[Ohio UZO News] KP; US Senate; Economist; EDM; Window on Eurasia (Paul Goble)

[Deychak, Orest]

Kyiv Post

US Senate urges NATO to put Ukraine, Georgia, on track for alliance
membership

Feb 18 2008

WASHINGTON (AP) - The US Senate urged NATO to put Ukraine and the
Republic of Georgia on a track toward membership. 

The support for the two countries came in a resolution passed without
dissent on Thursday that backed their hopes to join NATO's membership
action plan. The program helps countries prepare for eventual
membership. 

The measure is not binding on US policy. 

NATO may consider Georgia and Ukraine for the membership track at its
summit meeting in Bucharest, Romania, in April. It is unclear whether
the two countries have the required unanimous support of NATO's 26
member countries. 

Russia has made clear that it opposes an expansion of NATO to include
the two former Soviet republics. This week Russia threatened to target
Ukraine with nuclear missiles if it should join the alliance. 

 

S.RES.439 [110th] 

 

 

 

 

Title:A resolution expressing the strong support of the Senate for the
North Atlantic Treaty Organization to enter into a Membership Action
Plan with Georgia and Ukraine. 
Sponsor: Sen Lugar, Richard G.
<http://www.congress.gov/cgi-lis/bdquery/?&Db=d110&querybd=@FIELD(FLD003
+ at 4((@1(Sen+Lugar++Richard+G.))+01387))>  [R-IN] (introduced 1/31/2008)
Cosponsors: 8
<http://www.congress.gov/cgi-lis/bdquery/z?d110:S.RES.439:@@@P> 
Committees: Senate Foreign Relations 
Latest Major Action: 2/14/2008 Passed/agreed to in Senate. Status:
Resolution agreed to in Senate without amendment and with a preamble by
Unanimous Consent. 

 

(Note:  Text of resolution was sent out in my February 1 mailing.  OD )

 

 

Economist

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


What is it for?

Feb 14th 2008 

Cutting out the middleman in Ukraine

TO CONNOISSEURS of financial euphemism, the RosUkrEnergo website
<http://www.rosukrenergo.com>  is without peer. A company that appears
to own no reserves or pipelines made a stonking $785m in the gas
business in 2006 (the last year recorded) and more than doubled its
assets, from less than $2 billion to more than $4 billion.

It would be outrageous to suggest that anything underhand is going
on-after all, RosUkrEnergo is audited by blue-chip
PricewaterhouseCoopers and is associated with the ultra-respectable
Raiffeisen bank. But shareholders in Gazprom may reasonably wonder why
their company has outsourced the evidently lucrative business of buying
gas cheap in Russia and central Asia, and selling it dearly to Ukraine. 

Add to that puzzling corner of post-Soviet capitalism an array of vast
and baffling debts, supplies from one of the world's worst
dictatorships, plus a casual threat of nuclear retaliation and you have
the humdrum world of Ukrainian-Russian energy relations.

Once again, Gazprom has threatened to cut off Ukraine because of overdue
bills, and once again the issue has been fudged.

The Kremlin is clearly, and deplorably, trying to intimidate Ukraine
into dropping its newly revived ambitions to join NATO, and into
quashing any thoughts that it might host American missile-defence
installations. Vladimir Putin's loose talk about nuclear targeting is
particularly alarming. But the real point of the story is bad government
and corruption. 

It is a huge indictment of Ukraine's post-independence rulers that their
incompetence, crookedness and ruthlessness has after 17 years left the
country with no independent source of gas imports and such wasteful
patterns of consumption. That was not inevitable.

As Georgia has shown, necessity is the mother of both thrift and
invention. When mysterious explosions inside Russia cut the gas supply
to Georgia in 2006, the economy there did not collapse: instead the
authorities quickly restored a decrepit Soviet-era pipeline from
Azerbaijan, and industry started using energy a lot more efficiently.
Economic growth has rocketed.

Ukraine should take the same medicine-and better voluntarily now, than
being force-fed it by the Kremlin at some point in future. The proposed
White Stream pipeline, bringing gas to Ukraine across a corner of the
Black Sea, is an ingenious plan that deserves top-level political
support.

As the planned Nabucco pipeline through Turkey and the Balkans seems
finally to have been stymied by Russian machinations, White Stream may
now be the best hope not only for Ukraine, but also for Europe, of
securing an independent supply of gas from the Caspian, the Caucasus and
Central Asia.

It is also time to accept higher gas prices. A gas shortage is looming
in Russia, aggravated by the cynical but extravagant notion of extending
gas supplies to tens of thousands more households. Gas from Turkmenistan
is supposed to fill the gap, though whether enough will be forthcoming
is wholly unclear. The sooner Ukraine's booming economy gets used to
world prices, the stronger its position to haggle for whatever exports
are available.

But the biggest change should be to dump the notion that intermediary
companies in international gas trading are necessary or desirable. 

Ukraine's prime minister, Yulia Tymoshenko, is no stranger to this
world: in her earlier career as a businesswoman, she worked closely with
Itera, a predecessor of RosUkrEnergo. But she is right to insist that
her country's gas imports should be transparent now rather than later,
and it is troubling that Viktor Yushchenko, Ukraine's president, has
been dithering on the issue. The working group that he has agreed to set
up with Russia needs to ask some simple but tough questions (for
example: who exactly owns RosUkrEnergo?) and then draw the obvious
conclusions

 

Eurasia Daily Monitor

February 15, 2008 -- Volume 5, Issue 30

________________________________


RUSSIA-UKRAINE GAS RELATIONS: MURKY AFTER PUTIN-YUSHCHENKO MEETING

Presidents Vladimir Putin of Russia and Viktor Yushchenko of Ukraine
have agreed on a reshuffling of the cards in Russia-Ukraine gas
relations. During Yushchenko's February 12-13 visit to Moscow (see EDM,
February 14) the two presidents adopted on a personal basis what
Yushchenko termed "tactical decisions" on gas relations for 2008 and
"strategic decisions" for the years thereafter.

Regarding the latter, Yushchenko declared, "We have agreed on the
strategy, but will not publicize [afishirovat] it at this time." He
disclaimed "any desire as President to have to deal with gas issues" and
credited Putin with a similar aloof disinterest: "I am sure that the
same is true of Vladimir Vladimirovich" (Kremlin.ru, February 12; Russia
Television Channel One, February 13). Putin did not seem to take
umbrage.

The decisions focus on replacing the two intermediaries, RosUkrEnergo
and UkrGazEnergo, from the Russia-Ukraine gas trade. In their stead,
Gazprom and the Ukrainian state company are to establish two new joint
companies, each on a 50%-50% parity basis.

As Gazprom's chairman and Russia's president-in-waiting Dmitry Medvedev
told journalists on this occasion, the intermediary's title is
immaterial as long as the system continues. Gazprom, he said, can supply
gas to Ukraine at European prices of some $300 without intermediaries,
if Ukraine chooses that option. But if Ukraine wants cheaper Central
Asian gas, it must accept an  intermediary by agreement with Gazprom.
The Russian side is ready for either option, Medvedev said. He recalled
that Russia had in 2005 proposed to create such an intermediary in the
form of a Gazprom-Naftohaz joint company, but that the Ukrainian side
favored the RosUkrEnergo solution (Itar-Tass, February 14).

The two existing intermediaries are Gazprom's offshoots. RosUkrEnergo,
50% owned by Gazprom and 50% by Gazprom's Ukrainian allies, buys gas
from Gazprom and delivers it through Gazprom's pipelines to the
Russia-Ukraine border. UkrGazEnergo, 50% owned by RosUkrEnergo and 50%
by Naftohaz -- and managed by long-time Gazprom collaborators in Ukraine
-- buys that gas from RosUkrEnergo at the border and sells it within
Ukraine. There, UkrGazEnergo supplies the lucrative industrial market
and Naftohaz the debt-ridden household market. This system is in place
under the January 2006 agreements signed by Yushchenko's energy team
with Gazprom.

Through this arrangement, Ukraine receives gas at prices far below those
prevailing in Europe, although the price charged to Ukraine is rising
each year and should reach the European level by 2011. Ukraine pays
$179.5 per 1,000 cubic meters in 2008, compared to more than $300 paid
by most of Gazprom's customers in Europe. Gazprom sustains this discount
to Ukraine by buying Turkmen and other Central Asian gas far below
European prices, adding some volumes of "European-priced" Russian gas,
and selling the mix to RosUkrEnergo for transport to Ukraine, where
UkrGazEnergo distributes it to consumers. Attractive in the short term,
this system of discounts is actually depriving Naftohaz of revenues,
pushing it into indebtedness, and preventing it from modernizing
Ukraine's gas transit system, which Naftohaz owns and operates. By
pushing Naftohaz toward bankruptcy, Gazprom aims for some form of shared
control of Ukraine's gas transit system.

In late January-early February, Gazprom threatened to reduce gas
supplies to Ukraine as of February 11, unless Naftohaz begins
reimbursing arrears worth $1.5 billion. By Gazprom's accounting, $500
million of that sum stems from a suddenly increased "Russian" portion in
the Central Asian-Russian mix of gas supplied to Ukraine during
November-December 2007. With frost-hit Central Asia facing gas
shortfalls, Gazprom compensated for the missing Central Asian volumes by
adding expensive "Russian" gas for delivery to Ukraine by RosUkrEnergo.
Furthermore, Moscow complains that Naftohaz bought 5 billion cubic
meters of gas in January 2008 from UkrGazEnergo without a valid
contract, once the price of the gas mix went up (Interfax-Ukraine,
UNIAN, February 12-14).

The debt-formation mechanism has operated as follows: Naftohaz is unable
to pay to UkrGazEnergo, which in turn cannot pay to RosUkrEnergo, which
in its turn owes that amount to Gazprom. Thus, Gazprom turns to the
Kremlin to collect the debt from Ukraine. The mechanism seems to work as
Moscow intended all along.

The Ukrainian government is now looking at debt-repayment options, which
-- according to Fuel and Energy Minister Yuriy Prodan -- include:
collecting arrears from Ukrainian gas consumers, "restructuring its
debts to Gazprom," or taking yet another international loan to pay
Gazprom through that chain of intermediaries.

On February 14, the Ukrainian cabinet of ministers under Yulia
Tymoshenko decided to set up a commission to disband UkrGazEnergo and
replace it with a Naftohaz-Gazprom parity company. Thus, Gazprom can
move directly into the transmission and distribution system within
Ukraine, taking over  50% of the business if this arrangement takes
shape. RosUkrEnergo is to continue operating in 2008, pending its
replacement in accordance with the February 12 Putin-Yushchenko
agreement. That agreement is only an outline, likely to be challenged
politically in Ukraine.

--Vladimir Socor

 

Window on Eurasia: Ukraine, Not Russia, Successor of Kievan Rus,
Yushchenko Advisors Say 

Paul Goble
 

            Baku, February 15 - Kyiv is set to challenge two of the holy
of holies of Russian national identity: a group of advisors to President
Viktor Yushchenko says in a special report that Ukraine is the true
successor to Kievan Rus' and that Ukrainians have always been a separate
nation rather than "a by-product" of Russian development.

            Late Wednesday, the New Region news agency released a report
about the contents of a paper prepared for Yushchenko by the Kyiv
National Institute of Strategic Studies under the direction of the
president's secretariat that the president is slated to use in a speech
to the Ukrainian parliament (http://www.nr2.ru/kiev/164124.html).

            The paper's arguments have already sparked outrage in the
Russian blogosphere, are certain to infuriate many Russians inside the
Moscow government and beyond, and will further complicate relations
between Moscow and Kyiv. Indeed, that may force Yushchenko to avoid
making some of them at least in as direct a way as the report does. 

            But because the institute's position reflects the thinking
of an increasing number of Ukrainians - indeed, most of its contents
have long been common ground of Ukrainian intellectuals - it deserves
close attention regardless of what Yushchenko does with it.
Fortunately, the New Region report includes extensive quotations from
it.

            According to the institute, "Russian theoreticians of the
eighteenth and nineteenth centuries developed and Soviet ideologues
extended the notion that the Ukrainian people is 'a byproduct' of
historical development which arose as a result of alien
Lithuanian-Polish-Austrian intrigues."

            The Russian people, these Moscow ideologists said in the
words of the Kyiv report, is "the heir of Kievan Rus'," "a great people"
- "'god bearing' in tsarist times and 'the bastion of the world
revolutionary movement'" in Soviet ones - and thus has the special role
of "savior of humanity."

            "Over the course of centuries," the report continues,
"Ancient Princely Rus' was conflated with contemporary Russia." And it
says that Russians who dos so also insist that the formation of the
Ukrainian ethnos "occurred much later (not earlier than the 14th
century)" and has always wanted "to reunify with the great fraternal
Russian people."

            Such views, the report continues, continue to be
disseminated "in the information space of Ukraine" via "Russian
television programs and popular music where the central theme is
'Russian valor and glory,' Soviet symbols, the names of Ukrainian
villages and town, which even now glorify the people and events of the
imperial and totalitarian past." 

            Moreover, it says, "researchers and instructors with a
post-Soviet and pan-Slavic type of thought" not only keep such
historically incorrect views alive but spread them to the next
generation of Ukrainians to the harm of their nation and their state,
preventing them from overcoming the Russian and Soviet past.

            Ukrainians have written and spoken a great deal about the
"unprecedented" physical traumas their nation suffered in the past, but
they have focused less attention on the equally or even greater
ideological trauma that Russian and Soviet rule inflicted upon them.

            Now, the authors of the report say, it is time to insist on
the restoration of historical truth, to recognize and proclaim that
Kievan Rus' was the forefather of Ukraine rather than the foundation
stone of Russia and that Ukrainians are and have always been a separate
nation not an offshoot of the Russian one.

            As a first step in that direction, they continue, "the
calendar of state holidays, the toponymy of Ukraine, and the memorial
symbols of is cities and villages must be decisively cleansed from 'the
relicts' of the Soviet period" which "glorify events that for Ukrainians
were tragic and the names of the killers of the Ukrainian people."

            In addition, the authors of the report argue, Ukrainians
must recognize that both Ukrainian-Russian bilingualism and Ukraine's
continuing in the "'canonical territory' of Moscow Orthodoxy"
fundamentally contradict the Ukrainian national idea and must be
overcome.

            It is unlikely that Yushchenko or his government will choose
to advance all of these ideas all at once.  Indeed, one of the tasks of
such papers is to lay out an issue in the starkest terms rather than
define precisely what political leaders with their own sense of the
possible will choose to do.

            But the circulation of these ideas at the highest levels of
the Ukrainian government today suggest that more and more Ukrainians as
they move to integrate with the West are prepared to challenge Russian
historical conceptions that ignore the historical record and denigrate
their national dignity.

            

            

 

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