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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


Area ( 


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



Viktor Yushchenko

Update No: 308 - (31/08/06)

Political atavism to the fore
The political landscape in Ukraine was supposed to have been radically changed by the Orange Revolution in 1994. In fact recent elections have after a three-month travail brought back a veteran warhorse of the pre-revolutionary regime, former premier Viktor Yakunovich, to the leading position in his former post, whose powers now are much stronger than of yore. 
President Viktor Yushchenko has been eclipsed. In the battle of the Viktors it is now clear who is the true victor. Yushchenko may have agreed to the downgrading of the powers of the presidency with the idea that he could stand for the premiership again (he was once premier under former President Kuchma). That now looks a vain hope. There is nothing like being in office to dim one's popularity in countries in an (inevitably painful) transition.
The other main leader of the Orange Revolution, Julia Timoshenko, has been sidelined too. She as sacked as premier a year ago by Yushchenko, with whom, it is now clear, she has had a definitive falling-out. He preferred to have Yakunovich back, an ideological foe, than the Iron Lady of the same political persuasion. But then the bitterest enmities in poltics tend to be between those in the party; one just has to think of Thatcher's Conservatives and now Blair's New Labour.
But her eclipse is probably likely to be only temporary. Her sacking by Yushchenko now looks like a blessing in disguise, as does her six-week jail term under Kuchma. She can now lead the opposition, with every prospect of success next time round.

Former Ukraine Prime Minister Lazarenko Sentenced to 108 Months 
A single event can sometimes light up a whole landscape. Such is the case with the digrace and now jailing of a former premier of Ukraine. Former Ukrainian Prime Minister, Pavlo Lazarenko, was sentenced on August 25th to 108 months in jail and fined US$10 million for money laundering and interstate commerce of stolen property in connection with business deals he oversaw while prime minister. 
US District Court Judge, Martin Jenkins, sentenced Lazarenko at a hearing in San Francisco. Lazarenko was indicted by a federal grand jury in 2000 on charges that he extorted US$30 million from a Ukrainian businessman and obtained US$12 million from a state-owned farm through fraud. 
US prosecutors said he transferred millions of dollars to banks in Antigua, Switzerland and the US, including some in San Francisco. 
In June 2004 a jury found Lazarenko guilty of 29 counts of money laundering, wire fraud and interstate transportation of stolen property. Judge Jenkins threw out 15 convictions and affirmed the other convictions, including all the money laundering charges, some wire fraud charges and the charges on transportation of stolen property. Jenkins refused Lazarenko's request for a new trial. 

Ukraine's future looks less orange than lemon
Everything was meant to change in Ukraine as a result of the Orange Revolution in the last three months of 2004. We are now confronted with the fact that in reality it was a Lemon Revolution.
Corruption and cronyism were supposed to give way to transparency and democracy. "Bandits" were meant to be jailed, dubious privatisations were meant to be reversed. EU and Nato membership appeared to be within reach. 
It has not quite worked out like that - though some important goals were achieved. Pinpointing the most important gain, "the main achievement of the Orange Revolution was freedom of speech," says Taras Berezovets, chief editor of the Ukrainian political website, 
"Another benefit has been freedom of business. Politicians stopped interfering, and we now have an economic boom, which has continued despite recent political crises." 
But many of the Revolution's promised changes did not occur. Everything has turned bitter.
Corruption allegations still dog some government ministers. Political parties resemble business clans, bankrolled by tycoons who often double as members of parliament. Reports of vote-buying are rife. 

'Anti-crisis' coalition 
Party of the Regions        32% (Yanukovych)
BYT                                  22% (Timoshenko)
Our Ukraine                    14% (Yushchenko)
Socialist Party                   6%
Communist Party              4% 

Taras Berezovets of suggests that new elections held now would simply reduce Our Ukraine's share of the vote from 14% in March to 9% or 10%. What a new Yanukovych government will mean for Ukraine and for the legacy of the Orange Revolution is an open question. 
For example, the "anti-crisis coalition" formed by his Party of Regions, the Socialist Party and the Communist Party, pledges to continue moving towards Mr Yushchenko's goal of EU membership and to abide by any result of a referendum on Nato membership. "Yanukovych claims he is a new man, and is not going back to the bad old ways," says Taras Kuzio. "We simply do not know whether he will have to work within the parameters of the post-Orange system or not." 
How long a Yanukovych government will last is also unclear. The Party of Regions' big business backers do not have much in common with the Communists, and neither group has much in common with the more "Orange" members of the Socialist Party, some of whom have already begun splitting away. One can be sure that a Julia Tymoshenko-led opposition will be noisy and probably effective. One has to hope that these events are the birth pains of creating a democracy in a nation that has never known one. At the least there will certainly be elections and the people will be able to make a judgement on the politicians who are now supposed to be serving them - quite a distance from what could be expected from the Soviet and successor politicians who ruled the roost before the Orange upsets which achieved true election results, who were never before that held to account. 
So whatever happens next, and it may well be that the makeup of the present coalition will not hold indefinitely, Ukraine seems far from a return to political stability.



NRB expects more talks on sale to Sberbank 

Kyiv-based Bank NRB expects to continue talks on its sale to Sberbank of Russia, Vyacheslav Yutkin, the president of Bank NRB, said, Interfax News Agency reported.
"We have agreed with Sberbank and (Bank NRB) shareholders that we will start the second phase of registering the transaction. We expect to complete it by the end of this year," he said. Bank NRB recently removed a packet of documents from documents the National Bank of Ukraine submitted six months ago to receive permission to conduct transactions, because the timeframe of the annual auditor's report expired, which is necessary to submit such documents, Yutkin said. Under the terms of the agreement with Sberbank, Russia's National Reserve Corporation (NRC) has already handed over shares in Bank NRB for direct ownership, and Project-Invest, a joint Ukrainian-Swiss venture between RiS-Ukraine and Zumservis-Ukraine, which is a founder of Bank NRB, has joined the National Reserve Corporation, Yutkin said.



Kiev to seek fully "transparent" gas deals 

Russian exports of natural gas to Ukraine and Russian gas transit through Ukraine to Europe have become "the main focus" in the two countries' relations, Ukrainian Ambassador to Russia, Oleh Dyomin, said recently, arguing that agreements that are "not quite perfect" largely explain this. Every year, the two countries sign a protocol to a 2001 gas export and transit agreement, Interfax News Agency reported.
"There was to exist such a protocol for 2006, but unfortunately it has still not been signed," Dyomin told a news conference in Moscow. "The ultimate goal that the Ukrainian side will press for is putting our system of agreement in order: everything must be as transparent as possible," Interfax quoted him as saying.
"Everything should be utterly clear not only to specialists, but, because this has become a very popular subject and everyone is interested in it, everything should be utterly clear to everyone living in our countries," Dyomin said. Europe is following the Russian-Ukrainian gas dialogue "very closely," he said.
Ukrainian Prime Minister Viktor Yanukovich has said that the gas price will be an optimal one for Ukraine. 
"We are working even now in order to make sure our country has a sufficient provision of gas, to achieve a gas price that is optimal. I am not ready yet to say what this price will be, but I want to assure you that this price will be optimal," he said at a press conference in Kiev. He promised that negotiations in that area would be open and transparent. He stressed that Ukraine's government would aspire to find common language with energy suppliers and agreements in this sphere must be concluded at the state level.
Negotiations with the Russian national gas monopoly Gazprom are considered a first test for Yanukovich's government. In return for discounted prices, Gazprom is demanding control over transit pipelines through Ukraine. 
No details on Yanukovich's plans to travel to Brussels and visit the European Union and to Washington, which he named as his priorities, were available. 
Speaking about Russian-Ukrainian relations, Ambassador Dyomin pointed at the importance of energy issues. 
"The normalisation of relations in the area of energy, as well as the definition of more clear criteria in trade and industrial cooperation, is of course a priority," he said.
The activation of all mechanisms of the interstate commission, primarily the economic subcommittee, is a very important element, he said, adding that "there are a lot of issues that have been waiting to be discussed for a long time, and their resolution cannot be delayed."
Ukraine's Fuel and Energy Minister, Yury Boyko, has arrived in Moscow for his first working visit, where he was to meet with Russia's industry and energy minister and Gazprom's Board Director, Alexei Miller. Boyko's visit precedes Yanukovich's visit to Moscow.

UkrGaz-Energo raises US$110m from Raifffeisen 

Ukraine's sole gas importer UkrGaz-Energo has raised a US$110 million loan from Raiffeisenbank Ukraine and Raiffeisen Zentralbank Oesterreich AG at a weighted average rate of LIBOR plus 3.05 per cent, Interfax News Agency reported.
UkrGaz-Energo will use the money to buy natural gas in order to accumulate it in underground gas storage facilities and supply it to Ukrainian consumers during the 2006-2007 heating season. UkrGaz-Energo had pumped over five billion cubic metres of natural gas into underground storage facilities as of August 1, including about 3.6 billion cubic metres in June-July. RosUkrEnergo plans to supply UkrGaz-Energo with 32 billion cubic metres of gas in 2006, 58 billion cubic metres in 2007, and 60 billion cubic metres annually in 2008-2010.

Naftogaz transits 62.28 bcm of gas in H1

Ukrainian national oil and gas company Naftogaz ensured the transit of 62.28 billion cubic metres (bcm) of gas in the first half of 2006, including 57.09 bcm to European countries. The company exceeded its target by 139 million cubic metres, or 0.2 per cent, and was 752 million cubic metres or 1.3 per cent above target for gas transit to Europe, New Europe reported.
The company also implemented its commitment before the trader RosUkrEnergo A.G. (Switzerland) to withdraw gas from underground storage facilities and transit it to Europe. In the first four months of 2006, Naftogaz withdrew more than one billion cubic metres of gas from underground storage facilities and transferred it to RosUkrEnergo.



Humak buys back 15% of shares from Orkla foods 

Chumak, one of the largest producers of ketchup, mayonnaise, sunflower oil and canned goods in Ukraine, has bought back 15 per cent of its shares from Norway's Orkla Foods, Chumak president, Carl Sturen, said, Interfax News Agency reported.
"We bought back this package in 2006. We correlated our plans in relation to the Ukrainian and Russian market, however we decided not to work together at the current stage," Sturen said. Sturen did not rule out cooperation with the Norwegian company in the future. Chumak was set up in 1996 as a joint venture between Sweden's South Food and several Kherson region plants. Orkla Foods, a subsidiary of the Orkla group, bought a 15 percent stake in Chumak in 2002. Chumak has three processing plants in the Kherson region. The Ukrainian State Securities and Stock Exchange Committee said that Austria's Chumak Holding GmbH had a 38.49 percent stake.



Khreschatyk Bank acquires US$25m syndicated loan 

Kiev-based Khreschatyk Bank has acquired a US$25 million loan at Libor + 2.8 per cent, the bank's press service said. A credit agreement was signed recently, New Europe reported.
The one-year loan can be prolonged for another year. WestLB AG, London Branch organized the loan. The bank will spend the funds on loans for its clients, in particular the financing of foreign economic operations, retail loan programs and the financing of special budget programs for construction, transportation, infrastructure and public utilities in Kiev. Other participants in the syndicate include BayernLB Group (BayernLB and MKB Bank Nyrt.), Hypo Alde-Adria Bank International AG, SC Parex banka, Habibson Bank Limited, Bank Austria, Finansbank (Holland) N.V., Raiffeisen-Landesbank Steiermark AG.

World Bank approves project to develop exports 

The board of directors of the World Bank has approved a second project to develop Ukrainian exports under which the Kiev-based State Export and Import Bank (Ukreximbank) will raise a US$154.5 million loan, Interfax News Agency reported.
The loan will be provided for 20 years with a five year discount rate of Libor + 0.33 percent, the source said. The loan agreement will be signed very soon.
It was reported earlier that Ukreximbank is selecting commercial banks to take part in the project based on financial criteria agreed on with the World Bank.
The goal of the second project is to support the development of export enterprises in Ukraine, help implement the newest technology to manage production, introduce new banking instruments and widen business access to sources of export financing and develop the banking sector.



RusAl to invest US$200m in Nikolayev Alumina expansion 

Russian Aluminium plans to invest US$200 million in 2006-2008 through subsidiary Aluminium of Ukraine in expanding production capacity at the Nikolayev Alumina Refinery (NGZ). "A total of US$200 million will be invested in the program to increase the refinery's capacity to 1.7 million tonnes, as well as in construction of the No. 2 slurry dump," NGZ general director, Yury Ovchinnikov, said at a press conference in Nikolayev recently, New Europe reported.
He said US$69 million would be invested this year. However, the amount of investment in the first half of 2006 was slightly lower than in the same period of 2005, which Ovchinnikov said was due to objective reasons such as frost and the discovery of 149 bombs on the site of the future slurry dump that had to be cleared and destroyed. Ovchinnikov was reported as saying earlier that the new modernization plan for NGZ calls for expanding capacity to 1.7 million tonnes of alumina per year instead of the previously planned 1.6 million tonnes.



Norway's Telenor values Kyivstar at US$8bn 

Norwegian telecommunication company Telenor has valued its Ukrainian subsidiary, Kyivstar, at US$ eight billion, Telenor's Executive Vice President, Thor Halvorsen, said, New Europe reported. Telenor holds a 56.5 per cent stake in Kyivstar, which is Ukraine's largest mobile operator, while the remaining 43.5 per cent is indirectly controlled by Altimo, the telecommunications arm of Russia's Alfa Group, a major industrial and financial holding. Altimo and Telenor are also key shareholders in Russia's second largest mobile operator, VimpelCom. VimpelCom in February offered to buy 100 per cent in Kyivstar, which had 16 million subscribers as of June 30, having valued the company at US$ five billion.

Golden Telecom agrees to purchase 75% stake in S-Line 

Golden Telecom has signed an agreement on the purchase of a 75 per cent stake in Ukrainian Internet provider S-Line for US$7.5 million, Golden Telecom said in documents provided to the US Securities and Exchange Commission, New Europe reported.
The approval of the Ukrainian anti-monopoly agency is needed for the deal to be finalised, the documents say. As part of the deal, Golden Telecom will also offer S-Line a US$2.5 million loan, which will be guaranteed by the remaining 25 per cent stake in S-Line and should be paid off by November 2010. S-Line offers wireless wideband Internet access in Kiev. Golden Telecom, Inc., is a leading facilities-based provider of integrated telecommunications and Internet services in major population centres throughout Russia and other countries of the Commonwealth of Independent States.





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