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Action Ukraine Report
An International Newsletter, The Latest, Up-To-Date
In-Depth Ukrainian News, Analysis and Commentary

Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World
Friday, August 24, 2007
Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer

Clicking on the title of any article takes you directly to the article.
Return to Index by clicking on Return to Index at the end of each article

Despite political turmoil, economic growth is roaring
Eastern Europe: by Jason Bush, Moscow Bureau Chief
BusinessWeek, New York, New York, Wed, August 22, 2007
Interfax Ukraine, Kyiv, Ukraine, Sunday, August 19, 2007

Ukrainian News Agency, Kyiv, Ukraine, Wed, August 22, 2007
Naftohaz Ukrainy working with Marathon & Shell in Dnipro-Donets basin.
Ukrainian News Service, Kyiv, Ukraine, Thursday, August 16, 2007
Co-investment vehicle managed by SigmaBleyzer Southeast European Fund IV
Interfax Ukraine, Kyiv, Ukraine, Tuesday, August 14, 2007
Leading Bank Extends Electronic Payments to Retailers Throughout Ukraine
Business Wire, Phoenix, AZ, Tuesday, Aug 21, 2007
Ukraine's Privatbank owns 95.06% of the Latvian bank
Interfax, Riga, Latvia, Monday, Aug 20, 2007

AP Worldstream, Moscow, Russia, Wednesday, Aug 22, 2007

Interfax-AVN military news agency website, Moscow,
BBC Monitoring Service, United Kingdom, Wed, Aug 22, 2007

Two investors - Italy's FVH and ISD, owned by Ukraine's Donbass
Industrial Union - have already expressed interest in privatization.
By Jan Cienski in Gdansk and Andrew Bounds in Brussels
Financial Times, London, UK, Wed, August 22 2007 03:00

NTN, Kiev, in Ukrainian 1600 gmt 22 Aug 07
BBC Monitoring Service, United Kingdom, Wed, Aug 22, 2007
By Morgan Williams, SigmaBleyzer
President, U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Thursday, August 23, 2007
Business Wire, Minneapolis, MN & Purchase, N.W., Mon, August 20, 2007

Western Ukraine is trying to become Europe's answer to the challenge of
cheap Chinese factories despite bureaucratic red tape and political turmoil.
Companies like Jabil and Flextronics are investing in this area.
Evertig, Ekero, Sweden, Tuesday, August 21, 2007

Evertiq, Ekero, Sweden, Tuesday, August 21 2007

Interfax-Ukraine, Kyiv, Ukraine, Tue, August 21, 2007

The three great Ukrainian coaches of their generation - Valeriy
Lobanovskyi, Yevhen Kucherevskyi and now Viktor Prokopenko
- all dead, all cut down before their time.
Jonathan Wilson, Guardian Unlimited, London, UK, Tue, Aug 21, 2007


Interfax-Ukraine news agency, Kiev, in Russian 1220 gmt 22 Aug 07
BBC Monitoring Service, United Kingdom, Tue, Aug 22, 2007

"Ukrainian Breakthrough: Towards a Fair and Competitive Country"
Inform Newsletter, Issue 43, BYuT Party, Kyiv, Ukraine, Wed, Aug 8, 2007

BYuT Newsletter, Kyiv, Ukraine, Wed, 22 August, 2007
Writer analyses opposition leader's decision to join European right
ANALYSIS & COMMENTARY: By Viktor Chyvokunya
Ukrayinska Pravda website, Kiev, in Ukrainian 7 Aug 07
BBC Monitoring Service, United Kingdom, Tue, Aug 21, 2007
Ukrainian propresidential bloc's election list analysed
Ukrayinska Pravda website, Kiev, in Ukrainian 13 Aug 07
BBC Monitoring Service, United Kingdom, Tue, Aug 21, 2007
REPORT: By Olena Heda, Kommersant-Ukraina, Kiev, in Russian 21 Aug 07
BBC Monitoring Service, United Kingdom, Tuesday, Aug 21, 2007
Howard Wilkinson, Enquirer, Cincinnati, Ohio, Monday, Aug 20, 2007
Brad Buck, Staff Writer,, Florida, Mon, Aug 20, 2007
Roxanne Brown, Staff Writer,
Leesburg, Florida, Monday, August 20, 2007
By Helen Fawkes, BBC News, Alushta, Crimea, Friday, Aug 17, 2007
Erotic Symbolism in Ukrainian Folk Songs"
Lecture in English, comments and singing in Ukrainian,
Saturday, August 25, 2007, Ivan Honchar Museum, Kyiv, Ukraine
Action Ukraine Report #861, Article 28
Washington, D.C., Thursday, August 23, 2007
Despite political turmoil, economic growth is roaring

Eastern Europe: by Jason Bush, Moscow Bureau Chief
BusinessWeek, New York, New York, Wed, August 22, 2007

Stroll around downtown Kiev these days, and it's hard to miss the signs of
growing prosperity. The Ukrainian capital's golden-domed cathedrals share
the skyline with towering cranes and snazzy apartment complexes. Giant
billboards plug the latest Samsung (SSNKF) MP3 players and Nokia (NOK)

Diners spill onto the street from posh new eateries on Independence Square,
where three years ago hundreds of thousands of Ukrainians staged the
so-called Orange Revolution that propelled President Viktor Yushchenko to

To look at the scene, you'd never know that Yushchenko and his bitter rival,
Prime Minister Viktor Yanukovych, remain locked in a fierce power struggle
that is unlikely to be resolved even after parliamentary elections on Sept.

The lesson: Political instability and economic crisis don't always go hand
in hand, at least not in the former Soviet Union. Despite the standoff among
Ukraine's politicians, the economy is booming and foreign investments
continue to pour in.
Politics Stays Out of Business
Gross domestic product powered ahead by an impressive 8% during the first
half of 2007, and economists expect the strength to continue, boosted by a
surprisingly diverse economy of services, manufacturing, and raw materials.

Metals, mainly steel, account for 40% of exports, but most of the growth is
coming from manufacturing and services. Production of heavy equipment rose
22% in 2006. And Ukraine's software houses saw their exports jump by 50%
last year, to some $250 million.

Investors see promise in the growth. The Kiev stock exchange has more than
doubled in size this year, and now boasts a market capitalization of $76
billion-a sixfold increase since late 2004. And a real estate boom has
pushed up housing prices by 60% in 12 months.

"We joke that as long as all these disputes are going on, [politicians]
don't have time to interfere in business," says Taras Kutovyy, chief
financial officer at XXI Century Investments, a leading developer that in
May raised $175 million in Eurobonds to finance new apartments, hotels, and

The boom is being fueled by Ukraine's 46 million consumers, who are opening
their wallets for everything from houses to washing machines to big screen

Consumption has been growing by double digits since 2003, as roughly 70% of
Ukrainians can now afford new cars, furniture, and other big-ticket items,
up from 40% in 2003, according to market researcher GfK Group (GFKG.DE).
Luxury Mall
"It's clear that there is a growing Ukrainian middle class," says Tetiana
Sytnik, GfK's senior researcher in Kiev. That has attracted multinationals
seeking to sell to them. In June, PepsiCo (PEP) plunked down $542 million
for Ukrainian fruit juice maker Sandora, which has 50% of the local juice

Two months earlier, French supermarket chain Auchan entered the country via
a joint venture with local retailer Furshet, with a view to constructing 10
hypermarkets over the next two years.

Ukraine's new wealth is on display at Arena City, a six-story shopping and
entertainment complex that opened in 2005. The mall's 60 boutiques stock
expensive French and Italian clothing, furniture, and jewelry, and it
features dealers for Porsche (PSHG_P.DE), Bentley, and Mercedes (DAI).
"People are earning more money, and demand for exclusive cars and real
estate is rising.

We can see it everywhere," says Sergei Korolyov, sales manager at the Kiev
showroom for Porsche, which is on target to sell 350 cars this year, at an
average price of $140,000-up from 100 in 2005.

And it isn't just the premium nameplates flying out of showrooms: Sales of
all new cars jumped 40% last year-the highest rate of increase in Europe-to
370,000, as Ukrainians traded-in cheap Russian imports for pricier Western
models. The market is tipped to grow by an additional 25% this year.
Booming Bank Sector
The buying binge is being fueled by an explosion in consumer credit. Shiny
new bank branches are sprouting around town.

And in downtown Kiev, rows of portrait artists and old women hawking
souvenirs are flanked by young people in boxy costumes shaped like houses,
promoting a mortgage bank. Last year, the volume of retail loans surged by
137%, to $15.5 billion.

Previously almost nonexistent, Ukraine's banking sector-the fastest-growing
in Europe-hasn't gone unnoticed farther west. Over the past two years,
foreigners have bought four of Ukraine's top five banks.

In the most recent deal, Italian bank UniCredit (CRDI.MI) in July announced
plans to acquire Ukrsotsbank, the second-largest Ukrainian financial
institution, for $2.2 billion.

Of course, not everyone is benefiting from the economic boom. "We thought
that things would get better, and now we've lost faith," says Nataliya
Kolesnikova, a 32-year-old artist. She and her husband, a photographer,
enthusiastically joined the protests during the Orange Revolution.

But they complain that now corrupt tycoons and officials remain at liberty
while ordinary folk struggle to get by and are forced to pay endless bribes
demanded by policemen, doctors, and even teachers.

Ukraine still has a lot of catching up to do with more advanced economies in
the region. It remains one of Europe's poorest countries, with an average
income of just $3,000-half Russia's level and only 8% of Britain's.

And despite average annual growth rates of more than 7% stretching back to
2000, national output still hasn't recovered from the chaotic economic
transition of the 1990s and remains below the levels achieved in the Soviet

"If you compare the situation today to 10 years ago, the progress is
absolutely obvious," says Finance Minister Mykola Azarov. "But it isn't
fast enough to satisfy people."
Business-Friendly Standoff
There's also a risk that the political standoff in Kiev could start to take
a toll on growth if it delays passage of key legislation.

"The political crisis has derailed structural economic reforms: pension
reform, tax reform, judicial reform-which Ukraine badly needs as a
post-Soviet state," Azarov says. Still, in some areas Ukraine's government
is plowing ahead.

In early July, Parliament approved laws that lower export tariffs on metals
and toughen copyright protection. Those measures, plus others enacted over
the past year or so, should help pave the way for Ukraine's entry into the
World Trade Organization, now expected by next year.

Indeed, for all their feuding, Ukraine's leading politicians seem to share a
sense of purpose when it comes to improving the environment for business.
That's not surprising since many are closely allied with Big Business

Although both the government and private companies continue to be dominated
by wealthy oligarchs, the adoption of market economics has also fueled rapid
development of new businesses in telecommunications, real estate, and

Corporate managers, meanwhile, are too busy making money to lose sleep
over the long-term need for tax or pension reform. Says Porsche salesman
Korolyov, "I think people have now started to understand that politics is
politics, and business is business."
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax Ukraine, Kyiv, Ukraine, Sunday, August 19, 2007

KYIV - The growth of foreign direct investment (FDI) in Ukraine in the first
half of 2007 was $2.553 billion, which was 50.3% up on year-over-year, the
State Statistics Committee reported on Friday.

According to the source, foreign investors injected $3.2763 billion in
direct investments into Ukraine's economy in the first half of 2007, while
withdrawing $820.3 million.

The overall amount of FDIs in Ukraine by July 1, 2007, was $24.172 billion,
which was 11.8% up on the figure registered by January 1, 2007, or $518.6
per capita.

In the first quarter of 2007, investments from Cyprus grew by $950.5
million, those from the Netherlands rose by $330.5 million, those from
Austria by $323.2 million, those from Russia by $235.3 million, and those
from the United Kingdom by $225.3 million.

Investors from France increased their investments by $104.6 million, those
from Germany by $99.9 million, those from Poland by $88.1 million, and
those from Sweden by $73.4 million.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Ukrainian News Agency, Kyiv, Ukraine, Wed, August 22, 2007

KYIV - Shell International Petroleum Company Ltd concern and Alliance
Group (Russia) have created a joint venture to operate a chain of 150
gasoline filling stations in Ukraine under the Shell trademark. Ukrainian
News learned this from their joint statement.

According to the statement, operating management of the new enterprise is
up to Shell, who owns 51% in the joint venture while 49% belong to Alliance.
The enterprise became operational on August 21. During the first stage the
chain will be transferred to the joint venture for operating management.

The process of transfer is expected to finish within two months of the day
the joint venture was put in operation (i.e. by October 22).

The companies said that all gasoline filling stations in the chain would be
modernized to meet Shell's high world standards of environmental and
industrial safety.

The companies passed a decision to appoint Khristo Ivanchev to the post
of director general for development of the Shell network in Ukraine.

'The new joint venture is a combination of the world experience of Shell
Concern and extensive experience of Alliance and its expanded presence
on the Ukrainian market of gasoline filling stations. It gives us
competitive advantages on the market, helps us to react to the needs of our
clients better by way of providing good-quality products and ensuring high
level of service,' he said.

As Ukrainian News earlier reported, in July 2006, Shell and Alliance Ukraine
oil company (Kyiv), which is part of Russia's Alliance Group, agreed to use
the Shell brand at the gasoline filling stations of Alliance Ukraine.

In March 2007, the companies announced their intention to set up a joint
venture to manage 150 stations under the Shell trademark. Shell is one of
the biggest petroleum concerns in the world. Alliance and Alliance Ukraine
oil companies belong to Alliance Group.
NOTE: Shell is a member of the U.S.-Ukraine Business Council
(USUBC) in Washington, D.C.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Naftohaz Ukrainy working with Marathon & Shell in Dnipro-Donets basin.
Ukrainian News Service, Kyiv, Ukraine, Thursday, August 16, 2007

KYIV - The Naftohaz Ukrainy national joint-stock company passed a
decision on August 17 to create a joint venture of Chornomornaftohaz
and Ukrhaz-Energo companies for the development of Odesa and
Bezimenne deposits on the Black Sea shelf. Naftohaz Ukrainy spokesman
Oleksii Fedorov disclosed this to Ukrainian News.

He said Naftohaz Ukrainy owns 100% in Chornomornaftohaz and 50% in
Ukrhaz-Energo, and the State will control 75% of the future joint venture to
be founded on a parity basis.

Fedorv said the move would solve the problem of distribution of
Ukrhaz-Energo profits for 2006.

"In such a way, the profit of Ukrhaz-Energo will be directed to the mining
of gas on the Black Sea shelf through a joint venture which will be under
control of Naftohaz Ukrainy," he said.

Fedorv added that the decision on Ukrhazvydobuvannia's suspension of the
Odesa deposit project resulted from the need to direct efforts to increasing
inland hydrocarbon production and production in the Subbotine oil field,
which is the most promising field on the shelf.

He reminded that Naftohaz Ukrainy and Marathon International Petroleum
Ltd. had earlier agreed on joint exploration of the north-western side of the
Dnipro-Donets basin. Besides, the talks on joint activity with the
British-Dutch company Shell are about to finish.

"Naftohaz Ukrainy keeps on taking efforts to attract funds from professional
investors for additional research and development of hydrocarbon reserves
that are hard to reach, according to the Energy Strategy of Ukraine for
until 2030," Fedorov said.

He stressed that the end goal of all these efforts is to boost production of
Ukrainian hydrocarbons and ease dependence from external sources of
energy supply.

As Ukrainian News earlier reported, the development of Odesa and Bezimenne
deposits will require an investment of UAH 5.8 billion for both. The
deposits have estimated natural gas reserves of 22 billion cubic meters.

The Ukrainian continental shelf is believed to have 1.7 trillion cubic meters
of gas reserves. Maximum production in Odesa and Bezimenne fields is
expected to amount to 1 billion cubic meters a year. Ukraine set a gas
production target at 21 billion cubic meters for 2007.
NOTE: Shell and Marathon are members of the U.S.-Ukraine Business
Council (USUBC) in Washington, D.C.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Send in names and e-mail addresses for the AUR distribution list.
Co-investment vehicle managed by SigmaBleyzer Southeast European Fund IV

Interfax Ukraine, Kyiv, Ukraine, Tuesday, August 14, 2007

KYIV - The European Bank for Reconstruction and Development (EBRD)
may make a EUR22.3-million equity investment in Cyprus-based Oisiw
Limited, a special purpose co-investment vehicle to invest alongside and
be managed by SigmaBleyzer Southeast European Fund IV (SBF IV), to
improve telecoms and media infrastructure in Ukraine.

As EBRD reported on Tuesday, the total project cost is up to EUR 200
million. EBRD's equity investment will be made alongside with other equity
co-investors and limited partners associated with SigmaBleyzer Southeast
European Fund IV.

The project focuses on private sector development in the telecoms and
media industry sector, increasing competition, efficiency and delivery
of service.

An improved product offering and lower prices will be provided for
improved electronic communications in the regions.

As was reported earlier, SigmaBleyzer, a leading private equity firm focused
on Ukraine and Southeastern Europe, in February 2007 closed its fourth
fund, SigmaBleyzer Southeast European Fund IV (SBF IV).

The fund was closed at EUR 250 million ($326 million), the maximum
amount allowed by the partnership agreement, and 25% above its target.

A total of 40 partners invested in the new fund, with investments ranging
from a few million euros to 20% of the fund, provided by the largest partner
in SBF IV, the European Bank for Reconstruction and Development.

Other investors in the fund include Goldman Sachs, UBS, LVMH, Bank
Austria, InvestKredit and other large financial institutions and family

SBF IV announced plans to make investments of EUR 10-70 million, with
larger investments possible through a series of co-investment agreements
with its partners.

SigmaBleyzer created the first Ukrainian Growth Fund (UGF) in 1996. Since
that time, UGF has grown into a family of three funds consisting of UGF I,
UGF II, and UGF III. SigmaBleyzer runs offices in Bulgaria, Romania,
Ukraine, the Netherlands, [Kazakhstan] and the United States.

Among SigmaBleyzer's Ukrainian projects is the country's largest cable
TV operator - Kyiv-based CJSC Volia-Cable.
NOTE: SigmaBleyzer Emerging Markets Private Equity Group is
a member of the U.S.-Ukraine Business Council (USUBC) in
Washington, D.C.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Leading Bank Extends Electronic Payments to Retailers Throughout Ukraine

Business Wire, Phoenix, AZ, Tuesday, Aug 21, 2007

PHOENIX - Hypercom Corporation (NYSE: HYC) today announced that
PrivatBank, one of the leading banks in Ukraine, has purchased 11,000
Optimum T2100 and M2100 GSM/GPRS card payment terminals.

This latest purchase follows the more than 4,000 units order of the same
terminals delivered early in 2007, and increases to 15,000 the total number
of GSM/GPRS Hypercom Optimum terminals purchased by PrivatBank as
it extends electronic payments to retailers throughout the Ukraine. Hypercom
was selected over all other global payment suppliers in a competitive

The Hypercom electronic card payment terminals were supplied by Servus
Systems Integration (SSI), the distributor of Hypercom products in Ukraine.
PrivatBank selected SSI because of the high level of technical support,
consultancy and training services they can offer the banking network.

"This latest commitment from PrivatBank further strengthens our already
significant position in the Ukraine, giving us an even better opportunity to
maintain market leading share as the adoption of electronic payments
throughout this important region continues to rise," said Kazem Aminaee,
Managing Director of Hypercom EMEA.

"The continued expansion of our POS network is directly in line with the
bank's strategy of providing the highest quality products and services to
our clients," said Yuriy Kandaurov, vice-chairman of the Board of Directors
of PrivatBank.

"Our goal is to provide maximum comfort and safe payments in a trading
network for our clients, enabling consumers to quickly and easily pay for
purchases with plastic cards in any Ukrainian city, regional center or

"This second agreement speaks to our long standing relationship with
Hypercom and the consistent quality of Hypercom's product," said Elnura
Mamedli, Deputy General Manager, Director of Payment Systems'
Department of SSI.

"By working together, we have achieved first position POS product market
share leadership in the Ukraine and have positioned ourselves to maintain
that leadership as the market continues to grow."
About PrivatBank (
PrivatBank is the leader of banking services in Ukraine. Nationwide,
PrivatBank's servicing network consists of 2,475 branches and offices all
over Ukraine. As of July 1, 2007, PrivatBank maintained 12 million personal
accounts, the attracted amount of individual clients' sums gained UAH15.188

PrivatBank is the leading issuer and service operator of plastic cards in
Ukraine. Currently, PrivatBank's number of issued cards exceeds 12.5
million, and there are 3,864 ATMs and 29,782 POS terminals in its card
servicing network.
About Servus Systems Integration (
SSI is one of the leading companies in the field of self-service and payment
systems technologies. Its dominant activities include self-service systems,
software support for payment systems, warranty and post-warranty for the
solutions provided in all regions of the Ukraine, and training and
consulting services.
About Hypercom (
Global payment technology leader Hypercom Corporation delivers a full suite
of high security, end-to-end electronic payment products and services.

The company's solutions address the high security electronic transaction
needs of banks and other financial institutions, processors, large scale
retailers, smaller merchants, quick service restaurants, and users in the
transportation, healthcare, prepaid, unattended and many other markets.
Hypercom solutions enable businesses in more than 100 countries to securely
expand their revenues and profits.

Hypercom and Optimum & Design are registered trademarks of Hypercom
Corporation. All other products or services mentioned in this document are
trademarks, service marks, registered trademarks or registered service marks
of their respective owners.

This press release includes statements that may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Ukraine's Privatbank owns 95.06% of the Latvian bank
Interfax, Riga, Latvia, Monday, Aug 20, 2007

RIGA - Latvia's Paritate Banka has changed its name to Privatbank, as
Ukraine's Privatbank owns 95.06% of the bank, the bank said in a press
release. The bank also increased its charter capital by 7.1 million lati to
10.65 million lati.

Privatbank Advertising Director Gita Markovska declined to comment on
the name change and said a bank spokesman would give a press conference
next week. The shareholder structure has not changed, he said.

Privatbank was 16th among 24 Latvian banks by assets at the end of June.
Privatbank was 18th on the Interfax-1000 ranking of CIS banks
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
NOTE: Send in a letter-to-the-editor today. Let us hear from you.

AP Worldstream, Moscow, Russia, Wednesday, Aug 22, 2007

MOSCOW - Boeing Co. believes airlines in Russia and the 11 other former
Soviet republics in the Commonwealth of Independent States may buy more
than 1,000 new passenger planes worth US$70 billion (A52 billion) over the
next 20 years, the U.S. company said Wednesday.

"We will witness significant growth in the demand for air travel as the
economies of Russia and the CIS continue to expand," said Craig Jones,
vice president of Sales for Russia/CIS, Boeing Commercial Airplanes,
according to a statement on the U.S. company's Web site during a major air
show outside Moscow.

Boeing said it forecasts that airlines in the region will take delivery of
about 470 planes in the Boeing 737 size range or its equivalent, worth US$30
billion (A22 billion), while the demand for twin-aisle jets such as the
Boeing 777 and 787 will total 110 airliners worth US$20 billion (A15
billion) over the 20-year period.

Most of the rest of the demand will be for smaller regional jets, it said on
the site.

With more people traveling as the 1991 collapse of the largely closed Soviet
Union recedes and economies grow, Jones said that domestic and international
air traffic in Russia and the CIS has increased by 36 percent over the last
decade. "Most indicators point toward continued economic growth for the
region," he was quoted as saying.

The CIS comprises Russia, Ukraine, Belarus, Armenia, Azerbaijan, Georgia,
Moldova, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan.

Russian airline Aeroflot has signed deals this year to buy 22 Boeing 787
Dreamliners and 22 Airbus A350 XWB.
NOTE: Boeing is a member of the U.S.-Ukraine Business Council
(USUBC) in Washington, D.C.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax-AVN military news agency website, Moscow,
BBC Monitoring Service, United Kingdom, Wed, Aug 22, 2007

ZHUKOVSKIY, Moscow region - Ukraine's Motor Sich signed an agreement
for the supply of 74 D-436-148 engines to power An-148 airliners at the
MAKS 2007 airshow in Zhukovskiy on Wednesday [22 August].

The deal was signed by Motor Sich's CEO Vyacheslav Bohuslayev and
Russian [aircraft leasing company] Ilyushin Finance's head Aleksandr Rubtsov.

"Under the contract, 74 air engines and 34 auxiliary power plants for An-148
aircraft will be shipped," Rubtsov said, noting that some of the engines and
auxiliary power units are to equip 12 An-148s bought by the state-owned
Rossiya transport company from Ilyushin Finance under a contract signed on
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Two investors - Italy's FVH and ISD, owned by Ukraine's Donbass
Industrial Union - have already expressed interest in privatization.
By Jan Cienski in Gdansk and Andrew Bounds in Brussels
Financial Times, London, UK, Wed, August 22 2007 03:00

Poland's Gdansk shipyard, cradle of the Solidarity union that helped bring
down communism, is fighting European Commission demands to slash
capacity to compensate for past aid.

The shipyard yesterday sent the Commission a report spelling out its planned
route back to viability, a plan that does not agree with the commission's
determination that it shut down two-thirds of its production capacity.

"We could close one slipway but closing two would mean the end of the
shipyard," Andrzej Jaworski, the yard's CEO, told the Financial Times. The
second slipway could be closed after the yard is privatised and the new
investor has built a floating dock, he added.

The yard is more than a business with 3,000 workers - it is a political
icon, especially for the Law and Justice party government and the leading
opposition Civic Platform party, both of which trace their roots to the
Solidarity movement. Solidarity was formed in 1980 after a sit-in at Gdansk
shipyard, then known as the Lenin shipyard, led by Lech Walesa, who went
on to become president.

With early elections looking increasingly likely this year, the shipyard's
future is likely to become a key political battle, especially if the
Commission is painted as wanting to cripple the yard.

The government of prime minister Jaroslaw Kaczynski has long placed large
symbolic value on the Gdansk shipyard. Mr Kaczynski has held a political
rally there and Mr Jaworski, a politician and a Kaczynski loyalist, was
appointed to head the yard last year.

Neelie Kroes, the European competition commissioner, is aware of the
political sensitivities but determined that Gdansk does not gain an
advantage over rivals that have already been through painful restructuring,
costing thousands of jobs.

A spokeswoman for Kroes said yesterday: "What the Commission wants to
see is not a closed Gdansk shipyard, but a genuine, far-reaching
restructuring of a company that would ensure its long-term viability."

The shipyard's plan does not appear to meet that definition. Indeed,
officials said yesterday it could increase capacity because of proposed
future investment.

"They should close capacity and then build back up. Poland wants to do it
the other way round [to avoid job losses]," said one official. "We have to
ensure a level playing field . . . for the sake of competitors."

Poland's three big shipyards, in Gdansk, Gdynia and Szczecin, have been in
and out of bankruptcy ever since the fall of communism in 1989, with much
of the problem coming from workers' and politicians' resistance to job cuts.
All are now controlled by the state.

The Commission, which says the yards have received Euro1.3bn ($1.8bn,
ё900m) in aid since Poland entered the EU in 2004, has already signed off
on restructuring plans involving capacity cuts for Gdynia and Szczecin.

Mr Jaworski says the Gdansk yard will be ready for privatisation in about
three months and two investors - Italy's FVH and ISD, owned by Ukraine's
Donbass Industrial Union - have already expressed interest.

At a time when other shipyards are taking advantage of soaring demand for
shipping, Gdansk could have a decent future if it is allowed to restructure,
he said.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

NTN, Kiev, in Ukrainian 1600 gmt 22 Aug 07
BBC Monitoring Service, United Kingdom, Wed, Aug 22, 2007

Ukrainian Prime Minister Viktor Yanukovych has said that there will be no
more meat and dairy wars between Ukraine and Russia as he has settled all
issues in this area during his 21 August visit to Moscow. The following is
an excerpt from a report by the Ukrainian NTN TV channel on 22 August:

[Presenter] It is up to a special commission to decide on the dismissal of
[Emergencies Minister] Nestor Shufrych, Ukrainian Prime Minister Viktor
Yanukovych has said. Such was the prime minister's reaction to the
president's demand that the minister be sacked.

The emergencies minister, as well as other cabinet ministers, came to
Poltava today for a visiting session of the Cabinet of Ministers. The key
issues on the agenda are the regulation of food prices and the preparation
of the housing utility sector for winter. [Passage omitted: repetition]

[Correspondent] Viktor Yanukovych is satisfied with his visit to Moscow.
There will be no more meat and dairy wars.

[Yanukovych] We have worked out a mechanism for cooperation with
Russia, and there will be no return to the so-called meat and dairy wars.
You will feel that almost everything has been settled by now.

If there are any practical issues that need to be dealt with for the sake of
peaceful functioning on the Russian food market, we will have to make all
the necessary steps together. [Passage omitted: repetition]

[At 1330 gmt, the Interfax-Ukraine news agency quoted the head of the
presidential secretariat, Viktor Baloha, as accusing Yanukovych's cabinet of
inability to deal with the increasing illegal import of meat.]
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
If you are receiving more than one copy of the AUR please contact us.
By Morgan Williams, SigmaBleyzer
President, U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Thursday, August 23, 2007
WASHINGTON - U.S. Ambassador to Ukraine, William Taylor, met
with fifty-five members and guests of the U.S.-Ukraine Business Council
(USUBC) at a working luncheon/roundtable on Monday, August 20th,
in Washington.
Ambassador Taylor brought some opening remarks and then answered
a series of questions regarding business, economic and political issues
raised by those at the luncheon.
Ukraine's Ambassador to the United States, Oleh Shamshur, also
attending the meeting, brought some remarks and participated in the
question and answer/roundtable discussion session.
Issues discussed at the luncheon/roundtable included: Ukraine's
accession to the WTO; Decree 31 which sets caps on gas prices; U.S.
OPIC's continued closure for Ukraine; preventing corporate raidership;
accelerating VAT tax refunds; repealing grain export restrictions; private
land purchases as of January 1, 2008; business corruption; judicial reform;
intellectual property rights violations; Millennium Challenge Corporation
program for Ukraine; need for a new economic/civil code; creating
nuclear waste storage facilities in Ukraine; creating an alternative source
of nuclear fuel; lack of energy conservation programs; the current
governmental and political climate and the upcoming Parliamentary
The U.S.-Ukraine Business Council announced it has doubled its
membership in 2007 and now has forty-five members. The Council
expects to have sixty members by the end of the year.
Company and organizations who had representatives at the luncheon
included: Ukrainian-American Environmental Association; Cisco Systems;
Vanco Energy Company; Heritage Foundation; Rand Corporation; Bunge
North America; Bracewell & Guiliani, LLP; International Monetary Fund;
Marathon Oil Corporation; The Coca-Cola Company; Heller & Rosenblatt;
Bechtel Corporation; U.S. Civilian Research & Development Foundation;
Westinghouse; Emerging Markets Group, Ltd; Open World Leadership,
Library of Congress; U.S. Department of State; PBN Company; Russian-
Ukrainian Legal Group; International Environmental Trading Group; Boeing
Company; Deere & Company; Center for Strategic and International Studies;
SASI; U.S.-Ukraine Foundation; Vital Voices Global Partnership;
SigmaBleyzer Private Equity Group; Lockheed Martin; Cargill; Global Trade
Development and Access International.
Ambassador Taylor returned to Ukraine on Wednesday to be in Kyiv for
the 16th Independence Day Celebration on Friday, August 24th.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Send in a letter-to-the-editor today. Let us hear from you.

Business Wire, Minneapolis, MN & Purchase, N.W., Mon, August 20, 2007

and PepsiCo (NYSE:PEP) today announced that they have completed
the joint purchase of 80 percent of Sandora, LLC ("Sandora"), the leading
juice company in Ukraine. The joint venture expects to acquire the remaining
20 percent interest in Sandora in November 2007.

"We're excited to extend our strong partnership with PepsiCo and begin
working with the Sandora team and its market-leading brands to capture the
growth opportunity in Ukraine," said Robert C. Pohlad, Chairman and Chief
Executive Officer of PepsiAmericas.

"We have a clear strategy to grow and expand our international business and
Sandora is a great fit, providing immediate scale
in a high growth market."

"We now serve consumers in over 10 countries in Central and Eastern Europe,
in both developing and emerging markets. Combined with our scale and
profitability in the U.S., we have a balanced portfolio of markets that
position us well for long term sustainable growth."

As previously announced, PepsiAmericas expects the acquisition to be $0.02
to $0.03 dilutive in 2007. This is included in its previously announced full
year earnings per share outlook.

The Sandora transaction is expected to add approximately 4 percentage points
to volume, lower net pricing by 2 points and cost of goods sold per unit by
1 point, while adding a point to selling, delivery and administrative

The company forecasts that Sandora will add an estimated 1 percentage point
to operating profits, driving estimated reported operating profit growth to
15 to 18 percent.

This operating income contribution in 2007 will be offset by higher related
interest expense and the minority interest recorded primarily for PepsiCo's
40 percent interest in the joint venture. PepsiAmericas will consolidate the
joint venture into its financial results.

The transaction is not expected to have an impact on PepsiCo's previously
announced earnings per share guidance for 2007.
About Sandora
Sandora has established itself as the leader in the high growth juice
category with a range of distinctly positioned brands that represent
approximately half of the total juice volume consumed in Ukraine.

With over 3,500 employees, Sandora has a powerful sales and distribution
organization and two modern production facilities located in Nikolaev.
About PepsiAmericas
PepsiAmericas is the world's second-largest anchor bottler in the Pepsi
system and in the U.S. serves a significant portion of a 19 state region,
primarily in the Midwest.

Outside the U.S., the company has operations in Europe and Caribbean,
specifically in Poland, Hungary, the Czech Republic, the Republic of
Slovakia, Romania, Ukraine, Puerto Rico, Jamaica, the Bahamas, and
Trinidad and Tobago.

The company also has distribution rights in Moldova, Estonia, Latvia,
Lithuania and Barbados. The company serves areas with a total population of
more than 150 million people. PepsiAmericas manufactures, distributes and
markets a broad portfolio of PepsiCo and other national and regional
beverage brands. For more information, please visit
About PepsiCo
PepsiCo (NYSE:PEP) is one of the world's largest food and beverage
companies, with 2006 annual revenues of more than $35 billion. The Company
employs approximately 168,000 people worldwide, and its products are sold in
approximately 200 countries.

Its principal businesses include: Frito-Lay snacks, Pepsi-Cola beverages,
Gatorade sports drinks, Tropicana juices and Quaker foods. The PepsiCo
portfolio includes 17 brands that generate $1 billion or more each in annual
retail sales.

PepsiCo's commitment to sustainable growth, defined as Performance with
Purpose, is focused on generating healthy financial returns while giving
back to communities the company serves. This includes meeting consumer needs
for a spectrum of convenient foods and beverages, reducing the company's
impact on the environment through water, energy and packaging initiatives,
and supporting its employees through a diverse and inclusive culture that
recruits and retains world-class talent. PepsiCo is listed on the Dow Jones
North America Sustainability Index. For more information, please visit
Cautionary Statement
This release contains forward-looking statements of expected future
developments, including expectations regarding anticipated earnings
associated with the Sandora acquisition.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Western Ukraine is trying to become Europe's answer to the challenge of
cheap Chinese factories despite bureaucratic red tape and political turmoil.
Companies like Jabil and Flextronics are investing in this area.

Evertig, Ekero, Sweden, Tuesday, August 21, 2007

Zakarpatye region is divided into 18 administrative territorial units,
including 5 regional administrative centers (Uzhgorod, Mukachevo, Khust,
Beregovo, and Chop), and 13 districts.This province is based in the
Uzhgorod area and the province is known as Transcarpathia.

Jabil is building a 280,000-square-foot factory that will employ 2,400. The
company expects to invest $90 million in the region and produce 300,000
cell phones per week.

EMS provider Flextronics is building a plant in the town called Mukachevo.
The investment is expected to be worth $ 29 million.

Zakarpatye region became a focus of attention for such well-known
transnational companies like Volkswagen, Skoda, Audi , Fischer, Philips,
Hewlett Packard, Flextronics, TDK, Leoni, Delphi, Yazaki, Jabil, Le-Go,
Henkel, and others, which are already running their investment projects in
the region.

The area in Western Ukraine is known for its poverty and high unemployment.
The region wants to attract foreign companies to invest in the region by
escaping rising wages, taxes and real estate costs in neighboring countries.

Analysis of the region's economic development in the last few years proves
sufficient influence of investments upon its growing development rates.

As of January 1, 2007, according to data of the statistics department, the
region has 773 enterprises running with direct foreign investments. In
general, over the period of foreign investing the region received USD 298.2
mn of direct foreign investments.
Per capita figure makes USD 239.7 and by this indicator the region ranks
ninth among all regions of Ukraine.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Evertiq, Ekero, Sweden, Tueday, August 21 2007

EMS provider Flextronics is building a plant in Mukachevo, Ukraine. The
investment is expected to be worth $ 29 million, and the new plant will
employ 3000 people.

The production date is still unknown, according to the Transcarpathian
Investment Agency in Uzhgorod, Ukraine. Flextronics officials declined to
comment, edn reports.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax-Ukraine, Kyiv, Ukraine, Tue, August 21, 2007
KYIV - Ukrainian President Viktor Yuschenko will participate in events
marking Ukraine's Independence Day on Friday, August 24.

At 0900, Yuschenko and his wife will participate in a prayer for Ukraine at
St. Sophia Cathedral, the presidential press service has reported.

At 1000, the president will deliver a speech at Sofiyska Square. Yuschenko
will also take part in a ceremony to present awards to those who made a
significant contribution to Ukraine's development and a presentation of
passports to those young people from all Ukrainian regions who were born
on August 24, 1991.

At 1200, events with Yuschenko's participation will continue on Independence
Square. At 1930, a ceremonial reception on the occasion of Ukraine's
independence will be held.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
The three great Ukrainian coaches of their generation - Valeriy
Lobanovskyi, Yevhen Kucherevskyi and now Viktor Prokopenko
- all dead, all cut down before their time.

Jonathan Wilson, Guardian Unlimited, London, UK, Tue, Aug 21, 2007

So that's it. They're all gone. The three great Ukrainian coaches of their
generation - Valeriy Lobanovskyi, Yevhen Kucherevskyi and now Viktor
Prokopenko - all dead, all cut down before their time.

As a journalist, you can get blase about death. Footballers or coaches die,
you go through your old notebooks and make a couple of calls, you check
a few facts, you write their obituaries, you move on.

On Sunday, though, when I read the email saying Prokopenko had died the
night before, it was like a blow to the pit of the stomach.

For one thing, I couldn't quite believe he was as old as 62; for another,
the manner of his death, slipping outside a barber's shop and banging his
head, seemed cruelly trivial. And for a third, Prokopenko was an open and
ebullient man, a great interviewee, and somebody who once did me an
enormous favour.

Prokopenko was the least successful of the great trinity, but he was also
the one whose side played the most consistently entertaining football.

Lobanovskyi, who died of a stroke in May 2002, won eight Soviet titles, six
Soviet Cups, five Ukrainian titles, three Ukrainian Cups and two European
Cup-Winners' Cups; Kucherevskyi, killed in a car crash last August, took
Dnipro Dnipropetrovsk to the Soviet title in 1988; but Prokopenko was the
eternal runner-up.

He did win the Ukrainian Cup with Chornomorets in 1992, but he was more
famous for finishing second. His Rotor Volgograd side lost in the 1995
Russian Cup final - although they did

There was no great outcry against Prokopenko, but there was a sense that he
was at times perhaps a little too aggressive. That, though, suited Shakhtar
fans who, rather like Newcastle under Kevin Keegan, revelled in the idea
that they played football in what they saw as the right way.

They were honest, blue-collar, salt-of-the earth, as opposed to Dynamo,
whose style, based around Lobanovskyi's statistics, was seen as drier,
somehow less noble.

Still, there comes a time when you have to win. Shakhtar and Dynamo had
been all but inseparable through the first half of the 2001-02 season.

Shakhtar struck twice in the last 10 minutes to draw 2-2 away at Dynamo in
the second game of the season, and the following week a late Julius Aghahowa
goal gave Shakhtar a 2-1 win at Polihraftechnica Olexandria, while Dynamo
were held by Dnipro.

From then on, though, they matched each other win for win. When Shakhtar
were held at CSKA, Florin Cernat missed a late penalty that would have given
Dynamo victory at Metalurh Donetsk. Come October and the last game before
the winter break, Shakhtar still led Dynamo by two points.

Shakhtar were away to Vorskla Poltava. I arrived on the morning of the game
on a night-train from Kyiv, and interviewed Prokopenko in his hotel.

Perhaps because I was foreign, he was astonishingly forthright, talking at
length about the pressure of Dynamo's pursuit and his continuing belief in
attacking football.

That night, in atrocious conditions, Shakhtar took an early lead, piled
forward in search of a second, were caught on the break, and ended up
drawing a game they should have won at a canter.

As news came through that Dynamo had come from behind to win away at
Zakarpattya, the small cluster of travelling fans set fire to the plastic

I'd arranged to speak to Aghahowa after the game, but when I approached him
in the corridor outside the dressing-room he brushed by me, muttering "not
now, not now" over his shoulder. Prokopenko, though, as he passed on his
way to the mandatory press conference, leaned close and murmured, "I'm

And so it was that, by the time the Ukrainian press got out of an emotional
press conference, I'd already broken the news of Prokopenko's resignation
through, the website I worked for at the time.

A little later that night, as Ukrainian sports editors panicked, we were
able to publish the interview I'd done earlier in the day, and so seemed
remarkably ahead of the game. A small thing perhaps, but on such minor
triumphs are a journalist's self-esteem built.

Prokopenko certainly remembered, and we talked about that night the last
time we met, a little over three years ago. Appropriately, it was at a
reserve game between Shakhtar and Chornomorets, the team where
Prokopenko had established his reputation as a player.

It was a dire goalless draw but he was as bullish as ever, laughing at the
tedium of the football, and insisting, half-jokingly, that he never got the
credit he deserved for the success of that 2001-02 side, which, under Nevio
Scala, went on to break Dynamo's monopoly on the title, finishing the season
unbeaten. That was, as he said, his team - just guided by a more pragmatic,
less fretful soul.

This feels like the end of an era. Oleh Blokhin, Oleksiy Mykhailychenko or
Oleh Protasov, perhaps, may come in time to be regarded as great, but none
are anywhere near the class of Lobanovskyi, Kucherevskyi or Prokopenko yet.

And without Prokopenko's booming laugh, Ukrainian stadiums will be a quieter
place. He will be missed.
[return to index] Action Ukraine Report (AUR) Monitoring Service]
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Interfax-Ukraine news agency, Kiev, in Russian 1220 gmt 22 Aug 07
BBC Monitoring Service, United Kingdom, Tue, Aug 22, 2007

KIEV - The leader of the Party of Regions' parliamentary faction and the
coordinator of the parliamentary majority in the Supreme Council
[parliament] of the fifth convocation, MP Rayisa Bohatyryova, has called on
President Viktor Yushchenko and the [propresidential] Our Ukraine party to
attend an extraordinary parliamentary session on 4 September to consider the
abolition of immunity [from prosecution] for MPs.

Bohatyryova was speaking in an exclusive interview with the Interfax-Ukraine
news agency on Wednesday [22 August].

Bohatyryova said that she is going to proceed with the preparation for the
emergency session of the Supreme Council of Ukraine.

"We are ready to abolish immunity for MPs even today. I am calling on the
Ukrainian president to back our initiative to amend the constitution at a
special meeting during the 4 September extraordinary session, and to attend
the session, together with his political force," she said.

She stressed that Our Ukraine's refusal to attend the session would mean
that this political force, which is urging the abolition of immunity for
MPs, is "insincere, that they are manipulating society's and that they are
ready to do anything for the sake of power".

"If we turn out to be hostages to political sabotage by the Yuliya
Tymoshenko Bloc and the Our Ukraine-People's Self-Defence bloc, we
will give a preliminary approval to an appropriate constitutional bill on the
abolition of the untouchable caste in Ukraine in accordance with the
Ukrainian constitution, laws and the Supreme Council's rules of procedure,
and will refer it to the Constitutional Court to get its conclusions,"
Bohatyryova said.

She added that a decision on the abolition of all benefits for state
officials of all levels, including the sale of their state dachas [country
houses] at auctions and on a requirement for them to use Ukrainian-made
cars as their official vehicles, instead of Mercedes, would be adopted
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
"Ukrainian Breakthrough: Towards a Fair and Competitive Country"

Inform Newsletter, Issue 43, BYuT Party, Kyiv, Ukraine, Wed, Aug 8, 2007

KYIV - Last week, BYuT unveiled its blueprint for Ukraine's strategic
development. In a document entitled "Ukrainian Breakthrough: Towards a Fair
and Competitive Country," the faction conveyed 12 provisions, representing
the basis of its electoral programme.

"Our objective is to set high goals and to propose pragmatic and simple
ways to achieve them," said Yulia Tymoshenko, BYuT's leader.

The provisions are wide ranging and address issues as diverse as the
Constitution, through to attracting foreign investment and greater energy

"The Ukrainian Breakthrough is key to our country's future prosperity,"
said Ms Tymoshenko, noting that the programme "is designed to put the
country on a fast-track." She expressed her hope that it would "be used by a
new and professional government as the foundation for its work."
Summary of the 12 provisions:
[1] Constitutional Breakthrough: proposals for a national referendum to
approve and adopt a new Constitution. The people would have a direct say,
deciding on far ranging issues such as the type of government (whether
presidential or parliamentary); the elimination of parliamentary privileges
and deputy immunity; the ability to strip corrupt deputies of their
mandates; expand powers for regional government, etc.

[2] Judicial Breakthrough: a judicial reform programme, including measures
to protect the judiciary from political, administrative and corrupt
influences. A key proposal is to raise salaries for judges and abolish a
requirement for them to hear specific cases. Also envisaged is a legal aid
scheme for poor citizens.

[3] Information Breakthrough: reforms to remove media bias. The package
includes the creation of public broadcast television; greater transparency
and disclosure of ownership of media interests; the establishment of
agreements between owners of media outlets and journalists in order to
facilitate open and honest editorial policy; widespread internet
availability, etc.

[4] Anti-corruption Breakthrough: a systematic programme to combat
corruption. Its cornerstone is less government interference in the economy
and a huge reduction in bureaucracy.

Measures include establishing a special committee to analyse legislation and
statutory acts with a view to eliminating avenues for corruption; the sale
of non-agricultural land by auction; providing the parliamentary opposition
with control of the Chamber of Accounts; instigating declarations of
expenditure for all public employees; stiffer penalties for corruption
offences and the reintroduction of anti-smuggling initiatives.

[5] Demographic Breakthrough: a programme to increase the population and
provide improved social welfare services and payments.

Key measures include obligatory medical insurance coupled with free state
medical services for those that need it; affordable medication and a rural
doctor programme; increased payments for each newborn child (Hr 10,400 for
the first, not less than Hr 15,000 for the second and Hr 25,000 for the

In addition, there are proposals for increased baby care allowances and
long-term low interest loans for young families.

[6] Intellectual Breakthrough: an initiative to reverse the brain drain by
restoring simultaneously the status, and raising the standards, of the
education system. Measures include incentives for investment in professional
and higher education, and in research and

Businesses will be supported to invest in production technologies and there
will be free competition in high tech industries (particularly Internet and
mobile). Other measures include a system of Intellectual Property Rights and
the goal to put every household online.

[7] Transit Breakthrough: a package of measures to utilise Ukraine's
geographical position as an east-west transit country. The programme
envisages building new oil and gas pipelines and expanding public-private
partnership investment to improve road, railways and airports whilst
liberalising the regime for the transit of passengers and goods.

[8] Business Breakthrough: a concerted effort to address the imbalance
between large enterprises, which dominate the business sector, by encouraging
the growth of wealth creating small and medium-sized enterprises.

The programme proposes to reduce the tax burden through the adoption of a
new tax code while expanding assessment, minimising tax remissions and
abolishing VAT.

Other growth measures include simplifying the process to set up and
administer businesses and establish lower business lending rates in line
with European levels.

Also proposed are measures to liberalise banking and insurance services and
to encourage longer-term lending. Shareholder rights will be protected, the
permit system reformed and bureaucracy cut.

[9] Energy Efficiency Breakthrough: a raft of strategic initiatives, core to
which is to overturn the nation's dependence on monopolies for importing
energy, while strengthening collaboration and coordination of energy policy
with the EU.

Policies include integration with the European market for the supply and
consumption of electricity and measures to reduce oil and gas consumption
while increasing utilisation of brown coal and the production of synthetic

Completion of the Odessa-Brody-Plotsk (Gdansk) transit pipeline and the
building of a gas transit pipeline linking the Caspian (running through
Azerbaijan, Georgia and the Black Sea) is proposed, as well as surveys and
hydrocarbon extraction in the Black Sea and Azov Sea.

[10] Investment Breakthrough: the goal is to make Ukraine a highly
attractive investment proposition. Measures include tightening legislation
and legal contradictions which currently hinder investment.

Procedures will be streamlined to allocate land under long-term leases to
investors who will build new and hi-tech facilities in Ukraine.

Proposals include transparent and open privatisations and tender processes,
while a network of regional ombudsman will be established to simplify
processes for obtaining import certificates.

Special emphasis will be made to attract investment in the power sector and
all new legislation enacted will be in accordance with WTO practices.

[11] Construction Breakthrough: a programme to encourage development of this
vital sector. Proposals include a system of mortgage lending with low rates
for house purchases.

Policies include offering tax breaks for building industrial facilities,
while government targets will be set for social housing projects. Wider
powers will be given to regional governments with targets for construction
of housing and industrial facilities.

[12] Agricultural Breakthrough: a programme aimed at establishing a stronger
more profitable and environmentally responsible agricultural sector. Crucial
measures include the availability of development funds, agricultural
exchanges, insurance funds and land-banks.

Other initiatives involve the promotion of agricultural products to overseas
markets. Another goal is to facilitate a functioning land market.
Agricultural producers will have access to low interest loans, with
incentives put in place for the development of cooperative banks and credit
unions in rural areas.

Viktor Baloha, President Viktor Yushchenko's chief of staff, welcomed the
programme describing it as a "clear and intelligible" signal to society
about the intentions and priorities of the bloc.

"The announced programme is more than just the usual electoral declarations.
To my mind, this is more proof that Ukraine's democratic forces do not speak
the language of pseudo-exposing criticism and blatant lies with their
people, but offer them an effective agenda to improve the country," said Mr

He went on to say that the BYuT programme, together with plans by Our
Ukraine - People's Self-Defence (OUPSD), may be enacted in a coalition
between the two blocs after the election.

Mr Baloha's words go some way to counter speculation that OUPSD is
considering forming a coalition with the pro-Russian Party of Regions after
the election. Last week OUPSD diffused the situation saying that the best
coalition would be one with BYuT.

When asked if the prime minister's job was her goal in such a coalition, Ms
Tymoshenko responded, "The position does not matter, what matters is
breaking the political deadlock so that this country can really develop and

"People want economic stability but with transparency, they want a
government that is not self-serving but does its utmost to generate and
safe-guard jobs, increase investment and provide a decent standard of
living. They want a welfare system that looks after the needy and a system
of good healthcare.

They want schools, universities and institutions that are not corrupt and a
judicial system that is fair, honest and dependable.

They want elected officials that are accountable and work for them - who
won't be busy in office lining their pockets. In short they want effective,
accountable government. That is what matters. That is what we will deliver."
Questions or comments? E-mail us at
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

BYuT Newsletter, Kyiv, Ukraine, Wed, 22 August, 2007

Kyiv authorities appear to be attempting to thwart the bloc of Yulia
Tymoshenko (BYuT) from campaigning and last week started to dismantle
the opposition force's advertising in the city.

On Friday a group of unidentified persons followed by police cars began
taking down "The Ukrainian Breakthrough" advertising placed by BYuT
on Paton bridge. In an hour some 40 advertisements were removed.

The activities soon attracted the interest of journalists who filmed the
illegal removal of the advertisements. Once spotted, the group and police
retired sheepishly.

"The time of Kuchma is back. They are ready to use any methods to get rid
of us," said Yulia Tymoshenko, Leader of the Opposition and of her eponymous
bloc. "Kyiv Mayor Leonid Chernovetsky gave this illegal order. Now we are to
guard our billboards."

Ms Tymoshenko said that she would appeal to the courts, adding that Mr
Chernovetsky is merely fulfilling the demands of Ukraine's Prime Minister,
Viktor Yanukovych.

Prior to the removal of the billboards, BYuT was warned by advertising
agencies about pressure being exerted by the City's administration, which
included refusing to provide services for placing advertising and threats to
withhold business licenses.

Mr Chernovetsky, the Mayor of Kyiv is a controversial figure who is dogged
by persistent rumours connecting him to bribery, administrative pressure,
corruption and intimidation.

Artem Skoropadsky, a journalist from Kommersant-Ukraine, who has been
critical of Mr Chernovetsky, was beaten last week on the porch of his house
in the Obolon district.

Ms Tymoshenko has drawn attention to the removal issue on Ukraine's
Channel 5 TV. The opposition bloc also appealed to international monitoring
organisations, alleging that the Party of Regions and its allies are making
a concerted effort to subvert early elections in Ukraine and violate the
principle of equality for all political forces in the electoral process.

BYuT is appealing to advertising agencies not to give in to threats and
promises that those responsible for the removal will be subject to the full
force of the law.

But as of now, BYuT is resorting to party activists and people passing in
their cars to report any attempts to remove billboards.

Also on Friday, the Kyiv election headquarters of Ms Tymoshenko's ally,
Oleksandr Bryhinets was broken into. The burglars were selective and stole
only a computer containing election information.

"I am sure this robbery was politically motivated. It happened on the same
day when authorities were dismantling our advertising. They plan to declare
a real war against the opposition in Kyiv," said Mr Bryhinets.

Also this month BYuT's local headquarters in the city of Malyniv,
Zhytomirsky region was burgled. Once again the burglars seemed intent on
obtaining election information, stealing digital storage media while leaving
other valuables behind.
For further information or comments please contact Natasha Lysova:
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Writer analyses opposition leader's decision to join European right

ANALYSIS & COMMENTARY: By Viktor Chyvokunya
Ukrayinska Pravda website, Kiev, in Ukrainian 7 Aug 07
BBC Monitoring Service, United Kingdom, Tue, Aug 21, 2007

Opposition figure Yuliya Tymoshenko rapidly changed her priorities and
decided to join the conservative European People's Party recently and not
the Socialist International, Viktor Chyvokunya says in a report posted on a
popular Ukrainian website. He said that Tymoshenko did not hold any talks
with the parties that formed her bloc for the coming election.

Tymoshenko confirmed to the site that she would be on the left wing of the
European People's Party but Chyvokunya concluded by saying that the move
will mean Tymoshenko will have to alter her views on policies or risk
eventual exclusion from the European People's Party.

The following is the text of the report by Viktor Chyvokunya, entitled
"Tymoshenko changes course", posted on the Ukrayinska Pravda website
on 7 August; subheadings inserted editorially:
Yuliya Tymoshenko has carried out a revolution within the bloc named after
her. To date the Yuliya Tymoshenko Bloc [YTB] has always been presented
as a leftist political force.

However, last Sunday [5 August] Tymoshenko motioned a suggestion that was
voted on without any discussion, which turn everything upside down in YTB

The YTB congress that convened last Sunday was attended by a VIP guest from
Brussels - the president of the European People's Party, Wilfred Martens. He
invited Tymoshenko's bloc to join the club of the European People's Party.

After Martens' presentation, [senior YTB figure] Oleksandr Turchynov put to
the vote whether or not the Fatherland Party [led by Tymoshenko] should
acquire the status of an observer in the European People's Party.

This looked quite odd, as this was done at a congress of the Yuliya
Tymoshenko Bloc, while the presentation was addressed specifically to the
Fatherland Party.
However, the participants of the meeting, without a thought about the
consequences of this decision, unanimously supported a decision to integrate
into European People's Party, that is, to turn Tymoshenko into a
conservative politician. To date, Tymoshenko has had nothing in common
with the European right.

It is also known that a year ago, she announced her intention to join an
opposing body - the Socialist International. "We will surely become a member
of an international association of parties. We are looking at the Socialist
International as this is the most serious association of parties,"
Tymoshenko said about her intention to become a Socialist in late May 2006
at the "congress of YTB victors".

Still earlier, at the beginning of the previous election campaign [February
2006], Tymoshenko claimed she adhered to the ideology of solidarism, which
also has a great deal in common with leftist ideas.

Furthermore, Tymoshenko's bloc includes the Social Democratic Party whose
leader is Vasyl Onopenko's son-in-law, Yevhen Korniychuk. The ideological
roof for Social Democrats in the world is also the Socialist International.

Another YTB member are the liberals led by [Viktor] Pynzenyk, who are not
joining the European People's Party but the Liberal International.

Add to this the fact that YTB representatives in the Parliamentary Assembly
of the Council of Europe belong to liberal (Olena Bondarenko and Oleksandr
Feldman) and socialist factions (Hryhoriy Nemyrya) and not the European
People's Party.

Tymoshenko's recent ideological summersault can be explained by the fact
that the European People's Party is, in fact, the most powerful political
association in Europe - this is the party of French President Nicolas
Sarkozy with whom Tymoshenko began to develop relations two years ago,
German Chancellor Angela Merkel, European Commission President Jose
Manuel Barroso and the president of the European Parliament, Hans-Gert

Yet, the prospect of turning all these political players into allies is not
a reason for such a rapid change of political views.

Moreover, the Socialist International brings together equally powerful
personalities. To date, the status of observers in the European People's
Party has been Our Ukraine and [Borys] Tarasyuk's People's Movement
Ukrayinska Pravda's sources say that negotiations about Tymoshenko's
joining the European People's Party lasted for two months.

However, in Tymoshenko's words it was not Fatherland that applied for
membership of the European People's Party but the latter invited the most
charismatic Ukrainian politician to join it.

Martens was very surprised to learn that not so long ago Tymoshenko
proclaimed that her party's course was to join the Socialist International.
"I have no confirmation of this information; I didn't know this," said the
leader of the European People's Party answering a question from Ukrayinska
Pravda at the YTB congress on Sunday.

Integration into the right was backed in Tymoshenko's team by [MP] Hryhoriy
Nemyrya. In the internal struggle his opponent was former Socialist Party
faction member Yosyp Vinskyy, who advocated joining the Socialist

There were attempts to discuss this issue at the level of the YTB
leadership. Namely, statutory materials of both organizations were handed
out but in the context of the [coming] early election no-one wished to
consider such a minor problem.

As a result, it looks like the socialist idea in Tymoshenko's bloc lost and
the rightist won. Integration into the European People's Party is a fiasco
for Vinskyy who is, in fact, the third most important person in Tymoshenko's
team today. From his answers it can be concluded that he is thinking about
leaving YTB.

In his interview with Ukrayinska Pravda, Vinskyy confirmed that negotiations
had been held regarding Fatherland joining the Socialist International but
it never came to a membership application.

"Today, the party decided to join the European People's Party. As you saw,
it was unanimously supported by the congress. They have the right to do so.
And I have the right to decide whether to stay with this party. When they
receive their membership status then I will make up my mind," Vinskyy said.

He also pointed to an obvious discrepancy: "I am a social democrat. Yuliya
Tymoshenko is a leftist politician and the European People's Party is a
association of rightist Christian parties."

It follows logically that having started the process of joining the European
People's Party Tymoshenko will have to correct her ideological messages -
for example, to protect the inviolability of private property instead of
demanding a review of unfairly privatized facilities.

However, Yuliya Tymoshenko herself told the Ukrainska Pravda website that
her appearance in the European People's Party is an exotic phenomenon.

"What are your personal views?"
"Centre-left, of course," was Tymoshenko's confident answer.
"Then you need to join the Socialist International!"

"Listen, the European People's Party has a left wing that includes agrarian
parties, peasant parties and social democratic parties. This leftist wing of
the European People's Party is much further to the left than the Socialist
Tymoshenko did not lie. But she didn't say the whole truth either. The
European People's Party really does include the Agrarian People's Union of
Bulgaria. However, it positions itself as a "centre-right" force.

Portugal is represented in the European People's Party by social democrats
that are so only in name and, in fact, they are conservatives, while in this
state the leftist force is the Socialists. After the 1974 revolution, all
parties in Portugal sought to add something leftist to their brands and this
causes confusion.

Portuguese social democrats used to be called the People's Democratic
Party. The leader of the Portuguese social democrats is Jose Barroso - the
president of the European Commission and a person with rightist views.

It is difficult to forecast what Tymoshenko will do in the future. Even if
she receives the status of a full member of the European People's Party this
status will have to be confirmed by actions on the basis of conservative

Thus, she will have to protect not a hired worker but the owner of the
enterprise. She will have to speak against abortion and in favour of
reducing unemployment benefits.

Her readiness to take steps which are unpopular with ordinary people is not
compatible with all Tymoshenko's previous activities in politics. If
Tymoshenko fails to change her stance then her actions that run contrary to
rightist ideology could become grounds for her expulsion from the European
People's Party.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Ukrainian propresidential bloc's election list analysed

Ukrayinska Pravda website, Kiev, in Ukrainian 13 Aug 07
BBC Monitoring Service, United Kingdom, Tue, Aug 21, 2007

There are three large groups in the election list of the propresidential Our
Ukraine-People's Self-Defence bloc: President Viktor Yushchenko's, tycoon
Ihor Kolomoyskyy's and former Interior Minister Yuriy Lutsenko's, a popular
website has said. It profiled the three factions and other smaller groups in
the bloc.

The following is the text of an article by Viktor Chyvokunya entitled "The
list of Our Ukraine-People's Self-Defence: quotas of Pryvat, Baloha,
Lutsenko, 'Luzhniki group'" and published on the Ukrayinska Pravda website
on 13 August; subheadings are as published:

The Orange bloc moves towards the early election under the slogans of
cancelling people's deputy immunity, with the money of new sponsors of the
project and with oaths not to form a grand coalition [with the Party of

A week ago, the list of Our Ukraine-People's Self-Defence was agreed and
voted at a congress, however so far it has not been published. One of the
delegates of the congress gave his copy of the list to Ukrayinska Pravda,
otherwise we would not have been able to get hold of it.

According to calculations inside the headquarters, about 100 positions in
the list are expected to make it to parliament. This means that the Our
Ukraine-People's Self-Defence will have to receive a little over 19 per cent
of votes in the election, considering the distribution of votes given to
outsider parties.

Should some deputies move to executive offices, those below the 100 mark
will become MPs. Contrary to the list of the Party of Regions, where the
people of [tycoon] Rinat Akhmetov dominate, the list of the Our
Ukraine-People's Self-Defence bloc can be divided into several sectors.
Tretyakov-Kolomoyskyy group
The president's former first aide, Oleksandr Tretyakov, who waited for hours
in [the head of the presidential secretariat, Viktor] Baloha's reception for
a meeting, was in 59th position.

The president's former press secretary, Iryna Herashchenko, who is now in
charge of the UNIAN news agency, which Kolomoyskyy passed on to
Tretyakov, will manage it.

Tretyakov's friend, Eduard Zeynalov, is 76th. He is the head of the
Kirovohrad regional headquarters of Our Ukraine-People's Self-Defence.

Tretyakov's impact turned out to be quite limited. His close associate Yuriy
Ruban was in 195th position and Tretyakov's long-time friend and partner,
Volodymyr Karetko, a former first deputy head of the Ukrnafta board of
directors, was as low as 331st. However, the head of Ukrnafta, Ihor
Palytsya, is in 68th place.

He is a creature of Ihor Kolomoyskyy, who mediates contacts between the
oligarch and Viktor Baloha. Palytsya is a guarantee that the orange camp
considers interests of the Pryvat group in exchange for all kinds of
assistance from this financial-industrial group.

Lawyer Andriy Bohdan, who cooperated with Yushchenko in the times of the
Orange Revolution, is in 93rd place. He represents the Judicial Advisers
firm, which used to be called Pukshyn and partners, named after the deputy
head of the presidential secretariat, Ihor Pukshyn.

This structure was the Cabinet of Minister's lawyer in the case of the
privatization of the Nikopol ferroalloys plant, where the interests of
Tymoshenko and Kolomoyskyy coincided. The lawyers said then that they
provided services to the Cabinet of Ministers for free.

Bohdan was included in the bloc's list on the quota of People's
Self-Defence. Contrary to Viktor Baloha's announced ban for state officials
from the presidential secretariat and governors to run for parliament, there
are some exceptions.

Roman Tkach, the governor of Ivano-Frankivsk Region, is in 54th position in
the list. This region is the second strategically important one after
Dnipropetrovsk Region for the Pryvat group.

Here they own an oil refinery, a regional energy distributing company and a
ski resort. When after the revolution Konstantin Grigorishin tried to change
the management at regional energy distributing companies, Tkach came
personally to restore Kolomoyskyy's managers at the enterprise.

It is not ruled out that Tkach was put forward as parliamentary candidate
for Pryvat to be able to have an even more loyal governor in Ivano-Frankivsk
Lutsenko-Babakov group
The biggest surprise in the list of Our Ukraine-People's Self-Defence was
former Kiev mayor Oleksandr Omelchenko. He is part of Lutsenko's quota.

It is expected that Omelchenko will support the former interior minister
[Lutsenko] in mayoral elections, which the orange camp strives to hold next

There is a forecast that Omelchenko is going to be a deputy head of the Kiev
headquarters of Our Ukraine-People's Self-Defence. This idea is supported by
the head of Our Ukraine's Kiev branch, Mykola Martynenko.

People's Self-Defence leader Yuriy Lutsenko is not just the number one in
Our Ukraine list. He filled the list with a large group of his supporters.
Some of Lutsenko's people are directly linked with the Russian Luzhniki
group of Russian MP Aleksandr Babakov and influential entrepreneur Mikhail

Number 17 in the list is Ivan Spodarenko, the owner of Silski Visti
newspaper, which is the most popular publication in provincial areas.

Spodarenko left the Socialist Party and joined Lutsenko, who managed to find
sponsors for the newspaper. According to some sources, people related to
Babakov helped the publication.

Oleksandr Cherevko, one of the Silski Visti managers, is in 137th position
in the list. Number 41 in the list is Hennadiy Moskal, who used to be
Lutsenko's deputy [interior minister] and was involved in the investigation
of the case of [Party of Regions MP] Borys Kolesnykov. It is now a matter of
honour for the head of the Party of Regions election headquarters
[Kolesnykov] to bring him to book.

Moskal is close to Lutsenko and at the same time to Davyd Zhvaniya. When
Zhvaniya was in charge of the Our Ukraine headquarters in Luhansk, Moskal
was the governor there.

When Zhvaniya was the emergency situations minister, he appointed the head
of the Crimean directorate of the ministry Serhiy Vasylenko, who used to be
Moskal's office manager when Moskal was in charge of the State Committee for
Migration. Serhiy Vasylenko now occupies 77th position in the list of the
propresidential bloc.

No 49 is Kateryna Lukyanova, head of Lutsenko's organizations in Vinnytsya,
such as Anticriminal Choice and Forward Ukraine. Before that she was in
charge of the Socialist Party in Vinnytsya and Moroz and Lutsenko even came
down to christen her daughter.

Serhiy Kharovskyy, former head of the internal security department of the
Interior Ministry in times when it was headed by Lutsenko, holds 69th
position. Work in police structures is not the only element in Kharovskyy's

He once was the director of a combine plant in Kherson following his links
with Ukrahromashinvest structures. When Viktor Pinchuk received control of
Ukrahromashinvest, he removed Kharovskyy and after the revolution Kharovskyy
removed Pinchuk from Ukrahromashinvest.

Kharovskyy also was a member of the Ukrnaftoprodukt supervisory board in
times when the structure was part of the sphere of interests of Andriy
Derkach [businessman who now heads the Enerhoatom nuclear energy company].
Sources in the People's Self-Defence say that Derkach and Kharovskyy split
several years ago.

In addition, Kharovskyy was the head of the Khersonnaftoprodukt supervisory
board. MPs from the Party of Regions, Lisin and Zlochevskyy, and a Russian
group Alyans are shareholders of Khersonnaftoprodukt.

Kharovskyy was formally nominated to the election list of the
propresidential bloc by the Forward Ukraine party. He is positioned as a
member of the coordination council of the nongovernmental organization
Anticriminal Choice.

Yuriy Hrymchak, a former deputy governor of Donetsk Region and earlier the
head of Donetsk regional branch of the Socialist Party of Ukraine, where
Lutsenko appointed him instead of himself, is in 73rd place in the list.
After Lutsenko broke up with the Socialists and moved to Forward Ukraine,
Hrymchak became the Forward Ukraine leader in Donetsk Region.

Oleksandr Bobylyov, a former head of Dnipropetrovsk police in Lutsenko's
times, is in 81st place. As a leader in a Ukrainian region which is crucial
for the Pryvat group, he built relations with Kolomoyskyy, although,
according to sources in People's Self-Defence, the relations "transformed
into antagonism".

Yuriy Lutsenko's brother, Serhiy, the founder of the Anticriminal Choice, is
in 85th place. Orest Drul, People's Self-Defence spin doctor, who was hired
by Taras Stetskiv last autumn to make up the concept of this project which
was then called "people's justice", is No 101. Taras Stetskiv himself is in
29th position.

There are several Lutsenko's fellow townsmen in the list. A journalist from
Rivne, Oleksandr Smyk, is in 113th position. He was in charge of the
Ternopil branch of the Anticriminal Choice and of the Forward Ukraine party.

A deputy chief editor of Rivne Vechirne newspaper and former Socialist,
Serhiy Shturhetskyy, is in 133rd position. When Lutsenko joined the Forward
Ukraine party, Shturhetskyy became its leader in Rivne Region.

Lutsenko's friends from the Russian Babakov-Voyevodin group are represented
in the list by two people. Kyrylo Kulykov was in charge of the Ukrainian
Interpol bureau when Lutsenko was the internal affairs minister. Before
that, Kulykov was a representative of the Luzhniki group in some business
projects on the territory of Ukraine.

Ihor Pikovskyy is in 97th place. He is mentioned as "a public activist" in
Forward Ukraine documents. It is not known what he does, but several years
ago he was appointed the head of the supervisory board at the Promzvyazok
plant, which belongs to the Luzhniki group.

A large part of Babakov and Voyevodin's assets is registered on the
territory of the Promzvyazok plant on 6 Moskovskyy avenue, particularly, the
First Investment Bank.
Kyrylenko group and Yushchenko family
Some time ago Viktor Yushchenko's brother Petro sold his shares in the First
Investment Bank to this Russian group. Petro Yushchenko is in 39th position
in the list. His son, the president's nephew and the head of the Kharkiv
branch of Our Ukraine, Yaroslav Yushchenko, is in 87th position.

No 12 is Liliya Hryhorovych, ready for self-immolation, who with the help of
a bottle of gasoline ensured herself a life-long place among members of the
propresidential bloc.

Yushchenko's relative through the christening of children and former head of
Azhio bank, Stanislav Arzhevitin, is No 63. On the day prior to Yushchenko's
inauguration, Arzhevitin made him hetman of Ukrainian Cossacks. A memorial
plaque stating this event is located right in Bohdan Khmelnytskyy Square in
[central] Kiev.

A former industrial policy minister, Volodymyr Shandra, is in 75th position.
He is a relative of the president's son-in-law, Oleksiy Khakhlyov. Khakhlyov
himself, as is known, was not accepted by the Our Ukraine congress this

The editor-in-chief editor of Donetsk based newspaper Ostrov, Yevhen
Talyshev, is No 83. His quite privileged position can be explained by
Talyshev's conceptual struggle against Yanukovych in his newspaper for
several years. Another explanation is that Talyshev is close to the
president's brother and Petro Yushchenko's deputy carries a press card of
the Ostrov newspaper.

Illya Rybchych, No 90, was removed after Yanukovych's second arrival, from
the post of the head of Ukrhazvydobuvannya, the most profitable subdivision
of Naftohaz.

He is believed to be close to the "hutsul" group in Yushchenko's circles and
to Petro Yushchenko. Rybchych was included in the list on the quota of the
Ukrainian Right.

It is worth remembering that Our Ukraine leader Vyacheslav Kyrylenko owes
his position to the fact that Petro Yushchenko liked him. Kyrylenko is in
second position in the list and his friend and head of the Our Ukraine
executive committee, Oleh Humenyuk, in No 34.

The head of Our Ukraine youth organization, Stepan Barna, is in 108th
position. He is also said to be close to Kyrylenko, although Baloha played a
significant role in Barna's career by supporting his election as a member of
Our Ukraine presidium.
Zhvaniya's group
Davyd Zhvaniya used to be Viktor Yushchenko's favourite once and at the
peak of their friendship they became relatives through christening.

Their relations cooled down with time and Zhvaniya accused the president of
weakness and left Our Ukraine. It was not so easy for him to even receive a
place in the election list because the president himself was against it.

Eventually People's Self-Defence succeeded in securing independence in
forming its quota and Zhvaniya, who at the beginning of the project was the
first to invest in Lutsenko, received 21st position.

Recommended by Zhvaniya, Nataliya Lukyanova, the head of the chemical
addiction prevention and AIDS, is in 89th position.

There are two more people close to Zhvaniya: 105th Nataliya Musevych and
141st Yuriy Rezunnyk. Both are included in the People's Self-Defence quota.
Musevych was responsible for legal advice from the very beginning of the

Rezunnyk and Musevych were members of the Enerhoatom management team
when Zhvaniya cooperated with this state company. Also, Rezunnyk and
Musevych are founders of the Financial Investments firm which was used at the
presidential elections as a cover. At that time, Zhvaniya was deputy head of
Yushchenko's election headquarters.

Financial Investments owns a six-litre G-class Mercedes, which Andriy
Yushchenko [the president's son] drives. When the scandal with Andriy
Yushchenko's BMW M6 broke out, the Financial Investments company
sacrificed the numberplate of one of its cars so that Andriy Yushchenko's
sports car with Czech numbers did not stand out among other cars.
Katerynchuk's group
The fact that Mykola Katerynchuk refused to vote with indignation for the
Our Ukraine-People's Self-Defence list at their joint congress is explained
by him being fooled.

It was first planned that he should receive three positions in the first
100. However, only Katerynchuk himself turned out among the first 100
positions. He was in fifth position but it was made clear for him that he
would only be used as a ceremonial bystander.

Katerynchuk's second person, spin doctor Viktoriya Pidhorna, is in 121st
place and Svitlana Kustova, a lawyer from Moor and Krosondovych firm is in
145th place. Katerynchuk's partner in this firm, Oleh Boyko, received 250th
Petro Poroshenko's group
After Petro Poroshenko refused to run for parliament in exchange for a post
with the National Bank, it was expected that his father will run for
parliament instead of him. It was announced by the former secretary of the
National Security and Defence Council [Poroshenko], who said: "I cannot say
that there will be no Poroshenko on the list."

However, Poroshenko's father, who has been in charge of the Vinnytsya branch
of Our Ukraine for many years, was not included in the final version of the
list. According to some reports, Oleksiy Poroshenko got seriously ill - he
had a stroke. Although for the sake of justice and honour he should have
been included in the list.

Yuriy Stets, producer general of the 5 Kanal television channel, can
conditionally be considered Poroshenko's man. He is from Lutsenko's quota
and has No 53 in the list.

Viktor Korol, who did not become the head of Security Service of Ukraine, is
in 88th position. Like Oksana Bilozir (44) and Pavlo Zhebrivskyy (67), Korol
did not undergo lustration executed by the new party leaders towards
Poroshenko, which was much targeted and not quite fair.
Viktor Baloha's group
Although Baloha is the head of the presidential secretariat and the head of
the propresidential bloc election headquarters, he does not have a very big

Olesya Orobets, the daughter of deceased people's deputy Yuriy Orobets, is
in 18th position. Her father took active part in the election in Mukacheve
[Transcarpathian Region] when victory was stolen from Viktor Baloha.
Orobets himself was heavily beaten in the conflict.

Ihor Kril is in 40th position. He is Baloha's first deputy in the election
headquarters and is very close to him personally. No 60 is Mukacheve city
mayor Vasyl Petyovka, Baloha's cousin.

Vlad Kaskiv owes his 31st position in the list to an invitation from Viktor
Yushchenko supported by Baloha. Kaskiv's companion, Illya Shevlyak (123rd
position) was appointed the head of the propresidential election
headquarters in Luhansk, following Baloha's decision.

Mykola Kovach, who is in 99th position, is in charge of the Transcarpathian
Hungarian institute. Some of Baloha's people did not make it to the upper
part of the list, such as his advisers Anatoliy Medvid (203) and Serhiy
Lukyanenko (287), Halyna Horokhovska from Mukacheve knitting factory (306)
and the head of Uzhhorod district administration, Anatoliy Kolibaba (383).

Besides the groups of influence in the election list of Our Ukraine-People's
Self-Defence, there are also several interesting details. Oleksandr
Bakumenko, who is in 118th position, is the head of the Union of poultry
breeders association was proposed by the Ukrainian Right.

The owner of Nasha Ryaba [poultry company] is also a member of the Ukrainian
Right, which provides the answer to the question whose creation Bakumenko

There is also an interesting tandem of opponents in the election list of the
propresidential bloc. The previous Kiev mayor, Oleksandr Omelchenko, is in
13th place and his son in 120th place. The father of the present secretary
of the Kiev city council [Oles Dovhyy], Dovhyy Senior is in 55th place and
the uncle of the secretary, Dovhyy Junior, in 119th place.

To confirm agreements concerning Petro Poroshenko, the head of the National
Bank of Ukraine, Volodymyr Stelmakh, is in 28th place.

There are two enigmatic figures in the upper part of Our Ukraine. No 61 is
Yuriy Anatoliyovych But, who was taken from Lutsenko's personal quota.

In the documents of People's Self-Defence, But is written down as "a public
activist" and in the tax administration database he is registered as a
cofounder of United Consultancy of Ukraine. This company's second founder is
a Russian company dealing with tax optimization, United Consultants FDP.

According to sources in the Party of Regions, But moved to Ukraine from
Russia not long ago. In Russia, he worked in some projects with Putin's

Another interesting story is No 107 in the list, Burzu Khanhulu Aliyev
[Burza Xanqulu oglu Aliyev]. The only mention of him on the Internet is the
deputy president of the public organization with the complicated title "Kiev
centre of journalistic research of GUAM countries Silk Route".

Our sources in the political council of the Our Ukraine-People's
Self-Defence bloc told us seriously that Aliyev was included in the list
based on agreements between Yushchenko and the Azeri president within
the framework of friendship of nations and oil corridors.

There has been no information in the media about Burzu Aliyev. However,
Ukrayinska Pravda managed to find out that until recently Aliyev worked as a
top manager in Ekmi-furniture and Ekmi-colour that produce dye for hair.

Aliyev moved to Kiev from Azerbaijan in the years when the present foreign
minister of Azerbaijan, Elmar Mammadyarov, studied at the international
relations department of the Kiev Taras Shevchenko University.

They were friends as representatives of the same Diaspora. Maybe this is the
source of information about secret grounds for Aliyev to appear in the Our
Ukraine-People's Self-Defence list.

And there is another totally unexpected coincidence. A representative of the
Armenian Diaspora, Garegin Arutyunov, runs for parliament in the election
list of the Yuliya Tymoshenko Bloc in 106th position. Considering that
Aliyev of Our Ukraine is from Nagornyy Karabakh, there might be another
conflict line in the new convocation of parliament - Armenian-Azerbaijani.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

REPORT: By Olena Heda, Kommersant-Ukraina, Kiev, in Russian 21 Aug 07
BBC Monitoring Service, United Kingdom, Tuesday, Aug 21, 2007

The District Administrative Court of Kiev has satisfied law suits brought by
the opposition Yuliya Tymoshenko Bloc and the pro-presidential Our
Ukraine-People's Self-Defence bloc over the Central Electoral Commission's
13 August decision that would allow people to vote at home without proving
their inability to vote at polling stations.

The blocs said that this would open the way for vote-rigging at the 30
September parliamentary election.

The following is the text of the report by Olena Heda, entitled "Court does
not limit the freedom of movement. The Central Electoral Commission has
been obliged to adopt new rules for voting at home" and published in the
Ukrainian newspaper Kommersant-Ukraina on 21 August:

At its session yesterday [20 August], the District Administrative Court of
Kiev obliged the Central Electoral Commission [CEC] to define the procedures
for proving voters' inability to move independently and to cast ballots at
polling stations.

The court rendered this decision after considering suits filed by the Yuliya
Tymoshenko Bloc [YTB] and the Our Ukraine-People's Self-Defence bloc.

The suits were prompted by the CEC resolution dated 13 August that said that
the individuals who want to vote at home can simply file a statement to this

"It was not determined who should confirm that such citizens cannot move
independently, because this creates conditions for possible vote rigging,"
the deputy head of the Our Ukraine-People's Self-Defence legal department,
Valeriy Karpuntsov, told Kommersant.

Representatives of the two blocs immediately filed the suits in an attempt
to declare the CEC resolution as unlawful. They insisted that the CEC should
be obliged to define a clear procedure for confirming the inability to move
independently by the citizens who expressed their wish to vote at home. The
two suits were considered as a consolidated case during their hearing.

Having listened to the arguments by the sides, a board of judges declared
the commission's resolution as unlawful "in the part dealing with the
approval of the form of an application by a voter who is temporarily
incapable of moving independently with a request to allow voting at home".

The court obliged the CEC to adopt a resolution that should approve
mandatory requirements for statements on voting at home and to approve the
procedure for checking the information in such statements.

"Unfortunately, this court decision, as well as the court's previous one on
the YTB registration, does not look to be credible," Vladyslav Zabarskyy, a
representative of the [ruling] Party of Regions in the CEC, told Kommersant.

He said that territorial election commissions have been given sufficient
powers to check the justification for voting at home in each specific case.

"In reality, there are no grounds to use home voting for the sake of vote
rigging," Zabarskyy said. He believes that about 2m voters will not be able
to cast ballots at home if the requirements are made tougher.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Howard Wilkinson, Enquirer, Cincinnati, Ohio, Monday, Aug 20, 2007

CINCINNATI - Cincinnati Mayor Mark Mallory will head Tuesday
to Kharkiv, Cincinnati's sister city in the Ukraine, for three days of
talks with a group of mayors from around the world.

On the agenda, the mayor said, will be building business relationships
with officials from other countries and promoting the city's cultural
and business opportunities.

"My goal has always been to take Cincinnati's story out to the rest of
the world; and it's a pretty good story to tell,'' said Mallory, who
will be making his first international trip as mayor.

Cincinnati has had a "sister city" relationship with the Ukrainian
city since 1989. Mallory won't be the first to visit - former mayor
Charlie Luken has been there; and, in 1995, then-mayor Roxanne
Qualls led a 32-member delegation for a nine-day visit.

Mallory's delegation will be much smaller - only five people,
including himself. He will be accompanied by Stan Bahler, president of
the Cincinnati-Ukraine Partnership; Lt. Kurt Byrd of the Cincinnati
Police Department, and two of his staff members, chief of staff Carl
Walker and press secretary Jason Barron.

Cincinnati taxpayers won't be picking up the tab - the
Ohio-Kentucky-Indiana Sister City Coalition and Kharkiv City Council
are sponsoring the trip.

Kharkiv officials have also invited mayors from Russia, the Czech
Republic, Bulgaria, Latvia, Lithuania, Georgia, Germany, Israel and
Poland for a celebration of the 64th anniversary of Kharkiv's
liberation from Nazi occupation in World War II.

"We're hoping, that by continuing these exchanges with Kharkiv, we'll
e looking at more opportunities for economic development here in the
future,'' Bahler said.

In addition to meetings with the mayors from other international
cities, Mallory said he plans on meeting with the heads of various
Kharkiv city departments.

Mallory said he is taking a gift for his counterpart in Kharkiv - a
painting by Jarrett Jamison, a Walnut Hills High School graduate who
is studying art at UC, who painted his work "Freedom" for Cincinnati's
ArtWorks program.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Brad Buck, Staff Writer,, Florida, Mon, Aug 20, 2007

BUSHNELL - Sandra Shield has turned a lifelong passion for sewing into
quilts for orphans in the Ukraine. "I've been sewing since I could hold a
needle," she said. Shield, 68, gets plenty of help from George, 69, her
husband of 50 years.

They've lived in Bushnell for about five years, coming here from Lynchburg,
Va. Between the two places, they've also lived in Ocala and Leesburg, where
George Shield worked as an educator and associate pastor.

The Shields' son, Ron, works in upper management for McDonald's. Sandra
Shield had sewn several quilts for people staying at Ronald McDonald houses,
where families of dying children can stay while the kids are hospitalized.

A few years ago, Ron Shield and his wife, Tami, visited the Ukraine and came
back with about 3,000 photographs, George Shield said Friday from the
Bushnell family room.

When George and Sandra saw the pictures, they knew they had to help the
orphans. "That's when the Lord put it in me," she said.

Working together in the what they call their "sweat shop," George and Sandra
have made seven afghans so far for orphans in the Ukraine. They send them
either to the 700 Club or to Operation Blessing International, both in
Virginia Beach, Va. From there, the materials go to the Ukraine.

The Shields said they've learned to mass produce quilts. She starts the
quilts, he adds some touches and she finishes the job.

"There's just something about a quilt," Sandra Shield said. "You just feel
like Linus and his security blanket."

Orphans abound in the Ukraine, where more than 30,000 of them live,
according to Operation Blessing. Many of orphans' parents lead lives filled
with alcohol, drugs and crime and abandon the children at an early age,
George Shield said. Then, unfortunately, after many of the orphans get too
old to live in an orphanage, they too turn to a life of crime, he said.

The Shields have not had the privilege of visiting the Ukraine, but they
hope to go someday soon. They receive DVDs from the church, and through
them, they feel like they know the children.

"We're just trying to show those kids that somebody loves 'em and cares
about 'em," George said. For more information or to help the Shields make
and ship more quilts to the orphans, call them at 569-0166.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Roxanne Brown, Staff Writer,
Leesburg, Florida, Monday, August 20, 2007

GROVELAND - It's been said that one person can make a difference. For
special needs children in Simferopol, Ukraine, that person is Amy Gomes
from Groveland.

Gomes, the founder of Hope Haven Ukraine, now a 501(c) nonprofit
organization, intends to provide education and therapy for those children by
building them a school.

Gomes is leaving to Simferopol this week for 4 to 5 months to see if she can
get things going. "I think there's a reason God said, 'You're going to
Ukraine. You'll be working there,' " said Gomes.

Gomes, a therapist and owner of Central Florida Pediatrics, has traveled to
Russia and Romania, providing therapy and other services to children living
in orphanages.

Things changed in 2001 when Gomes said she ended up in Ukraine and
found her calling in life.

Gomes said she noticed kids with even the slightest disability were shunned
from society, hidden by their families in their homes or placed in
orphanages - even if they weren't orphaned.

Gomes said disabled kids are not easily accepted; special needs students are
not allowed to attend public schools.

A child with something as simple as a leg length discrepancy faces serious
problems. Gomes said people there would only see how that child would
interfere with other children in the crowded schools because they wouldn't
be able to keep up or climb steps.

Families may also be financially unable to provide the proper care for their

She said many parents are single moms without governmental support and
services and are forced to stay home with their children. This creates a
greater financial hardship, forcing parents to place the child in an

"Although the mentality is changing in Ukraine, special needs kids are
taboo. The people believed that having a child with a disability was like
sin in the family or a sign that you'd done something wrong," said Gomes.

"I just want to give them a little hope that their child, if disabled, can
be as productive as possible and have a life regardless of their physical
disability." "In fact, that's where the name (Hope Haven Ukraine) came
from," she said.

After that first visit, Gomes kept thinking there was something there she
needed to do but didn't know what. It was just a feeling. She visited
several more times and even ended up adopting a child who is now grown
and helping in her efforts.

One day, Gomes said she heard her inner voice telling her she was to build a
school for the children in Simferopol. She said the moment she spoke out
about it after that, things started coming together in every direction.

"It was incredible. It's got to be God. It's not my imagination. I just
stood back in awe and said, "Wow, this is cool," Gomes said.
Gomes said people started donating every type of item needed for a special
needs school.

Walkers, wheelchairs, supplies, books and every item imaginable started
rolling in and before she knew it, filled up a hauler truck and then two.

She was able to secure a bank loan for construction costs and not only
received the blessing of Clermont's Real life Christian Church, her church
of 22 years, but their support, both emotionally and as much as they could
do financially.

The local Girl Scouts organization chipped in and donated a load of toys,
desks and backpacks and a local airport owner even donated office and
school supplies he had stored away in his hangar.

Gomes said when the school is built, it will be the first school of its kind
in Simferopol. It will not only provide therapy clinics, which there is a
few of there, but education as well, which there is not.

"I really hope it will be the beginning of a really unique thing. In fact, I
know it won't be the last school I open there," said Gomes.

On Aug. 25, Gomes will leave for Simferopol to find, secure and purchase
the location for Hope Haven.

Although Gomes said she is aware of about 300 disabled children who could
benefit from such a school, Hope Haven will begin with 50 children, ages
3-18, with various disabilities.

Teachers, therapists, nurses, the director and all non professional
personnel will be nationals (from Ukraine), with salaries provided through
the American based, non-profit corporation.

Parents of the children in the school will be expected to participate in
voluntary services and a small fee will be charged per month, which will be
offset by scholarships set up here to cover tuition.

Gomes is hoping to have the 5,000 square-foot $250,000 building
constructed and open by 2008.

She said it will have handicap accessible playgrounds and gardens, along
with a barn filled with horses and other animals; something Gomes thinks
will add to the therapy's benefits.

As of now, Gomes said she has sufficient supplies to start the first school,
but still needs financial donations for construction, tuition costs and

She also said her dream includes donated buses with wheelchair lifts to get
the children to and from school. "There's no need to open the schools if I
can't get the kids there," she said. Besides all that, another thing Gomes
said she needs plenty of is prayers.

"I don't know where all the money is going to come from yet, but I don't
care. I just know it will come, whatever I have to do," said Gomes. "If I
have to sell my home or use my retirement for it, that's fine. I'll just
work till I die."

"It's just that I know these kids are sitting at home not going anywhere or
doing anything and it breaks my heart," she said.

For more information or to make a donation, visit
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

By Helen Fawkes, BBC News, Alushta, Crimea, Friday, Aug 17, 2007

ALUSHTA, Crimea - We are all being told to lay off too much booze,
but a Ukrainian health spa is prescribing patients a course of cocktails.

The Crimean Stars Sanatorium in Alushta has devised a treatment called
"wine therapy".

It claims the treatment can help alleviate a range of medical problems like
stress, impotence and heart disease. Even though it may sound like a
joke, the sanatorium takes its "wine therapy" very seriously.

Your first stop is not the bar. Instead, there is a medical consultation.
Patients are then advised which cocktail they should take.
Dr Alexander Sheludko, who came up with the treatment, points out that
medical research has shown that wine in moderation can be good for you.

He boasts that hundreds of people have now had a taste of his medicine.
"Wine is a live product which contains vitamins. It has lots of compounds
which are biologically active," he says.

There are seven different types of cocktails on offer. The formula is simple
- lots of dried herbs are mixed with lots of Crimean wine. Sometimes
vodka is added for an extra kick.

Then all you have to do is sit back, relax and make sure you take your
"prescription" three times a day for a week or two. Small glasses of the
drink are served from 0700 in the sanatorium's cafe.
Lena Borodina, who works as a hairdresser in Russia, has tried lots of
alterative treatments. She says that living in Moscow is stressful and that
she travelled to the Ukrainian clinic for something to help her unwind.

"I think that wine therapy is an excellent type of treatment. It relaxes
you, gives you strength and fills you with vigour," she adds. "I'm happy
that it seems to be working well and I rather enjoy it."

But Ukrainian health experts are sceptical about whether there are any
real medical benefits from "wine therapy".

There is also the question about whether it is such a good idea in a
country that has high levels of alcoholism.

"I think that such therapy could lead to someone becoming addicted to
drink. It could become the first step towards psychological dependence,"
Dr Iryna Lipych, a specialist in alcohol dependency, says.

"It is also important to remember that alcohol causes lots of medical
problems, and especially that it has a bad effect on liver."

Some of the Crimean cocktails taste very strong. If they are drunk on an
empty stomach, they could well make you feel a bit tipsy.

Wine therapy may not be a panacea, but it does give a whole new
meaning to the phrase "just what the doctor ordered".
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Erotic Symbolism in Ukrainian Folk Songs"
Lecture in English, comments and singing in Ukrainian,
Saturday, August 25, 2007, Ivan Honchar Museum, Kyiv, Ukraine

Action Ukraine Report #861, Article 28
Washington, D.C., Thursday, August 23, 2007

WASHINGTON- Remember all those old Ukrainian folk songs you have been
singing all these years, the ones you learned from your mama and baba? Do
you really know what they're about? The love song lyrics have special
meanings, and are rich in deep ancient symbolism of a most interesting kind.

Orysia Tracz of Winnipeg , Manitoba, Canada, a specialist in Ukrainian
ethnology, writer, translator, columnist for The Ukrainian Weekly,
translator of Ivan Honchar's album Ukraine and Ukrainians, will present a
lecture in English with comments and singing in Ukrainian on "Songs Your
Mother Should Never Have Taught You? Erotic Symbolism in Ukrainian
Folk Songs" in Kyiv on August 25th.
KOKHANNIA po-ukrains'ky / LOVE Ukrainian-style:
Love Themes in Ukrainian Folk Art
15:00 [3 P.M.] Saturday, August 25, 2007
Ivan Honchar Museum -- Ukrainian Centre of Folk Culture.
29, Sichnevoho povstannya, Kyiv [east of Pecherska Lavra]
With an exhibition from the Museum's collections --

All expats, the business community, tourists, lovers of Ukrainian song
welcome! Proceeds to benefit the educational programmes of the
Ukrainian Centre of Folk Culture " Ivan Honchar Museum".

Bus #24 to the final stop at Pecherska Lavra. TROLLEYBUS #38
Pecherska Lavra. Nearest Metro station is Arsenal'na, then transfer to bus.
Telephone(+380-44) 288 9268, 288 5419; Fax: (+380-44) 288 9268
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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return to index [Action Ukraine Report (AUR) Monitoring Service]