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 IMF approves $15.5 billion; Third top grain exporter; U.S. is military partner;
New Citi country officer; Media censors; ContourGlobal & Coca-Cola, DuPont
U.S.-Ukraine Business Council (USUBC)
Kyiv, Ukraine, Thursday, July 29, 2010
THURSDAY, JULY 29, 2010
UKRAINE BUSINESS NEWS - TEN ARTICLES
IMF approves $15.5 billion; Third top grain exporter; U.S. is military partner;
New Citi country officer; Media censors; ContourGlobal & Coca-Cola, DuPont
INDEX OF ARTICLES ------
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
1. IMF EXECUTIVE BOARD APPROVES US$15.15 BILLION STAND-BY ARRANGEMENT FOR UKRAINE
Press Release No. 10/305, IMF, Wash, D.C., Wed, July 28, 2010
2. BANKS OPTIMISTIC IMF LOAN WILL REBOOT UKRAINE
By Roman Olearchyk in Kiev, Financial Times, London, UK, Mon, July 26 2010
3. UKRAINE UNIONS SEEK TO BLOCK GAS PRICE INCREASE PLEDGED TO GAIN IMF LOAN
By Kateryna Choursina., Bloomberg, New York, NY, Tue, July 27, 2010
4. UKRAINE RANKS THIRD AMONG WORLD GRAIN EXPORTERS
UkrAgroConsult, Kyiv, Ukraine, Tue, July 27, 2010
5. UKRAINE WILL REMAIN RELIABLE MILITARY PARTNER OF THE U.S - CHIEF OF GENERAL STAFF
UkrInform - Ukraine News, Kyiv, Ukraine, Wed, July 28, 2010
6. U.S.-DEPUTY ASSISTANT SECRETARY RUSSELL TO DISCUSS RAISING FINANCIAL AID FOR SS-24 MISSILES DISPOSAL DURING TRIP TO UKRAINE
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, July 27, 2010
7. STEVEN FISHER APPOINTED CITI COUNTRY OFFICER FOR UKRAINE
Citi, New York, New York, April 2, 2010
8. UKRAINE: MEDIA OWNERS CAN BE SOME OF WORST CENSORS
OP-ED: by Martin Nunn, communications director for People First Foundation and
chief executive officer of Whites Communication, public relations consultancy
Kyiv Post, Kyiv, Ukraine, Friday, July 16, 2010
9. U.S. CONTOURGLOBAL COMPANY STARTS BUILDING COMBINED HEAT POWER PLANT FOR COCA-COLA UKRAINE
Ukrainian News Agency, Kyiv, Ukraine, Wed, July 28, 2010
10. UKRAINE: DUPONT READY TO INVEST INTO ZAPORIZHIA TITANIUM-MAGNESIUM PLANT
Ukrainian News Agency, Kyiv, Ukraine, Wed, July 28, 2010
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1. IMF EXECUTIVE BOARD APPROVES US$15.15 BILLION STAND-BY ARRANGEMENT FOR UKRAINE
Press Release No. 10/305, IMF, Wash, D.C., Wed, July 28, 2010
WASHINGTON, D.C. - The Executive Board of the International Monetary Fund (IMF) today approved a 29-month SDR 10 billion (about US$ 15.15 billion) Stand-By Arrangement (SBA) for Ukraine in support of the authorities’ economic adjustment and reform program. (1)
An initial disbursement equivalent to SDR 1.25 billion (US$ 1.89 billion) is available immediately, with subsequent disbursements subject to quarterly reviews. The SBA entails exceptional access to IMF resources, amounting to 728.9 percent of Ukraine’s quota in the Fund.
Following the Executive Board’s discussion of Ukraine, Mr. Lipksy, First Deputy Managing Director and Acting Chair, made the following statement:
“Ukraine is emerging from a difficult period during which the economy was severely hit by external shocks and exacerbated by domestic vulnerabilities. The authorities are committed to addressing existing imbalances and putting the economy on a path of durable growth, through important fiscal, energy, and financial sector reforms.
“At the core of the authorities’ economic program is a comprehensive consolidation strategy to safeguard fiscal sustainability. Fiscal adjustment will start in 2010 and deepen in 2011–12 backed by robust structural reforms of the pension system, public administration, and the tax system.
"The financial position of the gas sector will be strengthened, including through domestic price hikes and broader reforms supported by other multilateral institutions, which will help eliminate energy subsidies and create a more modern and viable sector, while protecting the most vulnerable with better targeted social assistance programs.
“Reforms are also underway to rehabilitate the financial system and enhance the National Bank of Ukraine’s independence and accountability. The planned recapitalization of banks and steps to strengthen the supervisory and institutional framework are essential to restore financial stability, tackle the mounting problem of impaired assets, and eliminate impediments for robust economic recovery.
“Sustained implementation of these reforms will help Ukraine entrench macroeconomic stability, boost confidence, facilitate access to capital markets, and emerge with more balanced and robust growth.
“The Executive Board also reviewed a report from the Managing Director on the provision of data on net international reserves, which led to two noncomplying purchases in 2009 and a breach of obligation under Article VIII, Section 5 of the IMF’s Articles of Agreement.
"Given the minor economic effect of the deviation and that action has already been taken to change the NIR definition under the new Stand-By Arrangement, the Board agreed to grant waivers of nonobservance of the performance criterion and that no further remedial action is required”.
ANNEX
Recent Economic Developments
The global economic financial crisis hit Ukraine hard in late 2008 and 2009. As a major steel exporter and borrower in international markets, Ukraine’s economy was severely hit by the decline in demand for steel products and reduced access to capital markets—the impact of which was magnified by pre-existing economic and financial vulnerabilities.
Confidence in the currency and the banks waned, causing a system-wide run on deposits; real GDP collapsed, along with domestic demand; and falling fiscal revenues strained public finances.
Notwithstanding the toll of the crisis on Ukraine’s economy, the 2008 program managed to restore macroeconomic and financial stability. The sharp adjustment was to an extent unavoidable given the large pre-existing imbalances. However, measures to restore banking system confidence helped stabilize deposits and exchange rate pressures eased over time. By mid-2009, an incipient recovery was under way.
Against a difficult economic environment and a complex political situation, the program eventually went off track as policies weakened and reforms stalled in the run up to the Presidential elections.
PROGRAM SUMMARY
Key objectives of the authorities’ program are to consolidate public finances, restore banking system soundness, and develop a more robust monetary policy framework.
To help achieve this, the government will implement reforms and institutional changes, including tax and expenditure policies, pension and energy sector reforms, and measures to strengthen central bank independence and rehabilitate the banking system. Strict adherence to these policies will help deepen market access, facilitating exit from Fund financial support.
The economic reform program aims to support the authorities’ agenda in four key areas:
[1] Restore confidence and fiscal sustainability by reducing the general government deficit to 3.5 percent of GDP in 2011 and 2.5 percent in 2012 and
setting public debt firmly on a downward path below 35 percent by 2015;
[2] Initiate reforms to modernize the gas sector and eliminate Naftogaz’s deficit starting from 2011, including through gas tariff increases and a price
mechanism that depoliticizes price setting of public utilities. A new gas law adopted in early July will improve efficiency through unbundling
production, transit, and distribution to end-users, and allowing new entrants and investment into the domestic gas sector;
[3] Restore and safeguard banks’ soundness through completion of recapitalization plans by end-2010 and strengthened supervision, and;
[4] Develop a more robust monetary policy framework focused on domestic price stability under a flexible exchange rate regime to be implemented by
a more independent National Bank of Ukraine.
Ukraine joined the IMF as a member on September 3, 1992. Its quota is SDR 1,372 million (about US$2,078.4 million).
FOOTNOTE:
(1) The Board also noted cancellation of the SBA for Ukraine that was approved on November 5, 2008 (see Press Release No 08/271).
LINK: http://www.imf.org/external/np/sec/pr/2010/pr10305.htm
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2. BANKS OPTIMISTIC IMF LOAN WILL REBOOT UKRAINE
By Roman Olearchyk in Kiev, Financial Times, London, UK, Mon, July 26 2010
KYIV - Only a couple of weeks after Ukraine cancelled a $2bn Eurobond issue, bankers who saw it as a missed and attractive opportunity are now hoping the former Soviet republic will return to capital markets following this week’s expected approval of a $14.9bn standby loan from the International Monetary Fund.
“There will be a window for Ukraine to borrow and market appetite will be strong immediately after the IMF approves assistance,” says Tim Ash, emerging markets analyst at Royal Bank of Scotland. “The appetite for Ukrainian corporates has also been strong and is getting stronger,” he added.
Had the planned $2bn Eurobond gone to market, the 10-year bond would have been Ukraine’s first issue since 2007, but its estimated 8 per cent yield was considered expensive.
However, some European bankers are still keen to buy fresh debt from a government that is desperate to cover a budget shortfall.
After adopting a series of unpopular but economically necessary austerity measures in recent weeks, including a budget sequester, Ukraine is close to securing the IMF loan when the Fund’s board meets on Wednesday. Renewing co-operation with the IMF could serve as a positive signal for the market.
Early this summer, international debt markets opened up to the country’s biggest and most politically-influential businessmen. The vast steel and energy holdings of Rinat Akhmetov, Ukraine’s richest man, have in recent weeks raised nearly $2bn through Eurobond placements and syndicated loans. Mr
Akhmetov hopes to use the money to expand his dominance of Ukraine’s steel market, which is ranked among the world’s top 10 exporters.
However, not all the country’s industries are as fortunate.
The fragile domestic banking sector was hit hardest of all last year, denting the books of European banks who hold more than a 40 per cent market share. With non-performing loans in double-digit percentage levels, the mountain of bad debt that needs to be cleaned up is huge. Preoccupied with this effort, banks are still not lending at pre-crisis levels.
Net banking sector losses are down substantially from last year’s $4bn, but are still high relative to the sector’s size – at about $1.1bn for the first half of 2010. Results of a central bank stress test released this month show that at least a third of Ukraine’s 175 banks need an additional $5bn in capital injections.
Experts warn that until banks start lending again, the nation’s economy will struggle to crawl out of recession.
“The banking sector in Ukraine remains fragile,” says Martin Raiser, head of the World Bank office in Ukraine. “For Ukraine, the recovery of the banking sector will play a critical role in recovery. Without the flow of credit, investment will remain subdued and this would impact the pace of post-crisis GDP growth.”
Government figures released last week indicate that the economy has rebounded from its sharp drop last year, reporting 6 per cent growth year-on-year in the first half of 2010.
“The worst is over,” but Ukraine’s shaky bank sector “is not out of the woods yet”, according to Mr Raiser. “The combination of external shocks and weak risk management – in part because of lax supervision – before the crisis has meant that the need for fresh capital is considerable and the process of deleveraging to reach more healthy capital/asset ratios is likely to continue for some time,” Mr Raiser added.
LINK: http://www.ft.com/cms/s/0/db258a52-98d5-11df-9418-00144feab49a.html
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3. UKRAINE UNIONS SEEK TO BLOCK GAS PRICE INCREASE PLEDGED TO GAIN IMF LOAN
By Kateryna Choursina., Bloomberg, New York, NY, Tue, July 27, 2010
KIEV - Ukrainian trade unions are asking the nation’s courts to block the government’s effort to double natural gas prices, a key component of the deficit-reduction plan under review by the International Monetary Fund.
Unions have filed three actions with the Kiev city administrative court, which will hear the first case Sept. 16, officials from the National Forum of Trade Unions said at a news conference today in Kiev. A similar move by the unions last year delayed the disbursement of funds from the IMF.
“Most of Ukraine’s trade unions have protested the government’s price increase through the courts,” said Vyacheslav Roy, head of the union that represents workers at small and mid-size companies. “We want tariff increases to be proportional with wages.”
The government said July 14 it would raise the price households and utilities pay for gas to reduce losses at state- owned energy company NAK Naftogaz Ukrainy and qualify for a new $14.9 billion loan from the IMF. The Washington-based lender’s board will decide on the loan tomorrow.
Ukraine has agreed to cut its budget deficit to 4.99 percent of gross domestic product this year after it ballooned as economy contracted 15.1 percent in 2009. Naftogaz will have a deficit of 10 billion hryvnia ($1.27 billion) this year, compared with 30 billion hryvnia in 2009, Deputy Prime Minister Serhiy Tigipko said July 14.
SUBSIDIES PROMISED
The government has promised to provide subsidies to poor people to help them pay for increased energy costs. “We have to provide all subsidies to compensate for tariff increases by Sept. 1 as agreed with IMF,” Prime Minister Mykola Azarov said today at a news conference. “If subsidy allocation is done wisely, the increase will be unnoticed by most people.”
The unions today called for improvements to ensure efficient delivery of compensation and demanded that workers receive all back pay they are owed before the prices increases take effect. Wage arrears nationwide reached 1.79 billion hryvnia as of July 1, according to the state statistics office.
The National Commission for Energy Regulation increased the gas price households will pay from Aug. 1 to 725 hryvnia per 1,000 cubic meters for annual use of less than 2,500 cubic meters and 1,098 hryvnia ($91.83) per 1,000 cubic meters for use less than 6,000 cubic meters, according to its Web site.
Naftogaz paid $230 dollars for 1,000 cubic meters of Russian gas in the second quarter. Ukraine will pay Russia $269 per 1,000 cubic meters this quarter and $289 in the fourth quarter, Azarov told reporters today. Local prices have to “comply with the market price,” he said.
The World Bank said in March that Ukraine needs a large initial increase in prices followed by gradual increase so that population pays “fair price.”
The Kiev administrative court in February annulled a June 2009 resolution by the energy commission that proposed a 20 percent increase in gas prices at the end of 2009, followed by 20 percent increases each quarter 2010 because the resolution wasn’t coordinated with trade unions, according to Kommersant- Ukraine newspaper.
NOTE: To contact the reporter on this story: Kateryna Choursina in Kiev at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
LINK: http://www.bloomberg.com/news/2010-07-27/ukraine-unions-seek-to-block-gas-price-increase-pledged-to-gain-imf-loan.html
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4. UKRAINE RANKS THIRD AMONG WORLD GRAIN EXPORTERS
UkrAgroConsult, Kyiv, Ukraine, Tue, July 27, 2010
KYIV - Ukraine has exported 21.2 million tons of grain during the 2009/2010 marketing year (MY, July 2009 through June 2010), secured its positions as the world's third largest grain exporter after the United States and the European Union. Russia, which supplied 19.9 million tons of grain to foreign markets, is fourth, Ukrainian Agrarian Confederation (UAC) reported.
According to UKRINFORM, the figure is above average, but not a record one. In the 2008/2009 season, Ukraine supplied 24.7 million tons of grain to foreign markets.
Wheat, barley and corn remained main crops exported by Ukraine. According to the UAC in the season 2009/10 Ukraine exported 9.3 million tons of wheat, barley - 6.2 million tons, corn - 5.3 million tons, peas and buckwheat - by 0.4 million tons. During the past season, Ukraine exported 9.3 million tons of wheat. Bangladesh and South Korea became the largest customers of this grain.
Ukraine firmly maintains the leadership in the world in the export of barley. With the volume of world trade in barley at 17 million tons, Ukraine supplied 6.2 million tons of barley to foreign markets, nearly half ahead of the closest pursuer - Australia.
The country exported 5.3 million tons of corn, approximately the same amount exported last season. Egypt was the main buyer of corn. Export of peas and buckwheat from Ukraine in the season 2009/10 was 0.4 million tons.
The UAC predicts the 2010 harvest of early crops along with cereals will be some 30.5 million tons, including 17.5 million tons of wheat, 11 million tons of barley, 600,000 tons of rye, 500,000 tons of peas, buckwheat, millet, oats and rice - 900,000 tons, according to UAC director general Serhiy Stoyanov. "With corn, which, as we expect, will be about 14 million tons, the total grain harvest in Ukraine in 2010 could reach 44.5 million tons," Stoyanov said.
An agrarian sector analyst Andriy Tovstopiat predicts that grain production in Ukraine will exceed 45 million tons in the 2010-2011 marketing year.
Meanwhile, the Ministry of Agrarian Policy of Ukraine has lowered the forecast of grain exports from 21 million tons to 16 million tons in the 2010/11 marketing year (July 2010 through June 2011), including about 6.7 million tons of wheat, of which bread wheat makes 3 million tons, about 4 million tons of barley, and more than 5 million tons of corn.
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5. UKRAINE WILL REMAIN RELIABLE MILITARY PARTNER
OF THE U.S - CHIEF OF GENERAL STAFF
UkrInform - Ukraine News, Kyiv, Ukraine, Wed, July 28, 2010
KYIV - Ukraine will further remain a reliable partner of the U.S. in support of peace and security in Europe and the world. Chief of General Staff, Chief Commander of the Armed Forces of Ukraine, Lieutenant General Hryhoriy Pedchenko said this during his meeting in Kyiv with the U.S. Army Commander in Europe, General Carter Ham, who came on a two-day visit to Ukraine among a U.S. military delegation.
At the beginning of the meeting, Pedchenko welcomed Ham and members of the US military delegation on the Ukrainian soil, and expressed gratitude for the support of the U.S. to implementation of Ukraine's foreign policy, the press service of Defense Ministry says.
He also noted that Ukraine highly appreciates the current level of strategic partnership with the United States, and seeks to deepen it, including in the sphere of security.
"Cooperation between our armed forces is based on mutual recognition of democratic values, common challenges and security risks," says the General Headquarters Chief, adding, ,,Despite financial difficulties, Ukraine will continue to remain a reliable partner of the United States in maintaining peace and security in Europe and the world."
In turn, Ham thanked the Ukrainian side for the opportunity to conduct general training in the framework of bilateral international exercises. The troops had a great opportunity to learn from each other, the General said, expressing confidence that further cooperation will be based on the practical experience that the two countries' military obtained.
The U.S. General also thanked the Ukrainian side for participation in peacekeeping missions, noting he had personally observed the fulfillment by the Ukrainian military of their peacekeeping mission in Kosovo. The Ukrainian military are well prepared and are true professionals, he said.
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6. U.S.-DEPUTY ASSISTANT SECRETARY RUSSELL TO DISCUSS RAISING FINANCIAL AID FOR SS-24 MISSILES DISPOSAL DURING TRIP TO UKRAINE
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, July 27, 2010
KYIV - The U.S. will soon continue the dialogue on a new format of cooperation in a program to dispose of solid fuel from SS-24 intercontinental ballistic missiles at Pavlohrad Chemical Plant (Dnipropetrovsk region).
U.S. Deputy Assistant Secretary of State Daniel A. Russell will arrive in Kyiv in August or September to discuss raising U.S. financial assistance for the program, a high-ranking military official told Interfax-Ukraine. According to him, a relevant agreement was reached during the visit of U.S. State Secretary Hillary Clinton to Ukraine on July 2-3.
"The U.S. is looking for the ways to participate in the program and share financial costs with Ukraine to complete the program in 2013," the source said.
The funds needed to complete the program in 2013 are estimated at about $95 million.
"During the talks the U.S. State Secretary confirmed the United States' readiness to raise the financing of the program. According to the agreement, the new conditions for partnership will be considered during Deputy Assistant Secretary Russell's visit to Kyiv in August September," the agency's interlocutor said.
Ukraine is obliged to dispose of solid rocket fuel from RS-22 ballistic missiles under the Strategic Arms Reduction Treaty (START-1) and state programs on the elimination of SS-22 ballistic missiles and solid fuel from SS-22 ballistic missiles. It was planned to dispose all solid propellant in Ukraine, about 5,000 tonnes, by late 2011.
The United State appropriated about $24 million for building an SS-24 solid fuel disposal installation in Ukraine. Pilot trials of the installation began in Pavlohrad in 2002. In 2003, the United States withdrew from the solid propellant disposal project at the Pavlohrad Chemical Plant.
The financing from the Ukrainian national budget was carried out irregularly, while budget financing of the state program in 2010 was not foreseen at all.
At present the U.S. Defense Department is partially compensating for Ukraine's expenses on recycling under a so-called "black box" mechanism.
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7. STEVEN FISHER APPOINTED CITI COUNTRY OFFICER FOR UKRAINE
Citi, New York, New York, April 2, 2010
NEW YORK - Citi has announced the appointment of Steven Fisher as Citi Country Officer (CCO) for Ukraine, effective April 1st, 2010 and subject to regulatory approval.
In his new role, Steven Fisher will play the critical role of growing the Citi franchise in Ukraine. Steven will report to Zdenek Turek, President of ZAO Citibank, Head of Citi Russia and CIS, and will be based in Kyiv. Steven Fisher succeeds Nadir Shaikh, who is joining Citi Private Bank in a senior position based in London.
Zdenek Turek said: "We would like to thank Nadir Shaikh for his contribution to the Citi Ukraine franchise; his leadership has been instrumental in making Citi a highly respected bank in Ukraine. We are confident that Steve's leadership and seasoned business management experience will add tremendous value to our clients and the growth of our Ukrainian business."
Steven Fisher has been with Citi for 26 years and he brings unique and deep experience to this role. He recently served as Corporate Banking Regional Head for Russia, Ukraine and Kazakhstan, during which time Citi arranged and underwrote over $150 billion in financing for Citi's clients in the region.
Throughout his career, Steven has demonstrated extensive management and marketing experience in the fields of client relationship management, transaction products services, corporate finance & investment banking, and franchise and credit risk management.
Steven had previously served in regional and country roles across Asia, EMEA and North America. He holds a M.S. degree in Foreign Service from Georgetown University in Washington D.C., and a B. A. degree in International Relations, specializing in China and Russia, from Cornell University in New York State.
"I look forward to working with the excellent team on the ground to continue our momentum and deliver the full power of our universal banking model to clients in the region. Citi has built a truly great franchise in Ukraine, and Ukraine, being a country with huge potential for growth, remains one of the top priority markets for Citi in the region." said Steven Fisher.
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Additional information may be found at www.citigroup.com or www.citi.com.
PJSC "Citibank". Public Joint Stock Company "Citibank" is a 100%-owned subsidiary of Citi (headquartered in New York, U.S.A.). PJSC "Citibank" was registered by the National Bank of Ukraine in May, 1998 and on October 30, 1998 the Bank was granted the package of banking licenses authorizing it to conduct all principal banking operations. Citibank Ukraine's customer base is composed of the leading Ukrainian companies and multinationals, to which we provide a range of banking products including financing, treasury and transaction services
LINK: http://www.citibank.ru/russia/news/eng/234.htm
NOTE: Citi is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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8. UKRAINE: MEDIA OWNERS CAN BE SOME OF WORST CENSORS
OP-ED: by Martin Nunn, communications director for People First Foundation and
chief executive officer of Whites Communication, public relations consultancy
Kyiv Post, Kyiv, Ukraine, Friday, July 16, 2010
The Ukrainian media are close to bursting with indignation at the censorship being imposed on the media since the presidential election five months ago.
It is clearly evident that media freedoms have deteriorated with several critical TV stations losing their broadcasting frequencies on technicalities and increased instances of journalist harassment and assault.
Whilst such deplorable behavior cannot be condoned, I pose the question: even before this deterioration, was Ukraine’s media ever really free from censorship?
Let me get my position straight. Media censorship in any form is an infringement of article 19 of the United Nations Universal Declaration on Human Rights, to which the government of Ukraine is a signatory. Censorship is an attack on freedom and should be vigorously resisted.
During the era of ex-President Leonid Kuchma, journalists labored under the infamous “temnyky,” written instructions from the authorities on how to report a story. Then, the culprit was obvious and blame could easily be attributed, but today the authorities appear to be taking a different course that enables denial of culpability. A “temnyk” issued to any media outlet today would be all over the Internet within minutes, thus most of the censorship would appear to be via third parties or directly from the media owners.
A journalist wearing a "Stop Censorship!" T-shirt distributes a mock newspaper on June 6 in Kyiv, showing what news would be like in the future if censorship persists in Ukraine. Journalists gathered for a rally that day to stand up for their rights. (Yaroslav Debelyi)
But herein lies a dilemma. Most of the media owners belong to either the Party of the Regions or opposition factions. I can understand why those aligned to the government may have decided to toe the line, but why have the opposition forces done the same?
Surely they should seize the opportunity to use their media cannon to inflict the greatest damage possible on the new administration? But they haven’t. So one wonders who these invisible censors really are who wield so much power?
It is a positive step to see that the president has now ordered the state prosecutor to investigate just who is to blame? Perhaps it’s the prime minister, backed by the tax police, or media owners wishing to curry favor, or intimidation by the Security Service. In reality, no matter who the originator is, in the court of public opinion it is the reputation of the president and the nation that suffer.
One also has to ask why the president should be so upset with negative media comments. In his era, Russia President Boris Yeltsin used negative press comment to great effect enhancing his first election victory by some 5 percent.
The answer to this conundrum lies not with the president but with total failure, over decades, of the presidential PR team to do anything but try to cover the president’s back.
In the PR world of advanced communications, the battle between positive and negative news is won not by censorship, but by those who are the most professional. This lack of PR professionalism in the presidential administration press corps only fuels paranoia, the natural expression of which is censorship.
The administration would serve the interests of the president far more effectively if it were to create positive news to combat negative press rather than resorting to censorship to keep the lid on what is already a very open jar.
COMMERCIAL CENSORS
Sadly, it is not just the authorities who act as censors. Editors themselves are subject to massive censorship from within their own organizations.
Only this time it is not some grey state official sitting in a dark corner. The culprit is the media owner or their own advertising departments. Today, in Ukraine, good news, particularly related to business and politics, is considered to be “advertising.” Consequently, advertising departments insist that such news should be paid for. Bad news, on the other hand, is considered to be “real news” and therefore worthy of coverage.
This is “political and commercial censorship” and it’s been going on for decades. If you want to understand why the international image of Ukraine is so bad, much of the problem lies with this particular media policy, as there is little good news getting out.
Unfortunately, during the past 20 years, Ukrainian publishers have learned precious little. Publications are only viable if they deliver stuff that is useful and informative. The public simply will not pay for other people’s advertising, no matter how well it is disguised.
Ukraine’s largest newspaper (Fakty I Komnentarii) has a circulation of 1.1 million, which is less than Ukraine’s larger women’s magazines, so the public are voting with their wallets. Despite this many papers still churn out the same political pap coupled with disguised advertising on the argument that they need the revenue.
If they got their business models right and delivered what their customers wanted, as opposed to following the edicts of their often political masters, then they would not need the revenue from paid journalism.
So where does all this censorship end… Will they turn off the Internet or introduce Chinese-style firewalls? Will they turn off all the mobile phones and reintroduce the Soviet style listening posts on the land lines? This would only do more damage and erode further Ukraine’s drive toward European values. At the end of the day, the government would be far better served by creating policies that earned positive comment rather that trying to return the nation to the dark ages.
Censorship in all its forms is an affront to any democracy. Freedom of speech and freedom from censorship are our cardinal rights but until the media owners take it upon themselves to end their censorship they have little moral right to complain when the government seeks to do the same.
NOTE: Martin Nunn is the communications director for People First Foundation and chief executive officer of Whites Communication, a public relations consultancy in Ukraine. Whites Communication is a new member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
LINK: http://www.kyivpost.com/news/opinion/op_ed/detail/73811/
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9. U.S. CONTOURGLOBAL COMPANY STARTS BUILDING COMBINED HEAT POWER PLANT FOR COCA-COLA UKRAINE
Ukrainian News Agency, Kyiv, Ukraine, Wed, July 28, 2010
KYIV - ContourGlobal (United States) started building a combined heat power plant for Coca-Cola Ukraine, reads a statement made by the companies.
The statement notes, the main phase of the plant construction has been started, and its commissioning is planned for late 2010. The plant will have a capacity of 6 megawatts.
The heat power plant will be located on territory of a Coca-Cola Ukraine factory in the village of Velyka Dymerka, Brovary district, Kyiv region.
The companies stress, this construction is realised in frames of their short-term programme for construction of 15 heat power plants in 12 countries.
As Ukrainian News earlier reported, ContourGlobal and Coca-Cola in February 2008 announced their intention to build a combined heat power plant at Coca-Cola's Ukrainian factory by the end of 2009.
Coca-Cola Ukraine has operated at the Ukrainian market since 1992, it is a subsidiary of Coca-Cola Company (United States). U.S. ContourGlobal has operated in Ukraine since September 2005.
NOTE: ContourGlobal and Coca-Cola are members of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org. Garry Levesley
is the head of ContourGlobal's operations in Ukraine.
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10. UKRAINE: DUPONT READY TO INVEST INTO ZAPORIZHIA TITANIUM-MAGNESIUM PLANT
Ukrainian News Agency, Kyiv, Ukraine, Wed, July 28, 2010
KYIV - The Du Pont company, the United States, is ready to invest into the production of titanium sponge at Zaporizhia-based Zaporizhia Titanium-Magnesium Plant, the Industrial Policy Ministry said.
According to the report, Deputy Industrial Policy Minister Vitalii Kravchenko held a meeting with director of the mineral department of Du Pont and representatives of the Stock International GmbH, Austria, to discuss the investment.
Kravchenko said that the Industrial Policy Ministry supports the intentions of the American company to invest into the development of new technologies at Ukrainian enterprises. The Du Pont company also said that it may acquire 100,000 of ore materials in Ukraine.
As Ukrainian News earlier reported, Zaporizhia Titanium and Magnesium Integrated Works (ZTMK) has started production of titanium ingots on the base of
an agreement between ZTMK and the scientific and production center Tytan. Under the agreement ZTMK supplies sponge titanium to Tytan for production of ingots on tolling basis.
The public enterprise Zaporizhia titanium and magnesium integrated works is Ukraine's sole manufacturer of sponged titanium, it is run by the Industrial Policy Ministry.
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