, so they left nearly everything behind. They never returned.

Despite the wide spread of radiation, Soviet officials at first said very little publicly about what happened at Chernobyl. Many people believed their leaders rather than outside reports about the disaster.

It was radiation detectors in other countries, many hundreds of kilometers away, that forced the Soviets to admit to Chernobyl's accident.

Thousands of people were sent to Chernobyl to clean up debris from the blast. They also built a structure, called a sarcophagus, to cover the shattered reactor and its radioactive fuel. The workers' equipment became so contaminated that it had to be abandoned. The workers became contaminated as well. Many became ill.

The Soviet government said at least 31 fatalities at the Chernobyl plant were directly linked to the reactor explosion. The World Health Organization says another 2,200 deaths can be expected among those who took part in the cleanup. The WHO report added that, in all, Chernobyl could result in 4,000 fatalities from cancer and other radiation-linked causes.

Radioactivity forced officials to create a 30-kilometer-wide no-habitation zone around Chernobyl, sealing off Pripyat. Still, the power plant continued to generate electricity until it was finally shut down in December, 2000.

The Chernobyl nuclear plant's Soviet RBMK [type design] reactors were not encased in thick concrete structures called containment vessels that are standard in the West. At the International Atomic Energy Agency in Vienna, Nuclear Installation Safety Director Philippe Jamet stresses their importance.

"The containment vessels are very, are one of the barriers. We have to protect the environment and people against radioactivity in case of an accident," he said.

Russia, incidentally, still operates 11 RBMK-type reactors. The worst nuclear power accident in U.S. history, at Three Mile Island, Pennsylvania, on March 28, 1979, caused no fatalities and much lower impact to the surrounding area. A reactor containment vessel here remained intact despite a nuclear fuel partial meltdown.

Source: Voice of America

Friday, April 24, 2009

The Viktor And Yulia Show, Continued

KIEV, Ukraine -- A country in default, engulfed by social protests and political chaos, crumbling to bits. This has been the West’s nightmare image of Ukraine. It was the first country to ask the IMF for a bail-out, its currency was in free fall, its economy is contracting at an annual rate of 9%.

The squabbling “orange revolution” leaders, Yushchenko (L) and Tymoshenko, are failing to push through the longer-term reforms that the economy needs.

Yet the main activity in Kiev today seems to be putting up summer terraces outside cafés, not tents for demonstrators. In front of the main government building, a dozen bored protesters call on Yulia Tymoshenko, the prime minister, to come out “to the people”. Even in the industrial east, where output has fallen by as much as a third, the mood is subdued.

One reason is that trust in the government is so low and the experience of crisis so extensive that Ukrainians see little point in taking to the streets. At a time of hardship, working on a vegetable patch is preferable. A protest called by Viktor Yanukovich, leader of the opposition Party of the Regions, attracted relatively few people. There is no money to pay demonstrators. Stirring up his eastern heartland could annoy Mr Yanukovich’s business backers, who have been cutting jobs and wages.

Another reason for relative calm is that after several years of growth many Ukrainians have enough savings to get by for a few months. Some unemployment has been avoided by involuntary holidays and pay cuts. And though the main exporting industry, steel, is struggling, farming (which employs a quarter of the workforce) is doing well. Petro Poroshenko, a businessman, suggests that food production could become an engine of growth.

“Either the country is more resilient or the adjustment started earlier than we thought,” says Ceyla Pazarbasioglu, head of the IMF mission visiting Kiev. After a 40% devaluation, the hryvnia has stabilised. The trade balance went briefly into surplus for the first time in years. The rate of economic decline has slowed. “There is a feeling that we have touched the bottom,” Viktor Yushchenko, Ukraine’s president, says in an interview. On April 17th the IMF mission said it would recommend the release of the second tranche of Ukraine’s $16.4 billion loan.

The banks have undergone a stress test and the biggest will be recapitalised. For all the political cacophony, the government has pushed through the fiscal measures required by the IMF, including increased duties on alcohol and tobacco and higher gas tariffs for rich households.

In the short term, Ukraine needs to cut its budget deficit. In the longer term its big problem is the structure of public spending rather than low tax revenues, argues Pablo Saavedra, an economist at the World Bank. Its unreformed social system and its red tape, both inherited from Soviet days, are crushing burdens.

Ukraine devotes a third of GDP to social spending. Less than 2% of GDP goes to infrastructure investment. It takes 47 permits to open a business and three years to close it. All Ukrainian politicians, including Ms Tymoshenko, Mr Yanukovich and Mr Yushchenko, admit to corruption and lack of structural reforms in Ukraine—and blame each other. “We have been engaged with elections rather than with reforms,” says Anatoly Kinakh, who has served in several governments.

Now Ukraine is in the middle of a new election cycle. Mr Yushchenko’s presidential term expires in January and the campaign is under way. Political turmoil is nothing new in Ukraine, but when commodity prices were high and foreign credit cheap it had little impact on the economy.

No longer. Ukraine nearly botched its agreement with the IMF partly because some members of Mr Yushchenko’s Our Ukraine block refused to vote for fiscal cuts. Mr Yushchenko says that “half of my own block has been bought by Ms Tymoshenko, while the other half cannot support her economic methods”. He blames Ms Tymoshenko for sacrificing the ideology of the 2004 orange revolution to political expediency and populism. She says that he has sold out to vested interests.

Mr Yushchenko certainly has ideology and vision. He talks of building a nation-state and taking Ukraine into NATO and the European Union. “Six times in the 20th century we have declared our independence and five times we have lost it.” Yet on vision, rhetorically at least, there is little difference between Ukrainian politicians. Ms Tymoshenko talks eloquently of European integration and the need to consolidate a country historically divided between east and west.

“First of all we need to build Europe in Ukraine, because a country can only enter the EU if it has the same blood group, otherwise it will get rejected as an alien body,” she says in an interview. Even Mr Yanukovich, once backed by Moscow, now subscribes to the notion of European integration.

In truth, none of Ukraine’s politicians has risen to the promise of the orange revolution. Ms Tymoshenko’s actions sometimes smack of populism. When inflation rose last year, she imposed temporary controls on grain exports, for example. She has done little to promote long-term reforms.

But it was thanks to her intervention both that the IMF loan was unblocked and that a breakthrough was made in the gas-price stalemate with Russia in January. In contrast, Mr Yushchenko’s influence has been mostly disruptive despite his avowed liberalism. He has vetoed many government plans, including privatisations.

The problem goes deeper than animosity between two old allies. It is rooted in a flawed change to the constitution in 2004 that reduced the power of the president but stopped short of turning Ukraine into a parliamentary republic, fudging the responsibilities of president and prime minister. “Whoever wins the presidential election will next day run into the same problems,” says Ms Tymoshenko.

Inevitably, all three main leaders insist they will run for president, including Mr Yushchenko, despite a poll rating in low single digits. But Ms Tymoshenko’s popularity has also suffered recently. Even Mr Yanukovich, who now leads in the polls, has seen his popularity dented. Many Ukrainians feel that none of the three familiar faces is capable of taking the country forward. Tired of the mudslinging, 20% would either vote against all candidates or simply not turn out.

To hedge their bets many businessmen are now betting on other candidates, including Arseniy Yatseniuk, a 34-year-old who has already served as foreign minister, economics minister and central-bank governor. Mr Yatseniuk’s rating has doubled in a few months and he is now catching up with Ms Tymoshenko.

Her preferred option would be to change the constitution before the election and choose the next (symbolic) president in parliament. But she does not mind if Ukraine reverts to full presidential rule. “It does not matter to me what the head of the executive power is called: a prime minister, a chancellor, a president or a hetman.”

A bigger question is what kind of Ukraine will emerge from the crisis. And that will be determined not by elections, but by the willingness of political leaders to push through structural reforms.

Source: The Economist

Thursday, April 23, 2009

EU-Ukraine Gas Deal Is No Pipe Dream

BRUSSELS, Belgium -- One could have been forgiven for suspecting that this month's deal for the European Union to help reform Ukraine's gas market was just more political window dressing.

It is true that the scale of the incompetence, double-dealing and corruption in the Ukrainian gas market is enormous. However, this time the EU and Ukraine may have achieved a breakthrough.

For the first time, a reform plan for the Ukrainian gas sector is backed up by a detailed, stage-by-stage program to fundamentally reform the market. If this program is implemented, it would not only drive out the corruption and opacity in the market.

It would also provide a basis for increased revenues for Ukraine while enhancing EU energy security. What Europe needs to do now is work with Ukrainian politicians to implement the deal while taking parallel measures to ensure it really does work on the ground.

The core of the deal is a pledge by Ukraine to adopt EU energy legislation and to make this law binding by joining the European Energy Community. Under the agreement, the Ukrainian national gas company, Naftogaz, will turn its transmission subsidiary, Ukrtransgaz, into an independent operator.

Full legal unbundling will follow, allowing Ukrtransgaz to offer access to the network to all potential gas suppliers on transparent and commercial terms. Tariffs will reflect actual costs and will be levied on a nondiscriminate basis. Equally, there will be third-party access to gas-storage facilities, again on transparent and commercial terms.

On its own, this first part of the deal would raise much skepticism with most commentators. It amounts to no more than another pledge to comply with EU rules. What distinguishes this deal from Kiev's previous pledges is the extremely detailed master plan for renovating the Ukrainian gas pipeline network. The plan shows the Ukrainians are serious this time.

The master plan provides a network-by-network, section-by-section analysis and costing for what needs to be done to restore the network, what is technically involved, and the potential for enhancing network capacity. Under the master plan foreign investors, together with the World Bank, the European Bank for Reconstruction and Development, and the European Investment Bank, would provide capital to renovate the network.

This renovation proposal is vital. The Ukraine network delivers 80% of Russia's European exports. Even if Nord Stream and South Stream -- two Russian projects to deliver gas straight to Western Europe, skirting Ukraine and other transit countries -- are actually completed, Ukraine will still deliver significantly more gas to Europe than these two pipelines.

The Ukrainian domestic gas incumbent cannot afford to pay for the gas it needs for the Ukrainian economy as well as maintain the pipeline network. The renovation proposal, if implemented, will ensure the continued flow of gas into the EU and provide the capacity for more gas to flow -- at least an additional 20 billion cubic meters (bcm) and perhaps as much as 60 bcm. The total cost is approximately between $2.5 billion and $3 billion.

Given the economic crisis, it is unlikely that Gazprom will be able to afford the $20 billion South Stream project, and Nord Stream is also under financial pressure. Hence both Europe and Gazprom should welcome the funding of additional capacity via the Ukrainian pipeline network at a relatively modest cost.

Taken together, the liberalization of the Ukrainian gas sector and the renovation of the network should enhance EU energy security. Liberalization will root out most of the Ukrainian sector's opacity and corruption. Renovation and additional capacity will also ensure that the gas will flow securely and that more gas can be made available.

Furthermore, as Ukrainian President Viktor Yushchenko has pointed out, "a single, competitive gas market would help depoliticize the EU-Russia gas relationship." The EU-Ukrainian deal, together with the extension of the European Energy Community to Ukraine, will help create a single European gas market in which commercial, not political, principles will prevail. This will reduce the scope for politics in gas supply.

The EU and the international institutions need to do more, however, to ensure that the deal is implemented in practice. We already know from our experience of energy liberalization in the EU that energy companies backslide when it comes to market-opening measures.

For instance, subsidiary companies that own networks have a habit of swinging preferential deals to their holding companies which supply gas. The EU and international institutions such as the EBRD and EIB could insist that Ukraine significantly upgrade the powers and resources of its antitrust agency so that it can effectively police liberalization.

A further consideration for the EU, Ukraine and the international institutions is Russia. Prime Minister Vladimir Putin has indicated he very strongly opposes the EU deal. The facts, however, plainly stand against him. Two-thirds of Gazprom's revenues come from European sales.

Given that its market capitalization has fallen by more than 70% since January 2008, that its gas revenues have collapsed, and that it has accumulated more than $35 billion of debt, Gazprom can barely afford to build Nord Stream, never mind South Stream. If there is additional Russian gas available for sale to Europe, it needs a cheap supply route. The Ukraine/EU deal can provide that route.

There is another consideration. Given Gazprom's lack of capital, the company will need significant foreign investment into its gas fields and its own gas network infrastructure. Foreign capital is easier to raise if there is a comprehensive, legally binding regime that applies to your principal route to market. In other words, the Ukraine/EU gas deal should make it easier for Gazprom to obtain foreign investment for its gas fields and pipeline network.

The plan provides for initial funding and due diligence to be carried out in the next couple of months, and for Ukraine to take practical steps toward the liberalization agenda. So we will soon see if the promise of the Ukraine/EU deal is delivered. But of all the deals that have been done between the EU and Ukraine over the last few years, this one appears to be the most promising.

Source: The Wall Street Journal

EU Commissioner Hopes For Ukraine Deal By End Of 2009

BRUSSELS, Belgium -- The European Union and Ukraine could sign a new strategic deal by the end of the year, bringing Kiev and Brussels even closer on issues such as trade and travel, the EU's foreign-affairs commissioner said in Brussels on Thursday. "If things do not slow down for political reasons, hopefully we will be done by the end of the year," Benita Ferrero-Waldner told journalists in Brussels.

EU commissioner Benita Ferrero-Waldner.

"Negotiations with Ukraine proceeded very well in 2008 and we are continuing to make very good progress today. Large parts of the text have been provisionally closed," the commissioner said.

Complex issues such as the creation of a "deep and comprehensive" free-trade area and the management of individual economic sectors remain to be finalized, she said.

Ukraine's pro-Western government has been pushing for a closer relationship with the EU ever since the "Orange Revolution" which brought it to power in early 2005.

In September, the EU offered its former-Soviet neighbour an "association agreement" strengthening ties in a number of areas such as travel and free trade in return for European-style reforms to the country's political, economic and judicial systems.

Ukraine, which wants to join the EU in the long term, especially welcomed the fact that the proposed agreement was given the same name as a deal offered to former-Communist states such as Poland in the years before they joined the bloc.

However, Ukraine's image in the EU has been battered in recent months by the ongoing power struggle between its president and prime minister, and January's bitter row over Russian gas deliveries.

The country has also been hard hit by the financial crisis, with some experts warning that it could be on the verge of bankruptcy.

The EU is considering whether it should activate a scheme to provide guarantees for foreign loans aimed at keeping neighbours such as Ukraine from financial meltdown as a last resort in case international lenders cannot step in, Ferrero-Waldner said.

Source: DPA

Wednesday, April 22, 2009

Ukraine Above The Rest In Crisis Management

KIEV, Ukraine -- A month ago, a column was written about Russia's return to sane economic policy, but Ukraine has undertaken an even more impressive turnaround. Few countries have been more misunderstood than Ukraine, which has been particularly hurt by the global financial crisis.

Ukraine's Central Bank made a serious policy mistake by insisting on maintaining a fixed peg of the hryvna to the U.S. dollar.

In the wake of the Lehman Brothers bankruptcy, international finance froze throughout the world. Ukraine suffered from an underlying problem -- its high dependence on steel exports, whose prices and demand collapsed in fall 2008. In the first half of 2008, steel accounted for no less than 42 percent of Ukraine's exports. This year all of Ukraine's exports are likely to drop by almost 50 percent, but imports even more, so the current account deficit will become insignificant.

Ukraine's Central Bank made one serious policy mistake. It insisted on maintaining a fixed peg of the hryvna to the U.S. dollar. Because of the apparent safety and obvious profitability, foreign banks transferred short-term, speculative funds to Ukraine, which expanded the domestic money supply as the exchange rate was fixed and boosted inflation similar to what happened in Russia but worse.

In 2007, Ukraine's money supply surged by 51 percent and inflation peaked at 31 percent in May 2008. The speculative currency inflow widened the current account deficit to 7 percent of gross domestic product in 2008. This was not tenable, although Ukraine's budget deficit was minimal and its public foreign debt was only 12 percent of GDP in 2007.

What ultimately scared foreign investors was Ukraine's open political feuding. International investors are a strange anti-democratic lot who get worried by open arguments between politicians. They prefer strict authoritarian regimes like in China, Azerbaijan and Kazakhstan.

By Oct. 1, the Ukrainian economy suddenly halted. Steel production, mining and construction plummeted by about 50 percent in no time. The largest harvest ever could not salvage the economy. Astoundingly, industrial production contracted by more than 30 percent in the first quarter of 2009 over the same time one year earlier, and GDP probably plunged by 20 percent in this period. In addition, the stock market dropped by 90 percent from its peak last year.

Fortunately, the Ukrainian government acknowledged its crisis in early October and asked for help from the International Monetary Fund. Within four weeks, Ukraine concluded a deal with the IMF -- a large, strong two-year standby agreement with $16.4 billion of credits.

The IMF program was standard with three key demands: a nearly balanced budget, a floating exchange rate and bank restructuring. Ukraine has delivered. After some hesitation, the country's Central Bank let the exchange rate float. Although it depreciated by about 50 percent, it has since stabilized, giving Ukraine a new cost competitiveness.

Together with the international financial institutions, the Central Bank has examined all of Ukraine's banks and quantified their bad debt. Compared to the West, Ukraine's share of toxic debt is small.

Seventeen Western banks have committed themselves to recapitalizing their subsidiaries in Ukraine with $2 billion this year. In addition, it is estimated that two-thirds of the country's refinancing needs this year will be met. Most of this is done by European banks. So far, not a single foreign bank has withdrawn from Ukraine. Their prospects are just too attractive. Similarly, the three big Russian banks --VEB, VTB and Sberbank -- have increased their activity in Ukraine despite the crisis.

The Ukrainian authorities have taken seven private Ukrainian-owned banks under administration, and they have mobilized $2.6 billion for their recapitalization from the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank. All of them understand Ukraine's financial dilemma. The IMF assesses the total need for recapitalization of no more than $5 billion.

Yet the Ukrainian government had problems receiving its second tranche of the IMF loan because GDP declined much more than expected, and thus state revenues. The IMF assessed the budget deficit would be untenable at 6 percent of GDP, even leaving a possible public bank recapitalization of 4.5 percent of GDP aside.

The Ukrainian parliament agreed to increase excise taxes on alcohol, tobacco and diesel, and the prime minister decreed further revenue measures to reduce the budget deficit by 2 percent of GDP. With substantial financing from various international financial institutions, the IMF mission considered that the shortfall was almost covered and recommended a second enlarged tranche.

At the same time, the Ukrainian government has made a break with nontransparent gas-trading arrangements through the gas agreement with Russia on Jan. 19 and the agreement on the gas transit system with the European Union on March 23. These two decisions might belong to Ukraine's most fortuitous reforms. Fortunately, it joined the World Trade Organization in May last year, securing reasonable market access.

On April 1, the Ukrainian parliament voted by an overwhelming majority to hold the next presidential election on Oct. 25, which will help the country to clarify the political situation. The fundamental political problem, however, lies in the confusing constitutional compromise of December 2004, which was one of the most significant results of the Orange Revolution. Now all major parties demand a transition to a purely parliamentary system that would make it impossible for a president to block all decisions. They also call for open-party lists to make it impossible for wealthy businesspeople to purchase seats in parliament.

Ukraine has not faced the level of social unrest that other countries have experienced, despite the serious blows to its economy. During television talk shows, both the government and opposition speak their minds freely, and the people hear their arguments until they are satisfied -- or bored.

Thanks to early and resolute anti-crisis actions, international reserves remain reassuring at $25 billion, or eight months of imports. Industrial production increased in both February and March over the preceding month, suggesting that Ukraine might already have turned the corner (although GDP will probably still decrease by 8 percent to 10 percent this year). Even the bond and stock markets have soared in the last month.

Ukraine has shown exemplary crisis management thanks to a few Ukrainian top officials --notably Prime Minister Yulia Tymoshenko -- and a good job by the international financial institutions.

Source: The Moscow Times

Tuesday, April 21, 2009

Manhunt For Ukraine-Based Hackers

LONDON, England -- The US Federal Bureau of Investigation and UK’s Metropolitan Police are hunting a gang of six hackers based in the Ukraine who have hijacked 1.9m computers around the world, including machines at hundreds of large corporations and 77 government departments.

It is the largest network of hijacked computers – or botnet – to have been discovered. to date. It is at least four times larger than botnets that have been discovered in the past, which have tended to include 200,000 to 500,000 computers.

In the UK alone, more than 500 companies were caught in the network of infected machines, including both large and small businesses. Six UK local government computers were compromised, while in the US, computers at both federal and local government level were infiltrated, said Yuval Ben-Itzhak, chief executive of Finjan, the IT security company that discovered the network. He declined to name any of the businesses that were affected, but said they included some of the largest global corporations.

“With this many computers affected, everyone was there on the list – the US Federal government, big universities, very large public companies,” Mr Ben-Itzhak said.

Finjan has provided the FBI and Metropolitan Police with information about the network but there has been no update on whether the law enforcement agencies have been able to track down the criminals. The server from which the botnet was run is no longer in operation, but if the hackers are still at large, they will be able to set a new one up again very quickly.

The 1.9m computer botnet was created in a very short time, between February and March this year. Hackers can infect computers in different ways – by sending e-mails containing viruses or by taking over legitimate websites so that they transmit malicious software code to everyone that visits.

“The speed at which they were able to infect so many people was astounding. If these people are still out there, they can start all over again very quickly,” Mr Ben-Itzhak said.

Criminals can use botnets for a number of different things. They can steal personal details and account information stored in the machines. Or they can control the machines remotely, instructing them to send out spam e-mails and viruses.

They could also be used to mount a “denial of service” attack, where a large number of computers all try to contact a company or country’s computer systems at the same time, causing the system to crash. In May 2007, several Estonia government websites were brought down this way, making it difficult for the country to function. The Ukraine-controlled network would have easily been able to bring down any website it targeted.

Source: Financial Times

What's The Difference After Five Years?

KIEV, Ukraine -- It sometimes seems difficult to believe, but it's been almost five years since Ukraine underwent its Orange Revolution - an event that for many put the country on the world map. For others, however, the heady days of late 2004 were a big show that has ended in even bigger disappointments.

The romantic "Orange Revolution" of 2004.

How come the bandits haven't been put in jail, as Viktor Yushchenko promised during his romantic rise to the presidency? Why is Ukraine still mired in petty clan politics, with state interests taking a back seat to those of businessmen with a voice in parliament? And, most recently, the country appears to be backsliding in the one area that has seemed promising and substantive, the economy. Is it possible that Ukraine will revert to a backwater buffer zone outside of Europe and out of favor with Russia?

All of these concerns are nothing new in a fledgling democracy, which despite the protestations of its harshest critics, Ukraine can still claim to be.

It's true that there wasn't a mass round up of thugs after Yushchenko took power, but to quote the Bible: "He who is without sin, throw the first stone." The point here is that since there wasn't much of a law in Ukraine, the majority of the country's population have probably been lawbreakers.

As for those individuals with particularly ugly reputations for quashing the hopes of the people, abusing their positions in the police force or simply stealing more than is "decent', many have met their death in suspect suicides, hunting accidents or the like. This may not be justice in the legal sense, but we have come a long way since the eerie days of President Leonid Kuchma all the same.

Yes, the country's courts are still corrupt, and murder hasn't disappeared as a means of settling business disputes, but no one can honestly compare today's comical top cop Yury Lutsenko to his Kuchma-era counterpart Yury Kravchenko. Abusing the law and abusing people under the law are different in practice.

And yes, the corruption continues, but in an odd sort of Ukrainian way the venal are keeping each other in check, rather than jockeying for influence before a modern-day czar. Kuchma kept everything in his own hands, which meant all the other hands were empty and often pawing for what they could get.

Viktor Yushchenko, for all his weaknesses, is a very different man. In fact, he was likely allowed to take power precisely because of his weaknesses, which are allowed and even cherished in a democratic country.

The very fact that Ukrainians can talk and write about Mr. Yushchenko's flaws is proof enough in itself. His currents opponents for power have shown much less democratic credentials during the brief periods that they were allowed to head the government. Populism is the bridesmaid of a dictator, while trying to steal an election is far worse than the theft of state assets.

Recently, with presidential and quite possibly parliamentary elections in sight, Yushchenko has been increasingly compared to his predecessor Mr. Kuchma.

Like Kuchma, it is said, Yushchenko is trying to stay in power by changing the rules of the game. Again, we hear talk of a referendum to change the country's much-embattled constitution, proposals to create a bilateral legislature - only this time from the man who fought such initiatives tooth and nail during his rise to power: Yushchenko.

Yushchenko has additionally called for yet another round of early parliamentary elections, to be held concurrently with the presidential ones.

These proposals are indeed unorthodox and rightfully raise concerns. But to compare Yushchenko's initiatives to those of Mr. Kuchma is a gross exaggeration based on convenient historical amnesia.

Yushchenko may want dual elections, but in fact he's gotten a shorter term, with presidential elections currently scheduled four months before his five years are up. Could it be that the mild-mannered president is simply trying to keep his opponents at bay?

With single-digit approval ratings, a shrinking party in parliament and not many friends in the West or up north, can Yushchenko really be expected to take the country hostage in some sort of constitutional coup?

Kuchma couldn't get away with it, and he had much more power and opportunity to do so. In fact, Mr. Kuchma knew full well that it was time to pass on the baton but he tried to do so underhandedly and in an eastward direction.

Like Kuchma, Yushchenko also knows that he's on his way out, and therefore may be trying to soften the transition. If the president is really trying to create a bilateral parliament to have somewhere to go after electoral defeat, I say make him an honorary senator for life! Whatever his faults as head of state, he was the best man to choose at the time and paid a high price for his election.

If, on the other hand, Yushchenko is trying to restrain the ambitions of his opponents - More power to him! The country can only benefit from this.

It's economics that have brought Ukraine closer to Europe and its values - cash from industry and agriculture that has trickled down to a population that had never known what money, ownership, freedom of travel and information, etc, was.

And whoever is elected to replace Mr. Yushchenko will face a population more used to freedom than ever before. If nothing else - and he did a lot more - Yushchenko has kept the expectation of democracy alive among his countrymen.

The economy will pick up again, as economies do. Ukraine is a major exporter of steel, grain and chemicals. Under Yushchenko, it entered the WTO.

Issues such as what percentage of the vote a party will need to get into the next parliament are indeed important. But a democratic system where the president isn't czar offers enough protection to balance interests among lawmakers, who with time should become increasingly sensitive to their constituents. With the continued accumulation of wealth and safeguards of free speech, the people will not stand for anything else.

Source: Turkish Weekly

Monday, April 20, 2009

Europe's Double Failure In Moldova

WASHINGTON, DC -- Europe's passive attitude towards the ongoing crisis in Moldova shows that when faced with the choice between power and principle, the EU is all too eager to abandon its core values in exchange for apparent geopolitical gains.

Moldovan protestors hold signs and banners in Chisinau on April 10, 2009. About 10,000 people joined an opposition rally in Moldova on Sunday to denounce President Vladimir Voronin's "dictatorial" leadership after post-election rioting.

True, the wise conduct of foreign policy often requires such compromises between what is right and what is necessary. But in the case of Moldova, the EU misjudged the forces at play and made a mockery out of its alleged commitment to a free society.

By European standards, Moldova today qualifies as a failed state. The country's average GDP per capita is only $250, with almost 30 percent of its four million citizens living below the poverty line. It is also one of the main sources of human trafficking on the continent and the break-away republic of Transdniester, which stretches between Moldova and the Ukraine, is a regional hub for money laundering and arms smuggling.

In the eyes of the disenchanted Moldovan youths, the victory of the Communist Party in the parliamentary elections held on April 5th signaled the continuity of this bleak horizon. In scenes familiar to Eastern Europe in 1989, thousands of protesters took over the Parliament building in the capital Chisinau and demanded a recount of the vote, which they claimed was rigged.

The regime of outgoing President Vladimir Voronin - himself a former interior minister in the days when Moldova belonged to the Soviet Union - responded with a Soviet-style crackdown. Over 200 people have been beaten and jailed, some without access to lawyers.

The body of 23-year old student Valeriu Boboc was returned to his parents covered with bruises and journalist Natalia Morar, one of the key planners of the anti-communist demonstrations, went into hiding after being placed under house arrest.

Ten other journalists have been threatened or arrested by the Moldovan authorities. Backed by the Russian government, President Voronin accused Romania of plotting a coup against him, expelled the Romanian ambassador from Chisinau and reintroduced visas for Romanian citizens.

On both moral and strategic grounds, Europe's reaction lacked substance. In spite of the abuses, the EU went beyond traditional expressions of concern and invited Moldova to attend the inaugural summit of the Eastern Partnership. This initiative is due to be launched next month in Prague and aims to tighten relations with six former Soviet republics, including Ukraine, Georgia and Belarus.

There were good reasons for the EU to be cautious: observers from the Organization for Security and Cooperation in Europe (OSCE) found no evidence that the election had been manipulated. Yet certain members of the OSCE mission openly challenged its final assessment, arguing that the positive evaluation was the result of Russian maneuvering.

Furthermore, a United Nations inquiry concluded that Moldovan police subjected the detainees to cruel and inhuman punishment. In this context, Europe's deference towards President Voronin's regime dealt a blow to the country's already weakened pro-Western opposition, as well as to the aspirations of the young protesters for whom European integration is the only way for Moldova to chart a brighter course.

The EU position favored none of the rationales that would have made it strategically justifiable. Historically, Moldova has been coveted by Russia as a bridge to extend its influence into Eastern Europe and the Balkans.

With the establishment of the Eastern Partnership - which President Voronin labeled as a plot to encircle Russia - and the recent tensions between the EU and Moscow over Georgia and Ukraine, disputes over the post-Soviet space are bound to recur. The EU thus failed to appreciate that a complacent reaction vis-à-vis the Moldovan repression will not postpone inevitable disagreements with the Russian government.

What is more, the EU's decision to reprimand Romania for planning to relax citizenship criteria for circa one million Moldovans exposed the lack of cohesion in Europe's foreign policy: strangely enough, the EU was more troubled these plans than by the crackdown in Chisinau.

The EU prides itself with an approach to diplomacy guided by "effective multilateralism", i.e. a preference for dialogue over isolation and/or confrontation. As illustrated by the Moldovan crisis, pushing this idea too far can lead to results that are both morally and strategically undesirable.

Source: The Washington Post

Bringing Ukraine Into The European Club

MOSCOW, Russia -- Many of us who watched the Orange Revolution with admiration four years ago have become disappointed with its failure to usher in a period of democratic stability and sustained reform. Recent crises have strengthened this feeling.

Nonetheless, there have been some clear improvements. Media censorship has ended, elections are free and fair, civil society is flourishing and the economy is more open. These are considerable gains, especially when compared to developments in Russia. But that is a very low benchmark to set.

The Orange Revolution promised something more substantive -- an economic and political transformation that would put Ukraine firmly on the path to membership of the European Union.

But this hasn't happened yet, and part of the responsibility for this lies with the EU itself. Europe's soft power proved remarkably effective in encouraging the transition from communism to democracy in Eastern Europe but only when the promise of full membership was the end goal.

It was only the prospect of inclusion in the EU club that encouraged the emerging democracies to make the painful sacrifices required to get there. It also provided the financial support and political supervision needed to meet the immense legislative and administrative challenges involved.

The problem with Ukraine is that it expected to achieve the same results without any support or a clear statement that membership is an achievable goal.

Ukraine needs a clear signal that it is an integral part of the European-Atlantic community of democracies. U.S. President Barack Obama's desire for a new start in relations with Russia is understandable, as is German Chancellor Angela Merkel's recent call for Ukraine and Russia to work toward a new understanding.

But Ukraine should not be regarded merely as a factor in relations between great powers. It is a sovereign country in its own right and deserves to be treated as such. Europe should not lose sight of its fundamental values by failing to respect the legitimate interests and aspirations of a major country like Ukraine.

Yet the major reasons for Ukraine's disappointing progress are to be found in the deficiencies of its own political system. Without united leadership and effective political institutions, it is difficult for any country to chart a clear and consistent path.

Unfortunately, the deal that allowed President Leonid Kuchma to step aside in 2004 also saddled his successor with constitutional restrictions that undermined his capacity to govern. By weakening the office of president and creating an unstable and ill-defined division of powers with the prime minister and the parliament, this created sharp division at a time when unity was most needed.

The result has been a prolonged three-sided struggle for power leading to a series of serious political crises.

The most recent crises were the gas dispute with Russia and a serious economic downturn. European countries and international organizations trying to assist Ukraine have often been confused about which leader they should be dealing with in Kiev.

The International Monetary Fund's frustration over the terms of a badly needed loan package with the government is a case in point. President Viktor Yushchenko and the Central Bank were willing to agree on workable terms, but the second tranche of the package was held up because of irresponsible political bickering elsewhere.

Agreement now appears to have been reached, but Ukraine's international credibility has again suffered in the process.

The rest of Europe has little patience for dealing with leaders who put their own ambitions before the interests of their country. Yes, Ukraine has a presidential election in less than a year, and the potential candidates have a right to set out their positions.

But most mature democracies are able to keep political competition within acceptable constitutional boundaries. This is true even in countries like Germany, where the main political rivals are in coalition together. Part of the answer for Ukraine centers on constitutional reform to create a clearer and more efficient political order.

Another part of the answer is for Ukraine's political class to develop a culture of restraint and self-control in the national interest.

The EU should be willing to do much more to help Ukraine through this crisis and beyond, but it also needs to feel more confident about the country's political direction. This once seemed clear, but now there is doubt. Efforts to secure a $7.4 billion loan from Russia appear odd coming so soon after a dispute in which Ukraine expressed concern about excessive energy dependence on the same country.

A country committed to European integration should enjoy a close and intimate partnership with the EU, leading to eventual membership. A country seeking to exploit its intermediate position between Russia and the EU for short-term gain deserves a different kind of relationship.

Ukraine is too important to be relegated to the sidelines of European policymaking. Ukraine's difficulties should galvanize the EU to develop new policies of engagement and assistance. This should be a pragmatic endeavour, focused on practical results and backed by adequate financial support and real political will.

The agreement signed by Yushchenko and European Commission President Jose Manuel Barros on EU funding to increase safety and capacity of Ukraine's gas pipelines is an important step for future cooperation.

There is only so much that can be done from Brussels. The leaders in Kiev have to meet their side of the bargain, too.

Source: The Moscow Times

Ukraine Missing Man 'Safe And Well'

LONDON, England -- A tourist on holiday in Ukraine has described how a violent gang threatened to cut off his ears and remove his kidneys unless a ransom was settled by his family.

Eren Parker, 25, went missing earlier this month.

Eren Parker says he was bundled into the back of a car as he returned to his hotel in the southern city of Odessa on April 7.

The 25-year-old claims he was then guarded day and night before his family stumped up $16,000 and successfully secured his release.

Mr Parker, of Cornish Grove, Penge, said: “The gang said they would take my ears. They also threatened to cut out my kidneys and sell them.

“The people holding me would lose their temper when I couldn’t understand the Russian they spoke and so they beat me.

“I was terrified.”

The Foreign Office has confirmed a British national was missing in the city for a week until last Thursday (April 16).

Alerted by his Croydon-based family, the Met Police say they helped Ukrainian authorities with their investigations into the incident.

Taser attack

Describing his ordeal, unemployed Mr Parker said: “I was on the last day of my holiday and had gone to a restaurant in a casino.

“When I came out it was 5am and as I returned to my hotel in the city I was hit with a taser and thrown into the back of a car.

“They covered my eyes. I can’t remember exactly but there were about three or four men.

“I was taken to a garage and made to sit on the floor. I had no idea where I was.

“They took all my possessions.

“They told be nothing and I was sure they were going to kill me.

“I didn’t even know they were asking for money from my family. I was confused and scared.”

The keen footballer and Arsenal fan says he was moved to a flat after two days where he survived on bread, tomato sauce and mayonnaise. He said he drank only water.

During his time on the sixth floor apartment he claimed he tried to escape through a bathroom window.

He said: “I thought I could do it but I was so far up if I had jumped I would have broken my legs.

“Every 12 hours the two men guarding me would go and two more would arrive.”

He added: “I have no idea why they took me.”

$60,000 ransom

Single Mr Parker says he was suffering from shock when, last Thursday (April 16), he was taken to a hotel in the city where his sister and father were frantically trying to negotiate his release.

News of his kidnapping and a $60,000 ransom first came to light when the family received a call from a woman who allegedly helped to translate and broker a deal.

Mr Parker’s brother, 27-year-old Erol Kesen from Beckenham, says the family initially paid $5,000 but were forced to pay another $11,000 to end the ordeal.

After receiving the ransom money, the gang is understood to have released Mr Parker and handed back his passport, allowing him to fly back to the UK yesterday (April 20).

The Foreign Office admitted a British national was reported missing on April 9 in Odessa but was found “safe and well” on April 16.

But a spokesman added: “We cannot comment or speculate on whether a ransom was paid.”

Source: London News

All The King’s Horses, And All The Kings Men*...

KIEV, Ukraine -- "Ukrainska Pravda" today reveals that the European People’s Party, the "largest European-level party on the continent", have been trying for some time to act as peacemaker between president Yushchenko and premier Tymoshenko.

EPP president Wilfried Martens

EPP president, Wilfried Martens has even suggested assembling a heavyweight crew comprising former British PM Tony Blair, former Spanish PM Jose Maria Asnar, and former Polish president Alexander Kwasniewski to help bring Yush and Yulka together into some kind of working relationship again. Yushchenko has been against the idea all along, whilst Tymoshenko has been agreeable.

Maybe its because just over a year ago, Martens, at a meeting with Yushchenko, blamed the president’s secretariat of criminal acts against the Tymoshenko government. Martens allegedly declared: "Mr Baloha is a criminal!" To which Yushchenko apparently replied, "Look into my eyes! Do you consider these to be the eyes of a criminal?" "No, you are not a criminal - but the head of your secretariat is!" continued Martens.

"Financial Times" reports that the Yulia Tymoshenko government had unilaterally adopted initiatives needed to unlock an International Monetary Fund loan after MPs failed to adopt the required conditions in parliament.

It seems that the IMF Ukrainian mission head was OK with this, but, NUNS deputy, Ksenya Lyapina, who is one of Yushchenko’s closest confidantes, says lawsuits against the cabinet from entrepreneurs will follow and the resolutions will be eventually cancelled by the cabinet.

* From an English nursery rhyme about a character normally portrayed as an egg sitting on a wall:

Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall.
All the king’s horses,
And all the king’s men,
Couldn’t put Humpty together again.

Source: Agoravox

Hard-Core Investors Staying Put Despite Endless Crises

KIEV, Ukraine -- Weak competition, high profits still make nation a promised land for some businesses. No matter what Ukraine throws at them, a small, hard-core group of foreign investors – from giant multinational corporations to lone expatriates – weathers the turbulence.

A conveyor line at the Trostyanets chocolate factory in Sumy Oblast, the biggest Kraft Foods factory in Ukraine.

They stay through crisis and boom times, “blue” and “orange” politicians, a hryvnia worth 4.6 to the dollar and a national currency that trades closer to 10.

They stay put when other foreigners get scared away by headlines of rampant corruption, a sea of bureaucratic red tape and political chaos. Who are these determined businesspeople? Do they make a lot of money here? If so, how do they manage to swim in Ukraine’s muddy waters?

“Ukraine is the best kept secret in Europe,” insisted George Logush, vice president of Kraft Foods International and area director for Ukraine, Eastern Europe and Central Asia. “The European media did a wonderful job, focusing on negative things and rarely showing positive aspects. [To them, I say]: ‘Thank you for sheltering this market for us from the competitors.”

Kraft Foods Ukraine is part of Kraft Foods, the world’s second-largest food and beverage company. It is one of the most successful investors in Ukraine, known by Ukrainians for Korona and Milka chocolate, Jacobs coffee, Lux potato chips, holding a leading position in all three categories. In 14 years, Kraft invested more than $150 million into Ukraine’s economy and increased its business by 100 percent, Logush said, a feat that “would not be possible in very many countries.” Today, the Kraft group boasts annual revenue in Ukraine of about $400 million on domestically-produced products, and more on imports, such as coffee.

The company arrived in 1995, when the economy was still reeling from the collapse of the Soviet Union four years earlier. The hryvnia, the new national currency, had not yet arrived. In its place, until 1996, Ukrainians used the karbovanets, a coupon-like form of payments.

One of the keys to Kraft’s success, Logush said, has been the company’s ability to take advantage of hard times to introduce new product lines. “Now we launch biscuits,” Logush said. “Crisis is the time when you can shake up the established order, because it’s being shaken anyway.”

Yet Kraft remains one of a relatively small number of multinational corporations and foreign investors who have ventured into Ukraine, a vast and largely untapped market of 46 million citizens.

The nation has attracted a mere $35 billion in foreign investment since independence. By comparison, nearly $200 billion has poured into neighboring Poland, a European Union member with eight million fewer citizens than Ukraine, since the Soviet Union's collapse.

Many investors have stayed out because of corruption, red tape and political squabbles between ex-Prime Minister Victor Yanukovych's "blue" forces and the "orange" ones led by the now-dissolved alliance of President Victor Yushchenko and Prime Minister Yulia Tymoshenko.

Jorge Zukoski, president of the American Chamber of Commerce, said Kraft’s success is shared by many foreign investors brave enough to tiptoe into the market. They stay, Zukoski said, because they’re generating higher profits than they might in other nations. By establishing themselves first, companies such as Kraft grew fast, faced limited competition and can look forward to high growth rates ahead.

Zukoski said it helps to be in a place for the long run.

“At the end of the day, the large strategic and institutional investors that we represent see the current global financial crisis as a short-term blip on the radar screen. They look at Ukraine as a 50- to 75-year play and understand that there are very few countries left in the world that have the potential to drive future growth for their companies.” Despite the challenges and difficulties, chamber members keep striving for a Ukraine that is “competitive and well-positioned when global growth resumes,” Zukoski said.

But for some investors, the headaches of doing business in Ukraine are simply too much. And, while normal economic cycles are manageable, sometimes Ukraine’s off-the-charts corruption is not.

“The crisis did not affect our business in Ukraine as much as the corruption,” said Hanan Mor, owner of an investment company, in an interview with Israel’s Calcalist newspaper. “That is why we are stopping any business initiatives in this country.”

But the cheerleading and individual success stories cannot hide the fact that, by many measures, Ukraine’s business climate remains unfavorable. The list of grievances is long: unstable legislation, corruption, red tape, non-transparent taxation system, raider attacks, abuse of intellectual property and auctioneer rights.

Politicians are aware of the problems, even if they seem unwilling or unable to improve the situation. As parliamentarian Nataliya Korolevska told an investors' conference in February: "As the world investment capital reaches $1.5 trillion, Ukraine has to do everything to participate in the process under competitive terms.”

Hard-core investors say instability is part of the game.

“I’ve been here for 15 years and this country has never been stable. I wouldn’t advise anybody to stay out of Ukraine, just because they want to wait for the next election,” said Glen Willard, a 15-year business veteran in Ukraine and founder of Willard, an advertising and public relations company.

Willard admitted that the worst part of doing business in Ukraine is its unpredictability. “Other than that, business is not easy anytime, anywhere,” Willard said: “So just get over it.”

Kraft’s Logush also said Ukraine is not for the squeamish.

“If you need to find an excuse to leave the country, you’ll find it,” Logush said. “Particularly, in terms of political instability, I think people are just extremely shortsighted and purposely blind. How long has democracy been in Ukraine?”

American businessman Paul Waters is one of hundreds of expatriates who have thrived on the Ukrainian market. Since arriving 17 years ago, Waters appears to have done a little bit of everything in Ukraine and he has no intention of leaving. From steel trading to the construction business, software and solar panel systems development, Waters said that “Ukraine has been very kind to me. I could be sitting on my boat in California fishing. But in Ukraine, I am enjoying everything. It’s not a Disneyland, it is real,” Waters said.

Waters did, however, confess that it took him awhile to get accepted. He also was cheated several times by Ukrainian partners.

“When I arrived, there were all these Soviet bosses, running businesses and, certainly, they were not as open to our ideas,” Waters said. Ukrainian companies still lack efficient administrators, but they have plenty of highly educated people, computer wizards and other professional standouts to choose from, according to Waters.

Seasoned foreign investors have had success in the financial, insurance and telecommunication sectors, as well as food production and construction, according to Konstantin Stepanov, chief analyst at Sokrat investment group.

The leading individual foreign direct investment in Ukraine’s all-important metal sector came from the $4.8 billion re-sale of the former Kryvorizhstal steel mill in Kryviy Rih, the nation’s largest steelmaker, to ArcelorMittal Steel in 2005. The sale followed a scandalous purchase by a group led by Ukrainian billionaires Rinat Akhmetov and Victor Pinchuk, who bought the steel mill for six times less than what ArcelorMittal, the world's largest steel company, paid in an open auction.

So, 18 years after independence, Ukraine still represents a big gamble with big potential payoffs – and terrible downsides. It’s a high-risk, high-reward game, Logush admitted. But many are betting that emerging economies will get out of the crisis more quickly than developed ones.

“Which of them will [foreign investors] gamble on first? The ones with the greatest multiplier effect, the largest scales, like China and Brazil. But they always want to spread the risks,” Logush said. “I think those who’ll go into the Ukrainian economy will do very well.”

Source: Kyiv Post