[Ohio UZO News] AP; KP; EDM; OSCE; DC

[Deychak, Orest]

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EU POL Ukraine Election; Ukrainian election officials reverse decision,
register opposition party candidates 
15 August 2007
 

KIEV, Ukraine (AP) - Ukrainian election officials reversed their decision
and registered candidates from the opposition party led by former Prime
Minister Yulia Tymoshenko for next month's parliamentary election, an
official said Wednesday. 

The Central Election Commission voted 14-0 with one abstention to reverse
its decision that found Bloc Yulia Tymoshenko's candidates ineligible for
the Sept. 30 vote, commission spokesman Konstantin Khivrenko said. 

Tymoshenko's representatives could not be immediately reached for comment. 

In the original ruling, the commission said the candidates had failed to
provide their exact street addresses. At the time, Tymoshenko called the
commission decision politically motivated and hundreds of her supporters
have been holding rallies outside its building. 

A Kiev court ruled Tuesday that the election commission should review its
decision. 

Ukrainian politics has been riven by a power struggle between President
Viktor Yushchenko, who has pledged to bring the former Soviet republic
closer to the West, and Prime Minister Viktor Yanukovych, who is seen as
more friendly to Russia. 

The two were bitter rivals in the 2004 presidential election. Yanukovych was
initially declared the winner, but Yushchenko won a court-ordered revote
after weeks of mass protests against electoral fraud, which became known as
the Orange Revolution. 

Yanukovych staged a remarkable political comeback last year when his party
received the most votes in parliamentary elections and formed the ruling
coalition. 

 

 <http://www.kyivpost.com/>  

 
Opinion > Op-Ed  

Yanukovych and gas price capping

Taras Kuzio

Aug 15 2007

A failure to change the price capping policies should warn against returning
the Yanukovych government to office after the pre-term parliamentary
elections

In May 2005, when the Yulia Tymoshenko government introduced limited and
temporary price caps on oil, President Viktor Yushchenko threatened to
remove her from office. Western observers also quickly jumped on the
bandwagon and used price capping and re-privatization as two sticks with
which to beat the Tymoshenko government. 

The result has been that in some business circles and among foreign
investors the enduring memory of the 2005 Tymoshenko government is price
capping and support for mass re-privatization. Both memories are taken out
of context and are merely used by the same group of critics of Tymoshenko
who refer to her negatively as 'populist' (see "Whose 'populist' in
Ukrainian politics," Kyiv Post, July 5).

Why then the deafening silence over the price capping on a far greater scale
of gas prices by the Viktor Yanukovych government? 

Prime Minister Yanukovych told his government on July 18 that 'his
government would never undertake populism.' In reality, the bans on export
of grain and gas price controls are two big examples of populist price
controls introduced by the Yanukovych government to win votes.

On Dec. 19 of last year, the Anti-Crisis parliamentary coalition adopted the
2007 state budget. Article 3 of the budget law states that all enterprises
with state ownership of more than 50 percent, as well as joint ventures and
Joint Activity Agreements (JAAs) concluded with these enterprises must sell
their monthly production to a company specified by the government.

In a Jan. 16 government resolution (No. 31), Naftogaz Ukrainy was named as
the company authorized by the government. Naftogaz became de facto the only
company authorized to buy gas from JAAs and then sell it on to the Ukrainian
population. The aim of these policies introduced by the Yanukovych
government is to control the price of gas for the population on a scale far
greater than temporary oil caps in 2005. The difference between the historic
selling price of gas in Ukraine to industrial end-users at market prices of
$4.88 mcf (1,000 cubic feet) and the fixed government price of $1.63 is more
than 300 percent. 

Many Western companies have opted to therefore halt all sales of gas rather
than sell at a capped unprofitable price. The new capped price does not
cover the costs of exploration, development and production, leading to lower
production and investment. Cardinal Resources, a public limited company
traded in London with a US subsidiary, Carpatsky Petroluem, is one of a
number of Western companies which have halted all gas sales and instead
placed their gas into storage.

The Yanukovych government policies have two negative outcomes.

Firstly, foreign investors, such as Cardinal, have an adverse cash flow
because they cannot sell gas at market prices. To agree to sell their gas at
the capped price to Naftogaz Ukrainy would be to sell it at a loss.

Secondly, Cardinal, as with other foreign investors, sees the government's
price capping policy as particularly having a negative effect on foreign
investors. Price capping reduces the incentive for foreign investors to come
to Ukraine at a time when only 28 percent of Ukraine's gas demand is met by
domestic production. 

Government price capping of gas directly contradicts Ukrainian legislation,
such as the Civil Code and the Law on Foreign Investment. In April, Europa
Oil and Gas (Holdings) plc won their case in court of the right to sell gas
at market prices but the government continues to ignore the court ruling.
This is not the only evidence of a non-listening government. Cardinal
Resources sent letters on the gas price capping policy to Prime Minister
Yanukovych last December, to Minister for Fuel and Energy Yuriy Boyko in
March and to the CEO of Naftogaz Ukrainy in May. 

Cardinal Resources failed to receive responses to two of the letters and
only a curt and non-committal reply from the Deputy Minister for Fuel and
Energy. A March letter from US Ambassador William Taylor to Minister Boyko
also failed to receive any response. Two meetings between Boyko and Cardinal
Resources produced no results.

A July paper published by the prestigious Washington think tank, the Center
for Strategic and International Studies (CSIS), described how it was
'extremely difficult' for Western energy companies to obtain a foothold in
the Ukrainian market. Western investors have the potential to make Ukraine
independent in its energy needs, thereby making Ukraine free of Russia's
monopolist and corrupt energy relationship.

It has long been evident though that a large proportion of the Ukrainian
elites wish to maintain the status quo because they receive large rents from
the existing corrupt energy relationship with Russia. Energy corruption
therefore overrides Ukraine's national interest and the country's national
security.

According to Ambassador Keith Smith, author of the CSIS report, a major
factor blocking Western investment in the energy sector is 'control of
natural resources by groups hostile to Western investors.' The Yanukovych
government is effectively squeezing Western investors out of Ukraine,
Ambassador Smith concludes. The two groups which benefit from these price
capping policies are the corrupt intermediary RosUkrEnergo, which, according
to a Radio Free Europe/Radio Liberty report, is the biggest money laundering
operation in Europe, and local oligarchs. Only one political force - the
Tymoshenko bloc - has consistently opposed the use of RosUkrEnergo as a
middle man.

The Ukrainian population meanwhile suffers while Western investors pause, or
withdraw. Desperately needed foreign direct investment (FDI) and
technologies are directed toward governments that show themselves amenable
to international standards of economic behavior. 

The Yanukovych government's policy puts into question its stated desire to
join the WTO, establish a free trade zone with the EU and eventually join
the EU. Price capping also puts into doubt the government's declared
interest in attracting foreign investors and its stated desire for energy
security and independence. These policies are far more populist than
anything introduced in 2005. The unwillingness of the Yanukovych government
to respond to the concerns of foreign investor, or to have any common
courtesy in responding to the US Ambassador, necessitates a stronger
response from the US government, EU and WTO. A demarche should point out
that the Ukrainian government's price capping policy is inconsistent with
international norms on attracting foreign investment, attaining WTO
standards consistent with membership and the Ukrainian government's
statements on seeking energy self-sufficiency. 

A failure to change the price capping policies should warn against returning
the Yanukovych government to office after the Sept. 30 pre-term
parliamentary elections. Ukraine's post-election new government should be
committed to three policies: attracting foreign investment, battling
corruption and energy independence.  The Yanukovych government has proven
that it has no commitment to any of these three policies.

 Dr. Taras Kuzio is a Research Associate of the Institute for European,
Russian and Eurasian Studies, Elliott School for International Affairs,
George Washington University and President of the consulting firm Kuzio
Associates.


 Eurasia Daily Monitor -- The Jamestown Foundation
<http://jamestown.org/images/edm_banner2.jpg> 	
August 16, 2007 -- Volume 4, Issue 160	

UKRAINE'S 2007 ELECTIONS WILL ALSO DECIDE UKRAINE'S NEXT PRESIDENT

Ukraine's September 30 parliamentary elections will decide the country's
next government and most likely determine the outcome of the presidential
elections two years later. As seasoned Zerkalo nedeli commentator Serhiy
Rakhmanin pointed out, the "pre-term parliamentary campaign gives [President
Viktor] Yushchenko a great opportunity to launch the presidential campaign
ahead of time."

The conflated election campaigns have led to electoral populism. Yushchenko
and his Our Ukraine-Self Defense (NUNS) coalition have launched a campaign
to remove parliamentary immunity, a campaign issue last raised by President
Leonid Kuchma in an April 2000 referendum. The Party of Regions, which now
dominates parliament, replied by calling for the end of immunity for all
officials - president, prime minister, judges, and deputies.

These moves should discourage corrupt oligarchs and businessmen from running
for parliament and help separate business and politics. But the
anti-oligarch election rhetoric does not square with the continued presence
of oligarchs in both the Party of Regions and NUNS. Yuriy Lutsenko's
People's Self Defense, Our Ukraine's ally in the 2007 elections, was
established by an oligarch, Davyd Zvannia. The Privat oligarchic group,
allied to former senior Yushchenko adviser Oleksandr Tretyakov, has eight
representatives in the NUNS list.

The leaders of Self-Defense claim to have reformed. Lutsenko admitted, "Yes.
We are the only political force that publicly accepted its mistakes,
including the choice of personnel, and cleaned out and renewed ourselves."
The party removed businessman Petro Poroshenko, whose name is associated
with the corruption charges that led to the September 2005 political crisis.

According to Zerkalo nedeli, the NUNS election list was heavily influenced
by Lutsenko and Ihor Kolomoysky, the controversial head of Privat. Thus the
changes look more like musical chairs than cleaning house.

NUNS needs to regroup after Our Ukraine's poor performance in the 2006
elections, when it obtained fewer seats than in 2002. The coalition also
needs reinforcement to compete with the Yulia Tymoshenko bloc (BYuT),
another veteran of the Orange Revolution. Finally, NUNS needs nation-wide
support. Anti-oligarch and anti-corruption sentiment mobilized many
western-central Ukrainians to participate in the Orange Revolution. These
sentiments are not popular among voters in eastern Ukraine, who have had no
qualms about voting for a convicted felon supported by oligarchs -- Prime
Minister Viktor Yanukovych.

Yanukovych's Party of Regions has always included corrupt and discredited
former Kuchma officials and oligarchs, such as Renat Akhmetov, who has
ignored calls by the president to not run for parliament. Akhmetov ranks
seventh on the Party of Regions election list.

NUNS has unequivocally stated that its election and future coalition partner
is the BYuT. Senior NUNS leaders have publicly refuted suggestions that they
may enter a coalition with the Party of Regions. Lutsenko has stated that
NUNS would only enter a grand coalition if BYuT also agreed. Yushchenko has
been less clear in his intentions. Following the 2006 elections Yushchenko
sent two close allies to separately negotiate with BYuT and the Party of
Regions, a strategy that he may repeat this year.

The parliamentary coalition established after the 2007 elections will
heavily influence the outcome of the 2009 elections. With the prime
minister's position strengthened following constitutional reforms in 2006,
the office is an even better launching pad for the presidency.

However, Yushchenko has proven unable to work with two of his three prime
ministers, Yulia Tymoshenko and Yanukovych, because he sees both as
potential competitors for the presidency. Ideally, Yushchenko would prefer
that neither of them become Ukraine's next prime minister. The Party of
Regions is leading the polls, so the Orange camp is battling for second
place. If NUNS places second, Yushchenko would likely chose a
non-threatening technocrat, such as former prime minister Yuriy Yekhanurov,
for the job.
 
If BYuT finishes second, as seems likely, Yushchenko could again be tempted
to negotiate a grand coalition with the Party of Regions. His only condition
would be that Yanukovych not be prime minister. Yushchenko has reportedly
reached such an agreement through Yekhanurov, who has always been close to
the Party of Regions, and presidential secretariat head Viktor Baloga.

This scenario poses three risks for Yushchenko.

First, forcing NUNS into a grand coalition with the Party of Regions might
be more palatable than in 2006, as it would not include the Communists and
Yanukovych would not be prime minister. However, it would split NUNS and
prevent the planned post-election unification of its constituent members
into a pro-presidential party and vehicle for Yushchenko's re-election in
2009.

Second, it would push BYuT into opposition, where it has always felt rather
comfortable. Tymoshenko was the only one of four opposition leaders who did
not stand in the 2004 elections. If Tymoshenko was in opposition in
2007-2009, during which time Yushchenko supported a grand coalition, the
president could lose orange voters.

Third, the Party of Regions could renege on any agreement to stand aside in
2009, and members could submit their own presidential candidate.
Alternatively, they might find it difficult to persuade their voters to back
Yushchenko, after seven years of hostile propaganda against him.
 
Yushchenko is convinced that the 2007 elections are the key to his
re-election in 2009. But not repeating the same strategic mistakes made
against Tymoshenko and Yanukovych in 2005-2006 will also play an important
part in deciding Ukraine's future.

(Zerkalo nedeli, August 11-17; Inter TV, August 6; Ukrayinska pravda, August
2, 13)

--Taras Kuzio

 <http://www.osce.org/> OSCE 
 Office for Democratic Institutions and Human Rights
<http://www.osce.org/graphics/flags/odihrlogo.gif> Office for Democratic
Institutions and Human Rights
Press release

ODIHR deploys long-term election observation mission to Ukraine


KYIV, 13 August 2007 - The OSCE's Office for Democratic Institutions and
Human Rights (ODIHR) has opened an election observation mission for the 30
September parliamentary elections in Ukraine. 

The deployment of the mission follows an invitation from Ukraine's Foreign
Ministry to observe the elections. 

The mission, headed by Ambassador Audrey Glover, includes 17 experts based
in Kyiv. The ODIHR has requested that OSCE participating States second 60
long-term observers, who will be deployed around the country, as well as a
further 600 short-term observers to monitor activities on election day,
including the opening of polling stations, voting, the vote count, and the
tabulation of results. 

The mission will assess the elections' compliance with OSCE commitments for
democratic elections and other international standards, as well as with
national legislation. 

Observers will closely monitor campaign activities, the work of the election
administration and relevant governmental bodies, election-related
legislation and its implementation, the media environment, and the
resolution of election-related disputes. 

The mission intends to join efforts with short-term observers from the OSCE
Parliamentary Assembly, the Parliamentary Assembly of the Council of Europe,
the European Parliament, and the Parliamentary Assembly of NATO. 

The ODIHR observation mission and the Office of the OSCE Project
Co-ordinator in Ukraine operate independently under separate mandates.

 

Helsinki Commission:

Dear Colleague Letter to Members of the House of Representatives Urging
Cosponsorship of Resolution on Ukraine Elections (H. Con. Res 189)
Introduced July 23 by Helsinki Commission Chairman Rep. Alcee L. Hastings
(D-FL)

Cosponsors to date:  Reps. Louise Slaughter (D-NY), Doris Matsui (D-CA),
Michael McNulty (D-NY), Jim Gerlach (R-PA), Sander Levin (D-MI), Darrell
Issa (R-CA), Corrine Brown (D-FL), Marcy Kaptur (D-OH), Danny Davis (D-IL). 

Congress of the United States

House of Representatives

Washington, DC  20515

 

  July 30, 2007

Support Resolution on Ukraine Elections

Cosponsor H. Con. Res 189: Urging all sides to the political crisis in
Ukraine to abide by the May 27, 2007 agreement which calls for a new round
of parliamentary elections on September 30, 2007, and to ensure a free a
fair, transparent democratic system in Ukraine based on the rule of law 

 Cosponsors:  Louise Slaughter, Doris Matsui, Michael McNulty, Jim Gerlach,
Sander Levin, Darrell Issa   

 

Dear Colleague:

Please join me in supporting democratic processes and the rule of law in
Ukraine by cosponsoring H. Con. Res. 189, which urges all sides to abide by
the agreement signed by Ukraine's leadership on May 27, providing for a new
round or parliamentary elections to be held on September 30, and encouraging
the holding of these elections in a free, fair and transparent manner in
keeping with Ukraine's commitments as a participating State of the
Organizations for Security and Cooperation in Europe  (OSCE) . This
resolution is a demonstration of Congress' interest, concern, and support
for Ukraine as that strategically important country perseveres towards full
democracy and the rule of law. 

A political dispute between Ukraine's President Viktor Yushchenko and Prime
Minister Viktor Yanukovich -- rooted in weak constitutional deliniations of
their powers -- resulted in a political crisis in April and May.  After
weeks of tense standoff,  Yushchenko, Yanukovich and Parliamentary Speaker
Oleksandr Moroz reached an agreement calling for early elections to be held
on September 30.  

Ukraine has made important progress since the 2004 Orange Revolution, but
its democratic institutions and the rule of law are still emerging and lack
in their ability to safeguard democratic gains.  It is important for the
September 30 elections to be held in a free, fair, open and transparent
manner -- following the pattern of Ukraine's last two elections.  While
democratic elections will not, in and of themselves, resolve all of the
challenges facing Ukraine in strengthening the rule of law and delineating
power among branches of government, they are a critical stepping-stone in
Ukraine's democratic development.  

Democratic consolidation and the rule of law will enhance Ukraine's
aspirations for full integration with the West and, improtantly, serve as a
positive model for other former Soviet countries, many of whom are in the
grip of authoritarianism.   

Please have your staff contact Orest Deychakiwsky or Mark Hadzewycz at the
Helsinki Commission at 5-1901 or e-mail
<mailto:orest.deychak at mail.house.gov> orest.deychak at mail.house.gov regarding
cosponsorship.

 Below please find the text of the resolution.  

 Sincerely,

 /s/

Alcee L. Hastings

For text of resolution, full introductory statement, see Helsinki Commission
website:   <http://www.csce.gov/> www.csce.gov; click on map of Ukraine for
Ukraine page.

Constituents may contact their individual Representatives and urge that they
cosponsor H. Con.Res.189. 



 


 

 

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