Tuesday, August 31, 2010

Merkel Tackles Ukrainian President On Media Rights

BERLIN, Germany -- German Chancellor Angela Merkel said Monday she held "very open" talks with Ukrainian President Viktor Yanukovich about press freedom following criticism from journalists and international watchdogs.

German Chancellor Angela Merkel

"I made clear that with regard to certain democratic areas, in particular in the area of press freedom and the freedom of opinion, we had certain questions," Merkel said after talks with Yanukovich in Berlin.

"We discussed these questions very openly with one another. We also agreed that should there be any such problems in the future that we would be able to discuss them openly and honestly," she told reporters.

Ukrainian journalists have repeatedly warned of deteriorating media rights, saying pressure on reporters has increased since Yanukovich, seen as closer to Moscow than his predecessor Viktor Yushchenko, came to power in February.

On Friday, media rights watchdog Reporters without Borders sent a letter to Merkel asking her to discuss "growing obstacles to freedom of the press" in Ukraine during her meeting with Yanukovich.

The group also called on Merkel to press for a more thorough investigation into the disappearance of journalist Vasyl Klymentyev on August 11.

Ukraine's Interior Minister Anatoly Mogilev said on Thursday that it was likely that Klymentyev, the editor of a small weekly in Ukraine's northern city of Kharkiv specialising in sensational corruption exposes, had been murdered.

More than 100 Ukrainian journalists and artists took to the streets of Kiev on Thursday in a protest against censorship.

Private channels TVi and Channel 5 are currently at loggerheads over broadcast frequencies with one of the main national networks, Inter TV Channel.

Inter TV's owner, Valery Khoroshkovsky, is one of the country's richest businessmen and also head of the SBU, Ukraine's main government security agency.

The newspaper reported that the head of TVi had been spied on by intelligence services, something which Yanukovich has denied.

Source: German Expatica

Stolen Caravaggio Painting Returns To Ukraine

KIEV, Ukraine -- Caravaggio's "The Betrayal of Christ" which was stolen from a Ukrainian museum, has been returned to Ukraine by the presidential aircraft, the president’s press service has told Interfax-Ukraine.

The Betrayal of Christ was painted by Michelangelo Merisi de Caravaggio (1571-1610).

The restoration of the painting will be carried out in Kiev. Then the painting will be sent to an Odessa museum after the museum is equipped with the required security systems.

As reported, the painting, by Italian Renaissance artist Michelangelo Caravaggio, which was stolen from Odessa Museum of Western and Eastern Art, was returned to a Ukrainian delegation headed by Ukrainian President Viktor Yanukovych during their visit to Germany on Monday.

Caravaggio's "The Betrayal of Christ," one of the gems of the collection of Odessa Museum of Western and Eastern Art was stolen from the museum on July 31, 2008.

A number of experts estimate the work to be worth $100 million.

However, some experts believe that the stolen painting is an author's copy at best, and the original is in the National Gallery of Ireland in Dublin.

On June 25, in Berlin a group of three residents of Ukraine and one resident of Germany, who were trying to sell the painting, were detained in Germany.

The drama surrounding the long-last masterpiece has been extensively chronicled.

Source: Kyiv Post

Briggs Taunts Klitschko Ahead Of Oct. 16 Bout

KIEV, Ukraine -- Former heavyweight champion Shannon Briggs said Monday he would make current WBC titleholder Vitali Klitschko his "30-second, first-round victim" when they meet later this fall.

WBC heavyweight champion Vitali Klitschko (L) faced off with former WBO heavyweight champion Shannon Briggs at press-conference in Kiev, Ukraine.

"That's how a lot of my fights end," Briggs said Monday in Kiev.

Klitschko shrugged off the threat, suggesting that the fight on Oct. 16 in Hamburg, Germany, will be a test of his own mental strength.

"The only man who can defeat Vitali Klitschko is Vitali Klitschko," he said. But the 39-year-old Ukrainian also admitted, "It will be an amazing, exciting fight, full of drama."

Briggs is the fourth choice for Klitschko, after Russians Nikolai Valuev and Alexander Povetkin — and loudmouthed British heavyweight David Haye — refused the bout.

Haye had been calling out Klitschko and his brother Wladimir for months, but ultimately refused to take the fight when if was offered. Povetkin was the mandatory challenger but backed out at the last minute when his team decided he wasn't ready for Klitschko.

Klitschko (40-2) recognized Briggs (51-5-1) as "one of the most serious pretenders to the title." Briggs won the WBO title with a 12th-round knockout of Sergei Liakhovich in November 2006, but lost the title in his first defense against Sultan Ibragimov eight months later.

Briggs promoter Gregory Cohen said for the 38-year-old asthmatic from New York this is "essentially his last opportunity, and I am certain he is going to make the most of it."

Briggs considered retirement in the wake of the Ibragimov defeat, saying he entered a "diet of cookies, doughnuts and fried chicken" that ballooned him to 335 pounds. It was Klitschko, he said, who inspired his return after the two met in a Los Angeles restaurant.

"I was fat and he touched my stomach. And in that moment right there I decided to come back," Briggs said. "He should have left me alone."

Source: NBC Sports

Monday, August 30, 2010

Germany, Ukraine Want To Modernise Gas Pipelines

BERLIN, Germany -- Germany and Ukraine want to work together to modernise gas pipelines in the former Soviet satellite state, the two countries' leaders said on Monday.

German Chancellor Angela Merkel welcomes Ukrainian President Viktor Yanukovych in Berlin on August 30, 2010.

At a joint news conference with Ukrainian President Viktor Yanukovich, German Chancellor Angela Merkel said the two countries would launch a business forum this autumn as a platform for the expansion of energy ties and German investment.

"In particular, the possibility should be discussed of how and to what extent Germany can play a constructive role in the restructuring of the Ukrainian gas market," Merkel said.

Ukraine runs the main transit route for Russian gas headed to Europe, and Kiev and Moscow have a history of gas pricing disputes that have disrupted European supplies.

However, those disputes took place amid badly strained relations between the Kremlin and Ukraine's pro-Western former President Viktor Yushchenko.

Yanukovich, who has tilted foreign policy sharply back towards Russia since taking office, said he had proposed certain plans to Merkel, but did not mention specifics.

"Ukraine wants to be, and will be, a dependable partner for both Russia, a gas supplier, and Europe, an end user," he said.

It was in Europe's interest to help modernise the pipelines in order to gain influence over their use, he added.

Yanukovich says that taking Ukraine into the European mainstream is the focus of his foreign policy.

Source: CNBC

Ukrainian President Pledges To Tackle ‘Ransacking’ Corruption

BERLIN, Germany -- Ukrainian President Viktor Yanukovych said the former Soviet republic needs to tackle corruption that’s “ransacking” the state’s budget in order to lure investors and forge ties with the European Union.

German Chancellor Angela Merkel with Ukrainian President Viktor Yanukovych during an official welcoming ceremony in Berlin on August 30.

The Ukrainian parliament will begin passing laws reforming the court system next month as a way to rebuild trust among international investors, Yanukovych said in a speech today in Berlin.

“Today we confront the terrible cases of corruption and the ransacking of the budget,” Yanukovych said. “The country cannot go on like this.”

During a meeting with German Chancellor Angela Merkel, Yanukovych said Ukraine would be a “trustworthy partner” for the west, citing disputes with Russia over natural gas that have disrupted deliveries to Europe twice since early in 2006.

Merkel took aim at Ukraine’s press freedoms, saying that “we still have questions” on the issue.

Yanukovych’s seven-month-old government has bolstered relations with Russia and scrapped policies of his Western- oriented predecessor, Viktor Yushchenko. Russian President Dmitry Medvedev in April cut Ukraine’s gas price by about 30 percent, while the Ukrainian government agreed to extend Russia’s lease on a naval port in the Black Sea.

Merkel said she supported an association treaty between the EU and Ukraine, which ships about 80 percent of Russia’s gas exports to Europe.

“We are obligated to find a solution that can really exclude any future instability as far as gas delivery is concerned,” Yanukovych said after meeting with Merkel.

Source: Bloomberg

Sunday, August 29, 2010

Kharkiv Airport Gets New Terminal

KHARKIV, Ukraine -- Ukraine's president Victor Yanukovych was the guest of honour as a vital new airport terminal was officially opened in Kharkiv, in preparation for hosting games at UEFA EURO 2012.

Viktor Yanukovych addresses guests at the opening ceremony.

Ukraine's president Victor Yanukovych was among the honoured guests at the opening ceremony for Kharkiv airport's new terminal, a major milestone in the city's preparations for UEFA EURO 2012.

Deputy prime minister Borys Kolesnikov, UEFA EURO 2012 director Martin Kallen and Ukrainian tournament director Markiian Lubkivskyi joined Yanukovych along with a host of local dignitaries and aviation industry representatives at the ribbon-cutting event.

Acknowledging the role of FC Metalist Kharkiv owner Olexandr Yaroslavskiy in financing the building work, Yanukovych said: "The opening of a new terminal in Kharkiv opens a new air route into eastern Ukraine. It is a great example of government and private industry working together."

Guests were invited to take a tour of the new terminal on Saturday, while in the evening the citizens of Kharkiv helped celebrate this latest achievement with an open-air pop concert in the city.

The new terminal is set to be complemented by a temporary terminal, due to open in April 2012, to deal with the exceptional surge in traffic caused by football fans coming for the finals, to be staged in Poland and Ukraine from 8 June to 1 July 2012.

Yanukovych views the opening of the new terminal as another positive step in Ukraine's bid to host the finals, saying: "We have practically caught up with our UEFA EURO 2012 preparation schedule but we still have a lot of work to do."

Source: UEFA

Ukraine: A Cold Winter After The Hot Summer?

BRUSSELS, Belgium -- Ukraine could face an unexpectedly cold winter if Moscow decides to turn off the gas tap once again. Viktor Yanukovych’s presidential victory has improved relations with Russia, but Moscow may not be entirely satisfied with the current state of affairs.

Russian Prime Minister Vladimir Putin (L), and Ukrainian President Viktor Yanukovych meet at a presidential residence in Foros, near Yalta, in Ukraine’s Crimea Peninsula, July 24, 2010.

The Black See Fleet deal is significant, but Russia is eyeing Ukrainian state-owned gas company Naftogaz and wishes to manoeuvre Kiev into its Soviet-area customs union, as part of ensuring loyal allies in its neighbourhood.

Some in the new Ukrainian government believed Russian Prime Minister Putin’s words about a merger between Naftogaz and Gazprom to be a joke. Clearly, they were not prepared for such an initiative only a few days after the Black Sea Fleet deal.

However, such moves are nothing new from Russia. Ukraine has failed to change the conditions of its gas contract, and Russia may present Ukraine with a bill for unpaid gas supplies, demanding equity in Ukrainian assets as payment.

But why would Moscow rush? Russia is already busy challenging President Lukashenka in the run up to the upcoming presidential elections in Belarus, which are expected to be held in December 2010.

In Moscow’s eyes, Lukashenka has not been a loyal ally, delaying the customs union between Russia, Kazakhstan and Belarus, a pet political project of Moscow.

Also, Russia has its own internal problems to worry about, such as the wildfires and related governance issues. In addition, it is entering its own presidential elections campaign period, where Prime Minister Putin and the ‘liberal’ President Medvedev will evidently clash.

This may be mere theatre, but the Kremlin needs external targets to which it can export its internal travails and remind its neighbours of Russian power. Allies need to be bound through asset and institutional takeover; a lesson learned in Belarus.

In Ukraine, the near bankruptcy of Naftogaz makes any potential Russian claim ever more dangerous. According to the ruling of the Arbitration Court of the Stockholm Chamber of Commerce on 8 June, in January 2009 Kiev’s government had illegally seized 11 billion cubic metres of gas that belonged to the trader RosUkrEnergo that is 50 percent owned by Gazprom.

It now has to return these, plus 1.1 billion cubic metres in compensation and $192 million in penalties. Compensation in cash would be lethal for Naftogaz, and returning the gas would leave Ukraine with no reserves left in storage before the winter.

On the other hand, eliminating this from the books would help consolidate the company. To address the situation, the Ukrainian government has increased domestic gas prices by 50 percent, while there are rumours of a further 50 percent increase by the end of the year.

As the US increased its own shale gas exploration, there is more cheap liquefied natural gas available for Europe. According to the Ukrainian state, there are at least 2 trillion cubic meters of shale gas and 8 trillion of methane gas in cola beds.

US Total is to assess the size of slate gas deposits in Western Ukraine. But Ukraine must go further and develop a policy based on the country’s real energy interests. As the next step, it must re-gain the trust of the EU, which it lost in the 2008 gas war.

Russia is not only lagging behind Western technology, but it is also losing its energy weapon. This makes Moscow seek speedy action. Ukraine is one of the least effective energy producers, but also one of the largest gas consumers of the world. It cannot be seen merely as a transit country for Gazprom, but an important market in its own right.

Russian interests need to be protected there, either through loyal allies or the tough diplomacy of gas cuts. The European Union should revise its current policy of inaction before the winter becomes cold – in every sense.

Ukraine must realise first that the ball is in its court.

Source: New Europe

Bedding Down In Ukraine

LEEDS, United Kingdom -- Most efforts to send aid abroad have their logistical problems as most charities can attest to. However that can be heightened by sending something as unwieldy as hospital beds.

That's what the Leeds branch of the Rotary Club are doing though - providing nearly a hundred specialist beds for a hospital in Ternopil, Ukraine.

BBC Leeds found out just how much hard work goes into such a project.

Anita Rayner is chairman of the club's International Service Committee (ISC), and explained some of the background to the transporting of such an unusual cargo.

"The Rotary Club fund what we call ambassadorial scholars, whereby postgraduate students gain scholarships to continue their education. One of those scholars is from Ternopil and recently returned to Ukraine for the birth of his child."

"He was horrified by the state of the uncomfortable, unsuitable beds in use at the local hospital. So, he asked us if we could help."

"We've managed to source around a hundred beds - mostly from a York hospital - but that's when the hard work starts. Getting the beds to our loading yard to put onto our lorries. Luckily the Lord Mayor, found a company that could do it. They're not your usual beds after all - they're very heavy because of the hydraulics and unwieldy because of their shape."

"However, it's not just a matter of the physical shifting of the beds - these things have to be signed for by officials in Ukraine and that proved a problem as there's just been a change of government over there and finding the right people to sign off the paperwork was a bit of a nightmare.

Even more so, now that the government is more Pro-Russian and less inclined to look favourably on help from Western Europe."

"All of which means that part of what the ISC does is, in effect, diplomacy. We have to be very patient sometimes and try not to lose focus and remember why we've taken on what may seem at the time to be an onerous task."

"Hopefully though, we'll be able to get the beds through to the hospital at Ternopil with little or no hassle. The lorries set off on Thursday (26-8-2010) and will take around ten days to reach their destination... and then it'll be on to the next project."

Source: BBC News

Saturday, August 28, 2010

LDS Church Members Celebrate Kiev, Ukraine Temple Dedication

KIEV, Ukraine -- President Thomas S. Monson of The Church of Jesus Christ of Latter-day Saints is in Ukraine this weekend to dedicate a new temple in the country.

Thousands of Church members gathered for a cultural celebration Saturday. They sang and danced in traditional costumes to express their joy over the new Kiev temple.

Young people from nine countries in the temple district, which includes Eastern Russia, Moldova and others in the former Soviet Bloc, traveled thousands of miles to attend. Church leaders say the temple is a miracle.

"To see the people, feel the people, feel their love, their testimony -- it's just a miracle," said President Dieter F. Uchtdorf, Second Counselor in the Church's First Presidency. "It's just wonderful to be here. How much we're grateful for President Monson, for the love he expended tonight to these people."

Sunday, President Monson will lead three dedicatory services in the capitol city's newest landmark.

This is the first LDS temple built in Eastern Europe. It is the Church's 134th operating temple worldwide and the 11th in Europe. The temple was announced in 1998 and ground was broken for its construction in 2007.

The temple will serve close to 31,000 members of the faith beginning Aug. 30.

Source: KSL TV

Russia-Ukraine Trade Up 70% In 6 Months - Yanukovych

KIEV, Ukraine -- Ukrainian-Russian trade turnover increased 70% over the past six months, Ukrainian President Viktor Yanukovych said on Saturday.

Ukrainian President Viktor Yanukovych.

"I am pleased with this. I believe that we should follow an open policy in respect to our neighbors and be stable and reliable partners," he said in an interview with Deutsche Welle.

He accused the previous government of scaling down economic ties with Russia, causing Ukraine's GDP to fall 15%.

"Ukraine began to acquire the image as an unpredictable country," he said.

He said its current policy course was aimed at "democratizing society and upholding the country's national interests."

Source: RIA Novosti

In The Nerve Center Of The Cold War

PERVOMAISK, Ukraine -- We are 100 feet underground. The dark eyes of Edward Idrisovych Sabirov skip around the tiny room. He knows every inch of it. For five years, he waited here for an order that never came: Blow up chunks of the U.S.

SS-18 intercontinental ballistic missile. At the Museum of the Strategic Rocket Troops in Pervomaisk, Ukraine, visitors can take a tour of an underground Soviet command post that once controlled 10 nuclear-tipped missiles.

Today, Mr. Sabirov guides tourists through his old haunt, now the Museum of the Strategic Rocket Troops.

At the climax, he takes visitors by twos or threes into a cramped, gray elevator to descend to the underground command post. The center controlled 10 nuclear-tipped missiles buried in the rich black earth of the Ukrainian steppe.

This journey into the bowels of the Cold War reveals deadly doomsday mechanics. But Mr. Sabirov, who speaks both Russian and Ukrainian, is just as riveting. As he crisply explains his job, this intense man who grew up on the Volga River, east of Moscow, wins my respect.

He has me sit at his old console to go through the final steps required to wipe out several million Americans: Open a little door on the instrument panel. Press the gray button inside.

Nearby, a launch officer at another console presses a similar gray button. Then each launch officer opens another door on his console, revealing a small metal fitting into which each inserts a key. At the same moment, each twists his key while holding down a button.


After a moment of silence, I ask Mr. Sabirov what he thought about when he imagined turning the key.

"Truman," he says, in a flash. "I thought a lot about Truman. You know, he was the one who changed the rules of the game."

The unassuming little museum is about 3½ hours south of Kiev by car. Hawks wheel across the undulating horizon and skylarks sing above lime-green wheat fields.

Missiles and rocket engines surround the low museum building. Its five above-ground rooms display models and mock-ups of how the place operated during the Cold War. Photographs of the destruction wrought by President Truman's decision to bomb Hiroshima and Nagasaki line the walls of the back room.

The tour is in Ukrainian and may seem a bit long-winded, even with a translator. But it is worth the wait for the underground portion of the tour.

The trip to the base's nerve center begins with a walk through 100 yards of drab underground tunnels lined with cables. After a few minutes, we reach the elevator that hugs the side of a 12-story steel silo.

The same size as the missile silos, it was designed to quarter launch crews. The elevator has room for only three or four people at a time. "Please don't touch anything," he says to the rest of us before dropping out of sight with the first party.

When our turn comes, the descent provides plenty of time to wonder what would happen if the elevator malfunctioned. At the bottom, the door swings open on turquoise-paneled living quarters for the men waiting to go on duty. The space is less than 11 feet in diameter.

Three people could sleep and eat here, though typically there were crews of two. The space has the engineered feel of a railroad-car sleeping compartment and holds a small stove, a tiny refrigerator, three fold-down bunks, a drop-down table with seats, a shower, a sink, a toilet. In one corner is a ventilator. Smoking was allowed but drinking was strictly forbidden.

"If you were caught with alcohol, you were sent to a place people never come back from," Mr. Sabirov explains.

On one wall, a steel ladder goes up through a hatch to the cramped command center, where the launch crew sat during its six-hour shifts. The room, beige with a red linoleum floor, bristles with buttons and dials.

We sit at the command consoles as he guides us through the launch sequence. I man the senior station, now marked with No. 1 and a yellow and blue Ukrainian emblem.

Firing required four hands operating at once. The consoles were distant enough to make it physically impossible for one man to fire the missiles. Given that Soviet officers sat in this claustrophobic room for six-hour shifts, year after year, it seems like a very sane arrangement.

As Mr. Sabirov explains the procedures in crisp professional terms, I consider him sitting here in the 1980s, prepared to launch a missile while I was raising two daughters in Miami. I can't remember worrying much about the nuclear threat then, but sitting next to the launch key, I wonder whether I should have worried more.

Until 1991, Ukraine was an integral part of the Soviet Union, and the U.S. Defense Department considered the missile arsenal at Pervomaisk one of the crown jewels of the U.S.S.R.'s ballistic system.

When the Soviet Union collapsed, independent Ukraine inherited an arsenal of 1,900 strategic nuclear weapons. The Russians didn't relinquish the launch codes, but if Ukraine had taken over the missiles and warheads, as it might have, it would have become the world's third-largest nuclear power.

After a lot of back and forth, Ukrainians agreed to give up their nuclear sword. The warheads were shipped to Russia and dismantled. The rockets themselves were destroyed over the next few years.

Two other former Soviet republics, Belarus and Kazakhstan, did the same. Mr. Sabirov says that some Ukrainian visitors to the museum think it was a good idea, but others are sorry "we gave up the rockets."

As for Mr. Sabirov, "I don't get into politics myself." But his nostalgia is clear when he says: "We didn't have jeans, we didn't have butter, they put water in our margarine, but we had the best rockets in the world."

Source: The Wall Street Journal

Hopes Fade That New Ukrainian Tax Code Will Be Progressive

KIEV, Ukraine -- Experts say the document is unlikely to fulfill the key promise of relieving the tax burden on Ukrainian businesses, keeping many of them in the shadows.

Private entrepreneurs pay a single flat tax – currently from Hr 20 to Hr 200 per month. Under the proposed new tax system they will have to pay Hr 600 per month.

With the government preparing to discuss the final version of the controversial draft tax code at a special meeting on Sept. 1, experts say the document is unlikely to fulfill the key promise of relieving the tax burden on Ukrainian businesses, keeping many of them in the shadows.

According to the latest publicly available version of the draft code, the taxation system will largely be preserved in its current form. Most disappointing for business is the likely retention of cripplingly high payroll taxes, which many businesses blame for forcing them to pay employees under the table in order to survive.

Recently published research by the World Bank placed Ukraine as the world’s sixth biggest shadow economy with an average of 54.9 percent of the economy from 1999 to 2007.

Currently, employees are to pay a reasonable 15 percent income tax. But many employers discourage employees from declaring their entire salaries, or protect themselves by paying lower salaries, to avoid paying the high payroll tax. This tax is paid by employers as a percentage of the salary they give to employees, and typically exceeds 30 percent.

According to Valentyna Izovit, the head of Light Industry Association of Ukraine, for every Hr 1 industry earns it pays Hr 0.65-0.80 of tax, forcing many into the shadows. Many prefer to pay employees tiny official salaries or none at all, and hand over the majority of the salary in an envelope.

Kyiv resident Oksana, who did not want to give her last name out of fear of losing her job, works off the books at a land surveying firm. Officially she is paid Hr 900 per month, but the firm is paying her an additional Hr 2,000 in “grey salary” as it’s known.

“I started unofficially and was getting paid completely off the books, so it is better now. But every month I am afraid of not getting that unofficial part and wondering how I would cope,” Oksana said.

Those who work completely off the books can be let go at any time with no unemployment benefits. Furthermore, they don’t get record of length of service – one of crucial criteria for a pension – and have no insurance in case of accidents at work.

Many employers ask their employees to register as private entrepreneurs so that they pay a single flat tax – currently from Hr 20 to Hr 200 per month. The government is now trying to limit those who fall under the single tax, such as Internet providers, accountants, engineers and others. For many professions, the single tax looks set to rise to Hr 600 under the new tax code.

“This will surely force even more people into the shadows,” says Oleksandr Zholud, an economist at the International Centre for Policy Studies, a Kyiv-based think tank.

However, many do not mind working unofficially.

“Many employees do not have confidence in the Ukrainian pension and social security systems and prefer to receive more undeclared cash to finance their personal needs and take care of their retirement needs themselves,” said Oleh Chaika, director of tax and legal services at leading consulting firm KPMG Ukraine.

Kostyantyn Solyar, an associate at Asters law firm, said most Ukrainians do not understand why they should pay taxes and are very reluctant to do so. “This is understandable, as many Ukrainian bureaucrats are inclined to steal money from the state budget rather than invest them for the prosperity of society,” he said.

According to a survey conducted in 2009 by the Kyiv-based Razumkov Center think tank, 38 per cent of Ukrainians are certain their taxes are being stolen by officials and only 4 per cent actually see their taxes returned to them and their families through public services provided by the state.

“The biggest challenge is changing the overall mindset towards paying taxes in Ukraine,” said Jorge Zukoski, President of the American Chamber of Commerce in Ukraine.

“Both business and the population need to be convinced that if they invest into the state, the state will take care of them, their families and their neighbors in the future.”

Some countries have succeeded in bringing employers and employees out of the shadows by lowering the tax burden on them.

In Georgia, payroll taxes were eliminated and instead personal income tax was raised from 12 percent to 20 percent. This increased tax flow and contributed to Georgia moving up to 11th place in the World Bank’s Doing Business rating for 2010. Ukraine, meanwhile, is languishing in 142nd place.

Such a plan is not on the table for Ukraine. “It is a debatable issue, but forcing the economy out of the shadows has nothing to do with lower taxes ... [Lowering taxes] has an effect in short term only, say, in two years,” said Iryna Akimova, deputy head of the presidential administration.

Back in 2008 a single, flat payroll tax of 20 percent was considered by lawmakers. However, the idea came to a dead end.

“There is an ongoing discussion about a single social tax. ... But we simply cannot afford to lower taxes in the near future,” Akimova said.

Finance Minister Fedir Yefymenko said a decrease in payroll tax is only possible after pension reform.

However, some say these are weak excuses.

“We shouldn’t wait until private pension funds are introduced,” says Zholud.

“For starters, we could put everyone in equal position when it comes to pension. For example, governmental officials do not pay into the pension fund at all, while many of them receive a pension of thousands of hryvnias.”

Meanwhile, officials and experts admit that there are other ways to fill the budget while easing the pressure on business and average Ukrainians and restoring people’s trust in tax system.

According to Akimova, the state would save around $20 billion (Hr 160 billion) by eliminating corruption.

A property tax and luxury tax – neither of which is included in the code, despite demands from the presidential administration – would mainly hit those who can afford to pay, and could bring in Hr 5 billion and Hr 85 million respectively, according to government estimates.

A deal with Cyprus, which created an offshore tax haven for Ukrainian business, costs the country around 1-2 percent of gross domestic product every year, experts say.

But until these are introduced, the state will continue to squeeze small businesses.

“Most businesses and people want to work officially,” said Dmytro Oliynyk, head of the Employers Federation of Ukraine. “They just need to be encouraged and given clear simple rules.”

Source: Kyiv Post

Friday, August 27, 2010

Gazprom Says Merger May Cut Gas Price For Ukraine

MOSCOW, Russia -- A merger deal between Russia's gas giant Gazprom (GAZP.MM: Quote) and Ukraine's state energy company Naftogaz may lead to lower gas prices for Ukrainians, equal to Russia's domestic price tag, Gazprom's head said on Friday.

Ukraine has frequently asked Russia, its main fuel supplier, to lower gas prices due to the dire state of its economy. In 2009 a pricing row between the two governments led to cuts in gas supplies to Europe.

"The gas could be delivered (in the case of merger) to the population of Ukraine, as we believe, at a price, at which gas is delivered to the Russian householders," Gazprom Chief Executive Alexei Miller told state-owned Rossia 24 TV.

Russia has regulated local gas tariffs, set at 1,880 roubles ($61.22) for 1,000 cubic metres. In the second quarter, Gazprom sold gas to Ukraine at around $233 per 1,000 cubic metres.

On Wednesday, Ukraine's prime minister said the base price for Russian natural gas is still disadvantageous for Ukraine despite a new deal reached in April. [ID:nLDE67O0NM]

Last month, Ukraine's government, bowing to pressure from the International Monetary Fund, took the painful step of announcing a 50 percent rise in the price of domestic gas from August.

A merger between Gazprom and Naftogaz was first proposed by Russia's Prime Minister Vladimir Putin in April.

Gazprom has said the firms may create a joint venture before a full-blown merger.

The deal could give Moscow control over Kiev's gas transit network, which ships a fifth of Europe's gas consumption from Siberian fields, and has been a headache for the Kremlin in past years when Kiev suspended supplies during pricing disputes.

Source: XE

Stalin's Harvest

LONDON, England -- Poor wheat harvests in Russia and Ukraine, along with devastating wildfires in Russia, have resurrected fears of a global food crisis. Some have blamed global warming for inducing a severe drought. But the real blame rests with poor agricultural performance over the long term in a region still hampered by communist experimentation.

Russian and Ukrainian agriculture has yet to recover from the forced collectivization under communism.

To react by banning exports, as Moscow has done and Kiev is considering, would be counterproductive. Combined with restrictions on the use of modern agricultural technologies imposed in the European Union and being proposed in the U.S., such bans really could lead to a global food crisis.

After the Russian revolution in 1917, the Bolsheviks socialized all agricultural markets. Although they directed their rhetoric against "middlemen," their real aim was to squeeze farmers by paying them below-market prices and use the proceeds to finance state-owned industry.

This "New Economic Policy" backfired spectacularly as farmers fed grains to livestock, or converted them into liquor and then sold both on the black market, thereby evading the Bolsheviks' price controls.

Stalin dealt with such evasions first by denigrating independent farmers as greedy kulaks (the Russian word for fist) and then by starving them to death. As Soviet agriculture was collectivized and crops and livestock were confiscated, millions of peasants died. Russia and Ukraine have yet to recover fully from this assault on the countryside.

The contrast with China is stark. In the late 1970s, millions of peasants who had survived agricultural collectivization and Mao Zedong's "Great Leap Forward" two decades earlier responded to his death by becoming entrepreneurs.

In village after village, property was informally privatized. Output exploded, ensuring that attempts at sanctioning this illegal activity were carried out half-heartedly. Deng Xiaoping subsequently legitimized these bottom-up reforms in what became known as the "Household Responsibility System," which provided a major catalyst for China's modern economic take-off.

During the 1980s, Mikhail Gorbachev attempted similar reforms in Russia, but from the top down. These were not successful. After more than half a century during which entrepreneurship had been repressed, who would dare take the risks associated with farming and agricultural marketing?

In spite of the collapse of communism, it has been difficult to convert Stalin's collectives into private farms. Although most of the farming industry is privately managed, rural property rights are poorly defined and access to commercial credit is limited.

Also, bankruptcy law is ill-developed, which impedes the liquidation of inefficient operations and the transfer of real estate and other assets to efficient managers. All these factors undermine incentives to invest in productivity-enhancing technologies and good management. Former collectives are also subsidized, warping incentives further.

Fertilizer applications on Russian farms currently average 11 kilograms per hectare, which is below the amount needed to compensate for crops' uptake of nutrients and is similar to levels in sub-Saharan Africa. As a result, soil fertility is declining with each passing year.

Predictably, cereal yields in Russia (1,865 kilograms per hectare) are barely a quarter those of the United States (typically 7,000 kilograms per hectare or more), and similar to U.S. yields before the 1930s, when farmers began using hybrid seeds and synthetic fertilizer.

Russia and Ukraine have the potential to be far more productive, but to do so their governments must provide the right incentives to farmers to invest in land improvements and to use modern seed, fertilizer and pesticides. That means removing barriers to ownership and exchange.

Banning exports has the opposite effect, curtailing farmers' existing markets, then their incomes, then their incentives to invest, all of which would further reduce their low output.

World supplies of grains are also adversely affected by the EU's restrictions on the use of biotechnology and pesticides. In addition to limiting production in the EU, these restrictions also spill over into exporting countries.

Russian and Ukrainian producers, for instance, worry about falling foul of EU rules and so have additional reasons not to adopt beneficial yield-enhancing technologies.

To make matters worse, the U.S. Environmental Protection Agency seems to be following the EU's example and is seeking to restrict a number of widely used agricultural chemicals.

One of these is atrazine, a weed-killer that has been applied for more than four decades with no observable ill effects, and which the EPA itself reapproved four years ago. Such restrictions would further undermine global crop output.

Americans are accustomed to availing themselves of plentiful food at affordable prices, which most take for granted. But there is no such thing as a free lunch in the food economy.

Removing the inputs that make bountiful harvests possible will inevitably drive up prices and, as the experience of Russia and neighboring countries demonstrate, place the world at risk of shortages.

Source: The Wall Street Journal

Thursday, August 26, 2010

Going Down

KIEV, Ukraine -- President Viktor Yanukovych’s approval rating has plunged by double-digits as voters have balked at tough austerity measures adopted by his ruling coalition.

President Viktor Yanukovych congratulating citizens on Independence Day. Despite all the publicity, recent public opinion polls show that his popularity has plunged.

After accepting tough austerity measures in return for a $15 billion International Monetary Fund bailout, President Viktor Yanukovych’s popularity has plunged. With voters feeling the pinch of higher gas prices, his popularity could dive further if the cost of bread rises more amid surging global grain prices.

What will Yanukovych do to preserve his coalition’s strong grip on power? Will he win back voters by delivering reforms? Or will he trample on democracy, grabbing power long term as Vladimir Putin did in Russia?

Yanukovych’s popularity suffered a double-digit plunge, according to an August opinion poll, as voters balked at tough austerity measures adopted by his ruling coalition in return for badly needed loans from the International Monetary Fund.

The nationwide poll, conducted by the Kyiv-based Razumkov Center Aug. 10-14, found that 22.5 percent of Ukrainians completely supported Yanukovych in August, down from 39.7 percent in May and 40.9 percent in April. According to the poll, 38.7 percent of those surveyed support some of his actions, while 33.3 percent don’t support him.

During Ukrainian Independence Day celebrations on Aug. 24, Yanukovych pledged to pursue reforms, even “unpopular” ones, and preserve democracy.

But some observers say the Donetsk strongman could tighten his grip on the country’s media and employ other authoritarian measures to quell rising popular dissent against the austerity measures, which include higher gas prices and retirement ages.

Yanukovych took office in February with less than 49 percent of the popular vote, banishing the compromised heroes of Ukraine’s 2004 democratic revolution by a paper-thin margin.

His approval rating jumped soon afterward, amid promises that he would set the country on a more prosperous track. But with local elections scheduled for Oct. 31, the latest poll figures make for grim reading for the president and his Regions party.

Popular support of the party, a core element of the president’s ruling parliamentary coalition, has also sunk, according to the Razumkov poll, from 41 percent in May to 27 percent this month.

In May, almost 50 percent of Ukrainians also believed that Yanukovych was guided by national interests, with only 30 percent believing that he gave priority to personal or party interests. Now the figures have been reversed, with some 48 percent of Ukrainians suspecting Yanukovych of putting himself and Regions above the nation.

Pollsters had predicted that, following the post-election honeymoon period, Yanukovych would see a dip in his voter support ratings, according to Iryna Bekeshkina, acting director of the Kyiv Democratic Initiatives Foundation.

Experts at Razumkov said the 14.5 percent plunge for Yanukovych picked up in their poll was partially due to the president’s decision to prolong the stay of Russia’s Black Sea Fleet at a Crimean port, as well as his implementation of unpopular economic reforms.

Experts said cash-strapped citizens are most upset that Yanukovych, who pledged not to raise utility prices while campaigning for president last year, agreed to raise natural gas prices for households by 50 percent effective Aug. 1.

Badly in need of cash from the IMF to plug gaping budget holes, Yanukovych also agreed to gradually raise the pension age for women by five years over the next decade.

But his popularity rating could touch even lower depths if prices for the nation’s staple foods, starting with bread, continue to increase in response to poor harvests in the Black Sea region from this summer’s heat wave.

Moreover, the effect of increased gas prices, instituted at the beginning of the month, have yet to hit home in the form of utility higher bills. Heating bills peak in winter.

“I think Yanukovych's approval rating might plummet, but only to about 20 percent [from the current 27 percent] because his electorate does not have many alternatives,” Bekeshkina said.

Yevhen Kopatko, head of the Kyiv-based Research&Branding Group, which is widely believed to enjoy warm relations with Yanukovych and his party, said it’s too early to say whether the president’s ratings are in decline.

According to him, only in September, when the political season starts, will it be possible to determine whether the Razumkov poll indicates a clear-cut trend. Kopatko acknowledged, however, that the unpopular measures pushed forward by Yanukovych will negatively reflect his popular support.

“It depends not only on the decrease in living standards but also on how all these changes are presented to the public through propaganda on TV,” said Valeriy Khmelko of the Kyiv International Sociological Institute.

Yanukovych himself recently announced that he would soon begin touring Ukraine to explain to people why the austerity measures are so badly needed by the country. Some analysts interpret this announcement as an attempt by the president to preserve voter support ahead of local election scheduled for Oct. 31.

Bekeshkina believes this to be the only way out for Yanukovych to avoid falling sharply further in poll ratings. “Another option for Yanukovych would be to show that the austerity measures are being shouldered not only by the poor, but he failed to deliver on this by not cutting the pensions of former high-ranking officials,” she said.

Instead, he could try to tighten the screws in order to boost his power, a trend some analysts already detect.

The new law on local elections, adopted by Yanukovych’s ruling coalition this summer, severely limits competition by preventing parties formed less than a year ago as well as independent candidates from participating. Some believe that Yanukovych’s dominant ruling coalition is also not above browbeating the country’s media into submission.

“His administration may try to take full control of the national TV channels, which are still largely unconsolidated in support of the current administration,” said Volodymyr Fesenko, head of Kyiv Gorshenin Institute of Management Issues, a Kyiv-based think tank. “Yanukovych may now be tempted to use authoritarian methods,” he added.

Oleksiy Haran, the director of the School of Political Analysis at Kyiv-Mohyla Academy, said that Yanukovych is likely to tighten his grip on the country’s media in tandem with the use of some carrots. “In order to secure his powers, Yanukovych will keep promising people some social benefits, partially following up on such promises, while backtracking on other unpopular measures such as the tax code,” he said.

Regarding the upcoming elections, the president can be expected to use so-called administrative resources to help candidates whom he supports while hampering his opponents' chances, Fesenko said. Similar tactics were initially used by Russia’s Vladimir Putin in his building a managed democracy, Fesenko recalled.

Yet authoritarian measures alone are not enough to improve Yanukovych’s hold on power, according to Fesenko. “In Russia, broad public support was secured by huge revenues from rising oil and gas prices.” In the mean time, Yanukovych has called for an emergency session of parliament at the end of August.

He now seems to be pushing for the election law his coalition adopted this summer to be amended, supposedly to cancel clauses that undermine the chances of opposition parties.

“Yanukovych's proposal to introduce changes into the election law is driven by the drop in his approval ratings,” Bekeshkina said. “This is aimed at bringing in more parties to scatter the opposition.”

Other experts expect the president to also propose generous social packages to soothe public dissent.

Source: Kyiv Post

Ukraine's Interior Minister Suspects Police Involved In Journalist's Disappearance

KIEV, Ukraine -- Ukraine's interior minister says he believes a journalist who was reported missing earlier this month is likely dead, and that security forces are suspected of involvement in the disappearance.

Journalist Vasyl Klymentyev went missing on August 11.

Vasily Klymentyev, the editor of a weekly newspaper in the eastern city of Kharkiv, has been missing for two weeks. His deputy said Klymentyev was threatened after refusing to take money to halt the publication of a story about a regional prosecutor accused of accepting bribes to close criminal cases.

"We suspect that law enforcement officials, both former and current, might be involved in the case," Interior Minister Anatoly Mogiliov said in televised comments.

Law enforcement officials include the police, Interior Ministry troops, special security forces and prosecutors, among other agencies.

International rights groups have expressed concern about a deterioration of media freedom in Ukraine since Moscow-friendly President Viktor Yanukovych was elected to office in February.

The Organization for Security and Co-operation in Europe urged a "swift and transparent" investigation. Mogiliov, however, warned "the case will be quite difficult and take a long time."

Klymentyev's case is being followed with anxiety in Ukraine, where memories are still fresh of the unsolved murder of another journalist in 2000.

Like Klymentyev, Heorhiy Gongadze wrote about corruption. Gongadze, whose investigations implicated then-President Leonid Kuchma, had been missing for months before his decapitated body was found outside Kyiv.

The killing sparked months of protests against Kuchma, who was accused of involvement in his death.

Source: The Canadian Press

Nonaligned Ukraine Dances With Both East And West

KIEV, Ukraine -- Sitting as a buffer between East and West, Ukraine recently declared itself “nonaligned” thus ending its courtship with NATO. However, Ukraine’s new president now shows signs of exploring a military alliance with a Russian-led block.

Ukrainian President Viktor Yanukovych walks past Secretary of State Hillary Rodham Clinton ahead of a joint press conference in Kiev, Ukraine on July 2. While Ukraine officially became a nonalligned country in July, halting its process of joining NATO, the country is now considering joining a Russian-led block.

Since Russian-leaning Victor Yanukovych took the presidency in February, he has steered the country off its path towards NATO set by his pro-Western predecessor Viktor Yushchenko.

Last month, under Yanukovych’s direction, Ukraine's non-alliance became law. The law, however, still leaves the door open for Ukraine to join a regional military alliance—but it does not specify which one.

Recently, Yanukovych has been cozying up to Russia. Relations between the two countries, which had been deadlocked for years under the previous pro-Western administration, have been steadily warming. The two countries have begun cooperating across a broad range of issues including the economy, gas prices, nuclear power, and satellite navigation.

In April, Russia opened a branch of its military alliance the Collective Security Treaty Organization (CSTO) in Kiev. The Kremlin expects the two countries to cooperate more on security issues.

“CTSO for Ukraine means deeper integration in terms of foreign policy,” Alexander Babakov, the deputy speaker of Russian parliament told NTDTV.

Analysts say that the new military block has been created with a similar, parallel structure to NATO. It now includes Russia, Belarus, Armenia, Kazakhstan, Uzbekistan, Tajikistan, and Kyrgyzstan.

CSTO was established in 2002. In 1991, the last Russian-led alliance, the Warsaw Pact, was dissolved after the collapse of the Soviet Union.

At present, Ukraine is still continuing cooperation agreements with NATO and the U.S. made it clear after the non-alliance law was passed, that the door to NATO is still open.

“Ukraine is a sovereign and independent country that has the right to choose its own alliances and NATO's door remains open,” said U.S. Secretary of State Hillary Clinton on a trip to Ukraine in July.

"But it's up to Ukraine to decide whether or not you wish to pursue that or any other course for your own security interest," Clinton continued.

Public support in Ukraine to join NATO has been waning over the last few years.

Ukraine’s nonaligned status means it needs to sustain its military forces, which have suffered from a lack of financing for years.

Some analysts doubt that the cooperation with CSTO will be useful for Ukraine in terms of what the organization can offer.

NATO helps Ukraine dispose of post-Soviet era ammunition, re-train military officers, as well as help retired officers find their good use in non-defense occupations.

“CSTO does none of the above and it has never done so,” said Vladimir Gorbach, a political analyst with the Kiev Euro Atlantic Cooperation Institute.

“CSTO is made up of post-Soviet armies—countries which in terms of social development do not act as democratic ones, but rather as authoritarian ones. There is no sense to cooperating with that block,” he said.

When violent clashes claimed hundreds of lives in Kyrgyzstan in April and June this year, the block failed to do anything to calm the situation.

Source: The Epoch Times

Wednesday, August 25, 2010

Yanukovich Takes Over Missing Case

KIEV, Ukraine -- Ukrainian President Viktor Yanukovich has taken personal control of the investigation into the disappearance and suspected murder of a campaigning journalist, after his attitude to media freedom was questioned by international watchdogs.

Viktor Yanukovych

Vasyl Klymentyev, editor of the weekly Novy Stil newspaper in the industrial city of Kharkiv, was last seen on August 11th getting into a silver BMW with an unknown man. Six days later, his mobile phone was reportedly found on a boat adrift on a nearby reservoir.

Police sniffer dogs and divers searched the area but found no trace of the reporter, whose newspaper is known for probing corruption among politicians and major businessmen in Kharkiv and eastern Ukraine, which is Mr Yanukovich’s power base.

The case carries grim echoes in Ukraine of the kidnapping and murder in 2000 of journalist Georgiy Gongadze, missing for several months before his decapitated body was found outside Kiev.

Though he denied the allegations, then president Leonid Kuchma was accused of sanctioning the murder. Public anger over the case and his administration’s harassment of the media helped fuel the 2004 Orange Revolution that brought pro-western leaders to power.

Ukraine developed a vibrant and outspoken media in recent years, but journalists in Ukraine and experts abroad complain that pressure is again mounting on the press under Mr Yanukovich. He took office in February and is closer to the Kremlin than to Brussels or Washington.

“Law-enforcement bodies in the Kharkiv region and the whole of Ukraine must do everything – the possible and the impossible – to find the journalist,” Mr Yanukovich said as he ordered top security officials to report to him.

Petro Matvienko, Mr Klymentyev’s deputy, said the missing man had been threatened after refusing to take money to drop a story about a regional prosecutor accused of accepting bribes.

Media watchdog Reporters Without Borders said press freedom in the country had “deteriorated markedly in recent months”.

Source: Irish Times

Ukraine Asks To Review ‘Unfavorable’ Russia Gas Price

KIEV, Ukraine -- Ukraine’s government wants Russia to review the price it charges for natural gas supplies, saying that even with a discount, fuel costs are squeezing the economy.

Ukraine Prime Minister Mykola Azarov.

“Our aim is to review extremely unfavorable agreements with Russia,” Prime Minister Mykola Azarov said today at a government meeting. “Only the agreements signed in Kharkiv, under which we have a $100 discount, allow us to avoid collapse.”

Pricing disputes between Russia and Ukraine over supply and transit have disrupted gas deliveries to Europe twice since the start of 2006. Russian gas exporter OAO Gazprom’s contract prices, which are linked to global oil prices, have exceeded spot market levels.

Gazprom spokesman Sergei Kupriyanov declined to comment on whether Ukraine had formally sought a review of contracts.

Gazprom charged European customers an average $307 per 1,000 cubic meters in the first quarter, compared with an average of $187 per thousand cubic meters on the U.K. spot market, according to Troika Dialog.

Russian President Dmitry Medvedev in April cut Ukraine’s gas price by about 30 percent, in a deal he valued at $40 billion of aid to the neighboring country. In return, Ukrainian President Viktor Yanukovych agreed to extend Russia’s lease on a naval port in the Black Sea.

Transit Guarantees

Ukraine, which ships about 80 percent of Russia’s gas exports to Europe, also wants guarantees for transit volumes through its pipelines, Yuriy Boyko, the country’s fuel and energy minister, said in an e-mailed statement over the weekend.

Russia is planning several pipelines bypassing Ukraine, including Nord Stream, which is being built across the Baltic Sea, and South Stream across the Black Sea. The links may lower volumes crossing Ukraine.

Ukraine increased transit of Russian natural gas 22 percent to 57.4 billion cubic meters of in the first seven months of the year, the Fuel and Energy Ministry said today in an e-mailed statement.

The government is raising the gas price for households to help trim a budget deficit and qualify for future payments from a $15.2 billion loan program that the International Monetary Fund approved last month.

Source: Bloomberg

Russification Of Ukraine Renewed

EDMONTON, Canada -- The law making Russian an official language of law proceedings in Ukraine is not only unconstitutional, it is yet another step in the renewal of the russification of Ukraine that this new government has embarked upon.

Marco Levytsky is the editor and publisher of Ukrainian News, a bi-weekly newspaper distributed across Canada.

The ruling Party of Regions claim they are making Ukraine compliant with the European Charter for Regional or Minority Languages (ECRML). That is a most hollow claim.

The ECRML is designed specifically for “the protection of the historical regional or minority languages of Europe, some of which are in danger of eventual extinction”, none of which applies to the Russian language in Ukraine.

According to the 2001 census, 67.5 percent of the population declared Ukrainian as their native language and 29.6 percent declared Russian. That percentage already exceeds the number of ethnic Russians in Ukraine, which is 17.3 %, compared with 77.8 Ukrainians and 4.9 % others.

Ethnic Russians form 56% of the total Russian-speaking population, while the remaining Russophones are people of other ethnic background: 5,545,000 Ukrainians, 172,000 Belarusians, 86,000 Jews, 81,000 Greeks, 62,000 Bulgarians, 46,000 Moldavians, 43,000 Tartars, 43,000 Armenians, 22,000 Poles, 21,000 Germans, and 15,000 Crimean Tartars.

Furthermore, that number does not even reflect the actual usage of Russian in everyday life. According to a 2004 public opinion poll by the Kyiv International Sociology Institute, Russian is used at home by 43–46% of the population of the country (in other words a similar proportion to Ukrainian).

By regions, this accounts for 86.8% of the population in the east, 82.3% in the south and 46.9% in the east-centre. Russian language also dominates in both print and electronic media. The Ukrainian state subsidizes nearly 3,000 Russian schools. That’s discrimination?

Under Russian rule successive governments attempted to eradicate the Ukrainian language. The Russian Minister of Internal Affairs Pyotr Valuev in 1863 issued a secret decree that banned the publication of religious texts and educational texts written in Ukrainian.

This ban was expanded by Tsar Alexander II with the Ems Ukaz of 1876 which prohibited all Ukrainian language books and song lyrics as well as the importation of such works. Under the USSR, the Ukrainian language was not officially banned, but certainly frowned upon, suffered russification, and its usage declined.

If the PRU is so concerned about minority linguistic rights, why don’t they turn to their masters in the Kremlin? While, as noted earlier, Kyiv pays for 3,000 Russian schools in Ukraine, Russia doesn’t even pay for one to serve its 3-5 million strong Ukrainian minority (depending on official or unofficial figures).

Recent articles in Window on Eurasia, by analyst Paul Goble outlined some of the glaring discrepancies between Russian education in Ukraine and Ukrainian education in Russia. In Ukraine, 1.3 million children are studying Russian; but in Russia, only 205 are studying Ukrainian, a number so low that it can only involve students at a school attached to the Ukrainian embassy.

Ukraine currently publishes 1.5 million Russian-language textbooks and 125,000 Russian-Ukrainian dictionaries each year, whereas the Russian Federation government is not paying for the publication of a single copy of a Ukrainian-language book for students in that country. Furthermore, Moscow is seeking to suppress Ukrainian cultural organizations in Russia.

Because the Ukrainian language was threatened with extinction in its own homeland through Russian policies, it was necessary to provide the bare minimum of security for its continuation.

Frankly, existing Ukrainian language legislation is already toothless. So what’s the problem? Is it unreasonable to expect a minority to learn the language of the country they are living in, while preserving their own? Or do they really expect their own to dominate at the expense of the native language?

This is not therefore a matter of minority rights – but of minority rule, much as was the case in Apartheid-era South Africa.

Source: Marco Levytsky

Back To The Stalinist Future

FRANKFURT, Germany -- The clocks run backwards in Ukraine: hardly six months have elapsed since the last elections and nearly nothing remains of the “Democratic Awakening” that rocked the nation in 2004.

Independent, yes, but free? During celebrations of the nineteenth anniversary of Ukraine's independence, Kiev, 24 August 2010.

Writer Yuri Andrukhovych depicts the “internal occupation” of his country and implores Europe to watch closely what’s happening there.

It’s high time I got a grip on my subconscious. I don’t like my dreams at all. They’ve been troubling me for several months now. More or less ever since Ukrainian reality began to resemble the dream. It will take at least 10 years, announce the optimists. In other words at least two terms of office for the incumbent president.

A cloak-and-dagger vote

You could use present-day Ukraine to teach a whole course on “The fragility of democracy or How we’re being driving back into dictatorship”. The man who was gnawed by the “insult of 2004” [when he was beaten by Viktor Yushchenko in the presidential election] is relishing his revenge.

Viktor Yanukovych is the first “minority president” in our history: in the second round of the elections [February 2010], he won less than 49 per cent of the vote. So it looked as though he’d be even less effective than his predecessor. But that’s only how it looked to those of us naïve enough to believe the country’s constitution was inviolable.

By mid-March the new president had already seized power with amazing dexterity. He now has a parliamentary majority under his thumb that is incapable of doing anything but carrying out his orders and ignoring the opposition.

The latest case in point was the cloak-and-dagger vote held at night on the law on foreign policy principles. Of the 420 amendments proposed by the opposition, not a single one was admitted.

Bring the middle class to heel, bleed the opposition dry

The cabinet is run by Mykola Azarov, an avowed enemy of small and medium-sized businesses – and the president’s staunch ally. His favourite pastime: crushing his adversaries.

The tax legislation he has proposed, for example, allows tax inspectors to enter people’s homes to search the place. The object is clear: to bring the middle class to heel, bleed the opposition dry by administrative means, so his own henchmen can enrich themselves.

I can’t remember the last time a Ukrainian court found for the opposition. But they can’t possibly be in the wrong every time! No sooner has parliament passed a new law on public assembly than the judges feel it is their utmost duty to proscribe protest actions.

Meanwhile, the militia have shown they’re quite capable of quelling protest even without a court order.

Stalin monuments popping up again

Once upon a time there was a country that wasn’t so bad at all, a country brimming with hope and knocking on Europe’s door. Where did it go? We’re hearing about more and more so-called “preventive interviews” with journalists and representatives of the public sphere, about efforts to recruit new names for the “loyalty lists”, and about files being kept on opposition activists.

The country is morphing back into a police state again. “Back” is the key word here: we’ve gone back to the past. The 1970s perhaps?

Yanukovych’s “Party of Regions” is bound to win by a landslide (target proclaimed: 70%) in the local government elections this autumn. The point of the “reforms” is to create a “Russia 2” of sorts – albeit more feeble, more backwards.

And the right social order to achieve that end is a brand of neo-Stalinism of a feudal oligarchic cast. Not for nothing are Stalin monuments popping up again in the Ukraine.

What does the Yanukovych regime need Europe for?

Only one thing remains a mystery though: What does the Yanukovych regime need Europe for? What’s the point of all this playing at integration and the unchanged Euro-rhetoric? Is it only for the banking connections?

Or to facilitate holidaymaking in Sardinia? Never before have we had a state power that was so far removed from European values. Sometimes we can’t help yearning for Kuchma’s return [Leonid Kuchma, president forced to resign in 2005].

Hence my plea to the European Community: “Watch, more closely than ever before, what this Ukrainian government is doing! God only knows why, but they still care what you think. And don’t let them play you with their twaddle about ‘order’!”

Actually, all I really want is to dream my dream to the end. Five years ago I couldn’t have imagined that our vision would suffer such a shattering defeat in the year 2010. No battle fought, and the war is already lost.

The upshot is occupation. In Ukraine we have a special term for that: “internal occupation” ­– by means of presidential elections and parliamentary machinations. But it simply cannot be that such an anachronistic system, an outgrowth of Stalin’s legacy, should win out in the historical scheme of things.

That questionable conviction is what I pin all my hopes on today. Or rather what’s left of them.

Source: Frankfurter Allgemeine Zeitung

No Hope For National Team - Ukraine Coach

KIEV, Ukraine -- The outgoing coach of Ukraine's national football team sharply criticised the side's chances in Euro 2012, saying he saw "no hope" for the side, according to Tuesday news reports.

Ukraine coach Myron Markevych

"Believe me, when I decided to quit, I knew what I was doing," Ukraine coach Myron Markevych told BBC's Ukraine-language radio.

"I do not see a future for Ukraine's national team." Markevych cited interference in the day-to-day affairs of the side by senior officials in the Federation of Football of Ukraine (FFU) as the main reason for his lack of confidence.

"The person who follows me in this job will continue our work, and perhaps he will have some success," Markevych said. "But only if he is not interfered with. And I don't believe that will happen."

It was the harshest public criticism yet by Markevych, one of Ukrainian football's longest-serving coaches, of the FFU management.

Ukraine reached the quarter-finals at the 2006 World Cup, but since then failed to qualify for Euro 2008 and the 2010 World Cup.

The team is, however, guaranteed a spot in Euro 2012, as co-host along with Poland.

"In two years the best teams in Europe will travel here, and Ukraine must show a worthy side for Euro 2012," Markevych said.

"But a foreign (national team coach) would go crazy working here." Markevych, 56, quit the national side on Saturday, four months after having taken on the team. He cited alleged bias by FFU officials against Metalist Kharkiv and in favour of Dynamo Kiev, Ukraine's best-known club.

The FFU last week penalised Metalist nine points in league standings for fixing the result of a 2008 club match. The reduction moved Dynamo ahead of Metalist into fourth place, and into striking range of a lucrative Champions' League slot.

The penalty all but ended Metalist's chances to qualify for either Champions' League or Europa League participation in 2011.

Markevych, Metalist's coach since 2005, has repeatedly alleged the boss of FFU, Ukrainian industrial tycoon Hryhory Surkis, is responsible for the FFU decision.

Surkis has owned Dynamo Kiev since 1993, and headed the FFU since 2000.

Surkis, by midday Tuesday, had not responded publicly to Markevych's latest allegations. In past comments, Surkis has denied his FFU management was in favour of Dynamo.

Source: AFP

Tuesday, August 24, 2010

Miss Universe's Miss Ukraine Supports Full-Body Scanners At Airports

LAS VEGAS, USA -- During yesterday evening's Miss Universe pageant two big things went down. One was the crowning of Miss Mexico, Jimena Navarrete, as the winner, only the second time in history for Mexico to take the title.

The second notable thing came dural the "Final Question" period, when Miss Ukraine was asked about her stance on full-body scanners in airports.

Miss Ukraine, 23-year-old Anna Poslavskaya answered this question put to her by judge Jane Seymour: ""Many airports are using full-body scanners. How do you feel about going through a scanner that can actually see through your clothes?"

Poslayskaya replied (through an interpreter) that she supports full-body scanners in the name of security: "I think it's a very important question of security...if that helps us to save the lives of people, then I'm for it."

The answer helped Miss Ukraine place as the third runner-up in the pageant, but what we'd now like to know is if she also supports full-body scanning for people with less than a pageant-ready body.

Source: Jaunted

Monday, August 23, 2010

Ukraine Marks Independence Day On Tuesday, August 24

KIEV, Ukraine -- Ukraine marks the 19th anniversary of the gaining of independence on Tuesday. In an address to the people of Ukraine on the occasion of the Day of Independence, President Viktor Yanukovich pointed out, "Nineteen years ago with great hope and belief we responded to the challenge of fate by embarking upon the road of creation and development of an independent state of our own".

The President believes that "the peculiarity of the present day, when we are entering a 20th year of independence, is that the authorities do everything to ensure that Ukraine gains an economic independence as well".

"Because a real independence is based precisely on that foundation. My programme of reforms is a programme for building an economically independent Ukrainian state," Yanukovich stated.

"I shall not allow the country to swerve off the democratic road of reforms to satisfy the selfish interests of some irresponsible politicians," the Head of State added. "I understand that the road that we have chosen is very complex and hard.

However, there is no other road to a genuine freedom and real independence. There is no other road to an independent Ukraine, in which I would like our children to live".

On August 24, 1991, the Ukrainian parliament adopted an "Act of Proclamation of the Independence of Ukraine". "A republican referendum must be held on December 1, 1991, to reaffirm the Act of the Proclamation of Independence," said the resolution of the Verkhovna Rada.

The outcome of the historic referendum marked the beginning of a final break-up of the Soviet Union. Presently, on December 8, 1991, the leaders of independent Ukraine, the Russian Federation and the Byelorussian SSR signed a Belovezhye Accord on the dissolution of the Soviet Union.

The Accord was ratified by the parliaments of those countries and supported by a majority of the republics of the USSR. Shortly after that the state independence of Ukraine was recognized in the whole world.

Notwithstanding the fact that during the December 1 referendum in 1991 more than 90 percent of Ukrainians supported the independence of Ukraine, thereby factually legalizing the country's withdrawal from the Soviet Union, many present-day Ukrainians pine for Soviet times.

Over 45 percent of Ukrainians participating in a survey carried out by the Razumkov Center are confident that the economic situation has deteriorated and the population's living standards have declined in the independent Ukraine, as compared with those in the Ukrainian SSR.

The present authorities promise to rectify the situation in the country through effecting large-scale reforms. However, in order to do that, Yanukovich associates believe, it is essential to broaden the powers of the Head of State.

According to Sergei Levochkin, head of the presidential administration, Yanukovich with his powers has enough clout in the state but that his activity, in effecting reforms, in particular, could have been more effective if those powers were extended. Levochkin declared in favour of reverting to the Constitution of the1996 pattern.

Yanukovich himself also states that he wants to enhance the presidential powers. With this end in view he considers it advisable to rewrite the Constitution. "The Constitution in the present-day dynamic historical conditions requires some amendments.

Some of its norms, such as, specifically, those hastily adopted at the end of 2004, have become the cause of imbalance and a serious crisis of power and, it means, the target for well-founded criticism inside the country and on the part of the international community," Yanukovich said earlier.

According to sources, in a speech on Tuesday, Yanukovich is expected to state the need to cancel the constitutional reform of 2004, which will enhance his powers. It is true, as Mikhail Chehetov, deputy head of the parliamentary faction of the Party of Regions, said, "No one knows now what the President will say exactly". In so doing the Member of Parliament recognized the need to enhance presidential power.

"We all are in need of order and, it means, a strong vertically integrated system of power with clear-cut powers. And we shall ensure that," Chechetov emphasized.

On Monday, Yanukovich stated that he so far intends to refer to the Verkhovna Rada only proposals about amending the law on local elections.

"On August 25, immediately after the Independence Day, I shall sign amendments to the electoral law and I shall insist on the convocation of an extraordinary meeting of the Verkhovna Rada so that we could amend the law and political forces would get an opportunity under the provisions of the new law to take part in the elections", he said.

The President did not specify what amendments exactly he intends to initiate, pleading an extensive list of amendments.


Reimagining Ukraine - Building A Ukraine Policy Based On Today’s Strategic Real

WASHINGTON, DC -- The United States and Russia played a grand chess game in Eurasia for nearly two decades after the collapse of the Soviet Union. U.S. policy toward countries in the region essentially became а derivative of Russia policy as a result.

President Barack Obama walks with Ukraine President Viktor Yanukovych during the official arrivals for the Nuclear Security Summit in Washington on April 12, 2010.

We failed to forge long-term partnerships and instead sought leverage, neglecting engagement that provided no benefit in the push and pull with Moscow. Local elites came to see their countries more as pawns in this game than as fully fledged sovereign states with independent policies.

But the Obama administration’s successful “reset” of relations with Russia provides an opportunity to rethink our policies toward Eurasia, a term we use here to refer to the countries of the greater Black Sea region and Central Asia. We explain in our Foreign Affairs article “Reimagining Eurasia,” that a U.S. strategy to reimagine Eurasia should be based on three principles:

■ Policy toward Eurasian states should be formulated based on their merits, not their value as bargaining chips or their relationships with other powers.

■ Engagement should employ all of the tools in our toolbox, including diplomatic, economic, and cultural ones, and not just those related to security and natural resources.

■ U.S. policy should emphasize transparency and win-win opportunities, while simultaneously rejecting Russian notions of “spheres of influence” and antiquated zero-sum arguments from Eurasian governments.
Implementing this strategy will be a challenge throughout Eurasia, but Ukraine represents a particularly difficult case. Ukraine will always be a sensitive topic for Moscow because of its massive symbolic, cultural, and economic significance for Russia.

And the Orange Revolution only amplified this sensitivity—the Kremlin still considers the wave of protests that followed falsification of the country’s 2004 presidential poll to be a Western plot to undermine its influence.

Zbignew Brzezinski, in a landmark Foreign Affairs article, characterized the strategic rationale behind U.S. policy toward Ukraine since its independence, writing, “Without Ukraine, Russia ceases to be an empire, but with Ukraine suborned and then subordinated, Russia automatically becomes an empire.”

Analysts justifying U.S. involvement today regularly cite Brzezinski’s argument even though he wrote these words more than 16 years ago. The Kremlin has great ambitions for its relationship with Kyiv, and the United States certainly must remain vigilant.

But Ukraine’s independence is no longer in question, as was the case when Brzezinski was writing. U.S. policy should reflect that reality rather than still viewing the country through a Russia-centric lens.

It is not surprising—with the U.S. approach to Ukraine so firmly stuck in the past—that policy paralysis set in following the January 2010 elections that brought President Viktor Yanukovych to power.

Yanukovych’s push to improve relations with Moscow rendered our approach, which essentially rested on the previous leadership’s aspirations for integration into Euro-Atlantic institutions, irrelevant overnight.

The debate is now between those who advocate punishing Yanukovych for his “pro-Russian” decisions and those who urge blind embrace of the new president for fear that criticism might push him closer to Moscow. Neither position represents an effective Ukraine strategy.

The Untied States should not make policy based on the notion of Ukraine as geopolitical plaything, but should rather see that a whole host of U.S. interests are in play in this European country with a population larger than Spain’s and a landmass nearly equal to France’s.

Ukraine plays a crucial role as a transit country for Russian gas to Europe and has huge hydrocarbon reserves of its own. It has the potential to be an agricultural powerhouse and is already a leader in industries such as metals and chemicals.

Ukraine also features a political system that, though deeply flawed, is far more open and competitive than its former-Soviet neighbors. A successfully consolidated democracy there could serve as a powerful example.

And Ukraine could be a key regional security actor since it is both a Black Sea littoral state and a party to the multilateral process for resolving the frozen conflict in neighboring Moldova. It is also either the source or transit point for a number of transnational threats such as proliferation of nuclear materials, illegal migration, human trafficking, narcotics, and pandemic disease.

This wide-ranging list of opportunities and potential problems calls for broad-based engagement with Ukraine—the kind of engagement we sorely lack.

The new leadership in Kyiv thinks of Ukraine in ways that are in large part a product of years of U.S.-Russia tug of war. They speak of their country as a “bridge between East and West” and have recently codified its “non-bloc” status, comparing their position to postwar Austria.

A Ukraine strategy that takes the country on its merits would not need to be tailored to Yanukovych’s self-proclaimed geopolitical orientation. It would also seek to increase U.S. influence there without reference to Moscow.

Competing with Russia over Ukraine is a futile exercise and a dangerous one since it exacerbates already sharp cultural and linguistic divisions within Ukrainian society between the Southern and Eastern regions and the population west of the Dnipro.

That is not to say Washington should turn a blind eye if Russia genuinely threatens Ukraine’s sovereignty. But Washington and Moscow do share an interest in avoiding civil strife in Ukraine, and perhaps that would be the most effective frame for conversations with the Russians.

This outline of a proactive Ukraine policy is an example of how to begin reimagining Eurasia. The allegation often heard in Washington that Obama’s “reset” with Russia has come at the expense of U.S. ties with the former Soviet states is not only false, but it also misses the point.

The tired, zero-sum framework we now have for U.S. engagement in Eurasia will inevitably spark a new strategic competition with Moscow, erasing the gains of the past year and a half. The “reset” therefore requires a new strategy for the region in order to remain successful.

Source: Center for American Progress

Shevchenko 'Upset' By Resignation Of Ukraine National Side Coach

KIEV, Ukraine -- Football star Andrei Schevchenko said he was "upset" by the recent resignation of the coach of Ukraine's national team, Myron Markevych, according to interview comments made public Monday.

Andrei Schevchenko

"I had developed excellent, warm relations with him," Shevchenko said in Sunday evening post-game remarks published by his side Dynamo Kiev. "It is a great pity that Myron Bohdanovych (Markevych) took the decision. But it was his to make."

Markevych on Saturday declared he was quitting his job as head coach of Ukraine's national team "on moral grounds," alleging the club he also coaches, Metalist Kharkiv, was the victim of bias on the part of senior officials in the of the Ukraine football federation (FFU).

Markevych's decision leaves the national team without a coach, less than two years before the Euro 2012 tournament, which the Ukraine is co-hosting with Poland.

Three Metalist players on Sunday announced they would not play for the national team, because of their agreement with Markevych's position, according to a Channel 24 television news report.

The FFU, the organisation controlling Ukrainian football, on Sunday made public a statement rejecting Markevych's resignation on grounds he submitted the resignation by fax.

Markevych's contract terms with the FFU do not allow a resignation on "moral terms," but FFU voting members will meet on Wednesday to discuss Markevych's allegations, according to the statement, made public on the FFU website.

Ukraine assistant coach Yury Kalitvintsev was a possible candidate to replace Markevych, Shevchenko said in the interview.

The FFU last week last week deducted nine points from Metalist Kharkiv and Karpaty Lviv and fined both clubs for fixing a 2008 match result.

The deduction dropped Metalist's place in current league standings from fourth to fifth place, and moved Ukraine's best-known club, Dynamo Kiev, from fifth to fourth place.

Markevych, 59, alleged FFU head Hryhory Surkis engineered the point deduction for Metalist, to improve Dynamo's chances of participating in Champions' League or Europa League competition in 2011, at Metalist's expense.

Surkis, a Ukrainian industrial tycoon, has owned and operated the side Dynamo Kiev since 1994, and headed the FFU since 2000. He had by Monday afternoon made no public comments on Markevych's allegations.

Surkis in past comments has repeatedly denied his position as FFU head benefits Dynamo in Ukraine top-flight competition. His critics have alleged the dual positions held by Surkis constitute a conflict of interest.

Source: DPA

Missing Ukrainian Journalist Threatened Before Disappearance

NEW YORK, NY -- The case of Ukrainian journalist Vasyl Klymentyev, who went missing almost two weeks ago, is no closer to being solved with human rights organizations pointing out several irregularities in the investigation.

Vasyl Klymentyev, an editor and reporter for Novyi Stil (New Style), an investigative newspaper in Kharkiv, was last seen on Aug. 11 outside his home.

His girlfriend told police that Klymentyev had entered a metallic-gray BMW with an unknown man, reported the Committee to Protect Journalists (CPJ).

CPJ and Reporters Without Borders have both reported the case and urged Ukrainian authorities to fully investigate.

According to reports from both press freedom organizations, a few days after he disappeared, Klymentyev’s mobile phone was found in a boat drifting on a reservoir, near Kharkiv, Ukraine's second largest city. Searches of the area by local authorities yielded no results.

Novyi Stil in known for its reports on corruption, local government irregularities, and social injustice.

The newspaper’s Deputy Editor Petr Matviyenko believes Klymentyev’s disappearance is linked to his professional work. Talking to local media, Matviyenko said that Klymentyev had been threatened several times before, and had been offered bribes to keep quiet over damaging evidence he collected on some Kharkiv region officials.

Matviyenko said that a few days before Klymentyev disappeared he wrote an exposé on corruption over illegal logging. His article focused on a 74-acre stretch of land outside Martove, a village not far from Kharkiv, where trees were illegally felled.

His article criticized a local prosecutor and the head of the regional tax department, Stanislav Denysyuk, according to local media reports. Denysyuk was named as being in charge of logging in the area.

Reporters Without Borders (French RSF) and the Committee to Protect Journalists have strongly urged local authorities to give the case their full attention as an attack on the press.

"Given that Klymentyev's newspaper was known for its critical coverage of authorities, we urge investigators to focus on his journalism as a motive," said CPJ Europe and Central Asia Program Coordinator Nina Ognianova in a statement.

RSF pointed to some strange developments in the investigation including abusive police power in searching Klymentyev’s property.

The organization reported, based information from on Klymentyev’s son Oleg, that after the first police officer's visit to Klymentyev’a house turned up nothing unusual, the police returned for a second visit.

According to Oleg, Dzerzhynskiy District police arrived at the home and "forced the front door and, without showing a warrant, took away items without completing an inventory."

“As the case had not yet been defined as criminal, the police had no right to conduct a search,” the RSF said in a statement last week.

Another oddity highlighted by RSF was that judicial authorities decided to categorize the case as a possible “premeditated murder” even though the family had only reported the case as a "disappearance."

Press freedom has decline sharply in Ukraine since Russian-leaning President Viktor Yanukovych assumed power earlier this year.

Journalists complain that the government has become less responsive and there are few open meetings with the press.

Source: Epoch Times