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UKRAINE


 

 

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)

Books on Ukraine




Update No: 313 - (25/01/07)

Events in Ukraine strongly indicate that the reach out to the west signalled by the Orange revolution is now over. The European Union failed to encompass a long view and extend a concrete programme of involvement with this potential candidate nation. Uplifting words but little action are about the measure of how close they came to detaching this nation of 48.5 million from the Russian empire, to whose sphere of influence it inevitably will now drift back. NATO too, although for many years much advertised, is now unlikely to happen here in any form - although it's hard to see that objectively as any kind of disaster. Moscow has played its cards intelligently. The EU hasn't picked up a hand in the game and the US, anyway at embassy level, is probably a deeply frustrated spectator.
The one random card in the game is that of Yulia Timoshenko whose opposition party commands a significant vote, and who might pick up more of the old Orange support from President Yushchenko's smaller party, if he is really as sidelined as he appears to be.
There has been a three-person struggle going on in Ukraine, involving two former allies and their ostensible opponent. The two former allies hate each other's guts and have successively done a deal with the 'enemy.'

President side-lined
The man who led Ukraine's orange revolution two years ago has been transformed into a lame-duck president following a humiliating parliamentary vote that effectively strips him of all powers. Viktor Yushchenko, Ukraine's opposition leader turned president, no longer has the power to veto the choice of prime minister or foreign minister. Lawyers for President Yushchenko said on January 16th that they were preparing to appeal, describing the move as "unconstitutional". 
However, Mr Yushchenko appears to be the big loser in Ukraine's latest constitutional battle, which has paralysed the country over the past year because of vicious internal power struggles. The president lost his responsibilities after his ally-turned-rival Yulia Timoshenko decided to vote with the party of Ukraine's pro-Russian prime minister, Viktor Yanukovich. 
In late 2004, Mr Yushchenko and Ms Timoshenko led the popular orange uprising against a rigged presidential election. Mr Yushchenko duly beat Mr Yanukovich as president. However, last August the president was forced to appoint Mr Yanukovich as prime minister after his own allies, including Ms Timoshenko, failed to form a government. Mr Yushchenko and Ms Timoshenko had fallen out spectacularly a few months earlier, each accusing the other of corruption. 
One of Ms Timoshenko's closest advisers shrugged off the suggestion that she had betrayed the orange revolution by siding with Mr Yanukovich, her former enemy. "This is an absurd argument," Hryhoriy Nemyria told the Guardian. "We have never signed any kind of pact with Yanukovich." He added: "Ukraine's constitution doesn't function properly. Voting with Yanukovich was the lesser of two evils. We now want early elections." 
However, Russian newspapers noted that Ms Timoshenko has changed her famous peasant plait hairstyle - a sign, they said, of her own ruthless presidential ambition, although thanks largely to her, power now resides not in the presidency, but in leading the Parliament. 
Last Friday MPs summoned 366 votes to override Mr Yushchenko's veto of a bill outlining the powers of the cabinet - well above the 300 needed. They also shot down 42 other proposals by the president to amend the bill. 
Officials from Mr Yushchenko's Our Ukraine party described the vote as unconstitutional. They were preparing a challenge before Ukraine's constitutional court, they said. 
Analysts said that Mr Yushchenko - who is supposed to keep his presidential job until 2009 - had seen his powers steadily "whittled away". "He's been a potential lame duck since last year," Andrew Wilson, a Ukraine specialist at University College London, said, adding that "this is his last throw of the dice". Although Mr Yushchenko appeared to be nearing the end of his political career, yesterday's events did not mean Ukraine's orange revolution was finished, Mr Wilson said. "The rules in Ukraine are different from the rules before the revolution. The media is freer. And this is very much the cut and thrust of normal politics."

The new Entente Cordiale?
Ukraine has a very special relationship with Russia. Kiev after all was the original capital of Russia.
President Yushchenko knows this all too well. He opted for Viktor Yanukovich as his premier rather than former ally, Julia Timoshenko, knowing that the former would ease relations with Moscow, being premier under former president Kuchma, a pro-Russian stalwart of yore, whereas Timoshenko is (theroretically) even being sought out by investigators for alleged offences against Russian justice. Now she has taken her opportunity for revenge. 
The choice was made easier for him because he cordially detests her - and she, him. She was "the only man at the helm", she averred at the time of the Orange Revolution in October through to December, 2004. A slur on his manliness when he was down with a nasty bout of poisoning, which tends to show that even if true, she is not a gentleman.
The pay-off is warmer relations with Moscow. The metaphor is appropriate because it means that, unlike last year, there was no New Year cut-off of gas supplies. Putin made a point of going to Kiev before Christmas to indicate the new Entente Cordiale.

Putin: Warm welcome in Kiev
Actually, the Russian President's visit to Ukraine was anything but "the beginning of a new stage" or a "breakthrough" in Russo-Ukrainian relations, as official reports characterized it at the time.
It is true that the establishment of the Yushchenko-Putin Interstate Commission was a rare case in Russo-Ukrainian relations where one side's achievement was not the other side's loss. It took more than eighteen months to build this "mechanism of bilateral cooperation" that is supposed to benefit both nations.
Hopefully, it will, although sceptics remind us that many such "mechanisms" and "instruments" of cooperation with other countries, which Ukraine has built over 15 years of independence, have not worked effectively or at all. One of the examples is the mixed Ukrainian-Russian commission for cooperation: it was established in 1996 as pompously as the Yushchenko-Putin commission, and was liquidated very quietly recently.
Optimists are sure that the new interstate commission will facilitate and systematize bilateral contacts and discipline the negotiators at all levels. The commission has a secretariat, committees, and subcommittees. During the three months prior to Putin's visit, they held numerous meetings, preparing the ground for the Yushchenko-Putin Commission's maiden session.
Although the new mechanism might be short-lived (because the term of Putin's presidency is running out and so is Yushchenko's power), there is a hope that it can "clean up the heaps of problems", as the Ukrainian President has put it.
Yushchenko and his chancellery definitely wanted to leave out Prime Minister Viktor Yanukovich, who had seen Putin more often in five months of his premiership than Yushchenko had in twenty-three months of his presidency. The Foreign Ministry exerted a maximum effort to keep Yanukovich as far from the meeting as possible.

                                        ******

The following is a shrewd assessment of the situation from a Russian viewpoint;-

Ukraine - the view from the Kremlin
Walter Parchomenko
Vladimir Putin's Orange nightmare is over. The Russian leader can now sleep soundly. Premier Viktor Yanukovich and the Party of Regions are clearly in charge in Ukraine and, in their own words, are cleaning house and restoring order. Putin's Dec. 22 visit to Kiev to meet with Ukrainian President Viktor Yushchenko was an opportunity to observe firsthand the situation on the ground, and to quietly revel in the defeat of the Orange Revolution and its once worshipped hero. 
Putin's visit to Kiev has received increasing attention from Ukrainian and Western political observers. Prediction, in a highly dynamic political environment such as Ukraine's, is always hazardous. Consequently, it is not surprising that much of the available commentary offers sweeping generalizations and often idle speculation about the possible results of this meeting. Rather than add to this growing mountain of largely trivial speculation, it may be more instructive simply to highlight several key but generally inadequately grasped facts - essential background about recent Ukrainian-Russian relations. Doing so may shed light on Putin's true intentions in visiting Kiev and on his preferred vision for Ukraine.

Fact 1: President Putin has been and continues to be Viktor Yanukovich's most loyal foreign benefactor. He has never hidden his support for the fraud-marred premier. His public expressions of support have been deftly adjusted since Ukraine's 2004 presidential election to meet the country's changing political landscape, but his allegiance to Yanukovich and his Party of Regions remains unswerving. Amazingly, after blatantly fraudulent rounds of that election, Putin, like a brash schoolboy, rushed not once but twice to prematurely congratulate Yanukovich on victory. Learning from experience, he subsequently adopted a more circumspect but no less active role in supporting Yanukovich and his Party of Regions in the 2006 parliamentary election. Significantly, in the short period since becoming premier, Yanukovich has already met with Putin on several occasions, in Moscow and Sochi, to discuss bilateral cooperation.

Fact 2: Yanukovich and the Regions-led majority in parliament have unabashedly rushed to demonstrate their profound gratitude to Putin for his faithful support in shaping the Ukrainian political scene. Their conspicuous haste to deliver major political dividends to their Kremlin sponsor, although tactically imprudent because it diminishes their already low credibility at home and in the West, tellingly reflects their steely determination to quickly and steadily repay their enormous political debt to Putin. In just over 100 days, they have begun to synchronize important Ukrainian security policies with those of their northern neighbour. And in the words of ordinary citizens here in Ukraine: "They are firing Orange-leaning Cabinet ministers and delivering their heads on a platter to Vladimir Putin."

Fact 3: In Brussels last September, Yanukovich did much more than close the door on a NATO Membership Action Plan in 2006. Although only dimly perceived in the West, he also effectively placed a cross on any future Ukrainian membership in NATO. To the great delight of the Kremlin and members of Ukraine's so-called Anti-Crisis coalition in parliament, he rested the issue squarely on a future national referendum. It is no secret that Yanukovich's Regions party adamantly opposes Ukrainian membership in NATO and relishes today's harsh realities: Ukrainian public support for NATO today is low and declining, anti-NATO activities have increased over the past year, and the Ukrainian government's support for a NATO information campaign remains scant. Moreover, Moscow, as in the past, stands ready to resort to active measures in Ukraine to support anti-NATO forces, should the need arise. To believe that this decidedly negative trend line on Ukrainian membership in NATO can be easily reversed is, indeed, a pernicious myth.

Fact 4: Vladimir Putin waged economic wars - gas, meat, and dairy notably, in 2005 and 2006 with the clear intention of destabilizing Ukraine's economy and Yushchenko's Orange government. These "man-made crises," unquestionably, harmed Ukraine's economy and measurably influenced the political scene. With his man, Viktor Yanukovych, now in power, Putin no longer needs to wage economic wars. 
Putin, strictly speaking, only seeks good partner relations with Yanukovich and other Moscow-loyal members of the Regions-led parliamentary coalition.
Putin's aversion to colour revolutions and their leaders remains categorical. His ongoing economic war with Georgia, home of the Rose Revolution and reportedly 70 percent support for NATO membership, is compelling evidence of this fact and a stark daily reminder. 
At first glance, Putin's decision to end economic wars with Ukraine and help stabilize its economy, if only to benefit Viktor Yanukovich, is welcome news. The crucial question, however, is at what price to the nation? 
Putin's preferred vision for Ukraine is a mirror image of what he has accomplished in Russia during his presidency. Translated, this means total control of the "commanding heights" by a Moscow-loyal Party of Regions with the virtual monopolization of parliament by pro-Regions forces, the consignment of any democratic opposition in parliament to the political wilderness, and judicial attacks upon any uncooperative big business. It also means that the future of Ukraine's budding NGOs and any genuine security sector reform will be in grave jeopardy. It must be said that in Putin's Russia a distinction is made between acceptable (government affiliated) and unacceptable (state adversaries) NGOs, while security services unarguably function as a political instrument.
To what extent do Yanukovich and Party of Regions leaders share such a vision? Disturbingly, in just over 100 days in government, they have provided much cogent evidence of their preference for Putin's authoritarian style of leadership and model of government. Furthermore, their intent to gravitate toward a Moscow-Donetsk vector in domestic and foreign policymaking is evident almost daily.
Vladimir Putin will continue to view Ukraine through the prism of velvet revolutions and their clear and present danger to Russia's influence in the post-Soviet space. He will struggle unceasingly to ensure the demise of the Orange Revolution and a Ukraine outside of NATO. Moreover, Putin and Party of Regions leaders will likely remain loyal partners in this struggle.

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BANKING

Erste Bank acquires Ukraine's Bank Prestige 

Erste Bank Austria has reached agreement with the shareholders of Kyiv-based Bank Prestige to acquire 100 per cent of the bank for 79.1 million Euro, Erste Bank said, Interfax News Agency reported on December 20th.
"Erste Bank has agreed with the shareholders of Bank Prestige to acquire the full 100 per cent stake of the Bank (instead of 50.5 per cent as announced in July 2006) for a total compensation of US$104.0 million," a release said.
"Our decision was supported by the fact that the former owners will continue to support Bank Prestige with their know-how and local expertise. Additionally the established management team will stay on board. As a result, our plans for Ukraine remain unchanged and we continue to target a market share of four to five per cent by 2009," Andreas Treichl, CEO of Erste Bank, said.
Completion was expected in January 2007, the release said. Erste Bank will invest up to US$300 million (228.3 million Euro) in the bank's capital over the next four years.
Once the transaction has been completed, Bank Prestige will be fully integrated into Erste Bank Group and start to operate under the Erste Bank brand. The Bank has a full service license and will operate as a universal bank, focusing on both corporate and retail business, the release added.
Bank Prestige was the 59th biggest bank in Ukraine as of October 1, according to the National Bank of Ukraine. Erste Bank was established in 1819 as a savings bank and is one of the biggest banks in Austria. The bank works in the Czech Republic, Slovakia, Hungary, Croatia and Slovenia.

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ENERGY

Ukraine to supply coal mining equipment to China

Ukraine's state-run machine builder, Malyshev Plant, based in Kharkiv, is expected to deliver 100 BShK-2DM coal-mining complexes, valued at over US$40 million, to China during the next three years, the plant's first deputy director, Vitaly Nemilostyvy, said, Interfax News Agecny reported.
The contract was signed in late December 2006. The equipment is intended to mine coal from thin layers.
Malyshev Plant specialises in making armoured vehicles, diesel engines, agricultural machinery and equipment for the oil, gas and coal industries.

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FOREIGN COOPERATION

Ukraine wants stronger and closer ties with Romania 

On December 20th, the website en.for-ua.com reported that the head of the President's Secretariat of Ukraine, Viktor Baloga, and the Romania's ambassador, Trayan Hristia, discussed the prospects of further cooperation between frontiers of two states in the scope of the visit in Kiev.
After Romania's joining the EU on Jan. 1, 2007, this cooperation would be carried out within the European policy of neighbourhood. The head of the Secretariat put a question on speeding up the inauguration the international entry centre at the Ukrainian-Romanian state border "Solotvino-Sigetu-Marmatsiya." 
Baloga also congratulated the ambassador on Romania's joining the EU. During the meeting the parties discussed the meeting arrangement of the Presidents of Ukraine and Romania at the beginning of the year 2007. Moreover, the matter concerned the mutual Ukrainian-Romanian presidential commission.

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