[Ohio UZO News] Ukraine: AP; FT; EDM; KP (2)

[Deychak, Orest]

Associated Press


EU worried over political instability in Ukraine 


Jun 19 2008, 14:38

BRUSSELS, Belgium (AP) – EU officials on Thursday urged Ukrainian Prime Minister Yulia Tymoshenko to heal political rifts with her rivals to ward off further instability that would damage economic development in the former Soviet republic. 

A power struggle between Tymoshenko and Ukraine President Viktor Yushchenko are threatening to delay much needed economic and political reforms. The two were allies during the 2004 Orange Revolution against voter fraud, but they have repeatedly clashed over various policy matters, mainly concerning oil and gas. 

"We still have some preoccupation on our side on the political situation," EU foreign policy chief Javier Solana told Tymoshenko after talks at EU headquarters. "We would like very much to see the political situation stabilize." 

Tymoshenko told Solana she would work to heal political divisions. 

"Ukraine has a very good potential and is developing positively and what we need is to get is the political unity between the president ... and my majority in the parliament, and from my side as head of the government, I will do my best to head in this direction," Tymoshenko said. 

She said her government was working to lower inflation from 17 percent and said the economy would benefit from expected bumper crop harvests this year. 

Tymoshenko was in Brussels before an EU leaders summit to bolster Ukraine's membership bid. French President Nicolas Sarkozy will host an EU-Ukraine summit in September, at which the EU could present Kiev with an offer of closer ties. 

Poland and Sweden are pushing the EU to develop a new "eastern dimension" policy that would build ties with Ukraine, Moldova, Georgia and other former Soviet neighbors. 

Ukraine hopes to join the EU by 2020, but the EU remains divided on giving it the prospect of eventual membership. 

Financial Times

www.ft.com

Agribusiness eyes potential in Ukraine's fertile fields

By Roman Olearchyk in Kiev and Stefan Wagstyl 

Published: June 19 2008 

"Look at the colour, what a beautiful crop," says Richard Spinks, pointing to wheat and rapeseed fields that his company sowed this season in western Ukraine.

"If all of Ukraine's farms could produce the yields we are getting, this country could play a big role in feeding the world and establish itself as a geopolitical power," says the British chief executive of London-listed Landkom.

Once considered the bread basket of Europe, Ukraine's farms are still recovering from the economic collapse that followed the break-up of the Soviet Union. In spite of a favourable climate and some of the planet's most fertile soils, grain production halved after the Stalin-era collective farm system was broken up and wheat fields were turned over to pasture.

Landkom's business model is simple: lease inefficiently farmed land and apply western fertilisers and irrigation. With Ukraine's grain yield about 35 per cent of western Europe's, there is plenty of scope to improve returns.

Landkom, which last year raised just over $100m on Aim, London's junior market, has leased more than 100,000 hectares.

It is one of a growing number of agribusinesses that see profit in Ukraine. Leading grain and oilseed trading companies, such as Cargill and Toepfer, tiptoed into the market in the 1990s and today play a big role exporting grain. With food prices soaring, their timing looks perfect.

"Ukraine is not part of the problem; it's a part of the solution for food supplies," Jean Lemierre, the outgoing head of the European Bank for Reconstruction and Dev-elopment, said in Kiev last month.

Yuriy Melnyk, agriculture minister, says that with investment and the right technology, Ukraine could "double or even triple" production to one-seventh of world output.

Less than $3bn has been invested in Ukrainian agriculture since 1991, according to government data. Domestic producers are just starting to raise funds on international stock markets. Renaissance Capital, an investment bank, says $628m in new equity has been raised since August 2006.

Yuriy Kosyuk, chief executive of MHP, a poultry and agriculture group, says $27bn (€17bn, £14bn) could be invested over the next 15 years.

Whether that happens depends on the pace of reform in parliament. It is illegal to sell agricultural land, most of which is owned by millions of cash-strapped rural farmers.

An increasingly vociferous reform lobby is pushing hard to lift restrictions next year. Andriy Yarmak, a farming expert, says: "Companies are competing fiercely for this land today and we see more and more players."

But politicians say poor smallholders must be protected from exploitation at the hands of unscrupulous businesses that would buy the land at a fraction of its real value.

Mr Yarmak says the real boom will come when legislators sanction agricultural land sales - that with ownership rights, investment and productivity will surge.

Protectionism has also been a concern. Kiev has limited grain exports in recent years to keep bread prices down. As a result, farmers turned to exportable crops such as rapeseed, used in biofuel production. But with Ukraine joining the World Trade Organisation this year, restrictions are to be lifted.

One of the things that attracts foreign investors to Ukraine is the ease with which the harvest can be exported to the European Union via rail or sea.

Investors have been leasing land in the hope that they will be at the front of the queue to buy it or sell on the leases at a profit. Annual lease prices doubled to $60-$80 per hectare last year. Renaissance Capital, which has leased 300,000 hectares of land with the intention of reselling the leases, forecasts that they will double again this year.

Meanwhile, favourable weather and rising investment should deliver 40m tonnes of grain this season, up from last year's drought-affected harvest of 29m tonnes. About 14m tonnes of grain are earmarked for export, up from a meagre 2.4m tonnes last year.

Eurasia Daily Monitor

June 19, 2008

MOSCOW READY FOR MAJOR CONFRONTATIONS WITH PRO-WESTERN GEORGIA AND UKRAINE


In the past Russia strongly protested the expansion of NATO to include Central European states that were Soviet clients and former Warsaw Pact members during the Cold War, as well as the Baltic republics that were part of the Soviet Union. In the end, however, Russia backed down and accepted the inevitable shrinking of its effective sphere of influence. Now the rulers in Moscow seem to be ready for a major confrontation that includes the threat of military force against the pro-Western governments in Georgia and Ukraine, which aspire to join the alliance.

After a recent meeting between Russian and Georgian Presidents Dmitry Medvedev and Mikhail Saakashvili in St. Petersburg, Foreign Minister Sergei Lavrov told journalists, "We told the Georgians that their desire to join NATO will not help solve the problems of Abkhazia and South Ossetia; it will lead to renewed bloodshed" (RIA-Novosti, June 6). Later Lavrov added in a radio interview, "We will do anything not to allow Georgia and Ukraine to join NATO" (Ekho Moskvy, April 8).

Speaking last week in Sevastopol in Crimea, the main base of Russia's Black Sea Fleet, Russian Deputy Prime Minister Sergei Ivanov warned Ukraine that joining NATO would have serious consequences: "A complete disruption of military-industrial ties between Russia and Ukraine is inevitable, as well as the reduction of other trade and economic ties and an introduction of a visa regime." Ivanov implied that NATO would "force Ukraine to introduce a visa regime." Ivanov added, "More than 30 million Russians live outside Russia, and we are morally responsible for them" (RIA-Novosti, June 14).

Russian officials connect the possible future Ukrainian NATO membership with the fate of the Black Sea Fleet. Ivanov announced, "It is hard to imagine the Russian Black Sea Fleet without its main base; the fate of Sevastopol matters for all those who lived in the Soviet Union, it is our city." Ukraine's call for the withdrawal of the fleet from Crimea was perilous, because "it is dangerous to play not only with fire but also with history" (Itar-Tass, June 14).

Ivanov's rhetoric matches other recent official statements. Russia's permanent representative to NATO, Dmitry Rogozin, said in a TV interview: "The Black Sea Fleet simply does not have any other home; no Russian politician will agree for the fleet to leave Sevastopol, and this will not happen" (Vesti TV June 12). A rejection of Ukraine's NATO accession or the possible future withdrawal of the Russian fleet from Crimea after 2017, when the present lease of the Sevastopol base expires, are today part of Russia’s official foreign policy. Western assurances that Sevastopol will not be used as a NATO naval base after the Russians withdraw are not taken seriously. But there is a lot of time till 2017 and the Ukrainian NATO accession may not be swift, since today the majority of Ukrainians are against NATO membership and the government in Kyiv has promised a national referendum to decide on membership (RIA-Novosti, June 16).

Russia does not at present have the infrastructure on its own Black Sea coast to house the Black Sea Fleet, and building the needed facilities will require lots of time and money. What is worse, Russia does not have adequate military shipbuilding or ship-maintenance facilities on the Black Sea to keep a large fleet. The flagship of the Black Sea Fleet, the cruiser Moskva, has been repaired and modernized in Mykolaiv in Ukraine at a naval shipyard where in Soviet times all the aircraft carriers were built. Russia has managed to build several relatively small naval ships since 1991 (frigates and coastal patrol boats) in St. Petersburg and Kaliningrad, but not enough to replace its rapidly aging navy. Without access to the Mykolaiv yard, there may not be much fleet left to withdraw from Sevastopol (Nezavisimoye Voyennoye Obozreniye, June 12).

At present Moscow is using threats that Ukrainians will suffer if their nation joins NATO or if the Russian fleet is ousted from Sevastopol. At the same time, Russia has been supporting pro-Russian separatist feelings in Crimea and making territorial claims on Sevastopol. Moscow needs a pro-Moscow allied government in Kyiv or, if that is impossible, a separation of Crimea and Eastern and Southern Ukraine (with Mykolaiv), where millions of Russian speakers may either want to join Russia or form an allied protectorate.

The situation is different in Georgia, where a vast majority voted to join NATO in a referendum on January 5. There is no hope in Moscow that any anti-NATO pro-Russian forces may come to power in Tbilisi, and military action in support of separatists in Abkhazia and South Ossetia is being seriously contemplated (see EDM, June 12). The Russian Foreign Ministry has officially announced that Moscow refuses to discuss with Tbilisi the legality of the deployment of additional troops and armaments in Abkhazia, because the troops "prevented a Georgian blitzkrieg" (www.mid.ru, June 17). When substantial talks are essentially stopped while additional troops are deployed, it’s more than just a threat of the use of force.

 

--Pavel Felgenhauer



Eurasia Daily Monitor

June 18, 2008

 

UKRAINE PREPARING LEGAL PROCEDURES FOR RUSSIAN FLEET'S WITHDRAWAL ON SCHEDULE


Ukraine’s Cabinet of Ministers is drafting a bill for submission to the Verkhovna Rada (parliament) on preparations for terminating the Russian Black Sea Fleet’s deployment in Ukraine in 2017. Concurrently with that draft law, the Cabinet is working on a comprehensive assessment of the economic, ecological, and other implications of the Russian fleet’s deployment in Ukraine. President Viktor Yushchenko has instructed the cabinet to provide those documents by July 20, so as to initiate the process of withdrawal of Russia’s Black Sea Fleet from Ukrainian territory as soon as possible (Ukrainian Center for Independent Political Research (UCIPR), Research Update, vol. 14, no. 20/538, June 2008)….

--Vladimir Socor


RUSSIA STALLING TALKS ON FLEET WITHDRAWAL FROM UKRAINE

Moscow opposes Kyiv's suggestions to begin discussing preparations for the withdrawal of Russia's Black Sea Fleet from Ukraine's Crimea, with sufficient lead time to complete the multi-year process by the 2017 deadline. Russia's position seems to imply that the withdrawal process might only get underway by 2017 or close to that date, if Ukraine insists on adhering to the deadline. If that process does not start soon enough, however, Moscow would undoubtedly argue that the basing agreement should be prolonged by a five year-term, ostensibly to negotiate about the Fleet's possible withdrawal at some later time. Moscow could then drag out those negotiations indefinitely….

--Vladimir Socor

Link to complete articles:  http://www.jamestown.org/edm/ <http://www.jamestown.org/edm/> 

 

Kyiv Post

Racist attacks on rise

by Elisabeth Sewall, Kyiv Post, Editor
Jun 18 2008

Racially­ motivated violence reached unprecedented heights so far this year in Kyiv and throughout Ukraine, with more than 40 attacks and as many as six murders, according to nongovernmental organizations (NGOs) that are tracking such incidents.

In the past three weeks alone, two African citizens died on Kyiv streets, one a confirmed murder, the other not. But those two deaths brought to the number of suspected hate killings to six so far this year in the city….

Link to complete article:  http://www.kyivpost.com/nation/29140/ <http://www.kyivpost.com/nation/29140/print/>  

Kyiv Post

Editorial


Some billionaires are better than others 


by Editorial , Kyiv Post
Jun 18 2008

We have a lot of admiration for entrepreneurs who seize opportunities to make economies better, who create wealth and jobs and who then spread the bounty around – through significant taxes and charitable contributions to build fairer, more humane societies.

We can name Americans Bill Gates and Warren Buffett as a couple of rich guys we like. While both of these guys have their distasteful methods, we agree with their belief in progressive taxes (based on a person’s ability to pay) and their determination to give away most of their fortunes for the benefit of mankind.

Unfortunately, we still don’t see much to admire about Ukraine’s 50 richest guys. And they are all guys, according to the latest rankings of Korrespondent magazine, our sister publication in KP Media.

Ukraine’s billionaires say they want progressive taxes, which would also help smaller enterprise flourish, but we see more talk than action in a parliament they heavily influence.

Even among the top 50, there’s a huge disparity. Essentially there is Rinat Akhmetov, owner of System Capital Management conglomerate, with an estimated net worth of $31 billion. And then there’s everybody else, with Viktor Pinchuk in the No. 2 position at nearly $9 billion.

A nation is neither healthy nor its society stable when so much wealth – and political power -- is concentrated in the hands of so few people, many of whom seem so undeserving of the riches they acquired in the first place.

Since attempts to redress past injustices usually go nowhere, let’s look to the future.

Responsible elite pay their fair share of taxes, act in the national interest and promote a business climate with equal opportunities for all. The powerful also use their influence to support governments that solve crimes and stamp out corruption. Too little of that is happening in Ukraine.

In 2007, the publicity-sensitive Akhmetov reportedly declared to Gazeta Po-Kyivski newspaper that he paid about $20 million in taxes the previous year on annual income of $170 million. The Verkhovna Rada deputy was the only public official who responded to the newspaper’s request. His taxes amounted to the going rate at the time, not something to brag about, though his candor was appreciated.

Then there’s the Pinchuk method of reputation enhancement. Concerts on Independence Square are nice, and Paul McCartney put on a great show June 14. But glitz is not enough to erase memories of the Akhmetov-Pinchuk purchase of Kryvorizhstal steel mill for $800 million. In 2005, still the high tide of the now-listless Orange Revolution, that injustice was corrected in a rare, fair public auction. It fetched $4.8 billion from Mittal Steel – six times the Akhmetov-Pinchuk price. Now that’s the kind of government action in the national interest we long to see more often, instead of the political gridlock and stalled privatizations of today.

Guys, you can do better.

For articles on Ukraine’s wealthiest individuals, see:  www.kyivpost.com

 




 

 

 

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