Ukrainian politics and economy

Yushchenko offers upbeat assessment of first six months in power

2005-08-04T00:41:00.000-07:00

President Viktor Yushchenko gave an upbeat assessment July 25 of his first six months in office but also sounded a warning to his often-feuding government not to abandon the unity that brought them to power.

"We must demonstrate that we have stayed the same as we were seven months ago on Independence Square," Yushchenko said after a marathon eight-hour, closed door session with his top ministers.

Yushchenko came to power in January after last year's mass protests known as the Orange Revolution in which a divergent group of opposition leaders called their supports onto the streets to challenge a fraud-marred presidential vote.

The vote was re-held and Yushchenko convincingly won, going on to form a coalition government that brought together wealthy oligarchs, pro-business politicians and Socialists.

The team won popular support for their pledges to improve living standards and fight the corruption and cronyism that had marred the decade-long rule of former President Leonid Kuchma.

"All the immediate tasks that we put before us for the first half of the year, we solved them," Yushchenko said.

He claimed 489,500 new jobs had been created - halfway to the goal he set himself of one million new jobs every year. Yushchenko also praised the 4 percent growth in Ukraine's economy even though it represents a slowdown from last year, and the government's success at holding inflation at 6.4 percent.

"Today I can look in the eyes of those people who before this hadn't received pensions of a minimum living standard, of handicapped children and mothers who give birth to a kid," Yushchenko said, referring to new social benefits and the increase in pensions paid by his government.

Yushchenko called on the government and parliament to improve relations, asking them to "work as one team." This month, lawmakers refused to pass all the parts of the government's much-sought after package of legislation that is needed before Ukraine can join the World Trade Organization.

"You should be able to forgive and focus on the state," Yushchenko said, flanked by Parliament Speaker Volodymyr Lytvyn and Prime Minister Yulia Tymoshenko.

Yushchenko and his allies face parliamentary polls next spring, a major test at a time when political reforms will have transferred much of the presidency's powers to the prime minister, who will be chosen by the political forces that triumph in the legislative vote.

Yushchenko didn't address some of the thorniest issues to face the new government, such as the fuel crisis earlier this fall and rising food prices.

Notoriously late, Yushchenko kept journalists waiting on July 26 for almost three hours. At one point, he noted that he doesn't own a watch.

Ombudswoman investigates alleged beating of three opposition lawmakers

2005-05-25T08:40:00.000-07:00

Ukraine's top human rights official said May 23 she had launched an investigation into an alleged police attack on three opposition lawmakers.

"The use of force against lawmakers is a clear sign of a police state," Nina Karpachova said in a statement.

The former Soviet republic's new pro-Western leadership came to power after mass protests over election fraud last year. It has promised to improve human rights after the decade-long rule of former President Leonid Kuchma, who was accused of violating civil freedoms.

Ukraine's opposition Social Democratic Party of Ukraine (United), claimed that its lawmakers had suffered injuries in the western city of Uzhgorod while attempting to prevent police from transferring a former regional official from hospital back to jail.

Karpachova described the alleged police action as a "severe violation of law" and said she will launch an independent investigation into the case. She also demanded an urgent parliamentary session to establish what happened in the incident.

Ukrainian investigators detained Ivan Rizak, a former governor of the Western Zakarpatye region, earlier this month and charged him with abuse of power and bribery. Rizak, who suffers from a heart condition, was later transferred to a local hospital for treatment, but on May 20 doctors reported he was fit enough to return to jail.

On May 23, Interior Ministry spokesman Volodymyr Mulko said it was "too early to draw any conclusions," and that top police officials and prosecutors had traveled to Uzhhorod to investigate. He also said the policemen reportedly involved in the case had been temporarily suspended from duty.

Rizak is a staunch backer of former Prime Minister Viktor Yanukovych, who lost last year's bitterly contested presidential vote to then-opposition leader Viktor Yushchenko.

Authorities loyal to Yushchenko recently arrested several former officials on charges ranging from abuse of power to conspiring to commit murder.

Yanukovych and other opposition politicians have accused Yushchenko's government of persecuting its political opponents, but the new authorities say they are just fighting corruption that flourished under the former Kuchma regime.

Kuchma returns home after ex-minister's death

2005-03-11T06:49:00.000-08:00

Former President Leonid Kuchma returned to Ukraine on March 5 following the apparent suicide of a former interior minister who was to have been questioned in a killing Kuchma's opponents claimed is linked to both men.

Kuchma cut short a vacation at a spa in the Czech Republic to return to the Ukrainian capital on a chartered plane. He made no comments in the Kyiv airport's VIP lounge.

Former Interior Minister Yuriy Kravchenko, found dead March 4, had been implicated in organizing the 2000 killing of journalist Georgy Gongadze, who wrote about top-level corruption under Kuchma.

Kravchenko shot himself in the head in his house outside Kyiv hours before he was due for questioning about the journalist's murder, said Oleksandr Turchinov, head of Ukraine's State Security Service.

Interior Minister Yuriy Lutsenko said Kravchenko left a note saying he had "become a victim of the intrigues of (ex-)President Leonid Kuchma and his entourage."

Lutsenko cited Kravchenko's note as saying: "I am guilty of nothing. Forgive me ... I am leaving you with a clean conscience."

Gongadze was found decapitated in a forest outside the capital in 2000, which sparked months of protests against Kuchma.

Speaking before departing from the Czech Republic, Kuchma said he was prepared to talk to prosecutors, Czech and Ukrainian television reported.

President Viktor Yushchenko said authorities were doing everything possible to solve Gongadze's killing. "We have employed all resources, an army (of people), everything," he said in a speech March 5 at a meeting of his Our Ukraine's party.

State security chief Turchinov told the private 1+1 TV channel that "the testimony of the former president ... appears extremely important for the resolution of the case."

He added that Kravchenko's note "adds pretty much to the investigation."

"This note touches on concrete people who are also suspected in the (Gongadze) case, and gives the investigation the possibility to foresee the further direction of the probe," Turchinov told the station.

He said Kravchenko had shot himself twice at his summer residence in Kyiv's elite Koncha Zaspa suburb.

Kravchenko's first shot inflicted only a superficial wound in his neck, but "he was a strong man and he managed to shoot himself again through the right temple," Turchinov said.

Ukrainian television network Inter said Kuchma told reporters he did not believe Kravchenko had ordered Gongadze's killing. He was quoted as saying the former interior minister was under "crazy pressure," partly from the media.

The allegations against Kuchma were based on recordings that a former presidential bodyguard, Mykola Melnychenko, said were made secretly in the president's office.

In the tapes, Kuchma was overheard complaining repeatedly about Gongadze's reporting and ordering Kravchenko to "drive him out, throw (him) out, give him to the Chechens."

Melnychenko said March 4 that "Kravchenko's death only plays into Kuchma's hands."

"Fewer and fewer witnesses remain," Melnychenko said by telephone from London. Kuchma has disputed the tapes' authenticity.

The journalist's widow, Myroslava Gongadze, suggested Kravchenko's death was part of a cover-up attempt, saying there were "too many people from the old regime who would try to conceal the true course of events."

"Kravchenko was a key link in the chain of the crime," she said by telephone from the United States, where she now lives.

Yushchenko has made solving Gongadze's death a top priority for his government.

On March 2, Prosecutor General Svyatoslav Pyskun said investigators had identified all four suspects in Gongadze's killing - including two who are in custody - and knew who was the mastermind. He refused to reveal the person's identity.

Former interior minister shot dead

2005-03-05T03:27:00.000-08:00

Ukraine's former Interior Minister Yuri Kravchenko has been found dead at his country house, Ukrainian news agencies reported Friday.

Interfax-Ukraine, citing a police source, said Kravchenko had allegedly committed suicide.

No one answered the phone at the Interior Ministry on Friday morning.

Kravchenko has been accused by the opposition of being involved in the killing of opposition journalist Georgy Gongadze. He was expected to give testimony Friday to prosecutors about Gongadze's death.

Ukraine's Prosecutor General Svyatoslav Piskun said Wednesday that investigators had identified all four people involved in Gongadze's 2000 slaying and knew who was the mastermind. He refused to identify the person who ordered the killing, however.

Two of the suspected killers are in custody, one is under orders not to leave Kiev and the fourth is on an international wanted list. All were employed by Ukraine's Interior Ministry.

Gongadze, who wrote about alleged high-level corruption, was abducted in Kyiv in September 2000, and his decapitated body was found months later buried in a forest outside the capital. His death sparked months of protests against former President Leonid Kuchma, who the opposition alleged was involved in the killing. He denies involvement.

Ukraine, Georgia agree to reverse flow of oil in disputed pipeline

2005-02-28T11:29:00.000-08:00

The flow of oil in a key Ukrainian pipeline will be reversed to carry oil shipments from Kazakhstan and Azerbaijan to Western Europe, instead of pumping crude from Russia to the Black Sea port of Odessa.

The decision about the Odessa-Brody pipeline, announced following a meeting between Ukrainian Prime Minister Yulia Tymoshenko and her Georgian counterpart, Zurab Nogaideli, is likely to complicate relations between the two former Soviet republics and Russia.

Last summer, Ukraine's Cabinet agreed to open the long-idle pipeline for shipments of Russian oil to Odessa. But the United States has opposed that, saying it will increase Ukraine's energy dependence on Russia and raise chances of an oil spill as more tankers travel through Turkey's clogged Bosporus strait.

Georgia stands to benefit from the new deal because it will earn transit fees. And Georgia, like Ukraine, is interested in expanding its self-reliance compared to the regional energy power, Russia.

Russia is Ukraine's largest trade partner and energy supplier, while key Russian pipelines and other infrastructure links with Europe run through Ukraine.

Nogaideli traveled to Ukraine on Feb. 27 for a three-day trip and was scheduled to meet top Ukrainian officials, including President Viktor Yushchenko.

It was Nogaideli's first trip abroad since filling the post after the sudden death of Zurab Zhvania, who apparently fell victim to carbon monoxide poisoning.

Later in the day, Nogaideli and Yushchenko discussed boosting bilateral ties, and agreed to refresh an alliance of five former Soviet republics aimed at enhancing regional stability and encourage economic development.

The GUUAM group - comprising Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova - was established in 1997 in a bid to seek cooperation outside Russian influence.

Witness in Gongadze kidnapping wounded in attack after police say they identified abductors

2005-02-28T11:27:00.000-08:00

A key witness in the abduction and killing of a prominent opposition journalist has been wounded in a grenade explosion shortly after police said they had identified the perpetrators of one of Ukraine's most politically charged crimes, news reports said Feb. 28. Georgy Gongadze, a prominent Internet journalist who wrote about top-level corruption, was abducted in downtown Kyiv in September 2000. His decapitated body was later found buried in a forest.

Inna Kysel, a spokeswoman for the Ukrainian Interior Ministry, said late Sunday that investigators had identified people "who dragged Gongadze into the car."

"We have the vehicle as well," she said, quoted by the Interfax news agency.

The report offered no further details and Kysel was not available for comment Feb. 28.

Meanwhile, Ukrainian media reported that a witness in the Gongadze case and a police officer who was escorting him were seriously wounded in Kyiv on Feb. 27, hours after the police announcement, when an unidentified assailant tossed a hand grenade at them. Kyiv's TV5 television identified the witness as Yury Nesterov.

Ihor Honcharov, a former police officer and a key witness in the Gongadze case who died in prison two years ago, claimed in a letter published last year by Ukrainian media that Nesterov "helped two agents of Kyiv's police bureau for fighting organized crime to kidnap, torture and kill Gongadze" in a warehouse in Kyiv's Moskovsky district.

Ukrainian media reported extensively last year that the former Interior Minister Yuri Kravchenko ordered agents to follow Gongadze shortly before his abduction.

In June, Ukrainian prosecutors announced that a suspect had admitted beheading Gongadze, but they provided no other details.

Gongadze's death touched off months of violent protests against then-President Leonid Kuchma, whom the opposition alleged was involved in the killing. Kuchma denies the allegations.

"Police want to find not only who were the executors, but also those who masterminded this crime. It might be difficult but we will find them," Kysel said.

Ukraine's new president, Viktor Yushchenko, recently promised Gongadze's mother that solving the case was a "point of honor" for him.

Last year, a parliamentary committee recommended criminal proceedings against Kuchma as the likely suspect in masterminding Gongadze's death.

Ukraine's future is in the European Union

2005-02-27T00:55:00.000-08:00

President Viktor Yushchenko addresses the European Parliament in Strasbourg, France, on Feb 23. Yushchenko said "Ukraine's future is in the European Union".

Pora activists hand out oranges outside Moldovan Embassy

2005-02-26T10:52:00.000-08:00

Activists with the pro-democracy youth group that played a key role in Ukraine's "Orange Revolution" street protests passed out oranges outside the Moldovan Embassy on Feb. 25 in rallies intended to highlight the need for democratic elections.

Some 30 activists from the group "Pora" handed over a huge basket of oranges to Moldovan diplomats, and called on Moldovan President Vladimir Voronin to "conduct honest and democratic election" on March 6, according to a statement from the group.

The campaign in Moldova has heated up as Voronin accuses the opposition of planning an "Orange Revolution" after the elections, while the opposition says Voronin's administration is preparing election fraud.

The Pora statement also said activists handed out letters to ambassadors of Russia, Belarus and six other ex-Soviet countries, offering to their help in teaching democracy and sharing the experience of Ukraine's tumultuous, but peaceful turmoil last year

There was no comment on the action by any foreign representatives. Pora also said one of its leaders, Vlad Kaskiv, met with U.S. President George W. Bush in Bratislava on Feb. 24 during Bush's meeting with leaders of democratic movements from 13 eastern European countries.

Pora played a key role in rallying students during the protests that filled Kyiv during last fall's disputed presidential election in Ukraine. The group officially claims no political affiliation and says its only goal is to secure a free election and promote democracy.

Western-leaning reformer Viktor Yushchenko was elected president in December following two months of massive street protests sparked by fraud-plagued elections. Yushchenko's campaign color led the demonstrations to be called the "Orange Revolution."

Poroshenko orders inventory of country's weaponry

2005-02-26T10:49:00.000-08:00

A top defense official ordered officials Feb. 25 to take an inventory of all military weaponry and equipment in Ukraine, just days after two anti-aircraft missile systems were discovered missing from a military depot.

Petro Poroshenko, recently appointed chief of Ukraine's Defense and Security Council, gave the military six weeks to perform a "total inventory," noting that it would be an "extremely difficult task" given the size of the country's weapons stores.

He said that once the inventory was completed, he would be "absolutely public and open" about the circumstances surrounding the disappearance discovered Tuesday of two SA-7 Grail missile systems from a depot in Ukraine's southern Crimean peninsula.

The Defense Ministry said an investigation had been launched into the missing systems - also called Strela-3M, or Arrow.

The heat-seeking Strela missiles are produced in Russia, Eastern Europe, China, Egypt, former Yugoslav republics and elsewhere and are the anti-aircraft weapon of choice for guerillas, rebel forces and terrorists worldwide.

Ukraine's new government has been trying to clamp down on illicit weapons deals that flourished under former President Leonid Kuchma. Last month, a key Ukrainian lawmaker revealed the secret indictments or arrests of at least six arms dealers accused of selling Ukraine's nuclear-capable cruise missiles to Iran and China.

De-privatization, carefully

2005-02-26T01:00:00.000-08:00

The process of reviewing shady privatization deals, recently announced by President Viktor Yushchenko’s administration, makes us a bit nervous.

It’s true that some recent “privatizations” of valuable state properties have been pure thievery, scams devised to steal plum industrial enterprises from the Ukrainian polity and put them in the pockets of a rapacious elite. But it’s also true that, if investigators start looking under rocks, they’ll find something fishy with almost every deal that led to great wealth in post-Soviet Ukraine. Where do the investigators plan to stop? In the wrong hands – the hands of, say, western Ukrainian hardliners out to end the Russified east’s long hold on power – such investigations could turn into a witchhunt that would damage the country and keep foreign money far, far away.

At first, Yushchenko and his people seemed to have the right idea. The list of properties up for revision, Yushchenko said on Feb. 15, “will be limited. It will be closed, in the sense that no one will continue it.” Then, on Feb. 16, Prime Minister Yulia Tymoshenko announced that the government was now planning to review 3,000 privatizations. We had thought the number would be 30. Their ambitions had increased ten-fold. We hope they know their business.

Actually, there are good reasons beyond respect for property rights why the Yushchenko team should pursue privatization review only within limits. Super-rich Yushchenko allies like Tymoshenko, Emergency Minister David Zhvania and Petro Poroshenko, head of the National Security and Defense Council, probably wouldn’t feel much more comfortable with unrestricted investigations into the sources of Ukrainian private wealth than Pinchuk and Akhmetov do.

Opinion: High anxiety

2005-02-25T08:13:00.000-08:00

Most voters who dropped a ballot for President Viktor Yushchenko probably wanted things shaken up in Ukraine. That’s exactly what they’re getting.

Yushchenko’s activist government is upsetting one card table after another, to what appears to be consternation among a Ukrainian elite that has had it easy – scandalously easy – for a long time. What remains to be seen is how long the new government can continue to make its enemies uncomfortable without shooting itself in the foot, and damaging the country in the process.

In these fast-moving days, it’s difficult to figure out exactly what’s going on in the government. The privatization controversy is a good indication of that. In the early days of his tenure, Yushchenko announced that the government planned to restrict review of possibly crooked privatizations carried out under former President Leonid Kuchma’s watch to a mere 30 state properties. Then, last week, Prime Minister Yulia Tymoshenko stunningly revised that number upward to 3,000, generating panic among certain members of Ukraine’s tycoon class. Soon after that, word seeped out from the government that the revised number was wildly inflated. The number of privatizations to be reviewed was closer to 30 after all.

If such gestures are meant to keep off-balance the crooked Kuchma-era elites who form a significant percentage of the opposition to the new government, they’re working. It’s been interesting to see the charm offensive that’s been launched by certain powerful Ukrainians recently: after years of remaining silent and in the shadows, confident of their power, they’re now rushing to the press, eager to justify themselves and trumpet their virtue and patriotism. In short, they’re scared.

The trouble is that the government’s gestures might keep off balance people who aren’t members of the rapacious Kuchma-era robber elite. There are early signs that foreign money is starting to become impatient with the turmoil: no one wants to invest in a country in the midst of permanent low-grade revolution, and the economic life of which is in uproar thanks to the fact that thousands of properties are reverting to state ownership. Thanks, also, to the shenanigans of rich, powerful and rattled Yushchenko enemies who are running to the courts to fight out their privatization battles, and who are making as big a mess as possible.

Nor is it even clear whether the government is masterfully toying with its enemies like a cat toys with a mouse, or whether the confusion is an expression of internal disagreements. Last week, new Justice Minister Roman Zvarych either tried to quit his new post, or noisily staged a resignation. His actions seemed to be in response to a murky situation involving possible illegality and corruption in the oil-export business. The details remain unclear. What is clear is that the new administration is, like any administration, a patchwork of conflicting factions. Some of them have different visions than the others; some of them are possibly more honest than others.

Whatever the situation, Ukraine needs stability. By that we don’t mean the corrupt “stability” of the Kuchma years, which losing presidential candidate Viktor Yanukovych promised to maintain. We mean the stability of a democratic country in which citizens know they can expect official adherence to the rule of law, and in which is tolerated neither a thieving elite nor perpetual government crusades against its enemies and their property. It’s the stability of a balanced, healthy society. We hope things calm down, and that Yushchenko leads Ukraine to that type of stability soon.

Court annuls Kryvorizhstal deal

2005-02-25T07:26:00.000-08:00

A Kyiv court ruled Feb. 17 that last year's privatization of Ukraine's largest steel mill was illegal, a day after Ukraine's new premier announced that the government plans a massive probe into more than 3,000 post-Soviet privatization deals.

The court annulled its own ruling that had allowed the sale of the Kryvorizhstal mill to former President Leonid Kuchma's son-in-law, Viktor Pinchuk, and tycoon Rinat Akhmetov despite reportedly higher offers from bidders in the United States and Russia, a court official said.

The sale became one of Ukraine's most controversial post-Soviet privatizations, and new President Viktor Yushchenko had vowed to reverse it.

"This ruling is the first one that does not recognize this privatization as legal," said lawyer Irina Nazarova, who represents a group of lawmakers loyal to Yushchenko.

Pinchuk said in a statement that he would accept "any decision independently taken by the courts under the rule of law," and that "Ukrainian authorities themselves should comply with court decisions."

In an interview with Ukraine's Korrespondent magazine published this week, Pinchuk said that for himself and Akhmetov, their reputations as "honest businessmen and patriots" were of the utmost importance in resolving the issue.

In a sign that Pinchuk is eager to establish good relations with the new government, he hosted a luncheon that featured Yushchenko during last month's World Economic Forum in Switzerland, a high-powered gathering of government and business leaders.

Pinchuk's corporate lawyer Oleksiy Reznikov, however, dismissed the court's ruling Feb. 17 as "cynical and damaging."

"The court acted against the law," Reznikov told reporters, announcing plans to appeal to a higher court. The case could eventually reach Ukraine's Supreme Court.

Nazarova, lawmaker Pavlo Ignatenko and a group of deputies filed a lawsuit last year to annul the privatization, claiming the deal violated the rights of Ukrainian citizens to buy stakes in the company.

Yushchenko has called the mill's sale, at the rock bottom price of $800 million (665 million euros), a theft.

Yulia Tymoshenko said Feb. 15 that the government would investigate the privatization of some 3,000 other enterprises to learn whether they were sold off at discounts to tycoons connected with the former regime.

Andriy Dmytrenko, an analyst with Kiev-based Dragon Capital Investment House, called the court ruling "one of first steps in the process of the cancellation of murky privatization deals." He cautioned, however, that the Supreme Court "will have the last word."

In a statement, Pinchuk urged the government to conduct its inquiries into past privatizations "in a controlled manner, transparently and involving dialogue."

"Avoiding a murky and legally dubious process is the best way to improve the image of Ukraine in the international community, particularly in relation to European investors," he said.

Other bidders at the Kryvorizhstal auction, including Russia's OAO Severstal and a consortium of LNM Group and United States Steel Corp., cried foul after the sale, claiming they had offered more than Pinchuk and Akhmetov.

Earlier this week, Yushchenko pledged that his government would return the mill to the state "at any cost."

Analysts said that if the mill is put up for a transparent resale open to foreign bidders, the government might receive more than double what it sold it for last year. The state needs the money desperately to fill its budget gap.

Iosif Diskin, co-chairman of the Moscow-based Council for National Strategies, said Ukraine's example should push the Russian leadership to close the book once and for all on the contentious privatizations of the 1990s by providing the possibility for owners to pay an extra fee to hold onto property that was obtained on the cheap.

"What has the liberal, Orange Revolution done first of all? It has made the decision to review more than a 1,000 privatization deals," Diskin told a Moscow news conference.

"No liberal adherence to ownership rights stopped the leaders of the Orange Revolution - on purely economic grounds - from saying 'we will destroy the economic foundation of our political enemies'."

Criminal investigation into eavesdropping on Yushchenko and Tymoshenko

2005-02-25T07:20:00.000-08:00

The Ukrainian Security Service has launched criminal proceedings into last year's eavesdropping on former opposition leaders, including current President Viktor Yushchenko and Prime Minister Yulia Tymoshenko.

Oleksandr Turchinov, the head of Ukraine's State Security service, said investigators had established that the "eavesdropping was illegal and on a massive scale," likely authorized by top security officials loyal to former President Leonid Kuchma.

"This is a crime, and this crime will be punished severely," Turchinov told reporters. He refused to identify suspects.

Yushchenko and Tymoshenko were the top leaders of the massive opposition protests that erupted after November's fraudulent runoff for the presidency. The Supreme Court later annulled the vote and ordered a rerun, which Yushchenko won. Kuchma had given his support to then-Prime Minister Viktor Yanukovych.

Turchinov, an ally of Tymoshenko, was tapped to lead the much-discredited security service and carry out a massive overhaul of an agency implicated in widespread bribery and involvement in Yushchenko's near fatal poisoning last year. Yushchenko fell ill in September after a dinner with the top two officials from the security service.

The illness, later diagnosed as a massive dioxin poisoning, took him off the campaign trail for weeks and left his face badly scarred and discolored. Yushchenko described the poisoning as an assassination attempt. Both security officials denied any involvement.