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Key Economic Data 
  2003 2002 2001 Ranking(2003)
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: 317 - (30/05/07)

Ukraine is an unusual country. It is now in profound crisis.

The duel in the sun
There are two old-timers from communist days fighting it out for supremacy in Ukraine. 

One is the pro-Western Gorbachev of the affair, a victim of the machinations of the hardliners, President Viktor Yushchenko. The other is a different kettle of fish, Premier Viktor Yakunovich, who is proving to be a fresh face on the world stage.

This nation of 48 million is split by history and language, and remains divided over whether to embrace the West or Russia. Ukraine transports 80% of Russian natural-gas exports to the European Union, and is key to the energy security of the EU's US$15 trillion economy. Moscow, increasingly authoritarian at home and assertive with its neighbours, sees Ukraine as vital to its own security, economic interests and regional influence.

Historically, eastern Ukraine -- Yanukovich's power base -- is closely linked to Russia, and most people in the region are native Russian speakers. President Yushchenko is stronger in predominantly Ukrainian-speaking central and western Ukraine bordering Poland, Hungary, Romania and Slovakia, which tilts toward Western Europe. 

The crisis commences
The current crisis began on April 2nd, when President Yushchenko dissolved Ukraine's parliament, or Rada, and called for early elections. He accused his old rival of engineering a creeping coup by coaxing legislators to defect from other parties to give Mr. Yanukovich the votes he needs to change the constitution and emasculate his powers. 
After a long struggle for power in which Yushchenko fired three judges, Prime Minister Yanukovich has agreed to new elections, now set for September 30th. 

Opinion polls suggest the Party of the Regions will get the most votes, as it did last year. Yet Yushchenko's tough action in dissolving parliament and seizing back power is expected to bring some disillusioned Orange voters back to the fold, making the contest tight.

The comeback kid
But Yanukovich is likely to prevail. He has undergone one of the most extreme makeovers in global politics. 

Just two years ago, the Russian-backed machine politician was a pariah in the West after he claimed victory in the 2004 presidential elections, which were marred by fraud and the suspected involvement in a brutal poisoning that left his opponent disfigured. Only the subsequent mass street protests of the so-called Orange Revolution forced him to accept a re-run of the vote, which he lost.

Today, Yanukovich is locked once more in a struggle for supremacy with the pro-Western Orange leader who beat him. But this time, the thousands of protesters occupying Kiev's Independence Square for the past month flew not orange, but the blue colours of Yanukovich's Party of the Regions, and the red and hot pink of his allies, the Communists and Socialists. They dispersed only when Yanukovich defused the crisis by agreeing to hold new elections -- for the second time in as many years -- after his rival dissolved parliament.

With backing from a billionaire metals baron and political coaching from U.S. Sen. Bob Dole's former campaign strategist, Yanukovich was re-elected as prime minister last year. He has positioned himself as a champion of rule of law and democratic values, a visitor to Washington, Brussels and Davos, as well as Moscow.

Yanukovich's comeback is further evidence -- on top of the Gaza Strip, Iraq and Kyrgyzstan -- that the free elections encouraged by the U.S. do not guarantee winners who favour U.S. goals, or even Western-style democracy. Ukraine is adding a fresh twist to the lesson, as Yanukovich adopts the language and institutions of democracy to shed the anti-Western and antidemocratic image that cost him the election 2 years ago.

Gone is Yanukovich's bouffant hairdo, a favourite of Soviet apparatchiks. So too are the Russian advisers and televised meetings with President Vladimir Putin that characterized his 2004 election campaign, though the Russian lower house of parliament, or Duma, has issued two statements supporting him in the current power struggle. He says he wants to be the Ukrainian leader who starts membership talks with the European Union. He even polished his Ukrainian, which he now speaks in public instead of his first language, Russian.

"Time changes people, even Viktor Feodorovich Yanukovich," said Mr. Yushchenko, who is 53, three years younger than his opponent, in an interview. "But the test is in his decisions and actions," he added, accusing Yanukovich of trying to "usurp" power.
How far his makeover goes has implications far beyond Ukraine.



Eurocar increases production 77.5% in Q1

Ukraine's Eurocar in the Trans-Carpathian region, which manufactures vehicles in the Volkswagen group, increased production by 77.5 per cent in the first quarter of 2007 year-on-year, bringing it to 7,060, the company's press service reported, cited by Interfax News Agnecy.
The production of Skoda cars rose 47 per cent to 5,479 and production of Volkswagens rose 430 per cent to 1,322. The company also made 259 Seat cars from January to March. This model was not produced in the first quarter of 2006. The Skoda Fabia was the leader in the Skoda model range in the first quarter of 2007, with production rising 130 percent to 2,149 compared with the first quarter of 2006. The Octavia MKD was second at 1,702. Eurocar was launched in December 2001. It started commercial production of the Skoda Octavia in April 2002 and launched production of the Skoda Fabia in August 2002, the Skoda Superb in March 2003, Volkswagen models in October 2003, Audi models in April 2004 and Seat models in September 2006. Full-scale production of Volkswagen makes will be reached by the third quarter of 2008.



ING Ukraine assets increase 1% in Q1

ING Bank Ukraine increased its total assets one per cent to 3.51 billion hryvnias in the first quarter of 2007, the bank said in a statement. The bank's credit portfolio increased six per cent to 2.076 billion hryvnias in the quarter, including credits to corporate entities - six per cent to 2.054 billion hryvnias, New Europe reported.
Total liabilities increased 0.5 per cent to 2.988 billion hryvnias in the period, including funds from banks - 11 per cent to 1.378 billion hryvnias and from corporate entities - seven per cent to 1.52 billion hryvnias. The bank had a net profit of 23.734 million hryvnias in the quarter compared to 17.58 million hryvnias in the same period of 2006. ING Bank Ukraine has charter capital of 304.761 million hryvnias. The statement said that, as of January 1, 2007, the only shareholder in the bank was ING Bank NV (Netherlands).



Naftogaz, Ukrgaz-Energo may develop Black Sea shelf jointly

Naftogaz Ukrainy is considering attracting ZAO UkrGaz-Energo to jointly develop deposits in the Ukrainian sector of the Black Sea shelf, Yevgeny Bakulin, CEO of Naftogaz Ukrainy, said at a press conference in Kiev. "We are planning to further develop the Black Sea shelf and we plan to work with UkrGaz-Energo," he said, Interfax News Agency reported.
Naftogaz Ukrainy owns 50 per cent of UkrGaz-Energo charter capital, therefore, amid terms of a parity basis Ukraine will have complete control over all the processes and will receive 75 per cent of the profit from joint work. "The government retains complete control in similar work. We think this principle is very promising in relation to other projects. Moreover, 75 per cent of our activity will remain in Ukraine," he said. UkrGaz-Energo CEO, Igor Voronin, said that his company was interested in joint work on these projects during the press conference.

First EU credit tranche for nuclear power plant safety

Ukraine's Energoatom, the national nuclear power generating company, received in March 2007 the first tranche of a 49 million Euro loan from Euratom and the European Bank for Reconstruction and Development (EBRD) to implement measures to improve the safety of the second reactor at the Khmelnytskyy nuclear power plant and the fourth reactor at the Rivno nuclear power plant (X2-P4), Interfax News Agency reported. 
The company plans to invest about 359 million hryvnias (5.05 hryvnias/US$ one) into X2/P4 safety improvement measures, Energoatom Technical Director Anatoly Lavrenchuk told reporters in Yuzhno-Ukrainsk recently. In mid-2004, Energoatom, Euratom and the EBRD signed a package of agreements on a US$125-million loan to Ukraine to improve the safety of X2/P4. Energoatom operates 15 water-cooled reactors at four nuclear power plants with a combined generating capacity of 13,835 megawatts.



EBRD to issue US$97 million loan to Slavutych brewery

The European Bank for Reconstruction and Development (EBRD) will issue a loan for US$97.2 million to Ukraine's Slavutych Brewery, the EBRD said in a press release, New Europe reported.
Danske Bank syndicated US$48.6 million of the loan, the release says. The loan will be used to expand production capacity at the company's breweries in Kiev and Zaporizhiya and launch PET packaging systems. This marks the second loan Slavutych has received from the EBRD. Slavutych belongs to Sweden's Baltic Beverages Holding.



Mittal Steel Krivy Rih boosts Q1 pretax profit 72%

Mittal Steel Kryviy Rih (formerly Kryvorizhstal), Ukraine's biggest steel mill, boosted pre-tax profit 72.5 per cent year-on-year in the first quarter of 2007 to 1.087 billion hryvnias, Interfax News Agency reported.
An informed source told Interfax net revenue rose 49.8 per cent to 4.226 billion hryvnias, including growth of 40.5 per cent to 3.21 billion hryvnias from exports. The sales margin rose to 38.85 per cent, from 30.29 per cent a year previously. Accounts receivable soared 110 percent to 4.208 billion hryvnias and accounts payable rose 16 per cent to 839.261 million hryvnias. Net profit grew 82.7 per cent in 2006 to 2.93 billion hryvnias. Mittal Steel Kryviy Rih controls up to a fifth of Ukraine's steel market.

TMK says in preliminary discussions with Interpipe

Russia's Pipe Metallurgical Company (TMK), one of the world's largest steel pipe producers, said it was engaging in preliminary discussions with regard to a potential transaction with Ukrainian pipe and steel products company Interpipe, New Europe reported.
These talks are "at an early and exploratory stage and there can be no certainty that they will lead to a transaction or the form it will take," TMK said in a statement. Russian and Ukrainian media reports in April suggested that TMK was negotiating a merger with Interpipe, a deal that would create the world's biggest pipe producer. The merged company would be capable of producing 4.2 million tonnes or pipes per year - more than Luxembourg-based Tenaris, the current world leader, the reports said. Various sources, some of them from Interpipe, have been reported as saying that the companies are holding consultations. TMK has declined to comment on this information. TMK, which controls 12 percent of the world market oil and gas industry pipes, has 23 per cent of its shares traded on the stock market and a market capitalisation of approximately US$ eight billion. Board Chairman Dmitry Pumpyansky owns 77 per cent of TMK. Interpipe has 4.3 per cent of the world market for seamless pipes and is controlled by the businessman Viktor Pynchuk.





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