Books on Ukraine
Update No: 292 - (26/04/05)
Ukraine has suddenly become an incredibly important country.
Actually it always was; but the world did not know it.
It consists of the marches to Russia, the European outskirts of the largest
country on Earth.
It has just had a bloodless revolution, as a result of which it is going to join
the West, not remain sequestered to the East.
Visit to the US
On a trip to Washington the new Ukrainian president, Viktor Yushchenko, had
talks with President George W Bush; and he met Vice President Dick Cheney,
Secretary of State Condoleezza Rice and Defence Secretary Donald Rumsfeld.
He addressed both houses of Congress, an honour hitherto reserved for only
America's closest allies. In that Viktor Yushchenko joins a small but revered
group that includes British Prime Minister Tony Blair and Afghanistan President
So why all the fuss for a leader of a former Soviet Republic?
Yushchenko's warm US welcome
Yushchenko and his rise to power - in the bloodless "Orange
Revolution" - symbolises the hopes of President Bush's foreign policy
agenda. He is the living example - often cited by Mr Bush - of the world's
desire for democracy..
Or in the president's own words when he welcomed Viktor Yushchenko to the White
House: "You are an inspiration to all who love liberty...an example of
democracy for people around the world."
But there is a price
The Kremlin were incredibly miffed at backing the wrong horse in Ukraine, that
is Yushchenko's opponent Yakushenko, a stooge of his boss, the former president
Kuchma, himself a stooge of Moscow. They have gone ahead with gusto with the
idea of cutting Ukraine out of the lucrative trade in transiting natural gas
between Russia and the West.
There is now to be a gas pipeline, by-passing both Belarus and Ukraine, going
from Vyborg directly to Germany along the floor of the Baltic sea. Gazprom and
Ruhrgas have concluded the deal. There is a price for freedom!
Timoshenko another star
The person who made much of the running in the campaign was Julia Timoshenko,
now premier, due to Yushchenko having to recover from being poisoned on
September 9th. She is a former oligarch, her name synonymous with much that was
outrageous in the early years of Ukraine's independence although she says that
the money claimed to have been more than a $1billion has gone on legal bills,
(but it was not previously known that there were such expensive lawyers in
The Russians tried to smear her as having bribed Russian energy officials in the
1990s when she headed the state gas firm of Ukraine. Indeed they issued a
warrant for her arrest, but Russia the justice system is known to be merely the
handmaiden of the politicians, so that in itself means little.
These charges are pragmatically being dropped, now that she is in harness. She
is going to Moscow shortly to mend fences. She is clearly an able and a feisty
woman exemplified in that she is a fiery speaker. There were rumours in late
April that she was going to be dismissed, but she indignantly denied them as
She would appear to have the confidence of the president. They in fact make a
good team, he being the darling of the West (moreover he has an American
Ukrainian wife), while she knows the ropes when it comes to dealing with the
Russians, both those in Ukraine and Russia! He is a successful technocrat who
kick-started economic recovery in his stint as premier at the beginning of the
decade; she is the hands-on operator to provide management skills. Ukraine needs
Secretary Condaleezza Rice, following her Moscow meetings had discussions with
Yushchenko about a serious bid for Ukraine to join NATO which from being an
outside possibility previously now looks much more likely. The reasons are not
of course military, the raison d'etre of NATO, but political. It is accepted
that the US seeks to give sustenance to the new regime in Ukraine and to
Yushchenko who would dearly like to be in membership of the European Union.
However such an admission is many years away, for many reasons, not least that
Turkey's application was already received ahead of Ukraine and the EU is anyway
currently having sizable problems of its own over it's constitution, which puts
back all expansion plans.
But above all, EU membership is not in the gift of the US, whilst NATO
membership effectively is. Russia at first sight seems to be unexcited about
this, NATO no longer being projected towards any Russian threat, but that
reaction is probably about form. If only for morale's sake, Moscow is probably
seething about it.
The really big challenge faced by the new government is the immensely powerful
group of oligarchs who under the tutelage of the former president had an
arm-lock on the Ukrainian economy. Already Timoshenko has taken the fight to
them in several hard hitting taxation changes designed to limit cross border
smuggling; and provocatively removing from office and arresting the regional
governor of the Donetsk, a close colleague of the nest of oligarchs that thrive
in that region.
The Ukraine story has a long way yet to go.
AVIATION & SPACE
Ukraine, Europe boost space ties
Ukraine's National Space Agency and the European Space Agency (ESA) decided
recently to set up joint working groups to coordinate the development of new
space vehicles, the head of Ukraine's Pivdenne design bureau, Stanislav
Konyukhov, stated, Interfax News Agency has reproted.
The planned vehicles include launch vehicles, Konyukhov said.
Ukraine is currently seeking associate membership of the ESA. It is also
preparing to sign an agreement with the European Union on cooperation under the
Global Navigation Satellite System project, he said.
A joint seminar that will be held soon will hammer out specific proposals for
broader Ukraine-ESA cooperation, Konyukhov said.
Pivdenne, also known as Yuzhnoye, is the only Eastern European company
represented in the European Space Incubators Network (ESINET).
Ukraine to cut Russian coke imports 14% in 2005
Ukraine will reduce its imports of coking coal from Russia by 13.58% this year,
the company Ukrenergycoal Enterprises Ltd said at the Coal Transport Russia 2005
conference that opened in St Petersburg recently, New Europe reported.
"In 2005, imports of coking coal from Russia will not exceed seven million
tonnes in light of higher coal prices, higher transportation tariffs and
ordinary-grade coal because of the launch of additional production capacity for
enrich coal in Russia," the group said. Ukraine imported 8.1m tonnes of
coking coal from Russia in 2004.
LUKoil to invest US$500m in Ukraine by 2011
Russian oil company, LUKoil, plans to invest about US$500m in Ukraine by 2011,
LUKoil President, Vagit Alekperov, announced after holding talks with Ukrainian
President, Viktor Yushchenko, recently, New Europe reported.
"Of these resources, US$150m will be spent on completing the development of
gas filling complexes, US$170m on upgrading the Kalush oil refinery (Lukor) and
about US$330m will go to the Odessa oil refinery," Alekperov said.
He said LUKoil plans to increase the number of its gas stations in Ukraine to
210 in 2005 and ultimately bring this figure to 350. Alekperov also said LUKoil
is to build a new plant in Ukraine to produce lubricating oil. He said that
LUKoil investment in the new plant, which will include a packaging line, would
amount to about US$20m. "The company has decided to build a new oil plant
near Kiev, in the Borispol region, where we already have infrastructure. I hope
that the plant designs will be finished in the summer and that we will start
investing," Alikperov said.
He also said that LUKoil rejected the idea of acquiring a stake in OAO Azov Oil
and Lubricants (Azmol).
FOREIGN ECONOMIC COOPERATION
Yushchenko vows cooperation with Russian businesses
Ukrainian President, Viktor Yushchenko, recently said, Ukraine wants to draw
Russian businesses to the country's economy and is prepared to create equally
favourable conditions for Ukrainian, Russian and other foreign investors.
"In fact, Yushchenko has given his go-ahead for Russian-Ukrainian trade and
economic cooperation and promised to create even more favourable conditions than
in Russia," Vneshtorgbank President and CEO, Andrei Kostin, said following
Yushchenko's meeting with about 20 leading Russian businessmen in Kiev.
Kostin quoted Yushchenko as saying that the Ukrainian state authority is
transparent and that the state will provide guarantees of ownership rights in
Ukraine. "Yushchenko has vowed not to launch a massive review of the
privatisation results, saying that the list of privatised properties that that
need to be examined is not long," Kostin said.
Yushchenko put special emphasis on the strategic significance of
Ukrainian-Russian relations, saying, "the Western sector is strongly linked
to Ukraine's relations with Russia and vice versa," said Vnesheconombank
chairman, Vladimir Dmitriyev.
The talks have cleared a number of queries concerning the review of the
privatisation results and the future of Russian capital in Ukraine. "Most
of the participants left the negotiating table feeling more confident and
comfortable," said Dmitriyev. Russian bankers backed Yushchenko's proposal
to add representatives of Russian companies to the Foreign Investments Council
which is currently being revived in Ukraine.
Deutsche Bank to lend Naftogaz 2bn Euro
Deutsche Bank has pledged to open a 2bn Euro credit line for Ukrainian national
oil and gas company, Naftogaz Ukrainy, under a five-year framework agreement
that may be extended, it was reported recently. Deutsche Bank demanded no
collateral for the loan, Naftogaz Ukrainy chief executive, Olexy Ivchenko, told
the Ukrainian weekly, Zerkalo Nedeli.
Various currencies will be used - each tranche will come in whatever currency is
most economical for Ukraine. "Naftogaz Ukrainy has the complete priority as
regards the choice of projects for which the loan will be used," Ivchenko
said. The first tranche of about US$350m "will be spent on the optimisation
of technological processes, the modernisation of oil and gas production. We want
to work on increasing our own production of hydrocarbons. This is the first
target. The next is to modernise the gas transmission system," Ivchenko
said. He also said Deutsche Bank, which closed down its office in Ukraine
earlier, would reopen a new office in the country in May.
EBRD pledges to double loans for Ukraine in 2005
The European Bank for Reconstruction and Development [EBRD] thinks that the
Ukrainian government's actions are resolute and consistent, while its policy is
clear-cut and transparent. The EBRD promised to double the amount of loans for
the economy this year. The EBRD and domestic banks will agree on a list of
projects by May. The most attractive projects include energy, banking and
transport sectors, UT1, Kiev reported.
Financiers are interested in taking part in upgrading the rolling stock of the
Ukrainian railways. Europeans are also willing to invest in the development of
leasing and retail chains, as they think the investment climate has improved in
Jean Lemierre, EBRD president, met with investors, who are currently interested
in investing their money into Ukraine, as they see true progress, and also
improved business and legal environment. He said "we also view this as
significant progress, which we would like to support."
MINERALS & METALS
Copper imports up 34% in January-February
Ukrainian enterprises increased copper and copper-product imports 34.4% in value
year-on-year to US$15.93m in January-February 2005. The state customs service
said that February copper imports were US$7.65m and that copper imports
increased 50.5% to US$96.56m in 2004 as a whole, New Europe reported.
Ukraine's copper and copper-product exports dropped 79% to US$21.28m in
January-February (US$10.67m in February). Copper exports in 2004 contracted
10.8% to US$197.97m.
Ukraine cut its nickel and nickel-product imports 5.8% to US$9.08m (US$5.19m in
February) and tin and tin-product imports 23.3% to US$693,000 (US$648,000).
However zinc and zinc-product imports were up 27% to US$5.14m (US$2.59m in
February), lead and lead-product imports grew 53.7% to US$887,000 (US$449,000m
in February) and aluminium and aluminium-product imports jumped 48.9% to
US$25.16m (US$14.7m in February).
Aluminium and aluminium-product exports decreased 26.4% to US$44.62m in the two
months, exports of lead and lead products were down 6.1% to US$1.26m and nickel
and nickel-product exports fell 53.6% to US$326,000.
MTS looks to invest US$500m in UMC in 2005
Russia's biggest cellular operator Mobile TeleSystems (MTS) intends to invest
US$500m in Ukrainian Mobile Communications (UMC), New Europe has reported.
MTS has already invested roughly that amount in UMC so far, MTS President,
Vasily Sidorov, said during a "Ukraine-Russia. Prospects for Bilateral
Economic Relations. New Investment Opportunities and Risks" roundtable.
"For the two years in which MTS has been the main or sole owner of UMC, we
have invested more money than the previous owners had over the preceding seven
years," Sidorov said. MTS acquired the controlling stock interest in UMC in
early 2003, and bought up the remaining stock in the middle of that year. UMC
has roughly eight million subscribers. Sidorov said that the investment monies
would go to developing new services and new projects, including the creation of
infrastructure for international communications services. The bulk of the money
to be invested is to come out of MTS's own coffers, Sidorov said. There are no
plans to issue UMC bonds this year, he added.