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UKRAINE


 

 

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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 49,537 41,380 37,600 55
         
GNI per capita
 US $ 970 770 720 137
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km) 
603,700 

Population 
47,732,079

Principal 
ethnic groups 
Ukrainians 72.7%
Russians 22.1%
Jews 0.9%. 

Capital 
Kiev

Currency 
Hryvnya

President 
Viktor Yushchenko




Update No: 304 - (02/05/06)

Ukrainian CEC has announced official outcomes of parliamentary elections
On April 10th, Chairman of Ukrainian CEC Yaroslav Davydovich announced the final outcome of the March 26th parliamentary elections.
The Regions Party of pro-Russian Victor Yakunovich received 32.14% of the votes, the Bloc of Yulia Timoshenko - 22.29%, the pro-presidential Our Ukraine Bloc - 13.95%, the Socialist Party - 5.69%, the Communist Party - 3.66%. 
Thus, the Regions Party received 186 out of 450 seats at the Ukrainian Supreme Rada, the Bloc of Yulia Timoshenko - 129, Our Ukraine Bloc - 81, Socialist Party - 33, Communist Party - 21, while other parties have failed to overcome the 3% barrier, which it is necessary to surmount to enter parliament.
There is still no coalition, however, ready to form a government. 

Patching rifts for Ukraine coalition
Ukrainian President Viktor Yushchenko and his former Orange revolution partner Yuliya Tymoshenko started discussions April 6th over forming a coalition government two days after the vote count was certified, but immediately encountered difficulties. 
The Ukraine parliament (Verkhovna Rada) rejected a proposal on April 4th for a recount of votes from the March 26th parliamentary elections, and recognized the results. Several unsuccessful candidates had urged the Central Election Commission (CEC) to have a recount. 
Yushchenko, whose Our Ukraine party garnered 14 per cent of the vote and came in a disappointing third place, didn't support the recount call. He tried to avoid the embarrassment of his party's poor showing by standing behind the generally well-received elections as a triumph for Ukrainian democracy, the Associated Press reported, (see also below, where we give an article by him in full). 
CEC chairman Yaroslav Davydovich acknowledged that there were some election irregularities, but not enough to be able to say that vote rigging took place. He categorized calls for a recount as "political statements from losers," according to official Russian news agency Itar-Tass. 
With the vote tally certified but no clear winner, the Ukrainian president faced a tough choice between two of his main political rivals. The Our Ukraine party was in a position to determine the shape of the new government by joining a coalition with one of the two leading parties. Its 81 seats could have helped form a solid majority in a coalition with the winner of the elections, the pro-Russian Party of Regions. Or, it was in a position to repair its estranged relationship with the Yuliya Tymoshenko Bloc in an effort to form a three-party coalition including the Socialist Party of Ukraine. 

Difficult options
The second-place finisher, the Yuliya Tymoshenko Bloc, is led by Yushchenko's closest ally during the Orange Revolution that launched him to power in 2004. But their relationship became strained after Yushchenko dismissed Tymoshenko from her post as prime minister in September. 
The premiership ambitions of Yulia Timoshenko do not make it possible to create an "orange coalition" and to form a government. "There will be no 'orange coalition,' if Yulia Timoshenko does not give up her claim to the post of prime minister," said Igor Zhdanov, first deputy head of the executive committee of Our Ukraine Party. 
As a result, the prospect of the unification of pro-presidential Our Ukraine and the Party of Regions led by Viktor Yanukovich, which have been irreconcilable rivals so far, looks ever more realistic. 
Representatives of the Socialist Party, the Timoshenko Bloc and Our Ukraine signed a protocol on the formation of an "orange" parliamentary coalition on April 13. On the next day, however, the political council of Our Ukraine decided to remove from the protocol the item, which guaranteed the appointment of Timoshenko to the post of prime minister. Timoshenko urged Our Ukraine to reconsider the decision, which she regards as the denunciation of the April 13 agreements.
Prime Minister Yuri Yekhanurov, who tops the list of Our Ukraine, made it clear that the appointment of Timoshenko to the post of prime minister could bring about another round of confrontation in the country. "I wish she showed us their programme. We want to know what we are signing. What is in store for us - more confrontation?" he said in a live programme of the "1+1" TV channel on April 19th.
Yekhanurov urged the creation of a broader coalition, which would include the Party of Regions - the winner of the elections. "I favour a broad coalition. I think if one regards the whole of Ukraine - the South and the North, the West and the East, one will view the situation in a different way," Yekhanurov said. 
Timoshenko said that President Viktor Yushchenko had agreed already to the creation of a coalition in the new parliament between Our Ukraine and the Party of Regions. She referred to the information, received from a high-ranking representative of the pro-presidential bloc. "The agreement in principle on the creation of a so-called broad coalition has been reached," she announced. In her opinion, the agreement discredits the plan of the creation of an "orange coalition" and undermines agreements on the distribution of posts. 
Timoshenko said her bloc would do its best for the creation of the "orange coalition" made up of three political forces, and urged Yushchenko to head the negotiations "Yushchenko should work personally with the three political forces, so that they will sign the coalition agreement as soon as possible," she said. It remains unclear whether or not she is ready to give up her claim to the post of prime minister for the sake of the "orange coalition." 
Zhdanov from Our Ukraine also believes that the coalition should be made up only of "orange" political forces, and should not include the Party of Regions. "There is no other format, we do not see it. No talks are being held with the party of Viktor Yanukovich," he stressed. 
By all appearances, however, the problem of the make-up of the future coalition still remains to be resolved, and confusion reigns supreme.

Bad for business
Oksana Shuliar, an analyst at the Institute of Euro-Atlantic Cooperation, a think tank in Kiev, said that talk of another Tymoshenko premiership could scare away foreign investment. "Many British experts have expressed their concern that Tymoshenko's premiership will cause a very big flight of investment from Ukraine," Shuliar said. "Investors might start doubting whether to invest in Ukraine, as Tymoshenko's premiership was marked by calls for creating stricter rules for privatisation." 
Shuliar said that for investment, a Yushchenko-Yanukovych alliance made more sense. But such a convergence would have marked a return to the past, as it would serve to unite business and politics - the separation of which was one of the main aims of the Orange Revolution. 
"There were many calls [during the Orange Revolution] to make a clear division between the authorities and business. But in the case of this grand coalition - the one between the Party of Regions and Our Ukraine - there [would have been] no division between the authority and business," Shuliar said.
Stanovaya said there was no third option, as a coalition between the Party of Regions and the Yuliya Tymoshenko Bloc is out of the question. Stanovaya says Tymoshenko has characterized Yanukovych as an evil force in the hands of the Kremlin, while Yanukovych has described Tymoshenko as unpredictable and too ambitious.
This is an edited version of a story published by Radio Free Europe/ Radio Liberty with other wire sources that came out in Czech Business Weekly.

No prospects for "orange coalition" in parliament - opinion
The coalition of democratic forces ("the orange coalition") will have no political prospects in new Ukrainian parliament, holds Vladislav Kaskiv, the Ukrainian president's adviser. 
"Political formations, such as Yulia Timoshenko bloc and Our Ukraine will not exist by autumn, and there will be a spate of smaller political forces instead," Kaskiv told a news conference on April 17th, reported Itar-Tass on the same day. 
"People who formed the election bloc and received deputies' mandates had no common ideology and no common vision of the country's development. They rallied because of the common interest to get into parliament, no more, no less," Kaskiv believes.
He believes that "even if a formal coalition emerges now, it will have no political prospects." He holds that "the logic of the so-called orange vs blue standoff (between the Yushchenko team and the Party of Regions of Viktor Yanukovich - Itar-Tass) was that of political technology in the framework of the election campaign." "This was a technology for preserving and using the fact of the standoff and getting more deputies' mandates," Kaskiv said. 
A number of other experts share this view. They believe the coalition consisting of Yulia Timoshenko bloc, the Socialist Party and the pro-presidential Our Ukraine will not be a durable coalition without the Party of Regions that won the March 26th parliamentary election. But the Party of Regions is short of 40 seats for forming parliamentary majority, which is 226 deputies out of the 450, and the Party of Regions is not invited to the "orange coalition" so far.

Yushchenko: Putin's visit to Ukraine will promote settling of many issues
Russia and Ukraine are bound eventually to get on, willy-nilly. They need each other too much. But there can be many a hiccup on the way.
Ukrainian President Viktor Yushchenko believes that the process of settling the issues concerning deployment of the Russian Black-Sea Fleet in Ukrainian territory will gain a constructive meaning after finalizing the parliamentary elections and a visit of Russian President Vladimir Putin to Ukraine. The Ukrainian president made the statement at a news conference on April 12th.
"I am sure that after the election campaign in Ukraine is finalized and Vladimir Putin comes to Ukraine on an official visit, these issues will gain detailed and substantial meaning," the Ukrainian president is quoted as saying.
According to the Ukrainian leader, the visit of the Russian president will promote a settling of issues concerning 170 ground areas, 130-150 real estate objects, about 140 navigation facilities in Crimea used by the Russian Black-Sea Fleet. Yushchenko also expressed hope for the solution of issues concerning the usage of Ukrainian radio frequencies by the Russian fleet and Russia's paying for rent of two Ukrainian radio-location systems. 
The Ukraine's president stressed, provisionally, the date of the visit was set for late April - May taking into account finalizing of election procedures in Ukraine. Yushchenko also announced: "I believe that our meeting with the Russian president will be a historical one, a significant one; it will pave the way for solving many problems concerning economic cooperation in power engineering, military cooperation, investments, a separate block will be Ukraine's integration into the Eastern market."

Ukrainian president calls for the establishment of a Putin-Yushchenko commission
On April 13th, President Yushchenko received the Russian Ambassador to Ukraine, Viktor Chernomyrdin, a key player behind the scenes if ever there was one, a former premier of Russia and a man with the full confidence of Putin, widely known by reason of a former job, chairmanship of the largest gas company in the world, by the sobriquet 'Mr Gazprom' and perhaps the richest man in Russia. 
They discussed the outcome of the parliamentary elections in Ukraine, as well as economic and trade cooperation between the two countries. In particular, the subject of establishing a Single Economic Space in the territory of Russia, Belarus, Ukraine, and Kazakstan was "touched upon." The issue is debatable, as the Ukrainian party, contrary to its partners, is not ready yet to sign the basic package of agreements allowing the start of the Single Economic Space. 
Besides, one of the subjects at the meeting was the preparation of the visit of the Russian president to Ukraine. Yushchenko has spoken out for the establishment of a perpetual intergovernmental Putin-Yushchenko commission. The idea is obviously designed to avert the sort of friction that accompanied recent electoral events, the shut-off of gas to Ukraine in early January as a petulant response to untoward developments in the political sphere.

The murky world of gas
Two influential Ukrainian businessmen were named on April 26th as the owners of a one-half stake in RosUkrEnergo, a mysterious company that controls Ukraine's natural gas imports. Citing audit documents, the newspaper Izvestia said Dmitry Firtash - who has in the past played a role in importing natural gas from Turkmenistan to Ukraine and owns a Kiev basketball club - and Ivan Fursin, a banker, were the beneficial owners of the 50-percent stake.
Raiffeisen Zentralbank in Austria confirmed the names, saying it was holding the stake on their behalf. In an e-mailed statement, the bank said Centragas Holding, a company based in Vienna, "is a joint owner of RosUkrEnergo." Russia's state-controlled monopoly Gazprom owns the other 50 percent of Swiss-registered RosUkrEnergo.
Firtash owns 90 percent of Centragas and Fursin holds the other 10 percent, the statement said. Raiffeisen said in the past that it held the stake as trustee, but declined to disclose the names of the owners.
The disclosures come as concern is growing that Ukraine, which is the transit route for 80 percent of Russia's natural gas exports to Europe, was tolerating opaque deals, even after the "Orange Revolution" of 2004, that jeopardize regional energy security. Suspicion has even fallen on Yushchenko, whom some say is implicated.
RosUkrEnergo bounced into the public eye when it was named as the go-between in a deal to resolve a natural gas pricing dispute between Russia and Ukraine that interrupted supplies to Europe over the New Year. The U.S. Justice Department's organized crime section reportedly opened a probe into RosUkrEnergo, with diplomatic and financial sources saying that Raiffeisen had cooperated by providing information on the company.
Izvestia, which is owned by Gazprom, published extracts from an audit report by PricewaterhouseCoopers that named the two men as owners of Centragas.
Ukraine's energy minister, Ivan Plachkov, was quoted by Interfax- Ukraine news agency as saying that Kiev may review the natural gas deal made in January because of the revelations.
RosUkrEnergo's sales in 2005 were around US$3.5 billion and it made profits of US$500 million from the sale of about 40 billion cubic meters of gas, Raiffeisen has said. That makes it one of Europe's largest natural gas marketers.
Ukraine's state energy company, Naftogaz, is struggling to pay for natural gas imports after the January deal, under which the import price Ukraine must pay nearly doubled to US$95 per 1,000 cubic meters. Naftogaz has been unable to pass on the natural gas price increase to consumers and, according to local media reports, ran up losses of at least US$500 million in the first quarter of 2006.

                                        ******
An article can be interesting for what it says and for who is saying it. The following text by the president of Ukraine is interesting on both counts and for where it appeared, The Wall Street Journal Europe of April 3rd:-

A New Era for Ukraine
By VIKTOR YUSHCHENKO

KIEV -- Freedom triumphed in Ukraine a week ago as citizens voted in elections that international poll monitors judged to be democratic and fair -- not a given for a land that was once part of the Soviet Union. Regardless of the configuration of the next government, the result underscores that Ukraine's course of Euro-Atlantic integration remains on track.
One cannot help but wonder how our history might have been different had the Orange Revolution come a little earlier. My country's return to normalcy is the result of a number of important policies we have implemented since those fateful days in the fall of 2004.
First, we ended government censorship, unleashing rigorous and free media, which for the first time presented all the different political points of view and gave equal airtime to government and opposition candidates. This true competition between the parties sparked tremendous interest among the public, prompting two-thirds of registered voters to participate in the elections.
Second, the campaign and elections were conducted in an environment free of intimidation, fear and outright voter manipulation. This has not always been the case. In the past, candidates were being followed and harassed by police and secret service officials. Phones were tapped and family members of politicians threatened.
In the aftermath of the 2004 presidential election, more than 5,000 officials were prosecuted for falsifying election results. This time, there were strict controls to prevent election officials from abusing their powers. Parties were free to organize rallies and community gatherings without government interference. Law enforcement agents kept the peace and encouraged people to report troublemakers. The entire election process demonstrated an unwavering commitment to democratic values and respect for civil rights.
This election completes Ukraine's post-Soviet transition. We begin a new chapter in parliamentary democracy and local self-government. Changes to our constitution took effect three months ago, shifting some executive powers, such as nominating the prime minister, from the presidency to parliament. The essence of these changes is political power-sharing, requiring closer interaction between citizens, parties and government. The new coalition government must be formed two months after the official results are confirmed. Within my constitutional powers as president and commander-in-chief, I will appoint the ministers of foreign affairs and defense.
During discussions with the election winners last week, I suggested that lawmakers must now put aside their narrow political interests and campaign rhetoric and strive to unify the country. Cultural, religious and linguistic differences have no place on the political agenda. Similarly, federalism and special economic privileges will narrow and not strengthen Ukraine's economic opportunities and competitiveness. To this end, I'd like to see a "stability pact" signed by all parliamentary forces, outlining the general principles of national unity. The harmonious regional and socio-economic development of our country is a common goal upon which all parties should be able to agree. Then I believe both the new government and the loyal opposition will jointly recognize the political boundaries that stabilize the nation and secure our democratic evolution.
If the post-election period focuses exclusively on a game of musical chairs, where party leaders are more interested in ministerial portfolios and prized legislative committee chairmanships than reaching specific policy goals, then this election's success and the opportunity to move Ukraine forward risk being lost.
Therefore, a parliamentary majority must outline its vision, the specific laws and government programs it wants to pursue, and, most importantly, find the professional staff to deliver results. Voters are expecting no less.
Since the Orange Revolution, new economic horizons have opened for Ukraine. Our trading relations with the United States and the European Union have reached new heights. We hope to join the World Trade Organization this year. We've implemented tough and long-delayed reforms, among them market pricing for energy resources, bank liberalization, and better intellectual property protection.
Expanding domestic consumer demand will continue to be a major source of economic growth and job creation in the short term. Additional steps will be required to upgrade our education, health care and social services systems.
Court reform and the fight against corruption must move forward. Developing our transport infrastructure and expanding energy exploration, production and conservation top our agenda. As do the sale of state assets in public tenders to strategic investors to modernize outdated and under-funded production facilities.
In 2004, we began rebuilding public trust in government, starting a new dialogue that has led to greater openness, new freedoms and a revival of national pride. Voting patterns point to growing support for European democratic values. Finding the right formula to complete Ukraine's first test in parliamentary democracy and putting together a government will be the major test during the next few weeks.

                                             ******
Here is another view from the same source:-

Wall Street Journal March 29th
Ukraine's Victors
By MICHAEL MCFAUL 

Since the 2004 Orange Revolution, most of the news from Ukraine has emphasized the failures of the "revolutionaries." President Viktor Yushchenko and his first prime minister, Yulia Tymoshenko, could not sustain the economic growth rates seen under the pre-Orange government. Analysts in Moscow, London, Kiev and Washington blamed Ms. Tymoshenko's alleged populism for declining exports and depressed investment. Mr. Yushchenko looked like a feckless leader who was then tainted with charges of corruption over a gas deal between Russia and Ukraine, which delivered windfall profits to a mysterious company in Switzerland.
Ahead of Sunday's first elections since last winter, few Ukrainians seemed to remember their last trip to the ballot box fondly. In opinion polls conducted last month, only 19% believed that the country was going in the right direction, 60% in the wrong. These numbers were cited in various obituaries for the Orange Revolution.

                                      * * *

Then came Election Day. The results of Sunday's parliamentary poll and the process that produced them underscore the exact opposite: The Orange Revolution marked a democratic breakthrough in Ukraine that has not only proved enduring but also been built upon.
The sceptics got a couple important things wrong. First off, the volatile politics leading up to last weekend's vote were an expression of democratic politics, not their rejection. After criticizing Ms. Tymoshenko for her performance, President Yushchenko dismissed her and her government. That's the way it's supposed to work in democracies. Accusations of corruption against Mr. Yushchenko's administration, brought to light by an aggressive independent press, forced resignations of other officials from his staff. That's also democracy in action.
Then, most amazingly, both Ms. Tymoshenko and her detractors from within the Yushchenko inner circle had the chance to compete against each other for votes. No one was jailed, no one was removed from the ballot, no one was denied access to television, and no one was denied campaign financing from private donors. All that has become the norm in regimes further east of Ukraine.
Certainly, many Ukrainians may have been disappointed with the first results of the Orange Revolution. There is always a letdown after a revolution as high expectations often aren't met. But Ukrainian citizens did not express their disappointment by checking out of the political process. On the contrary, the 70% turnout for a parliamentary election is truly remarkable. During the Orange Revolution, Ukrainians came out on the streets of Kiev to protect their vote. This week, they demonstrated yet again that they value their right to decide who rules Ukraine.
And this vote was freer and fairer than recent elections in Ukraine, and a vast improvement over the tainted and falsified presidential election in 2004. To be sure, there were organizational problems in the formation and preparation of voter lists and local election commissions. Likewise, some complained that the Regions of Ukraine party headed by Viktor Yanukovych, who lost out in 2004, enjoyed unfair control of regional media outlets in the east, and that Mr. Yushchenko's Our Ukraine used state resources for its campaign and enjoyed greater media coverage. But compared to the 2004 election, the campaign atmosphere for this parliamentary election was free of intimidation or gross bias on the national television networks. Foreign and domestic electoral monitors gave their stamps of approval to the process. Most importantly, participants in the elections have accepted the results as legitimate.
Despite all the alleged failures of Ms. Tymoshenko, Mr. Yushchenko and the Orange government, the basic distribution of votes between former Orange coalition parties on the one hand (Yulia Tymoshenko's bloc, Our Ukraine, the Socialist Party and Pora) and the anti-Orange parties (Regions of Ukraine, the Communist Party and the Vitrenko bloc) is roughly the same as it was in the final (and fair) round of the presidential vote in December 2004. Then, Mr. Yushchenko won 52% of the popular vote compared to 44% for Mr. Yanukovych. On Sunday, parties formally affiliated with the Orange coalition won 46% of the vote, while the anti-Orange parties won 36% altogether. Despite all the bad news out of Ukraine since the Orange Revolution, Mr. Yanukovych barely maintained his electoral base -- 29.5% for Regions of Ukraine last Sunday, after all, is significantly less than the 44% that Mr. Yanukovych won in 2004 -- and did not orchestrate some kind of "comeback" in this election.
On the contrary, the real comeback kid is Yulia Tymoshenko. After her dismissal as prime minister last year, her approval ratings plummeted and conventional wisdom at the beginning of this year picked her party to finish third. Instead, as a result of a tenacious campaign effort, she reclaimed the Orange mantle, performing especially well in the central "swing" regions. While it remains unclear how negotiations over a new government will end, what is clear is that Ms. Tymoshenko is now well-positioned to become the next president of Ukraine.

                                         * * *

A polarized electorate -- a lingering legacy of the Orange Revolution -- helped to remobilize a significant number of Orange supporters. Voters did not cast their ballots based on pocketbook issues, but instead were motivated by more fundamental factors such as identity and support for or opposition to the Orange Revolution. But supporters of the revolution did not constitute a solid majority. If based on a thin majority, Ukraine's next government may not be stable, and instead susceptible to defections from minority coalition members. To forge a common national identity, Ukrainian leaders must eventually develop political parties based on ideas (not simply personalities or linguistic identities) capable of appealing to voters in all regions of the country.


                                            ******

Here is yet a third viewpoint:-

Whose Ukraine? 
By Viktor Erofeyev, International Herald Tribune

Ukraine reminds me more and more of a large piece of meat that two cats are fighting over.
The Russian cat believes that historically the meat belongs to it and was stolen, and so feels insulted and humiliated. The Western cat thinks that Russia has always treated this meat very badly, so taking it away is a sacred duty. It has not fully decided, however, what to do with the meat.
Russia, as the recent "gas war" demonstrated, is prepared to take the crudest and most decisive steps to get back the stolen meat. The recent Ukrainian elections show that Russia does have a chance to get it back. But if Russia swallows it, it will be bad for everyone - including Russia. A dependent Ukraine will substantially weaken the chances for a future democracy in Russia.
In reality, though, Ukraine is not meat. Ukraine must be seen for what it is. It is still a post-Soviet space: demoralized, uncertain of itself, somewhat depressive, internally divided, to a degree criminalized. It needs time and political will to overcome these problems.
But there's a distinct difference between the populations of Russia and Ukraine. In Russia, more than 50 percent of the people regard Stalin as a positive historic figure, as the founder of a powerful Soviet state. In Ukraine, Stalin is a fallen idol; he is identified with forced collectivisation, famine and repression. The defeat of Ukraine's Communists, who failed to get even 4 percent in the parliamentary elections, marks a final break with the Soviet past.
The future, however, is more complicated. I was in Kiev before the elections and, once again, I was struck by the beauty of its Orthodox cathedrals and its chestnut parks. Even the Stalinist buildings along the main street, Kreshchatik, did not discourage me - their facades are covered with innumerable advertisements and the marquees of fashionable boutiques.
It is difficult for a Russian to see Kiev as foreign: For him it is the mother of Russian cities, the oldest city of ancient Rus. Even now, with Kiev the capital of an independent Ukrainian state, Russian is the language most often heard in the streets. Ukraine is tied by blood to Russia - and not only by the Soviet past.
Young Kievan journalists with whom I met proudly described to me the Orange Revolution on Independence Square. Now, after the elections, this pride has been largely replaced by disappointment. The convincing victory of the pro-Russian party of Viktor Yanukovich, who, despite a criminal past and falsified results in the last presidential election, got nearly a third of all votes, speaks to the serious crisis of the Orange Revolution.
The unstable, compromised coalitions that will be formed may well exhaust the country and drag it into a political swamp. Once again, Ukraine hangs suspended at the edge of two worlds, the West and Russia, living up to its name, which means "borderland."
Viktor Yushchenko turned out to be a political dreamer, almost utopian, while his ally in the Orange Revolution, Yulia Timoshenko, literally drowned in revolutionary rhetoric. The West also contributed to the fading of Ukraine's European dreams. The European Union indefinitely postponed Ukraine's entry and played an ambiguous game, enticing Ukraine westward and then turning away to avoid irritating the Russians.
The Ukrainian writer Yuri Andrukhovich bitterly told me that Europeans treat Ukrainians with suspicion; they see them as bandits and prostitutes. It seems to me that Europe has to bring clarity to its Ukrainian policy. Ukraine has no future other than Europe, and everything possible has to be done - including an easing of the visa regime - so Ukrainians would feel at home in Europe, so Ukraine would systematically move toward European economic and moral values. Ukraine needs European guarantees.
The election results are a call to political realism. Ukraine turned out to be insufficiently Western, but also not overly pro-Moscow. Yanukovich won, but he did not conquer. Ukraine is hesitant, but it refuses to go backward.
Even Yanukovich is not against talking of integration with Europe, and he is indisputably correct when he raises the language problem. Kiev's rigid policy toward Russian, which is spoken by the overwhelming majority in eastern Ukraine, and its openly Russophobic rhetoric, are not only the result, but also the cause of mutual misunderstandings between Russia and Ukraine.
The sooner Kiev's politics become pragmatic, flexible and dynamic, the more supporters it will find on both sides of its borders. Not all Russia should be identified with the imperial pretensions of its current leaders.
Kiev's success depends on making democratic values attractive to its people, and in safeguarding them from savage capitalism. Russian democrats suffered a defeat in the 1990s and eventually gave way to Putin because they did not deal with the real population, pressing their reforms on a theoretical nation. The West must not put brakes on Ukraine's road to the EU and NATO, and likewise it must not crow that Ukraine is moving away from Russia. Irritating Russia is not tantamount to a successful policy.
The challenges before Kiev are not simple, but there is hope. 

Top

ENERGY

Seven companies to take part in Kerch PSA tender 


Seven companies have been accepted to participate in a tender for concluding production-sharing agreements (PSA) on the Prikerchenske oil and gas field, Interfax News Agency reported.
An interagency commission for PSA agreements ruled that the Hunt Oil Company of Ukraine, Shell, ExxonMobil, Vanco International Limited (the last three based in the United States), as well as Turkiye Petrolleri AO (TPAO, Turkey), Alphex One Limited (Britain) and Ukrnafta - will be able to take part in a tender for the right to sign a production sharing agreement (PSA) for prospecting oil and gas deposits in the Black Sea shelf located on the territory of Ukraine in the Kerch zone. Stanislav Stashevsky, the commission chairman, earlier said that 12 companies had obtained tender documents, seven of which had paid for the right to participate in the tender. Shell and ExxonMobil filed a joint bid, as did TPAO and Alfex One.

Odessa-Brody-Plock is rentable 

Transportation of the Caspian oil by pipeline from Odessa through Brody to the Polish town of Plock and then further to the Western Europe is rentable. And already the first year of operation will make a profit, the international consultative consortium said recently as it presented a business plan to representatives of the Polish and Ukrainian governments, the European Union, and interested firms at the presentation of the study. RBK-Ukraine quoted Polish Minister of Economy, Piotr Wozniakas, as saying the pipeline lengthened from Odessa to Plock could begin to operate in 2009. For that it is required to invest to its completion about US$450-500 million, Radio Liberty reported.
The International Consultative Consortium, which conducted the study, advised to lay the Polish section of the Odessa-Brody-Plock pipeline by the shortest way making a detour from Warsaw from its northern side, not as it has been proposed earlier through the southern densely-populated regions. This variant will diminish the costs of the projects by US$100 million and will accelerate the process.
The European Union backs up the project of the pipeline signed by Poland and Ukraine in 2003. Secretary for issues of energy engineering and transport of the EU Commission, Fauzi Bensarsa, expressed hope that a new pipeline would be connected to the existing network of the Druzhba oil pipeline, by which Russian oil comes to Germany.
Polish-Ukrainian Consortium Sarmatia was established to construct and operate the Odessa-Brody-Plock pipeline. Its co-chairman from the Polish party, member of the administration board in the Enterprise for Operation of Oil-Pipelines (PERN), Cezary Levandowski, in the talk from Radio Liberty confirmed the forecasts of the Polish minister. "In fact, if the conditions were favourable, this project would be recompensed during the first year of operation. That is that further on it would make a profit," he said. 
Lewandowski said he hopes that the European Union will take part in the financing of the project. The European Investment Bank is interested in providing credit. 
Europe has approved the final project of completing the Odessa-Brody pipeline. A consortium of companies - SWECO PIC, ILF GmbH and KANTOR - has presented a frame project of completing the Odessa-Brody-Plock works which are financed by the European Union.
Bensarsa stated in Warsaw on March 15th that the European Commission estimates the first deliveries of the Caspian oil by the Odessa-Brody-Plock route in 2009. "We reckon on the beginning of operation of the pipeline in 2009," said Bensarsa said. By the estimations of the European experts the construction of the pipeline will take about 18 months. 
Bensarsa has emphasised that conducted researches are evidence of the growing market of consumers of the Caspian oil in Europe and the increase of its production at the Caspian Sea, which guarantees that the project has prospects. 
He emphasised as well that the issue of diversification of energy carriers is one of the most important for the European Union, noting, that the pipeline will make it possible to increase the energy independence of the EU. He added that the European market of oil consumers differs by high paying capacity.
According to Bensarsa, the international consortium advises the completion of the Ukrainian oil pipeline Odessa-Brody to Polish Ozhechowo. He has noted that from Ozhechowo to Plock a pipeline was laid, which may be used to deliver the Caspian oil by the Odessa- Brody-Plock route. By Bensarsa's data, this route has been chosen from five alternatives as it is the shortest and makes it possible to save US$100 million in the construction of the pipeline and pump stations. Bensarsa said Brody-Ozhechowo is shorter than the other routes by 70 kilometres. Bensarsa has refused to give the price for the construction of this section, noting that promulgation of these data are the prerogative of the state oil-transportation companies of Ukraine and Poland - Ukrainian joint stock company Ukrtransnafta and Poland's Pern Przyjazn. Ukrtransnafta Press Secretary Oksana Balyun said the Brody-Ozhechowo route is the most simple as it does not go through rivers and nature conservation areas in Poland. Ukrtransnafta had earlier stated that US$350-450 million in investments will be required for completing the Odessa-Brody pipeline to Plock.

Gas transit through Ukraine down 1.2% in Q1 

The transit of natural gas through Ukraine fell 1.2 per cent, or by 0.4 billion cubic metres in the first three months of the year to 33.3 billion cubic metres, Interfax News Agency reported.
Gas transit in March this year fell 0.9 per cent (by 0.2 billion cubic metres) to 11.4 billion cubic metres, a source in the fuel and energy ministry said. Oil transit dropped 3.7 per cent, by 310,400 tonnes, to 8.092 million tonnes in the reporting period, the source said.

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FOREIGN LOANS

World Bank credit to reconstruct roads 

The World Bank is ready to consider a request from Ukraine for a credit of about 150 million Euro to finance road reconstruction projects, Vadim Gurzhos, head of the State Road Service said recently, New Europe reported.
He said that this may include projects to reconstruct the Kiev-Kharkiv or Kiev-Uman-Vinnitsa highways, but no final decision has been taken yet. Gurzhos said the World Bank may provide a credit at LIBOR + 0.5 per cent. Only the European Bank for Reconstruction and Development could provide the same terms, he said.

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