"The European Parliament's decision to recognize the famine of 1932-33 in Ukraine as a crime against Ukrainians and humanity is correct but incomplete, the head of Russia's Memorial human rights organization Arseny Roginsky said on Thursday.
"We welcome the European Parliament's decision, in particular the qualification, not as 'genocide' but as 'crime against humanity'", Roginsky said.
"But if this decision was related not just to Ukraine but also to the other famine-stricken territories, I would consider it completely right," he said.
"We think it necessary to raise the issue of expanding the European Parliament's decision and changing the qualification: the artificial famine in Ukraine, a whole number of Russian territories and Kazakhstan," Roginsky went on.
He added that Russian human rights defenders had backed the European Parliament's call on former Soviet republics to open archives related to the famine.
Memorial is a leading independent human rights organization dealing with rehabilitation of victims of political repressions in the former USSR.
On Thursday, the majority of European deputies supported a resolution qualifying the 1932-33 famine in Ukraine as a crime against the Ukrainian people and against humanity."
lexisnexis.com
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Monday, May 26, 2008
Cooling Kiev
Quote: Policymakers seeking evidence of the dangers of inflation could do worse than visit Ukraine, where it stands at 30 per cent. No other country in Europe comes close. Its inflation rate ranks alongside Venezuela and Zimbabwe, among the highest in the world. This is not the company that Ukraine would like to keep as it joins the World Trade Organisation and pursues economic integration with the European Union. But unless Kiev acts urgently, it will run into serious economic trouble.
Ukraine has been particularly exposed to global increases in food and energy prices. Its food bills were inflated by a bad harvest last year while energy costs were driven up by gas price increases imposed by Russia, the dominant supplier.
With this year’s harvest outlook good, consumers can expect some respite during the summer. As food represents 60 per cent of the consumption basket, overall inflation should also slow in the next few months. But this alone will not save the Ukrainian economy: energy costs will continue to rise as Russia seeks to double gas prices to around $400 per thousand cubic metres.
Also, about half Ukraine’s inflation is due not to food and energy but domestic economic performance. Kiev is rightly proud of an economic surge that has seen output grow nearly 8 per cent a year since 2000. But until 2008 the authorities did little to slow the accompanying credit growth of around 50 per cent a year. And they did even less to limit public spending. Since before the 2004 Orange Revolution, successive governments have paid huge increases in public wages and social benefits. The overall budget deficit has been kept in check – but a torrent of money put directly into consumers’ pockets.
The onus now is on the government to cut public spending hard and reduce the deficit from a projected 2 per cent of GDP to around zero. Unfortunately, the political struggle that has hampered policy-making since 2004 still prevents coherent action. President Viktor Yushchenko blames Yulia Tymoshenko, the prime minister. She blames him. Both criticise opposition leader Viktor Yanukovich.
All three have their eyes on the 2010 presidential election. But none wants to push for the retrenchment urgently needed. Without action, that poll may not be worth winning.
http://www.ft.com/cms/s/0/4ccc02a2-2b42-11dd-a7fc-000077b07658.html
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Ukraine has been particularly exposed to global increases in food and energy prices. Its food bills were inflated by a bad harvest last year while energy costs were driven up by gas price increases imposed by Russia, the dominant supplier.
With this year’s harvest outlook good, consumers can expect some respite during the summer. As food represents 60 per cent of the consumption basket, overall inflation should also slow in the next few months. But this alone will not save the Ukrainian economy: energy costs will continue to rise as Russia seeks to double gas prices to around $400 per thousand cubic metres.
Also, about half Ukraine’s inflation is due not to food and energy but domestic economic performance. Kiev is rightly proud of an economic surge that has seen output grow nearly 8 per cent a year since 2000. But until 2008 the authorities did little to slow the accompanying credit growth of around 50 per cent a year. And they did even less to limit public spending. Since before the 2004 Orange Revolution, successive governments have paid huge increases in public wages and social benefits. The overall budget deficit has been kept in check – but a torrent of money put directly into consumers’ pockets.
The onus now is on the government to cut public spending hard and reduce the deficit from a projected 2 per cent of GDP to around zero. Unfortunately, the political struggle that has hampered policy-making since 2004 still prevents coherent action. President Viktor Yushchenko blames Yulia Tymoshenko, the prime minister. She blames him. Both criticise opposition leader Viktor Yanukovich.
All three have their eyes on the 2010 presidential election. But none wants to push for the retrenchment urgently needed. Without action, that poll may not be worth winning.
http://www.ft.com/cms/s/0/4ccc02a2-2b42-11dd-a7fc-000077b07658.html
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Saturday, May 24, 2008
Visit our new Ukraine English News site
Ukraine english news, world news, Ukrainian language news, forum and the blog.
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Remembering the Holodomor horror
Quote: With each passing year, the evidence grows. Previously suppressed census data, photographs of soldiers guarding grain stores, accounts of local uprisings -- all add more depth and detail to the horrendous story of the Holodomor, the name Ukrainians have given to the famine that killed seven to 10 million in 1932-33.
"There is a wealth of documentation coming out," says historian Roman Serbyn of this dark chapter in the history of the Soviet Union. "Historians have trouble keeping up," adds the retired professor, who continues to research the Holodomor.
Information has been emerging since the demise of the Soviet Union, he says. A significant trove came to light last year when another cache of Soviet secret police (KGB) files was released.
This trickle of documentation is one of the reasons the term Holodomor is unfamiliar to most. And why, 75 years later, Ukrainians still seek recognition for what they call a genocide, perpetrated by Soviet leader Josef Stalin.
This trickle of documentation is one of the reasons the term Holodomor is unfamiliar to most. And why, 75 years later, Ukrainians still seek recognition for what they call a genocide, perpetrated by Soviet leader Josef Stalin.
As part of the campaign to increase Holodomor awareness, the International Remembrance Flame is expected to arrive in Ottawa on Monday, the last of 16 stops in Canada. The flame's journey through Canada is organized by the Ukrainian Canadian Congress and the Embassy of Ukraine. Stefan Horlatsch, an 87-year-old Holodomor survivor, is accompanying the torch on its Canadian journey. As a child he watched as Soviet authorities seized his family's land, livestock and grain. He lost 11 family members to starvation.
The Remembrance Flame then travels to the United States as part of a world tour that includes 33 countries.
Stalin's intention was to pay for industrialization by the export of grain. "Ukraine was the granary of Russia," says Mr. Serbyn.
In 1929, the drive to collectivize agriculture began. This process was viewed as essential to the development of a Communist state. Mr. Serbyn sees it differently. Collectivization, he observes dryly, "is a more efficient way of confiscating food for export."
At first, resistance was fierce. "Literally millions of people were involved in strikes and local uprisings," says Mr. Serbyn. "Soviet administrators were chased from the villages."
The bulk of the resistance came from a class of landowners known as kulaks. Because of their opposition Stalin set out to destroy them. Their land was seized and they were not allowed to join the collectives. Many were shot or deported to northern Russia. This process, known as dekulakization, deprived villages of their leadership. With resistance quashed, quotas were established and the peasants had to deliver the grain themselves.
At the height of the famine, it is estimated that 25,000 Ukrainian villagers a day were dying. At the same time, it is now known that there were 1.8 million tons of grain in state reserves. "We have photographs of guards guarding the locations," says Mr. Serbyn.
"All the government had to do was to stop exporting and release the grain," he says. "Instead they denied people were starving."
With most of the deaths in isolated villages, there is no way of knowing how many died, but the long-suppressed census figures of 1937 reveal that the number of Ukrainians within the Soviet Union was 26.4 million, almost five million less than in 1926.
In 1929, a number of Ukrainian intellectuals were arrested and blamed for organizing the peasantry. There were show trials, said Mr. Serbyn, "staged in a theatre, very symbolical."
About 45 academics and political leaders were executed, exiled, or imprisoned.
In 1931, the Ukrainian language was outlawed.
On Jan. 22, 1932, with famine raging, the borders of Ukraine were closed to prevent the starving from going in search of food.
The eight million Ukrainians living outside Ukraine were also targeted. The Kuban, an area in the Northern Caucasus populated by the descendants of Ukrainian cossacks, was also cordoned off. Entire cossack settlements were deported to northern Russia.
In Ukraine in 1932-33, any photographs were taken clandestinely. The Soviet government denied the famine, refused foreign aid and ordered members of the foreign press to remain in Moscow.
http://www.canada.com/ottawacitizen/news/story.html?id=a9f07ec6-737d-40ad-9781-1a504e2ca5fe&p=3
.
"There is a wealth of documentation coming out," says historian Roman Serbyn of this dark chapter in the history of the Soviet Union. "Historians have trouble keeping up," adds the retired professor, who continues to research the Holodomor.
Information has been emerging since the demise of the Soviet Union, he says. A significant trove came to light last year when another cache of Soviet secret police (KGB) files was released.
This trickle of documentation is one of the reasons the term Holodomor is unfamiliar to most. And why, 75 years later, Ukrainians still seek recognition for what they call a genocide, perpetrated by Soviet leader Josef Stalin.
This trickle of documentation is one of the reasons the term Holodomor is unfamiliar to most. And why, 75 years later, Ukrainians still seek recognition for what they call a genocide, perpetrated by Soviet leader Josef Stalin.
As part of the campaign to increase Holodomor awareness, the International Remembrance Flame is expected to arrive in Ottawa on Monday, the last of 16 stops in Canada. The flame's journey through Canada is organized by the Ukrainian Canadian Congress and the Embassy of Ukraine. Stefan Horlatsch, an 87-year-old Holodomor survivor, is accompanying the torch on its Canadian journey. As a child he watched as Soviet authorities seized his family's land, livestock and grain. He lost 11 family members to starvation.
The Remembrance Flame then travels to the United States as part of a world tour that includes 33 countries.
Stalin's intention was to pay for industrialization by the export of grain. "Ukraine was the granary of Russia," says Mr. Serbyn.
In 1929, the drive to collectivize agriculture began. This process was viewed as essential to the development of a Communist state. Mr. Serbyn sees it differently. Collectivization, he observes dryly, "is a more efficient way of confiscating food for export."
At first, resistance was fierce. "Literally millions of people were involved in strikes and local uprisings," says Mr. Serbyn. "Soviet administrators were chased from the villages."
The bulk of the resistance came from a class of landowners known as kulaks. Because of their opposition Stalin set out to destroy them. Their land was seized and they were not allowed to join the collectives. Many were shot or deported to northern Russia. This process, known as dekulakization, deprived villages of their leadership. With resistance quashed, quotas were established and the peasants had to deliver the grain themselves.
At the height of the famine, it is estimated that 25,000 Ukrainian villagers a day were dying. At the same time, it is now known that there were 1.8 million tons of grain in state reserves. "We have photographs of guards guarding the locations," says Mr. Serbyn.
"All the government had to do was to stop exporting and release the grain," he says. "Instead they denied people were starving."
With most of the deaths in isolated villages, there is no way of knowing how many died, but the long-suppressed census figures of 1937 reveal that the number of Ukrainians within the Soviet Union was 26.4 million, almost five million less than in 1926.
In 1929, a number of Ukrainian intellectuals were arrested and blamed for organizing the peasantry. There were show trials, said Mr. Serbyn, "staged in a theatre, very symbolical."
About 45 academics and political leaders were executed, exiled, or imprisoned.
In 1931, the Ukrainian language was outlawed.
On Jan. 22, 1932, with famine raging, the borders of Ukraine were closed to prevent the starving from going in search of food.
The eight million Ukrainians living outside Ukraine were also targeted. The Kuban, an area in the Northern Caucasus populated by the descendants of Ukrainian cossacks, was also cordoned off. Entire cossack settlements were deported to northern Russia.
In Ukraine in 1932-33, any photographs were taken clandestinely. The Soviet government denied the famine, refused foreign aid and ordered members of the foreign press to remain in Moscow.
http://www.canada.com/ottawacitizen/news/story.html?id=a9f07ec6-737d-40ad-9781-1a504e2ca5fe&p=3
.
Gazprom to Narrow Streams
Quote: The EU Industry Committee has discussed this week the proposals for gas market liberalization. The majority of the European Parliament members supported the third option that specifies creation of a supranational authority, Agency for the Cooperation of Energy Regulators (ACER), which will be in charge of the transmission network operation, focusing mostly on restricting the access to the EU market for the U.S. and Russian companies.People in Gazprom said yesterday that the EU hadn’t given detailed explanation about the actual operation of ITOs (Independent Transmission Operators) and about the procedures to raise funds with restricted efficiency. “The aftereffects from the market changes will be unpredictable. We are to understand whether the denial of a Transmission Operator to provide transport facilities in the stipulated dates and size will be viewed force majeur for a supplier with the possible non-execution of delivery contract,” said Stanislav Tsygankov, who heads the foreign economy department at Gazprom. “Today’s procedures enable big suppliers to build logistic chains inside the companies. Should the new regulations hinder implementation of investment projects, big suppliers may revise their investments in the infrastructural projects.” The novelty will adversely affect Gazprom profits generated by the existing Yamal-Europe gas pipeline and the effect on Nord Stream and South Stream pipelines running from Russia to Germany and Italy is yet unclear. “Gazprom will be able to own shares in Latvijas Gaze, Lietuvos Dujos and Eesti Gaas, but it won’t be represented in the BODs of those companies,” said East European Gas Analysis Director Mikhail Korchemkin. Russia won’t seal the new energy package with Europe on the terms offered by it, the State Duma Vice Speaker and Russian Gas Society President Valery Yazev made clear in Berlin. “The Europeans are mistaken when they think that we will tolerate it. More and more often, national gas monopolies tend to eye growing energy demands of Asia, India and Japan. Our country will always find a sales market,” the official pointed out.
http://www.kommersant.com/page.asp?id=895194
Now they're seeing that they might not be the only supplier of energy, and that their attempt at a monopoly of the market will be in vain, and deservingly so.
http://www.kommersant.com/page.asp?id=895194
Now they're seeing that they might not be the only supplier of energy, and that their attempt at a monopoly of the market will be in vain, and deservingly so.
Ukraine in the postcommunist world
Holodomor problem discussed at Columbia University
Quote: The Harriman Institute is one of Columbia University’s most authoritative institutions. It was founded in 1946 by William Averell Harriman, the US Ambassador to the Soviet Union in 1943-46. The objective of this institution was to carry out in-depth studies of the USSR and to train specialists who were required to substantiate US policy in Eastern Europe. Harriman, after whom the institute was named in 1992, declared time and again: “I want to stimulate and encourage the advanced study of Soviet affairs. To base policy on ignorance and illusion is very dangerous. Policy should be based on knowledge and understanding.” The renaming of the Russian Institute was not only a sign of recognition of the founder’s achievements and gratitude to the Harriman family for its multi-million-dollar endowment for the development of the Institute. The new name was necessitated by the changes that had emerged in the geopolitical situation. Whereas previously Americans identified all things Soviet with Russia, starting in the 1990s it became necessary to study the 15 post-Soviet countries after the USSR’s collapse. Ukraine also became the focus of attention, especially after the institute’s directorship went to Mark von Hagen. The scholarly merits of this youngish and dynamic Ukrainian Studies specialist were recognized when he was elected president of the International Association for Ukrainian Studies (replaced at the last MAU congress by Yaroslav Yatskiv of the National Academy of Sciences of Ukraine). In the fall of 2007 von Hagen was appointed chairman of the Department of History at the University of Arizona. Ukrainian Studies at Harriman Institute continue unimpeded. 2. A FEW WORDS ABOUT THE SCHOLARLY CONFERENCE In the 1950s research centers specializing in the study of Soviet and Eastern European history appeared in the West. One such center was founded at Columbia University in 1954. By the 1990s it had evolved into a large institution focused on Central and Eastern Europe. In 1997, in collaboration with the Harriman Institute, it established the Association for the Study of Nationalities. Its goal was to organize annual ASN conferences dealing with politics, economics, social, and cultural aspects of the post-Soviet countries. These conferences focus on the current situation in these postcommunist countries, and many historians participate in these scholarly gatherings. To comprehend the logical aspects of escaping the dead-end in which these countries found themselves as a result of the forcible implementation of the communist doctrine, it is necessary to study their recent past. This year’s ASN conference at the Harriman Institute took place on April 10-12. There were 11 panels, each lasting two hours. In view of the brief time allotted to the conference, strict time-limits were imposed on every presentation and debate. None of the sessions was clearly defined either thematically or regionally. I was amazed by this when I first attended the ASN conference a few years ago, and it took some time for me to figure out the secret. Each ASN conference has a clear-cut albeit invisible structure. Between eight and twelve thematic and regional panels take place during the conference, and sometimes films are screened or books discussed. The panels take place according to a certain chronology, so each expert specializing in a “narrow” field has an opportunity to take part in discussions of a topic that particularly interests the participant, who does not have to rush from one panel to the next. This year’s conference was attended by 594 scholars. Papers were submitted to the organizing committee in advance, and their topics were circulated among the participants of the various panels, so that they would be prepared to hold substantial discussions on a given subject. This took up at least one-third of the allotted time. Most of the conference participants were young people. Remarkably, a large number of representatives of Western universities and research centers hailed from postcommunist countries, judging by their surnames. This is further proof of the ongoing “brain drain.” As a rule, conference participants’ expenses are remunerated by the institutions where they are employed. For the most part, Ukraine’s National Academy of Sciences cannot afford to send its research associates to international conferences. My expenses were covered by the Shevchenko Scientific Society in America (NTSh). The hundreds of papers that were heard and discussed were well worth the money that was spent on a conference of this scope. The presentations reflected the broad range of changes that have taken place in the postcommunist world. The leaders of the “golden billion” countries led by the United States are following these changes with concern. They long ago realized that it is impossible to isolate oneself from the problems of postcommunist countries, so they want to figure them out, at times more so than the political elite of these countries. Harriman’s thesis that policy should be based on knowledge and understanding is still valid. 3. DISCUSSION PARTICIPANTS The panel on the Holodomor was one of 117. Other sessions that I attended attracted audiences that hardly surpassed the number of speakers. The spacious conference hall was packed for the subject of the Holodomor, which interests many people today. Before the session was called to order, one American scholar said that he had learned on the Internet that Olha Ginzburg, the chairperson of the State Archives Committee of Ukraine, had been relieved of her post. The audience responded instantly with applause. The Herostratus-like reputation of this communist member of the Ukrainian government is known halfway across the world. The Holodomor panel was chaired by Dr. Henry R. Huttenbach, a noted Holocaust researcher. The presenters, including me, were Oleh Wolowyna, Taras Hunczak, and Roman Serbyn, all professors of Ukrainian parentage, from North American universities. I got the impression that after James Mace no American or Canadian has become an expert in this field. A group of Canadian researchers from Toronto and Edmonton took part in the debate: Wsevolod Isajiv, Anna Procyk, Roman Senkus, Larissa Onyshkevych, Ambassador Extraordinary and Plenipotentiary Yuriy Sergeev, the Permanent Representative of Ukraine’s Mission to the UN, and his predecessor in this post, Professor Valeriy Kuchinsky of Columbia University, and others. 4. WHY ONLY NOW? Soviet Ukrainian history in its undistorted form was returned to our children a long time ago. Despite the appeals of Petro Symonenko’s party to stop the “rewriting” and “smearing” of the Soviet past, Ukraine’s Ministry of Education and Science has refused to endorse old textbooks. Pavlo Poliansky, who had been in charge of school curricula and textbooks, was relieved of his post during the period when socialists were dominant in the education ministry, but later returned after being promoted to the rank of deputy minister. As for those who completed their education under the Soviets and are now under the spell of Russia’s television series, nothing has changed. We live in cities and walk down streets named after those who shed rivers of blood in the comparatively recent past. We walk past monuments to people who destroyed their fellow human beings, guided by the Inquisition’s merciful principle “with no bloodshed,” except that they used famine, not fire. We have grown accustomed to paying homage to the victims of Soviet repressions and the famine once a year, a tribute to our own conscience, without realizing that the past has us firmly gripped by the throat. At least this is what the situation was like until recently, when President Yushchenko of Ukraine suddenly began signing one edict after another dedicated to historical problems. The Ukrainian Institute of National Memory was founded as a state committee with branches in regional centers. Ukrainian diplomats began using every opportunity to broach the subject of the 75- year-old Holodomor in their dealings with colleagues. As though in response, President Putin of Russia also started issuing statements, and Russia’s State Duma passed resolutions on the same historical issue, but they had a completely different content. Have Ukraine and Russia opened a new front of struggle in their common past? Is this so? We were asked these questions by various conference participants. Yuriy Sergeev offered the most convincing answers. In reality, there is no struggle. It is just that Russia and Ukraine are moving at different speeds in understanding the history of building the communist system between 1918 and 1938. There is an objective reason for this: Ukraine suffered incommensurably more because it wanted to remain Ukraine. I asked my colleagues, “Suppose three and a half million of your fellow countrymen were killed by famine. Wouldn’t you want to know what caused that famine?” No one contradicted me, but I was asked another question in response: “Why is the Ukrainian government so insistently placing this issue before the international community?” The government is doing this probably because it is a Ukrainian government, not a Soviet or post-Soviet one. We owe a debt of gratitude to the top-level Soviet functionaries, who finally allowed people to call the famine a famine 55 years after it took place in 1932-33. We should actually thank James Mace’s working group in the US Commission on the Ukraine Famine and the Ukrainian Diaspora in the United States, which succeeded in having this commission established. 5. WHY GENOCIDE? This question remained foremost. There were many objections: e.g., it was not an act of genocide, the Russians suffered equally during the famine, so they cannot be held responsible for the Holodomor in Ukraine, etc. Such objections are heard in both Russia and Ukraine. They sound convincing to those who identify Soviet power with the Russian government and the Soviet Union with Russia. After all, few people in the West called the USSR by its official name. Harriman called his institute “Russian,” not “Soviet.” I think that Ukrainian and Russian scholars will have to work long and hard to distinguish the Soviet part of our past from the Russian past, and vice versa. This is the only way for our society to comprehend the true nature of the Holodomor and many other phenomena in our shared history. In the course of communist construction the Kremlin used the “nationalities policy” as an effective means of overcoming the resistance of a multinational society to the forcible imposition of unnatural production relations. Everything stated above helps us to understand our opponents’ stand but does not offer rebuttals to their objections. Did the Russians suffer as much? Should they be held responsible for the Holodomor in Ukraine? These questions are not interrelated, so there should be separate answers to each of these questions. First, let us consider the national aspect of the mortality rate. There are statistics for 1932-33, including regions and nationalities, but they are incomplete. During the conference at the Harriman Institute Oleh Wolowyna presented a paper on the reconstruction of demographic statistics. He has many authoritative predecessors in this field. In particular, Stephen Wheatcroft of the University of Melbourne submitted his article “On Demographic Evidence of the Tragedy of the Soviet Village, 1931-1933” as a supplement to the third volume of the five-volume document collection/monograph entitled Tragediia sovetskoi derevni (The Tragedy of the Soviet Village, 1927-1939, Moscow, 2001, p. 866-887). The crux of his article lies in its closing lines, where the author writes that an additional 3 to 3.5 million deaths occurred in Ukraine alone, which probably brings the USSR’s total to 6-7 million. These figures tally with statistics published earlier in Ukraine. On April 2, 2008, Russia’s State Duma adopted the resolution “In Memory of the Victims of the Famine of the 1930s on the Territory of the USSR,” which boils down to refuting all attempts of the Ukrainian side to have this tragedy recognized as an act of genocide. The resolution, however, contains Wheatcroft’s calculations of direct losses inflicted by the famine: seven million people. This alone is indicative of colossal headway compared to the Russian Federation’s earlier official stand. If one takes into consideration the sharp decline in the birth rate during the famine years, this figure will rise to at least 10 million. Does such a number not provide enough grounds to talk about the genocide that was perpetrated against Ukrainians, Kazakhs, Russians and all the other peoples who were devoured by the state terror machine? The authors of the Duma resolution, including Konstantin Zatulin, babbled something about drought. There are preserved archival weather reports for this period, as well as Stalin’s statement of 1933, in which he resolutely denies all talk of drought. Russian politicians and researchers themselves must determine whether the man-made famine of 1932-33 was an act of genocide in the Russian Federation. That is their prerogative. Ours is to assess the tragedy of the Ukrainian people by using international legal categories, all the more so as a closer look at the famine statistics shows that the Holodomor in Ukraine was qualitatively different from the all-union famine in 1932-33. There were two regions in the Russian Federation, Kuban and Kazakhstan, which suffered terrible losses during the famine. These losses had a significant impact on the all-Russian mortality picture. The famine in Kazakhstan was caused by the forcible settlement of nomads and the confiscation of most of their cattle for state meat deliveries. The heavy consequences of the famine in Ukraine and the Kuban had the same causes: the confiscation of all foods under the guise of state grain deliveries and the blockade of these two Ukrainian territories. Elsewhere in the European regions of the USSR the death toll from the famine was considerably lower (by 10 to 20 times) because it was caused either by the confiscation of grain (in grain-producing regions) or by the stoppage of state grain deliveries (in grain-consuming regions). If only grain had been confiscated, one can speculate that the state was forced to sell grain abroad in order to raise funds for an accelerated modernization. But when the state confiscated all foods that keep for a long time from areas that were already starving as a result of the grain confiscations, then blockaded these regions, and banned the word “famine,” one must speak about the deliberate creation of conditions for the population, which were incompatible with its physical survival-in other words, genocide. None of our opponents at Harriman Institute could refute these simple and logical conclusions. Did the Russians have anything to do with Stalin’s policy of terror? Such allegations are heard every now and then in Ukraine, and they are instantly picked up and capitalized on by the Russian media. One should not pay attention to marginalized politicians and scholars who are carrying out their orders. The terror by famine was perpetrated by a narrow circle of the Communist Party and Soviet leadership: Stalin and his team. The Russian people, just like all the other nations of the totalitarian Soviet Union, have nothing to do with the Kremlin’s policy of terror that commenced in December 1917, with the rout of the Constitutional Democrats, and ended in March 1953, with the Doctors’ Plot. The international scholarly community has begun to treat the Holodomor in Ukraine as an actual phenomenon that must be studied. After returning to Kyiv, I received an invitation from Stephen Wheatcroft to take part in a comparative study of various forms and types of famine in the USSR, the People’s Republic of China, and other countries of the communist bloc. It is necessary to ascertain how the weapon of famine was used in the process of the state’s enslavement of society. Only one conclusion can be made: it will not be possible to conceal the horrific history of communism from international scholarship.By Stanislav KULCHYTSKY, THE DAY
http://www.ukrainians.ca/content/view/918/2/lang,en/
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Quote: The Harriman Institute is one of Columbia University’s most authoritative institutions. It was founded in 1946 by William Averell Harriman, the US Ambassador to the Soviet Union in 1943-46. The objective of this institution was to carry out in-depth studies of the USSR and to train specialists who were required to substantiate US policy in Eastern Europe. Harriman, after whom the institute was named in 1992, declared time and again: “I want to stimulate and encourage the advanced study of Soviet affairs. To base policy on ignorance and illusion is very dangerous. Policy should be based on knowledge and understanding.” The renaming of the Russian Institute was not only a sign of recognition of the founder’s achievements and gratitude to the Harriman family for its multi-million-dollar endowment for the development of the Institute. The new name was necessitated by the changes that had emerged in the geopolitical situation. Whereas previously Americans identified all things Soviet with Russia, starting in the 1990s it became necessary to study the 15 post-Soviet countries after the USSR’s collapse. Ukraine also became the focus of attention, especially after the institute’s directorship went to Mark von Hagen. The scholarly merits of this youngish and dynamic Ukrainian Studies specialist were recognized when he was elected president of the International Association for Ukrainian Studies (replaced at the last MAU congress by Yaroslav Yatskiv of the National Academy of Sciences of Ukraine). In the fall of 2007 von Hagen was appointed chairman of the Department of History at the University of Arizona. Ukrainian Studies at Harriman Institute continue unimpeded. 2. A FEW WORDS ABOUT THE SCHOLARLY CONFERENCE In the 1950s research centers specializing in the study of Soviet and Eastern European history appeared in the West. One such center was founded at Columbia University in 1954. By the 1990s it had evolved into a large institution focused on Central and Eastern Europe. In 1997, in collaboration with the Harriman Institute, it established the Association for the Study of Nationalities. Its goal was to organize annual ASN conferences dealing with politics, economics, social, and cultural aspects of the post-Soviet countries. These conferences focus on the current situation in these postcommunist countries, and many historians participate in these scholarly gatherings. To comprehend the logical aspects of escaping the dead-end in which these countries found themselves as a result of the forcible implementation of the communist doctrine, it is necessary to study their recent past. This year’s ASN conference at the Harriman Institute took place on April 10-12. There were 11 panels, each lasting two hours. In view of the brief time allotted to the conference, strict time-limits were imposed on every presentation and debate. None of the sessions was clearly defined either thematically or regionally. I was amazed by this when I first attended the ASN conference a few years ago, and it took some time for me to figure out the secret. Each ASN conference has a clear-cut albeit invisible structure. Between eight and twelve thematic and regional panels take place during the conference, and sometimes films are screened or books discussed. The panels take place according to a certain chronology, so each expert specializing in a “narrow” field has an opportunity to take part in discussions of a topic that particularly interests the participant, who does not have to rush from one panel to the next. This year’s conference was attended by 594 scholars. Papers were submitted to the organizing committee in advance, and their topics were circulated among the participants of the various panels, so that they would be prepared to hold substantial discussions on a given subject. This took up at least one-third of the allotted time. Most of the conference participants were young people. Remarkably, a large number of representatives of Western universities and research centers hailed from postcommunist countries, judging by their surnames. This is further proof of the ongoing “brain drain.” As a rule, conference participants’ expenses are remunerated by the institutions where they are employed. For the most part, Ukraine’s National Academy of Sciences cannot afford to send its research associates to international conferences. My expenses were covered by the Shevchenko Scientific Society in America (NTSh). The hundreds of papers that were heard and discussed were well worth the money that was spent on a conference of this scope. The presentations reflected the broad range of changes that have taken place in the postcommunist world. The leaders of the “golden billion” countries led by the United States are following these changes with concern. They long ago realized that it is impossible to isolate oneself from the problems of postcommunist countries, so they want to figure them out, at times more so than the political elite of these countries. Harriman’s thesis that policy should be based on knowledge and understanding is still valid. 3. DISCUSSION PARTICIPANTS The panel on the Holodomor was one of 117. Other sessions that I attended attracted audiences that hardly surpassed the number of speakers. The spacious conference hall was packed for the subject of the Holodomor, which interests many people today. Before the session was called to order, one American scholar said that he had learned on the Internet that Olha Ginzburg, the chairperson of the State Archives Committee of Ukraine, had been relieved of her post. The audience responded instantly with applause. The Herostratus-like reputation of this communist member of the Ukrainian government is known halfway across the world. The Holodomor panel was chaired by Dr. Henry R. Huttenbach, a noted Holocaust researcher. The presenters, including me, were Oleh Wolowyna, Taras Hunczak, and Roman Serbyn, all professors of Ukrainian parentage, from North American universities. I got the impression that after James Mace no American or Canadian has become an expert in this field. A group of Canadian researchers from Toronto and Edmonton took part in the debate: Wsevolod Isajiv, Anna Procyk, Roman Senkus, Larissa Onyshkevych, Ambassador Extraordinary and Plenipotentiary Yuriy Sergeev, the Permanent Representative of Ukraine’s Mission to the UN, and his predecessor in this post, Professor Valeriy Kuchinsky of Columbia University, and others. 4. WHY ONLY NOW? Soviet Ukrainian history in its undistorted form was returned to our children a long time ago. Despite the appeals of Petro Symonenko’s party to stop the “rewriting” and “smearing” of the Soviet past, Ukraine’s Ministry of Education and Science has refused to endorse old textbooks. Pavlo Poliansky, who had been in charge of school curricula and textbooks, was relieved of his post during the period when socialists were dominant in the education ministry, but later returned after being promoted to the rank of deputy minister. As for those who completed their education under the Soviets and are now under the spell of Russia’s television series, nothing has changed. We live in cities and walk down streets named after those who shed rivers of blood in the comparatively recent past. We walk past monuments to people who destroyed their fellow human beings, guided by the Inquisition’s merciful principle “with no bloodshed,” except that they used famine, not fire. We have grown accustomed to paying homage to the victims of Soviet repressions and the famine once a year, a tribute to our own conscience, without realizing that the past has us firmly gripped by the throat. At least this is what the situation was like until recently, when President Yushchenko of Ukraine suddenly began signing one edict after another dedicated to historical problems. The Ukrainian Institute of National Memory was founded as a state committee with branches in regional centers. Ukrainian diplomats began using every opportunity to broach the subject of the 75- year-old Holodomor in their dealings with colleagues. As though in response, President Putin of Russia also started issuing statements, and Russia’s State Duma passed resolutions on the same historical issue, but they had a completely different content. Have Ukraine and Russia opened a new front of struggle in their common past? Is this so? We were asked these questions by various conference participants. Yuriy Sergeev offered the most convincing answers. In reality, there is no struggle. It is just that Russia and Ukraine are moving at different speeds in understanding the history of building the communist system between 1918 and 1938. There is an objective reason for this: Ukraine suffered incommensurably more because it wanted to remain Ukraine. I asked my colleagues, “Suppose three and a half million of your fellow countrymen were killed by famine. Wouldn’t you want to know what caused that famine?” No one contradicted me, but I was asked another question in response: “Why is the Ukrainian government so insistently placing this issue before the international community?” The government is doing this probably because it is a Ukrainian government, not a Soviet or post-Soviet one. We owe a debt of gratitude to the top-level Soviet functionaries, who finally allowed people to call the famine a famine 55 years after it took place in 1932-33. We should actually thank James Mace’s working group in the US Commission on the Ukraine Famine and the Ukrainian Diaspora in the United States, which succeeded in having this commission established. 5. WHY GENOCIDE? This question remained foremost. There were many objections: e.g., it was not an act of genocide, the Russians suffered equally during the famine, so they cannot be held responsible for the Holodomor in Ukraine, etc. Such objections are heard in both Russia and Ukraine. They sound convincing to those who identify Soviet power with the Russian government and the Soviet Union with Russia. After all, few people in the West called the USSR by its official name. Harriman called his institute “Russian,” not “Soviet.” I think that Ukrainian and Russian scholars will have to work long and hard to distinguish the Soviet part of our past from the Russian past, and vice versa. This is the only way for our society to comprehend the true nature of the Holodomor and many other phenomena in our shared history. In the course of communist construction the Kremlin used the “nationalities policy” as an effective means of overcoming the resistance of a multinational society to the forcible imposition of unnatural production relations. Everything stated above helps us to understand our opponents’ stand but does not offer rebuttals to their objections. Did the Russians suffer as much? Should they be held responsible for the Holodomor in Ukraine? These questions are not interrelated, so there should be separate answers to each of these questions. First, let us consider the national aspect of the mortality rate. There are statistics for 1932-33, including regions and nationalities, but they are incomplete. During the conference at the Harriman Institute Oleh Wolowyna presented a paper on the reconstruction of demographic statistics. He has many authoritative predecessors in this field. In particular, Stephen Wheatcroft of the University of Melbourne submitted his article “On Demographic Evidence of the Tragedy of the Soviet Village, 1931-1933” as a supplement to the third volume of the five-volume document collection/monograph entitled Tragediia sovetskoi derevni (The Tragedy of the Soviet Village, 1927-1939, Moscow, 2001, p. 866-887). The crux of his article lies in its closing lines, where the author writes that an additional 3 to 3.5 million deaths occurred in Ukraine alone, which probably brings the USSR’s total to 6-7 million. These figures tally with statistics published earlier in Ukraine. On April 2, 2008, Russia’s State Duma adopted the resolution “In Memory of the Victims of the Famine of the 1930s on the Territory of the USSR,” which boils down to refuting all attempts of the Ukrainian side to have this tragedy recognized as an act of genocide. The resolution, however, contains Wheatcroft’s calculations of direct losses inflicted by the famine: seven million people. This alone is indicative of colossal headway compared to the Russian Federation’s earlier official stand. If one takes into consideration the sharp decline in the birth rate during the famine years, this figure will rise to at least 10 million. Does such a number not provide enough grounds to talk about the genocide that was perpetrated against Ukrainians, Kazakhs, Russians and all the other peoples who were devoured by the state terror machine? The authors of the Duma resolution, including Konstantin Zatulin, babbled something about drought. There are preserved archival weather reports for this period, as well as Stalin’s statement of 1933, in which he resolutely denies all talk of drought. Russian politicians and researchers themselves must determine whether the man-made famine of 1932-33 was an act of genocide in the Russian Federation. That is their prerogative. Ours is to assess the tragedy of the Ukrainian people by using international legal categories, all the more so as a closer look at the famine statistics shows that the Holodomor in Ukraine was qualitatively different from the all-union famine in 1932-33. There were two regions in the Russian Federation, Kuban and Kazakhstan, which suffered terrible losses during the famine. These losses had a significant impact on the all-Russian mortality picture. The famine in Kazakhstan was caused by the forcible settlement of nomads and the confiscation of most of their cattle for state meat deliveries. The heavy consequences of the famine in Ukraine and the Kuban had the same causes: the confiscation of all foods under the guise of state grain deliveries and the blockade of these two Ukrainian territories. Elsewhere in the European regions of the USSR the death toll from the famine was considerably lower (by 10 to 20 times) because it was caused either by the confiscation of grain (in grain-producing regions) or by the stoppage of state grain deliveries (in grain-consuming regions). If only grain had been confiscated, one can speculate that the state was forced to sell grain abroad in order to raise funds for an accelerated modernization. But when the state confiscated all foods that keep for a long time from areas that were already starving as a result of the grain confiscations, then blockaded these regions, and banned the word “famine,” one must speak about the deliberate creation of conditions for the population, which were incompatible with its physical survival-in other words, genocide. None of our opponents at Harriman Institute could refute these simple and logical conclusions. Did the Russians have anything to do with Stalin’s policy of terror? Such allegations are heard every now and then in Ukraine, and they are instantly picked up and capitalized on by the Russian media. One should not pay attention to marginalized politicians and scholars who are carrying out their orders. The terror by famine was perpetrated by a narrow circle of the Communist Party and Soviet leadership: Stalin and his team. The Russian people, just like all the other nations of the totalitarian Soviet Union, have nothing to do with the Kremlin’s policy of terror that commenced in December 1917, with the rout of the Constitutional Democrats, and ended in March 1953, with the Doctors’ Plot. The international scholarly community has begun to treat the Holodomor in Ukraine as an actual phenomenon that must be studied. After returning to Kyiv, I received an invitation from Stephen Wheatcroft to take part in a comparative study of various forms and types of famine in the USSR, the People’s Republic of China, and other countries of the communist bloc. It is necessary to ascertain how the weapon of famine was used in the process of the state’s enslavement of society. Only one conclusion can be made: it will not be possible to conceal the horrific history of communism from international scholarship.By Stanislav KULCHYTSKY, THE DAY
http://www.ukrainians.ca/content/view/918/2/lang,en/
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Friday, May 23, 2008
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Analysts foresee `new world energy order`
Quote: Market analysts call the Paris-based IEA the world`s most reliable independent source of oil information and welcomed its decision to undertake a deep study of oil supplies.
But the IEA`s new forecasts are likely to further upset markets. Oil prices hit an all-time high Thursday above $135 a barrel before falling back.
Less oil would mean even higher prices for everything from gasoline to food. Already, airlines squeezed by jet fuel costs are bleeding profits and predicting cutbacks and industry upheaval. Ford Motor said Thursday it was cutting production of gas-guzzling sport utility vehicles and forecast more rough times ahead.
Birol said the IEA study, whose results will be released in November, was prompted by concern about the volatility of world oil markets and uncertainty about supply levels.
"The prices are very high, and demand did not respond in the last few years as much as one would have expected," Birol said. "The growth in terms of production was not great. We did not see enough investment."
The spurt in oil prices Thursday came after a report in the Wall Street Journal that the IEA was planning to lower its forecast for long-term world supply.
Birol would not speculate on whether the forecast, which will predict supplies through 2030, could go sharply downward. "We will see," he said.
The IEA`s past forecasts put oil supply at about 116 million barrels a day in 2030, up from 87 million barrels a day now.
"Although the agency`s official assessment isn`t expected until later this year, the market`s interpretation is that global supply may be significantly tighter than previously projected by the major oil market monitors," said Jim Ritterbusch, president of energy trading advisory service Ritterbusch and Associates in Galena, Illinois.
Birol said oil companies and governments have been cooperative with the IEA experts preparing the report, but added, "It is not an easy task. It is the first time this is being done in the public domain on such a scale."
Simon Wardell, oil analyst at Global Insight in London, was skeptical that the IEA would get a complete picture from "countries that are very closely guarded" such as Saudi Arabia, the No. 1 producer.
That is important because Birol said one of the key shifts coming up is that the world will become increasingly reliant on national oil companies instead of multinational ones.
"Up to now, we have seen that the international oil companies were responsible for bringing a big chunk of the oil to the markets. Now, in many cases, since existing reserves are declining, a big part of oil will need to come from national oil companies. And they have their own conditions, their own context."
Birol called for greater investment everywhere.
Wardell said the IEA report would have limited effect on investment. "It`s not like oil companies aren`t already looking around," he said.
But he said governments could take notice and "start thinking of policies that would ensure more oil."
Birol noted that, "Both on the demand side and supply side, we have new actors who change the rules of the game."
He said most demand now and in the coming decades will come from China, India and the Middle East. That is a stark shift from past decades, when the U.S. and Europe were demand-drivers.
The IEA is part of the Organization for Economic Cooperation and Development, which brings together 30 rich nations. It has no links to OPEC, and its review may challenge the Organization for Petroleum Exporting Countries` view that the world is well-supplied with oil.
Birol said the report is looking at onshore and offshore supplies -- including hard-to-reach wells in the deep sea.
He noted that Brazilian state oil company Petroleo Brasileiro SA said Thursday it has struck more oil in waters near the huge offshore Tupi field -- but remained cautious about how much "good oil" such fields would produce.
Fears about fuel prices helped send shares in Europe`s largest airline, Air France-KLM, down 9 percent Thursday after it announced a quarterly net loss and said it expects the coming year to be "challenging."
CEO Jean-Cyril Spinetta said the soaring cost of fuel means the industry is in for a "profound transformation," predicting capacity reductions, the acceleration of mergers and the exit of some players from the market.
http://unian.net/eng/news/news-252620.html
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But the IEA`s new forecasts are likely to further upset markets. Oil prices hit an all-time high Thursday above $135 a barrel before falling back.
Less oil would mean even higher prices for everything from gasoline to food. Already, airlines squeezed by jet fuel costs are bleeding profits and predicting cutbacks and industry upheaval. Ford Motor said Thursday it was cutting production of gas-guzzling sport utility vehicles and forecast more rough times ahead.
Birol said the IEA study, whose results will be released in November, was prompted by concern about the volatility of world oil markets and uncertainty about supply levels.
"The prices are very high, and demand did not respond in the last few years as much as one would have expected," Birol said. "The growth in terms of production was not great. We did not see enough investment."
The spurt in oil prices Thursday came after a report in the Wall Street Journal that the IEA was planning to lower its forecast for long-term world supply.
Birol would not speculate on whether the forecast, which will predict supplies through 2030, could go sharply downward. "We will see," he said.
The IEA`s past forecasts put oil supply at about 116 million barrels a day in 2030, up from 87 million barrels a day now.
"Although the agency`s official assessment isn`t expected until later this year, the market`s interpretation is that global supply may be significantly tighter than previously projected by the major oil market monitors," said Jim Ritterbusch, president of energy trading advisory service Ritterbusch and Associates in Galena, Illinois.
Birol said oil companies and governments have been cooperative with the IEA experts preparing the report, but added, "It is not an easy task. It is the first time this is being done in the public domain on such a scale."
Simon Wardell, oil analyst at Global Insight in London, was skeptical that the IEA would get a complete picture from "countries that are very closely guarded" such as Saudi Arabia, the No. 1 producer.
That is important because Birol said one of the key shifts coming up is that the world will become increasingly reliant on national oil companies instead of multinational ones.
"Up to now, we have seen that the international oil companies were responsible for bringing a big chunk of the oil to the markets. Now, in many cases, since existing reserves are declining, a big part of oil will need to come from national oil companies. And they have their own conditions, their own context."
Birol called for greater investment everywhere.
Wardell said the IEA report would have limited effect on investment. "It`s not like oil companies aren`t already looking around," he said.
But he said governments could take notice and "start thinking of policies that would ensure more oil."
Birol noted that, "Both on the demand side and supply side, we have new actors who change the rules of the game."
He said most demand now and in the coming decades will come from China, India and the Middle East. That is a stark shift from past decades, when the U.S. and Europe were demand-drivers.
The IEA is part of the Organization for Economic Cooperation and Development, which brings together 30 rich nations. It has no links to OPEC, and its review may challenge the Organization for Petroleum Exporting Countries` view that the world is well-supplied with oil.
Birol said the report is looking at onshore and offshore supplies -- including hard-to-reach wells in the deep sea.
He noted that Brazilian state oil company Petroleo Brasileiro SA said Thursday it has struck more oil in waters near the huge offshore Tupi field -- but remained cautious about how much "good oil" such fields would produce.
Fears about fuel prices helped send shares in Europe`s largest airline, Air France-KLM, down 9 percent Thursday after it announced a quarterly net loss and said it expects the coming year to be "challenging."
CEO Jean-Cyril Spinetta said the soaring cost of fuel means the industry is in for a "profound transformation," predicting capacity reductions, the acceleration of mergers and the exit of some players from the market.
http://unian.net/eng/news/news-252620.html
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Tuesday, May 20, 2008
PACE Begins Preparing Report On Holodomor Of 1932-33 In Ukraine
Quote: Parliamentary Assembly of the Council of Europe has decided to begin preparing a report on the Holodomor of 1932-33 in Ukraine.
The head of the Foreign Affairs Ministry press service Vasyl Kyrylych has announced this to journalists.
The PACE political committee held a meeting on May 16 in Stockholm, Sweden, where they decided to start drawing the report to discuss the Holodomor.
Next they will determine key topics of the report and call a rapporteur, Kyrylych says.
"It is expected, according to experts, that before late in autumn the report may be ready and discussed by PACE," said Kyrylych.
So, by 2009 PACE may consider the report and take a decision.
http://www.ukranews.com/eng/article/123867.html
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The head of the Foreign Affairs Ministry press service Vasyl Kyrylych has announced this to journalists.
The PACE political committee held a meeting on May 16 in Stockholm, Sweden, where they decided to start drawing the report to discuss the Holodomor.
Next they will determine key topics of the report and call a rapporteur, Kyrylych says.
"It is expected, according to experts, that before late in autumn the report may be ready and discussed by PACE," said Kyrylych.
So, by 2009 PACE may consider the report and take a decision.
http://www.ukranews.com/eng/article/123867.html
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Sunday, May 18, 2008
EBRD cuts forecasts for three key states
Quote: The European Bank for Reconstruction and Development on Sunday cut growth forecasts for Ukraine, Kazakhstan, and Romania – three key countries for emerging markets investors – because of difficulties arising from the global credit crunch and mounting inflation.
While the EBRD, the multilateral bank for eastern Europe and the ex-Soviet Union, raised its 2008 growth forecast for the region as a whole, saying it was pulling through the global turmoil better than expected, it singled out the three countries, plus impoverished Tajikistan, for significant reductions.
In a report issued at the start of its annual meeting in Kiev, the EBRD warned that Kazakhstan was suffering from “the impact of inflation and credit stagnation” and reduced expected gross domestic product growth from 8.5 to 5.1 per cent. Romania’s growth forecast was cut from 6.5 to 5 per cent, on the grounds of “rapid monetary tightening”, with the central bank raising interest rates to counter inflation.
For Ukraine, the growth forecast was reduced from 6 to 5.5 per cent, as the EBRD warned of the impact of inflation which last month hit an annual rate of 30 per cent, the highest in Europe and among the highest in the world. Tajikistan’s GDP growth prediction was slashed from 9 to 4.1 per cent, because of the country’s exceptionally severe winter, power shortages and a serious accounting dispute with the International Monetary Fund which is hitting Dushanbe’s access to foreign credit.
The bank’s concerns about Ukraine were echoed by David McCormick, the US Treasury undersecretary for international affairs, who said he had raised the inflation issue in discussions with Ukrainian officials. “It’s a very significant issue . . . there’s a recognition here that we require an integrated combination of both monetary and fiscal policy.”
Erik Berglof, the EBRD chief economist, said: “We are in a global slowdown that is quite difficult . . . What’s coming up as the major concern in the region is inflation. It is related to a weaker fiscal stance in many countries.”
However, he emphasised that the region as a whole was growing faster than expected, with the bank raising its forecast average GDP growth rate from between 5 and 5.5 per cent in January to 6 per cent. This is still down on last year when the region grew 7.3 per cent, but is far ahead of western Europe, eastern Europe’s biggest economic partner.
The EBRD blamed the expected slowdown on the global credit crunch, a forecast weakening in export markets in western Europe, and counter-inflationary measures in many countries.
http://www.ft.com/cms/s/0/110d0692-2518-11dd-a14a-000077b07658.html
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While the EBRD, the multilateral bank for eastern Europe and the ex-Soviet Union, raised its 2008 growth forecast for the region as a whole, saying it was pulling through the global turmoil better than expected, it singled out the three countries, plus impoverished Tajikistan, for significant reductions.
In a report issued at the start of its annual meeting in Kiev, the EBRD warned that Kazakhstan was suffering from “the impact of inflation and credit stagnation” and reduced expected gross domestic product growth from 8.5 to 5.1 per cent. Romania’s growth forecast was cut from 6.5 to 5 per cent, on the grounds of “rapid monetary tightening”, with the central bank raising interest rates to counter inflation.
For Ukraine, the growth forecast was reduced from 6 to 5.5 per cent, as the EBRD warned of the impact of inflation which last month hit an annual rate of 30 per cent, the highest in Europe and among the highest in the world. Tajikistan’s GDP growth prediction was slashed from 9 to 4.1 per cent, because of the country’s exceptionally severe winter, power shortages and a serious accounting dispute with the International Monetary Fund which is hitting Dushanbe’s access to foreign credit.
The bank’s concerns about Ukraine were echoed by David McCormick, the US Treasury undersecretary for international affairs, who said he had raised the inflation issue in discussions with Ukrainian officials. “It’s a very significant issue . . . there’s a recognition here that we require an integrated combination of both monetary and fiscal policy.”
Erik Berglof, the EBRD chief economist, said: “We are in a global slowdown that is quite difficult . . . What’s coming up as the major concern in the region is inflation. It is related to a weaker fiscal stance in many countries.”
However, he emphasised that the region as a whole was growing faster than expected, with the bank raising its forecast average GDP growth rate from between 5 and 5.5 per cent in January to 6 per cent. This is still down on last year when the region grew 7.3 per cent, but is far ahead of western Europe, eastern Europe’s biggest economic partner.
The EBRD blamed the expected slowdown on the global credit crunch, a forecast weakening in export markets in western Europe, and counter-inflationary measures in many countries.
http://www.ft.com/cms/s/0/110d0692-2518-11dd-a14a-000077b07658.html
.
Visit our new Ukraine English News site
A vast amount of Ukraine news from several different news sites. Also a world news and a Ukrainian language news page. Also includes a new forum. Join us now.
http://www.ukraine-english-news.com/
.
http://www.ukraine-english-news.com/
.
Ukraine's PM backs new law strengthening president's powers
Quote: Ukrainian Prime Minister Yulia Tymoshenko voiced support Sunday for legislation strengthening the powers of the president with whom she has been at loggerheads, saying her government backed the law for the sake of democratic unity.
"At the president's request, our political team voted for a new law on the cabinet, reducing the government's powers.. and increasing those of the president," she told a press conference.
"We supported (the legislation) for the sake of the unity of the democratic coalition."
President Viktor Yushchenko and Tymoshenko were allies who led the 2004 Orange Revolution that peacefully overturned a rigged election originally awarded to a Moscow-backed candidate.
But relations between the two have since cooled.
Nevertheless on Sunday Tymoshenko defended the unity of the democratic coalition with Yushchenko's party, saying she hoped the new arrangements would "harmonise our activity and provide the government with the possibility to work".
On Saturday Yushchenko approved the new legislation strengthening his authority over the government by allowing him to install pro-Western figures in key posts.
It gives him the power to block prime ministerial candidates and leaves the nomination of foreign and defence ministers in his hands alone.
The law, overturning a 2007 decree which clipped the president's wings and asserted governmental control through parliament, won the votes of 245 pro-Western members loyal to Yushchenko -- 19 more than the legal minimum.
After things cooled between them, Yushchenko dismissed Tymoshenko as prime minister in 2005, and political analysts said the split between Ukraine's two most prominent politicians appeared to be worsening because both were likely to contest a presidential poll in 2009 or 2010.
http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=574&topicId=100007539&docId=l:793225126&isRss=true
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"At the president's request, our political team voted for a new law on the cabinet, reducing the government's powers.. and increasing those of the president," she told a press conference.
"We supported (the legislation) for the sake of the unity of the democratic coalition."
President Viktor Yushchenko and Tymoshenko were allies who led the 2004 Orange Revolution that peacefully overturned a rigged election originally awarded to a Moscow-backed candidate.
But relations between the two have since cooled.
Nevertheless on Sunday Tymoshenko defended the unity of the democratic coalition with Yushchenko's party, saying she hoped the new arrangements would "harmonise our activity and provide the government with the possibility to work".
On Saturday Yushchenko approved the new legislation strengthening his authority over the government by allowing him to install pro-Western figures in key posts.
It gives him the power to block prime ministerial candidates and leaves the nomination of foreign and defence ministers in his hands alone.
The law, overturning a 2007 decree which clipped the president's wings and asserted governmental control through parliament, won the votes of 245 pro-Western members loyal to Yushchenko -- 19 more than the legal minimum.
After things cooled between them, Yushchenko dismissed Tymoshenko as prime minister in 2005, and political analysts said the split between Ukraine's two most prominent politicians appeared to be worsening because both were likely to contest a presidential poll in 2009 or 2010.
http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=574&topicId=100007539&docId=l:793225126&isRss=true
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Thursday, May 15, 2008
Guest column: ‘Overcome rivalries and draw clear lines of authority’
Quote: There is an old saying: “Where there are two Ukrainians, there will be three hetmans.” Hetmans were the leaders of Ukraine’s traditional Cossack hosts and the proverb reflects the divisive politics of Ukraine’s past.
Modern-day Ukraine’s politics are no less fractious or confusing to the outside world. In the past 29 months, Kiev has seen five different governments, including two under pro-Russian prime minister Viktor Yanukovich and two under pro-western prime minister Yulia Tymoshenko, who is now in office. Such volatility is hardly surprising. At the height of the 2004 Orange Revolution, Ukraine seemed to have three presidents: lame-duck authoritarian Leonid Kuchma; his anointed successor Viktor Yanukovich, who claimed victory amid evidence of vote fraud; and Viktor Yushchenko, the reformer who swore himself in as president and eventually won a re-run election. At times, political tensions have been accompanied by signs of rampant corruption.
But, amid the turmoil, Ukraine has seen steady economic growth with gross domestic product rising at an average of 7.4 per cent a year since 2000. Personal incomes have risen and property prices have soared.
Increasingly, domestic and international business people have learned to discount the political tensions. Observers have come to understand that sharp struggles have contributed to democratic development, political pluralism, free media, and the absence of political persecution.
Business naturally would prefer predictability, stability, and the opportunity to work issues and legislation through a consistent team of decision-makers. Yet Ukraine has seen more continuity in its economic policies than lurches to the left and right.
As Alexander Motyl, a professor at Rutgers University in New Jersey, sees it: “Ukraine’s fragmented politics amounts to a weak state. If it’s too weak that can be bad for business. But if the state is preoccupied with its own affairs, that can be quite good for business.”
Big business is well represented in all three leading political forces – the Yanukovich-led Regions party, the pro-Yushchenko Our Ukraine bloc, and the Yulia Tymoshenko bloc – which cumulatively account for nearly 90 per cent of the seats in the legislature. A study indicated that about 40 per cent of deputies in the last parliament came from business backgrounds. With minor differences, Ukraine’s three major political leaders all respect the market system and are sensitive to business interests.
In one sense, the growing influence of business on Ukraine’s parties is a by-product of the intense political struggle. Since 2000 there have been two presidential and three parliamentary elections, as well as numerous local contests. The frequent elections generate a need to finance increasingly expensive campaigns. In turn, business leaders leverage financial support into a direct presence on party lists and influence over party programmes. As a result, the big parties all espouse business-friendly centrist economic policies when in office.
Some business people use their clout to lobby for narrow interests and at times exploit political influence for special advantage, and a disproportionate business presence in politics may damage pluralism over time. Some are not shy to bribe politicians and bureaucrats alike.
But in recent years, the business community’s role in politics has largely been salutary. Most of the business community quietly threw its support behind the Orange Revolution, seeing in Mr Yushchenko a leader who could help the country escape from the corrupt ruling elite. When, last year, a showdown between President Yushchenko and Mr Yanukovich, who was then prime minister, threatened to spiral out of control, business intervened.
Ukraine’s richest man Rinat Akhmetov, a patron of the Regions party, pressed for a ballot-box solution. When the verdict came in, he helped ensure his party accepted defeat.
But business is becoming increasingly worried about rising inflation, which, as well as being economically damaging can be socially disruptive. Instead of tackling the problem co-operatively, the president and prime minister are quarrelling as they prepare for the January 2010 presidential election.
In practical terms this means too little is being done to tame inflation, meaningful privatisation is stymied, and populist promises proliferate.
For a country that has shed its authoritarian past, dispersed power and checks and balances make sense. Yet the new system is not working properly, despite several attempts at constitutional reform. Political leaders still view politics as a matter of constant struggle.
http://www.ft.com/cms/s/0/93db761e-1fc1-11dd-9216-000077b07658.html
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Modern-day Ukraine’s politics are no less fractious or confusing to the outside world. In the past 29 months, Kiev has seen five different governments, including two under pro-Russian prime minister Viktor Yanukovich and two under pro-western prime minister Yulia Tymoshenko, who is now in office. Such volatility is hardly surprising. At the height of the 2004 Orange Revolution, Ukraine seemed to have three presidents: lame-duck authoritarian Leonid Kuchma; his anointed successor Viktor Yanukovich, who claimed victory amid evidence of vote fraud; and Viktor Yushchenko, the reformer who swore himself in as president and eventually won a re-run election. At times, political tensions have been accompanied by signs of rampant corruption.
But, amid the turmoil, Ukraine has seen steady economic growth with gross domestic product rising at an average of 7.4 per cent a year since 2000. Personal incomes have risen and property prices have soared.
Increasingly, domestic and international business people have learned to discount the political tensions. Observers have come to understand that sharp struggles have contributed to democratic development, political pluralism, free media, and the absence of political persecution.
Business naturally would prefer predictability, stability, and the opportunity to work issues and legislation through a consistent team of decision-makers. Yet Ukraine has seen more continuity in its economic policies than lurches to the left and right.
As Alexander Motyl, a professor at Rutgers University in New Jersey, sees it: “Ukraine’s fragmented politics amounts to a weak state. If it’s too weak that can be bad for business. But if the state is preoccupied with its own affairs, that can be quite good for business.”
Big business is well represented in all three leading political forces – the Yanukovich-led Regions party, the pro-Yushchenko Our Ukraine bloc, and the Yulia Tymoshenko bloc – which cumulatively account for nearly 90 per cent of the seats in the legislature. A study indicated that about 40 per cent of deputies in the last parliament came from business backgrounds. With minor differences, Ukraine’s three major political leaders all respect the market system and are sensitive to business interests.
In one sense, the growing influence of business on Ukraine’s parties is a by-product of the intense political struggle. Since 2000 there have been two presidential and three parliamentary elections, as well as numerous local contests. The frequent elections generate a need to finance increasingly expensive campaigns. In turn, business leaders leverage financial support into a direct presence on party lists and influence over party programmes. As a result, the big parties all espouse business-friendly centrist economic policies when in office.
Some business people use their clout to lobby for narrow interests and at times exploit political influence for special advantage, and a disproportionate business presence in politics may damage pluralism over time. Some are not shy to bribe politicians and bureaucrats alike.
But in recent years, the business community’s role in politics has largely been salutary. Most of the business community quietly threw its support behind the Orange Revolution, seeing in Mr Yushchenko a leader who could help the country escape from the corrupt ruling elite. When, last year, a showdown between President Yushchenko and Mr Yanukovich, who was then prime minister, threatened to spiral out of control, business intervened.
Ukraine’s richest man Rinat Akhmetov, a patron of the Regions party, pressed for a ballot-box solution. When the verdict came in, he helped ensure his party accepted defeat.
But business is becoming increasingly worried about rising inflation, which, as well as being economically damaging can be socially disruptive. Instead of tackling the problem co-operatively, the president and prime minister are quarrelling as they prepare for the January 2010 presidential election.
In practical terms this means too little is being done to tame inflation, meaningful privatisation is stymied, and populist promises proliferate.
For a country that has shed its authoritarian past, dispersed power and checks and balances make sense. Yet the new system is not working properly, despite several attempts at constitutional reform. Political leaders still view politics as a matter of constant struggle.
http://www.ft.com/cms/s/0/93db761e-1fc1-11dd-9216-000077b07658.html
.
Visit our new Ukraine English News site
A vast amount of Ukraine news from several different news sites. Also a world news and a Ukrainian language news page. Also includes a new forum. Join us now.
http://www.ukraine-english-news.com/
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http://www.ukraine-english-news.com/
.
Ukraine energy scheme backers revealed
Quote: Quote: A company owned by Ukraine’s richest man, Rinat Akhmetov, revealed on Thursday it was one of three financial backers for a strategically important hydrocarbon project whose fate was cast into doubt this week by Kiev’s prime minister. DTEK, Mr Akhmetov’s energy holding, revealed at a press conference in Kiev that it held a quarter interest as financial backer in a Black Sea exploration project led by Houston-based Vanco Energy Company. Vanco’s other two partners, each also with 25 per cent, were identified as Shadowlight, owned by Russian businessman Evgeny Novitsky, and Integrum Technologies, a subsidiary of an undisclosed Austrian investment holding. The investors came forward days after Yulia Tymoshenko’s government pulled Vanco’s licence to explore a vast 12,900km field off the Crimean peninsula. In identifying its financial backers, Vanco officials said they hoped to end speculation triggered by Ms Tymoshenko this week that Russia’s Gazprom, or partners of the Russian energy giant, could be involved. Vanco officials called for fresh negotiations with her government to restart the project. But Oleksandr Hudyma, energy adviser to Ms Tymoshenko, said the project’s fate remained very much in the air, saying: “The ownership question remains a conspiracy. It is still very unclear who has interests in this project, and who represents whom.” Vanco inked a production-sharing agreement last year when Kiev’s government was headed by the Moscow-friendly Viktor Yanukovich, considered to be a political ally of Mr Akhmetov. Delayed by 18-months of negotiations, the agreement represented the first sizable natural gas and oil exploration project on Ukraine’s Black Sea coast. Ms Tymoshenko pulled the licence this month, citing concern that Gazprom could, through partners, gain a hidden interest in the project that was originally intended to diversify energy supplies by boosting domestic production. Ms Tymoshenko also suggested past governments might have compromised Kiev’s “national interests” by yielding such a large field and unjustifiable proceeds to a single group. Vanco’s senior vice-president, Jeffrey Mitchell, expressed hope a compromise could be reached, suggesting the project could “generate energy independence” for Ukraine. Heavily dependent upon gas and oil imports from Russia and Central Asia, Kiev’s economy has struggled in adjusting to three stiff natural gas price increases in as many years, and rising oil costs. Experts say Ukraine holds significant amounts of untapped reserves. Vanco’s financial partners denied speculation raised by Ms Tymoshenko this week that their companies could be holding talks on selling their stakes to Gazprom. But Mr Mitchell struggled to identify the beneficial owner of Integrum Technologies, saying: “I plead ignorance.” Eckert Gerhard, a Vienna-based lawyer representing Integrum, refused to identify the beneficial owners or parent group. Mr Novitsky, a top executive at Russia’s Sistema diversified holding, said he was the owner of Shadowlight, which he described as an investment fund. Mr Hudyma accused Mr Yanukovich’s government of handling negotiations with Vanco last year on a production-sharing agreement in non-transparent manner. He suggested parties in the project today could have ties to close associates of the former prime minister. Earlier this week, Ms Tymoshenko criticised her political rival, President Viktor Yushchenko, suggesting he may have backed the Vanco project ignoring possible drawbacks.
http://www.ft.com/cms/s/0/c75a078e-22a1-11dd-93a9-000077b07658.html
.
http://www.ft.com/cms/s/0/c75a078e-22a1-11dd-93a9-000077b07658.html
.
Visit our new Ukraine English News site
A vast amount of Ukraine news from several different news sites. Also a world news and a Ukrainian language news page. Also includes a new forum. Join us now.
http://www.ukraine-english-news.com/
.
http://www.ukraine-english-news.com/
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Ukraine Becomes WTO Member
Quote: Ukraine has become a member of the World Trade Organization.
Presidential press service disclosed this to Ukrainian News.
Ukraine has become the 152nd state in the organization.
"The date will become history of our state, as the day when Ukraine was acknowledged as a member of the world's economic commonwealth by the international society," the report reads.
The talks on Ukraine's accession to the WTO have lasted for 14 years.
While this time, Ukraine has held bilateral consultations on access to commodity and service markets with 52 states-members of the organization, endorsed over 50 laws needed to bring Ukrainian legislation in a line with WTO requirements.
The report also said that the WTO opens wide opportunities for Ukraine to speed up development of national economy. In this, Ukraine receives favourable trade regime in relations with 151 countries, opportunity to use international instruments on settling trade conflicts, and opportunity to take part in elaboration of rules of international trade.
http://www.ukranews.com/eng/article/122625.html
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Presidential press service disclosed this to Ukrainian News.
Ukraine has become the 152nd state in the organization.
"The date will become history of our state, as the day when Ukraine was acknowledged as a member of the world's economic commonwealth by the international society," the report reads.
The talks on Ukraine's accession to the WTO have lasted for 14 years.
While this time, Ukraine has held bilateral consultations on access to commodity and service markets with 52 states-members of the organization, endorsed over 50 laws needed to bring Ukrainian legislation in a line with WTO requirements.
The report also said that the WTO opens wide opportunities for Ukraine to speed up development of national economy. In this, Ukraine receives favourable trade regime in relations with 151 countries, opportunity to use international instruments on settling trade conflicts, and opportunity to take part in elaboration of rules of international trade.
http://www.ukranews.com/eng/article/122625.html
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Growing in spite of the politics
Quote: While it has not made any fundamental changes in Ukraine’s geopolitical position, the post-2004 leadership has also managed to secure admission to the World Trade Organisation, the promise of an early start to talks on a free trade agreement with the European Union and a vague pledge of future Nato membership. Russia has increased gas prices and raised the volume on its anti-Ukrainian rhetoric but has proved unable to stop a perceptible westward shift in the country’s external relations.
For the pro-western Mr Yushchenko and Ms Tymoshenko this is clear progress. For the Moscow-friendly supporters of Mr Yanukovich, the picture is less positive. But they too are happy with the country’s economic advances and support Ukraine joining the WTO and getting closer to the EU – although Nato is a different matter.
Many Ukrainians end up ignoring politics altogether – or wishing that they were better served by their leaders. As Oleh Rybachuk, president of the Euro-Atlantic University in Kiev, says: “Our country is welcome in the world. But those who are running the country at the moment get a vote of no confidence.”
To be fair, Ukraine’s leaders are not entirely to blame for the lack of political stability. They are working in a system created during the Orange Revolution, with built-in political and legal contradictions. Mr Yushchenko triumphed in the disputed 2004 presidential election by a fairly narrow margin, backed by voters in the west and centre, but opposed by Mr Yanukovich’s supporters in the Russian-speaking east. The Orange team of Mr Yushchenko and Ms Tymoshenko then split, with Ms Tymoshenko winning the lion’s share of the political support, leaving the president bitter and increasingly vulnerable to political attack.
Under the deal which settled the 2004 election dispute, the presidency lost a considerable chunk of its powers to parliament, but not nearly enough to turn Ukraine into a parliamentary democracy. There are constant arguments about the relative powers of president, government and parliament.
Four changes of government and two parliamentary elections have failed to clear the air. Now, Mr Yushchenko is pushing for a constitutional reform to recover some of the president’s lost powers, while Ms Tymoshenko and Mr Yanukovich want to go in the opposite direction and boost parliament’s prerogatives. Hryhoriy Nemyria, the pro-Tymoshenko deputy prime minister for international integration, says: “The most successful countries from central and eastern Europe all adopted a parliamentary system. The alternative system in the post-Soviet region is the super-presidential system. It is important for Ukraine to avoid this temptation.”
At a recent press conference, Mr Yushchenko said he was not against a pure parliamentary system in principle, but insisted Ukraine was not ready for it. He referred to a parliament in which many lawmakers function as agents of influence for oligarchs as an “unstable institution”. The motivations driving politics in the parliament are “not yours or ours”, he said at a press conference on April 24.
It is impossible to predict how this debate will end. The only certainty is that the next presidential election, due in early 2010, is already figuring prominently in the minds of the leading forces. According to opinion polls, Ms Tymoshenko would have a good chance of unseating Mr Yushchenko, with a 25 per cent support rating, compared with the president’s 7 per cent. Mr Yanukovich is her most serious contender with about 23 per cent support, according to a March poll conducted by Kiev’s Research & Branding Group.
But, in all the confusion, it is important to recall that the Orange Revolution has ushered in a genuine multi-party democracy with real conflicts and a free media. The fear that officialdom inspired under the presidency of Leonid Kuchma has gone.
That said, the courts have yet to be brought into the post-Orange Revolution world. Political leaders have failed to deal adequately with the criminal legacy of the past, notably the killing of muckraking journalist Hryhoriy Gongadze, the fraud involved in the 2004 election and Mr Yushchenko’s near-fatal poisoning.
People complain that corruption can be as bad as it was in Mr Kuchma’s time, especially on questions linked to the booming property and construction markets.
Moreover, the business oligarchs who acquired influence under Mr Kuchma have by and large retained their political influence.
Rinat Akhmetov, Ukraine’s richest man with assets of $7.4bn, according to Forbes, the US magazine, stands behind Russia’s wealthiest men in absolute terms. But, with Russia’s economy five times bigger than Ukraine’s, Mr Akhmetov has more domestic clout than his Russian counterparts.
Nor does he face the same pressures from the authorities that Russian oligarchs do from the Kremlin.
Yet, despite the political conflicts, the economy is growing fast, with gross domestic product growing at more than 7 per cent a year since 2000. This year, economists foresee a modest slowdown to 5-5.5 per cent, as investment decelerates slightly.
With GDP per head of only €2,100 ($3,200) there is still scope for further rapid economic growth. WTO membership is forecast to expand trade and investment as will closer ties with the EU. Foreign investors see opportunities similar to those in central Europe five to 10 years ago. Banking and construction are prime targets and rising world food prices are increasing the attractions of the agricultural sector, despite the bureaucratic hurdles facing investment in land.
Net capital inflows last year hit a record $15.8bn, including a 60 per cent increase in foreign direct investment (FDI) to $9.2bn. This year, FDI is expected to remain high, but inflows will decline due to the global credit crunch.
However, officials’ biggest concern is not declining GDP growth but soaring inflation, which hit 30 per cent in April. Global food and energy price increases are having a serious impact, as are domestic developments, including spiralling annual credit growth of 50 per cent in recent years, and sizeable increases in public spending on pay, pensions and welfare.
The government is revising the budget to cut the planned deficit from 2 per cent of GDP and the central bank has raised interest rates. The International Monetary Fund would like to see firmer action but the prospect of the next presidential election campaign leaves politicians reluctant to squeeze very hard.
Electoral considerations are also holding up structural reforms, including the long-planned liberalisation of the arable land market. It is also unclear how aggressively the government will pursue its privatisation programme, which includes plans to sell strategic stakes in energy companies and in Ukrtelecom, the telecoms utility.
For business, the biggest challenge is rising energy prices. Russia has raised the gas price from below $100 per 1,000 cubic metres in 2005 to nearly $180 this year. The price is expected to increase again next year.
So far, industry has coped, assisted by record prices for energy-intensive exports, including steel, pipes and chemicals. Companies have invested in energy efficiency but there is still room for improvement with output per unit of energy standing at one-third of central European levels.
In foreign policy, Ukraine’s biggest achievement is WTO membership which Kamen Zahariev, Ukraine country director for the European Bank for Reconstruction and Development, hails as “a historic event for Ukraine”.
As well as the economic benefits, there is the political gain of entering deeper into international trading networks and of doing so before Moscow, because now Kiev will have a say on Russia’s entry terms.
WTO accession will also trigger the start of intensive talks with the EU on a wide-ranging free trade agreement that will include steel and chemicals. Mr Yushchenko and Ms Tymoshenko hope that growing economic integration with the EU will eventually lead to political integration, though they accept this may be a long way off.
Nato accession is more problematic. Mr Yushchenko has pushed hard for Nato, knowing that it can, in the right conditions, be achieved much quicker than EU membership, which involves years of reforms.
Ukraine, together with Georgia, this year applied for a pre-accession Membership Action Plan. The MAP bids were turned down at Nato’s summit in Bucharest but they were given instead promises of future Nato membership and commitments to review the MAP applications late this year. Mr Yushchenko hailed this as “a victory” but he knows there is much to do if Ukraine is to make further progress towards Nato membership.
For a start, opinion polls suggest that most Ukrainians oppose membership, even though they back EU entry. They favour the neutrality written into the constitution and are wary of irritating Russia. Mr Yanukovich’s Regions Party acts as a powerful focus for these sentiments.
Mr Rybachuk and other Nato supporters argue that opinions will change once the authorities roll out an information campaign.
They also expect to gain support from Russia’s persistent sabre-rattling towards Ukraine. Most Russians, including liberals, see Ukraine’s Nato moves as a betrayal of hundreds of years of common history. The Kremlin is also concerned about maintaining Russia’s military links with Ukraine, not least its presence in the Ukrainian Black sea naval port of Sevastopol where the Russian fleet is stationed under an agreement that expires in 2017.
Mr Yushchenko’s strategy is to talk softly where Russia is concerned but to work steadily towards fulfilling his country’s European ambitions.
His job would be a lot easier if he and political rivals could cooperate a little more.
The prospects of this happening before the 2010 presidential election seem minimal.
http://www.ft.com/cms/s/0/9a0e1adc-1fc1-11dd-9216-000077b07658.html
.
For the pro-western Mr Yushchenko and Ms Tymoshenko this is clear progress. For the Moscow-friendly supporters of Mr Yanukovich, the picture is less positive. But they too are happy with the country’s economic advances and support Ukraine joining the WTO and getting closer to the EU – although Nato is a different matter.
Many Ukrainians end up ignoring politics altogether – or wishing that they were better served by their leaders. As Oleh Rybachuk, president of the Euro-Atlantic University in Kiev, says: “Our country is welcome in the world. But those who are running the country at the moment get a vote of no confidence.”
To be fair, Ukraine’s leaders are not entirely to blame for the lack of political stability. They are working in a system created during the Orange Revolution, with built-in political and legal contradictions. Mr Yushchenko triumphed in the disputed 2004 presidential election by a fairly narrow margin, backed by voters in the west and centre, but opposed by Mr Yanukovich’s supporters in the Russian-speaking east. The Orange team of Mr Yushchenko and Ms Tymoshenko then split, with Ms Tymoshenko winning the lion’s share of the political support, leaving the president bitter and increasingly vulnerable to political attack.
Under the deal which settled the 2004 election dispute, the presidency lost a considerable chunk of its powers to parliament, but not nearly enough to turn Ukraine into a parliamentary democracy. There are constant arguments about the relative powers of president, government and parliament.
Four changes of government and two parliamentary elections have failed to clear the air. Now, Mr Yushchenko is pushing for a constitutional reform to recover some of the president’s lost powers, while Ms Tymoshenko and Mr Yanukovich want to go in the opposite direction and boost parliament’s prerogatives. Hryhoriy Nemyria, the pro-Tymoshenko deputy prime minister for international integration, says: “The most successful countries from central and eastern Europe all adopted a parliamentary system. The alternative system in the post-Soviet region is the super-presidential system. It is important for Ukraine to avoid this temptation.”
At a recent press conference, Mr Yushchenko said he was not against a pure parliamentary system in principle, but insisted Ukraine was not ready for it. He referred to a parliament in which many lawmakers function as agents of influence for oligarchs as an “unstable institution”. The motivations driving politics in the parliament are “not yours or ours”, he said at a press conference on April 24.
It is impossible to predict how this debate will end. The only certainty is that the next presidential election, due in early 2010, is already figuring prominently in the minds of the leading forces. According to opinion polls, Ms Tymoshenko would have a good chance of unseating Mr Yushchenko, with a 25 per cent support rating, compared with the president’s 7 per cent. Mr Yanukovich is her most serious contender with about 23 per cent support, according to a March poll conducted by Kiev’s Research & Branding Group.
But, in all the confusion, it is important to recall that the Orange Revolution has ushered in a genuine multi-party democracy with real conflicts and a free media. The fear that officialdom inspired under the presidency of Leonid Kuchma has gone.
That said, the courts have yet to be brought into the post-Orange Revolution world. Political leaders have failed to deal adequately with the criminal legacy of the past, notably the killing of muckraking journalist Hryhoriy Gongadze, the fraud involved in the 2004 election and Mr Yushchenko’s near-fatal poisoning.
People complain that corruption can be as bad as it was in Mr Kuchma’s time, especially on questions linked to the booming property and construction markets.
Moreover, the business oligarchs who acquired influence under Mr Kuchma have by and large retained their political influence.
Rinat Akhmetov, Ukraine’s richest man with assets of $7.4bn, according to Forbes, the US magazine, stands behind Russia’s wealthiest men in absolute terms. But, with Russia’s economy five times bigger than Ukraine’s, Mr Akhmetov has more domestic clout than his Russian counterparts.
Nor does he face the same pressures from the authorities that Russian oligarchs do from the Kremlin.
Yet, despite the political conflicts, the economy is growing fast, with gross domestic product growing at more than 7 per cent a year since 2000. This year, economists foresee a modest slowdown to 5-5.5 per cent, as investment decelerates slightly.
With GDP per head of only €2,100 ($3,200) there is still scope for further rapid economic growth. WTO membership is forecast to expand trade and investment as will closer ties with the EU. Foreign investors see opportunities similar to those in central Europe five to 10 years ago. Banking and construction are prime targets and rising world food prices are increasing the attractions of the agricultural sector, despite the bureaucratic hurdles facing investment in land.
Net capital inflows last year hit a record $15.8bn, including a 60 per cent increase in foreign direct investment (FDI) to $9.2bn. This year, FDI is expected to remain high, but inflows will decline due to the global credit crunch.
However, officials’ biggest concern is not declining GDP growth but soaring inflation, which hit 30 per cent in April. Global food and energy price increases are having a serious impact, as are domestic developments, including spiralling annual credit growth of 50 per cent in recent years, and sizeable increases in public spending on pay, pensions and welfare.
The government is revising the budget to cut the planned deficit from 2 per cent of GDP and the central bank has raised interest rates. The International Monetary Fund would like to see firmer action but the prospect of the next presidential election campaign leaves politicians reluctant to squeeze very hard.
Electoral considerations are also holding up structural reforms, including the long-planned liberalisation of the arable land market. It is also unclear how aggressively the government will pursue its privatisation programme, which includes plans to sell strategic stakes in energy companies and in Ukrtelecom, the telecoms utility.
For business, the biggest challenge is rising energy prices. Russia has raised the gas price from below $100 per 1,000 cubic metres in 2005 to nearly $180 this year. The price is expected to increase again next year.
So far, industry has coped, assisted by record prices for energy-intensive exports, including steel, pipes and chemicals. Companies have invested in energy efficiency but there is still room for improvement with output per unit of energy standing at one-third of central European levels.
In foreign policy, Ukraine’s biggest achievement is WTO membership which Kamen Zahariev, Ukraine country director for the European Bank for Reconstruction and Development, hails as “a historic event for Ukraine”.
As well as the economic benefits, there is the political gain of entering deeper into international trading networks and of doing so before Moscow, because now Kiev will have a say on Russia’s entry terms.
WTO accession will also trigger the start of intensive talks with the EU on a wide-ranging free trade agreement that will include steel and chemicals. Mr Yushchenko and Ms Tymoshenko hope that growing economic integration with the EU will eventually lead to political integration, though they accept this may be a long way off.
Nato accession is more problematic. Mr Yushchenko has pushed hard for Nato, knowing that it can, in the right conditions, be achieved much quicker than EU membership, which involves years of reforms.
Ukraine, together with Georgia, this year applied for a pre-accession Membership Action Plan. The MAP bids were turned down at Nato’s summit in Bucharest but they were given instead promises of future Nato membership and commitments to review the MAP applications late this year. Mr Yushchenko hailed this as “a victory” but he knows there is much to do if Ukraine is to make further progress towards Nato membership.
For a start, opinion polls suggest that most Ukrainians oppose membership, even though they back EU entry. They favour the neutrality written into the constitution and are wary of irritating Russia. Mr Yanukovich’s Regions Party acts as a powerful focus for these sentiments.
Mr Rybachuk and other Nato supporters argue that opinions will change once the authorities roll out an information campaign.
They also expect to gain support from Russia’s persistent sabre-rattling towards Ukraine. Most Russians, including liberals, see Ukraine’s Nato moves as a betrayal of hundreds of years of common history. The Kremlin is also concerned about maintaining Russia’s military links with Ukraine, not least its presence in the Ukrainian Black sea naval port of Sevastopol where the Russian fleet is stationed under an agreement that expires in 2017.
Mr Yushchenko’s strategy is to talk softly where Russia is concerned but to work steadily towards fulfilling his country’s European ambitions.
His job would be a lot easier if he and political rivals could cooperate a little more.
The prospects of this happening before the 2010 presidential election seem minimal.
http://www.ft.com/cms/s/0/9a0e1adc-1fc1-11dd-9216-000077b07658.html
.
Visit our new Ukraine English News site
A vast amount of Ukraine news from several different news sites. Also a world news and a Ukrainian language news page. Also includes a new forum. Join us now.
http://www.ukraine-english-news.com/
.
http://www.ukraine-english-news.com/
.
Wednesday, May 14, 2008
UKRAINE 2008: Tide starts turning as foreigners eye market
Quote: Ukraine's hot real estate market has in recent years caught the eye of investors across the globe. Surging demand has produced some superior returns over the past eight years, with annual growth in prices at double-digit rates.
Most of the beneficiaries over the past decade have been privileged domestic investors who snapped up flats and land in a frenzy, often at very low prices. Many who managed to close several acquisitions, typically with cash, turned into millionaires overnight.
Many of the commercial and residential development projects have, until recent years, been backed by domestic business groups. The tide is turning, however.
Since 2004, larger inflows of foreign investment have poured in, bringing the market its first structured investment vehicles and the first global real estate operator.
About $500m poured into the commercial real estate market last year, according to the Kiev offices of Colliers International, the property consultant.
Much of the action is still in Kiev, the capital. But activity is spreading fast to five other cities with populations of 1m or more, says Nick Cotton, who heads the Kiev offices of DTZ.
"With over $820m transacted on the investment market in Kiev, 2007 became a record year for direct investment into property. Office property preserved its leading role with the highest share of investment transactions estimated at about 60 per cent, followed by 33 per cent in retail," says Mr Cotton.
"In 2007 strong investor appetite combined with a shortage of stock, and an improved risk weighting resulted in yield compression being demonstrated at sub-10 per cent upon the sale of prime property," he says.
The figures are small compared with other emerging markets but mark a significant increase in activity.
"The property investment market in Ukraine, though still immature by western standards, has continued demonstrating increasing activity and is becoming more sophisticated," Mr Cotton says.
The first structured investment instruments, such as real estate funds, appeared just last year offering international investors exposure to this fast-growing market. Private placements and IPOs by newly established real estate funds raised $664m last year, according to Tomas Fiala, head of the Kiev-based investment bank Dragon Capital.
Residential flats that a decade ago were selling for about $50,000 have reached astronomical levels, typically more than $2,500 per sq m.
Such prices are enough to make Kiev one of the world's 20 most expensive cities in terms of property prices.
"Lack of income-producing investment grade properties in Kiev, combined with significant demand, results in vendors' high price expectations which are often perceived as irrational.
"This forces investors to follow more diversified strategies and to consider possibilities to enter joint ventures and forward finance deals, and expand to regional centres of Ukraine and, even to the smaller cities with populations of more than 200,000," says Mr Cotton.
Demand, particularly for quality residential and commercial space, will remain high in the near term, says Arie Schwartz, who heads Seven Hills, the Ukrainian arm of Scorpio Real Estate, founded by Benny Steinmetz, the Israeli property mogul.
In 2007, Seven Hills unveiled $1bn investment plans for Ukraine. The group has since launched construction of a residential real estate project in Kiev, and has three other projects in the pipeline for the capital, including mixed residential-commercial concepts.
"We have plans to enter each major city with more than 150,000 residents," Mr Schwartz says.
"I'm 32 years old and I keep joking that I will probably retire here. I will be here for a long time as we plan to invest billions of additional dollars into the Ukrainian market."
The sharp surge in purchase prices and rental rates is tapering off, but real estate experts do not expect a sharp downward correction in the immediate future. Demand consistently exceeds supply, particularly for commercial space, where the most growth is expected.
"Demand is high, but prices are not sustainable in the long term. We will see corrections in the future as more projects, particularly of higher quality, come to the market," says Mr Schwartz.
"Do not expect a bubble-bursting situation though. It will be a gradual correction with time."
Scorpio is, for now, the only big real estate developer on the Ukrainian market. But others are destined to arrive soon, according to Mr Schwartz.
"The market is full of scouts from leading developers and funds. Everyone is looking at the country," he adds.
http://search.ft.com/nonFtArticle?id=080514000158&ct=0
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Most of the beneficiaries over the past decade have been privileged domestic investors who snapped up flats and land in a frenzy, often at very low prices. Many who managed to close several acquisitions, typically with cash, turned into millionaires overnight.
Many of the commercial and residential development projects have, until recent years, been backed by domestic business groups. The tide is turning, however.
Since 2004, larger inflows of foreign investment have poured in, bringing the market its first structured investment vehicles and the first global real estate operator.
About $500m poured into the commercial real estate market last year, according to the Kiev offices of Colliers International, the property consultant.
Much of the action is still in Kiev, the capital. But activity is spreading fast to five other cities with populations of 1m or more, says Nick Cotton, who heads the Kiev offices of DTZ.
"With over $820m transacted on the investment market in Kiev, 2007 became a record year for direct investment into property. Office property preserved its leading role with the highest share of investment transactions estimated at about 60 per cent, followed by 33 per cent in retail," says Mr Cotton.
"In 2007 strong investor appetite combined with a shortage of stock, and an improved risk weighting resulted in yield compression being demonstrated at sub-10 per cent upon the sale of prime property," he says.
The figures are small compared with other emerging markets but mark a significant increase in activity.
"The property investment market in Ukraine, though still immature by western standards, has continued demonstrating increasing activity and is becoming more sophisticated," Mr Cotton says.
The first structured investment instruments, such as real estate funds, appeared just last year offering international investors exposure to this fast-growing market. Private placements and IPOs by newly established real estate funds raised $664m last year, according to Tomas Fiala, head of the Kiev-based investment bank Dragon Capital.
Residential flats that a decade ago were selling for about $50,000 have reached astronomical levels, typically more than $2,500 per sq m.
Such prices are enough to make Kiev one of the world's 20 most expensive cities in terms of property prices.
"Lack of income-producing investment grade properties in Kiev, combined with significant demand, results in vendors' high price expectations which are often perceived as irrational.
"This forces investors to follow more diversified strategies and to consider possibilities to enter joint ventures and forward finance deals, and expand to regional centres of Ukraine and, even to the smaller cities with populations of more than 200,000," says Mr Cotton.
Demand, particularly for quality residential and commercial space, will remain high in the near term, says Arie Schwartz, who heads Seven Hills, the Ukrainian arm of Scorpio Real Estate, founded by Benny Steinmetz, the Israeli property mogul.
In 2007, Seven Hills unveiled $1bn investment plans for Ukraine. The group has since launched construction of a residential real estate project in Kiev, and has three other projects in the pipeline for the capital, including mixed residential-commercial concepts.
"We have plans to enter each major city with more than 150,000 residents," Mr Schwartz says.
"I'm 32 years old and I keep joking that I will probably retire here. I will be here for a long time as we plan to invest billions of additional dollars into the Ukrainian market."
The sharp surge in purchase prices and rental rates is tapering off, but real estate experts do not expect a sharp downward correction in the immediate future. Demand consistently exceeds supply, particularly for commercial space, where the most growth is expected.
"Demand is high, but prices are not sustainable in the long term. We will see corrections in the future as more projects, particularly of higher quality, come to the market," says Mr Schwartz.
"Do not expect a bubble-bursting situation though. It will be a gradual correction with time."
Scorpio is, for now, the only big real estate developer on the Ukrainian market. But others are destined to arrive soon, according to Mr Schwartz.
"The market is full of scouts from leading developers and funds. Everyone is looking at the country," he adds.
http://search.ft.com/nonFtArticle?id=080514000158&ct=0
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Thursday, May 1, 2008
SEN. OBAMA JOINS SENS. BIDEN, LUGAR TO APPLAUD SENATE'S UNANIMOUS PASSAGE OF RESOLUTION SUPPORTING UKRAINE, GEORGIA ADMISSION TO NATO
Quote: Chairman of the Senate Foreign Relations Committee Joseph R. Biden, Jr. (D-DE) and Ranking Member Richard G. Lugar (R-IN) applauded the Senate's unanimous passage of their resolution expressing strong support for NATO's statement at the recent Bucharest Summit that the Alliance welcomes the eventual membership of Ukraine and Georgia.
http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=574&topicId=100007539&docId=l:784735285&isRss=true
.
http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=574&topicId=100007539&docId=l:784735285&isRss=true
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Wednesday, April 30, 2008
Insight: Russian grain could help ease food crisis
Quote: Supply remains variable and volatile. The loss of 50 per cent of the Australian winter wheat harvest during last year’s drought had a dramatic impact on wheat prices. Yet, those losses only accounted for some 3 per cent of global wheat output in a normal year, while wheat prices rose by 30 per cent between September and November. This was a clear indication that prices had become highly sensitive not to the factors driving demand but to historically low inventories.
Inventories have halved in seven years. Fifty days of cereal consumption in stock begins to look more like a crisis than an isolated statistic. Lower inventories can partly be attributed to fewer distortions in the agriculture system and improved supply-chain management.
However, as some price distortions disappear others appear. Export restrictions have been implemented by the likes of Australia, Russia, Ukraine, Argentina and Kazakhstan. Therefore, the rise in the wheat price from $8 a bushel to over $12 a bushel in the first two months of 2008 can be largely attributed to political decisions as grain-exporting countries seek to protect their own food supplies.
The Ukrainian government’s decision to lift its restrictions hopefully negates the possibility these short-term panaceas become permanent fixtures. Recent price declines taking wheat back to US$8/bushel can be largely attributed not only to the possibility of a half-decent harvest but also to the perception that the grain-exporting nations will remove trading restrictions as fast as they imposed them.
A similar theme has emerged in the rice market, but expect prices to decline sharply from the recent $25 a hundredweight level once the current frenzy ends.
We noted that grain supplies are volatile. However, fundamental demand increases will likely be met by countries with highly fertile but under-utilised land. Russia, Ukraine and Kazakhstan top the list of beneficiaries of this changing landscape.
Consider Russia. In 1992 the country had 120m hectares of farmland under cultivation. The change from public to private ownership ensured that one of the few advantages of communal ownership – access to plant and equipment – was lost.
Multiple ownership resulted in a “free rider” dilemma for the new owners of land ie, the efforts of individual contributions are shared equally. Consequently, in the last 15 years, some 40m hectares of rich farmland have lain fallow. And what is farmed is low yielding. Russia grows some two tons of wheat per hectare when it has the potential to produce five tons of wheat per hectare.
The ramifications are significant. From 75m tons of cereal output in 2007, Russia could multiply its grain output several-fold simply by enhancing yield management and bringing fallow land back into production. It could produce some 300m tons of cereals without the necessity of producing on virgin land.
This requires long-term planning and investment. Transferring ownership from inefficient multiple parties with no access to capital to large-scale corporate entities with long-term funding is time-consuming, while repairing fallow land is expensive. To attain higher yields needs lengthy investment in crop rotation. Overall the process can take 4-6 years.
These changes will help restore supply and demand imbalances across key cereal markets. That said, the entrepreneurial zeal transforming the Russian agricultural landscape will only restore some equilibrium to a dynamic market. So, while wheat at $12 a bushel might prove to have been a temporary blip, $4.50 a bushel is unlikely to be seen any time soon – even if it rains again in Australia one day.
Full article: http://www.ft.com/cms/s/0/99c75db4-16c9-11dd-bbfc-0000779fd2ac.html
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Inventories have halved in seven years. Fifty days of cereal consumption in stock begins to look more like a crisis than an isolated statistic. Lower inventories can partly be attributed to fewer distortions in the agriculture system and improved supply-chain management.
However, as some price distortions disappear others appear. Export restrictions have been implemented by the likes of Australia, Russia, Ukraine, Argentina and Kazakhstan. Therefore, the rise in the wheat price from $8 a bushel to over $12 a bushel in the first two months of 2008 can be largely attributed to political decisions as grain-exporting countries seek to protect their own food supplies.
The Ukrainian government’s decision to lift its restrictions hopefully negates the possibility these short-term panaceas become permanent fixtures. Recent price declines taking wheat back to US$8/bushel can be largely attributed not only to the possibility of a half-decent harvest but also to the perception that the grain-exporting nations will remove trading restrictions as fast as they imposed them.
A similar theme has emerged in the rice market, but expect prices to decline sharply from the recent $25 a hundredweight level once the current frenzy ends.
We noted that grain supplies are volatile. However, fundamental demand increases will likely be met by countries with highly fertile but under-utilised land. Russia, Ukraine and Kazakhstan top the list of beneficiaries of this changing landscape.
Consider Russia. In 1992 the country had 120m hectares of farmland under cultivation. The change from public to private ownership ensured that one of the few advantages of communal ownership – access to plant and equipment – was lost.
Multiple ownership resulted in a “free rider” dilemma for the new owners of land ie, the efforts of individual contributions are shared equally. Consequently, in the last 15 years, some 40m hectares of rich farmland have lain fallow. And what is farmed is low yielding. Russia grows some two tons of wheat per hectare when it has the potential to produce five tons of wheat per hectare.
The ramifications are significant. From 75m tons of cereal output in 2007, Russia could multiply its grain output several-fold simply by enhancing yield management and bringing fallow land back into production. It could produce some 300m tons of cereals without the necessity of producing on virgin land.
This requires long-term planning and investment. Transferring ownership from inefficient multiple parties with no access to capital to large-scale corporate entities with long-term funding is time-consuming, while repairing fallow land is expensive. To attain higher yields needs lengthy investment in crop rotation. Overall the process can take 4-6 years.
These changes will help restore supply and demand imbalances across key cereal markets. That said, the entrepreneurial zeal transforming the Russian agricultural landscape will only restore some equilibrium to a dynamic market. So, while wheat at $12 a bushel might prove to have been a temporary blip, $4.50 a bushel is unlikely to be seen any time soon – even if it rains again in Australia one day.
Full article: http://www.ft.com/cms/s/0/99c75db4-16c9-11dd-bbfc-0000779fd2ac.html
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Monday, April 28, 2008
Prodi declines South Stream post
Quote: Romano Prodi, Italy’s outgoing prime minister, has declined a proposal by Vladimir Putin, Russian president, to head the South Stream pipeline project bringing Russian natural gas to Europe once he leaves office next month.
Aides suggested, however, that Mr Prodi’s answer was not final. One close associate said the former European Commission president had not made a decision about his future following his imminent departure from Italian politics.
But the associate doubted that Mr Prodi, 68, would want to experience the kind of opprobrium that greeted Gerhard Schröder when he stepped down as German chancellor in 2005 and accepted from Mr Putin a top post in the Nord Stream Baltic pipeline that they had promoted together.
South Stream, the company that plans to pipe Russian gas across the Black Sea, is jointly owned by Russia’s Gazprom and Italy’s Eni. Mr Prodi and Mr Putin first discussed the concept over dinner in the Black Sea resort of Sochi in late 2006.
Alexei Miller, chief executive of Gazprom, was in Rome on Monday for lunch with Mr Prodi and Paolo Scaroni, the head of Eni, which is Gazprom’s biggest European buyer.
Mr Scaroni, a key player in developing closer energy ties between Italy and Russia, on Monday endorsed the idea of having Mr Prodi in charge of the $10bn (€6.4bn, £5bn) South Stream project.
South Stream’s route or routes into Europe once it crosses the Black Sea into Bulgaria have not been finally agreed. Hungary, Greece and the Balkans are all possibilities, as well as Italy. Kostas Karamanlis, Greece’s prime minister, visited Moscow on Monday. The Greek embassy said the visit was likely to lead to Athens being involved in the project.
South Stream is projected to carry 33bn cubic metres of gas a year to south and central Europe.
Russia wants alternative routes for the gas it sells to Europe to reduce its reliance on routes through Ukraine and Belarus, where pricing disputes and concerns over inadequate infrastructure risk interrupting supplies.
The EU and the US want to cut Europe’s reliance on Russian gas by promoting the Nabucco pipeline, which would bring gas from the Caspian region through Turkey. Russia insists the South Stream pipeline is not a rival to Nabucco.
Gazprom took further steps to strengthen its hold on natural gas supplies to Europe this month by signing a joint venture with Libya and entering preliminary talks on a project to pipe Nigerian gas to Europe across the Sahara.
http://www.ft.com/cms/s/0/ecc3b47a-153b-11dd-996c-0000779fd2ac.html?nclick_check=1
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Aides suggested, however, that Mr Prodi’s answer was not final. One close associate said the former European Commission president had not made a decision about his future following his imminent departure from Italian politics.
But the associate doubted that Mr Prodi, 68, would want to experience the kind of opprobrium that greeted Gerhard Schröder when he stepped down as German chancellor in 2005 and accepted from Mr Putin a top post in the Nord Stream Baltic pipeline that they had promoted together.
South Stream, the company that plans to pipe Russian gas across the Black Sea, is jointly owned by Russia’s Gazprom and Italy’s Eni. Mr Prodi and Mr Putin first discussed the concept over dinner in the Black Sea resort of Sochi in late 2006.
Alexei Miller, chief executive of Gazprom, was in Rome on Monday for lunch with Mr Prodi and Paolo Scaroni, the head of Eni, which is Gazprom’s biggest European buyer.
Mr Scaroni, a key player in developing closer energy ties between Italy and Russia, on Monday endorsed the idea of having Mr Prodi in charge of the $10bn (€6.4bn, £5bn) South Stream project.
South Stream’s route or routes into Europe once it crosses the Black Sea into Bulgaria have not been finally agreed. Hungary, Greece and the Balkans are all possibilities, as well as Italy. Kostas Karamanlis, Greece’s prime minister, visited Moscow on Monday. The Greek embassy said the visit was likely to lead to Athens being involved in the project.
South Stream is projected to carry 33bn cubic metres of gas a year to south and central Europe.
Russia wants alternative routes for the gas it sells to Europe to reduce its reliance on routes through Ukraine and Belarus, where pricing disputes and concerns over inadequate infrastructure risk interrupting supplies.
The EU and the US want to cut Europe’s reliance on Russian gas by promoting the Nabucco pipeline, which would bring gas from the Caspian region through Turkey. Russia insists the South Stream pipeline is not a rival to Nabucco.
Gazprom took further steps to strengthen its hold on natural gas supplies to Europe this month by signing a joint venture with Libya and entering preliminary talks on a project to pipe Nigerian gas to Europe across the Sahara.
http://www.ft.com/cms/s/0/ecc3b47a-153b-11dd-996c-0000779fd2ac.html?nclick_check=1
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Now It’s the $6 Loaf of Bread
Quote: From the crowded warrens of Krus na Ligas to the aisles of the Wal-Mart in Las Cruces, N.M., the price of food has become an unavoidable topic of conversation. In January, the bull run of agricultural commodities was an afterthought at the World Economic Forum in Davos, where the subprime crisis, sovereign-wealth funds and the seemingly inexorable rise of petroleum dominated the agenda. But in a few short months, food has replaced oil as the Next Big Threat to the long-running global expansion. In the past year, wheat and corn futures have risen 61 percent and 58 percent, respectively. Rice futures have more than doubled since last August.
placeAd2(commercialNode,'bigbox',false,'')
In the recent global boom—five years of synchronous growth that lifted hundreds of millions out of poverty, forged new trading links and brought the hope of a better life to the developing world—the availability of plentiful, cheap food was generally taken for granted. But now much of the recent progress is being threatened by expensive food, whose advent has been a long time coming. As with oil, the rising prices are fueled in part by speculators. And like oil, expensive staples are swiftly upsetting business plans, sparking inflation, causing political instability and inflicting widespread economic pain.
The United Nations' World Food Program says that hunger has reached a crisis level in all the 121 poorest countries it has recently surveyed. High food prices are "creating a silent tsunami threatening to plunge more than 100 million people on every continent into hunger," said WFP executive director Josette Sheeran in London. The tsunami is no longer so silent. Food-related protests have erupted in Cameroon and Egypt. In Haiti, where the desperately hungry have turned to mud pies (concoctions of cooking oil, bits of vegetable and dirt), riots over food toppled the government of President René Préval.
The reasons behind the price spiral are at once complicated and simple. Although grain harvests in 2007 were the largest in the world's history, unfavorable weather has caused crop failures in Ukraine, a big grain producer, and wiped out Australia's once vast rice production. The rising price of energy, which has jacked up the costs of farming (a great deal of fertilizer is made from petroleum), is also a factor. And so, too, is speculation, as momentum investors have piled into the commodity markets. But at root, the rising prices have been fueled mostly by a long-term, steady increase in demand. To put it simply, in recent years people in developing countries, particularly India and China, have been eating more—and eating better—than ever before. In China, the boom has led to vastly greater consumption of meat and dairy products. Grains are the biggest single cost in raising pigs and cows.
http://www.newsweek.com/id/134311
.
placeAd2(commercialNode,'bigbox',false,'')
In the recent global boom—five years of synchronous growth that lifted hundreds of millions out of poverty, forged new trading links and brought the hope of a better life to the developing world—the availability of plentiful, cheap food was generally taken for granted. But now much of the recent progress is being threatened by expensive food, whose advent has been a long time coming. As with oil, the rising prices are fueled in part by speculators. And like oil, expensive staples are swiftly upsetting business plans, sparking inflation, causing political instability and inflicting widespread economic pain.
The United Nations' World Food Program says that hunger has reached a crisis level in all the 121 poorest countries it has recently surveyed. High food prices are "creating a silent tsunami threatening to plunge more than 100 million people on every continent into hunger," said WFP executive director Josette Sheeran in London. The tsunami is no longer so silent. Food-related protests have erupted in Cameroon and Egypt. In Haiti, where the desperately hungry have turned to mud pies (concoctions of cooking oil, bits of vegetable and dirt), riots over food toppled the government of President René Préval.
The reasons behind the price spiral are at once complicated and simple. Although grain harvests in 2007 were the largest in the world's history, unfavorable weather has caused crop failures in Ukraine, a big grain producer, and wiped out Australia's once vast rice production. The rising price of energy, which has jacked up the costs of farming (a great deal of fertilizer is made from petroleum), is also a factor. And so, too, is speculation, as momentum investors have piled into the commodity markets. But at root, the rising prices have been fueled mostly by a long-term, steady increase in demand. To put it simply, in recent years people in developing countries, particularly India and China, have been eating more—and eating better—than ever before. In China, the boom has led to vastly greater consumption of meat and dairy products. Grains are the biggest single cost in raising pigs and cows.
http://www.newsweek.com/id/134311
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Saturday, April 26, 2008
Crude oil prices close to $120 on Gulf action
Quote: On Friday, oil jumped by more than $3 after a US military vessel fired on an Iranian boat in the Gulf, fuelling concerns about a conflict escalating between Washington and Tehran.
Nymex June West Texas Intermediate jumped $3.32 to a session high of $119.38 a barrel yesterday before easing back to trade $3 higher at $119.06, up 2 per cent this week. ICE June Brent surged $2.66 to $117.00 a barrel, up 2.7 per cent this week.
Oil hit a record $119.90 a barrel on Tuesday amid concerns about the outlook for supplies from Saudi Arabia, production disruptions in Nigeria and evidence of strong demand from China.
Adam Sieminski, of Deutsche Bank, said the cost of getting oil out of the ground was rising rapidly - around 20 per cent annually - and the price could reach $150 a barrel in another five years. "There is a huge risk that the oil price will continue to escalate until it gets to some level, perhaps $200 a barrel, when demand will finally collapse," said Mr Sieminski.
US petrol prices reached the $3 a gallon level for the first time this week and Nymex May RBOB unleaded gasoline spiked to a record $3.0815 a gallon yesterday, up 3.1 per cent this week.
Gold firmed 0.6 per cent to $890.25 a troy ounce yesterday, down 2.8 per cent this week. Some traders think the dollar could be close to a turning point if the Federal Reserve signals an end to interest rate cuts next week, and this may be deterring some investors from opening new long positions in gold.
In agricultural markets, US wheat prices dropped to a five-month low after Ukraine eased restrictions on exports. The move by one of the world's largest wheat exporters could put pressure on Russia to remove its export tax. CBOT May wheat fell 6.2 per cent to $8.16 a bushel this week.
Some US corn plantings have been delayed by rain and farmers are watching weather forecasts anxiously. CBOT May corn dipped 2.2 per cent to $5.86 a bushel this week. Rice traded at record levels with indicative prices for Thai medium-quality white rice, the global benchmark, quoted above $1,000 a tonne. Exporters offering rice to Japan at $1,300 a tonne were rejected.
http://search.ft.com/nonFtArticle?id=080426000121&ct=0
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Nymex June West Texas Intermediate jumped $3.32 to a session high of $119.38 a barrel yesterday before easing back to trade $3 higher at $119.06, up 2 per cent this week. ICE June Brent surged $2.66 to $117.00 a barrel, up 2.7 per cent this week.
Oil hit a record $119.90 a barrel on Tuesday amid concerns about the outlook for supplies from Saudi Arabia, production disruptions in Nigeria and evidence of strong demand from China.
Adam Sieminski, of Deutsche Bank, said the cost of getting oil out of the ground was rising rapidly - around 20 per cent annually - and the price could reach $150 a barrel in another five years. "There is a huge risk that the oil price will continue to escalate until it gets to some level, perhaps $200 a barrel, when demand will finally collapse," said Mr Sieminski.
US petrol prices reached the $3 a gallon level for the first time this week and Nymex May RBOB unleaded gasoline spiked to a record $3.0815 a gallon yesterday, up 3.1 per cent this week.
Gold firmed 0.6 per cent to $890.25 a troy ounce yesterday, down 2.8 per cent this week. Some traders think the dollar could be close to a turning point if the Federal Reserve signals an end to interest rate cuts next week, and this may be deterring some investors from opening new long positions in gold.
In agricultural markets, US wheat prices dropped to a five-month low after Ukraine eased restrictions on exports. The move by one of the world's largest wheat exporters could put pressure on Russia to remove its export tax. CBOT May wheat fell 6.2 per cent to $8.16 a bushel this week.
Some US corn plantings have been delayed by rain and farmers are watching weather forecasts anxiously. CBOT May corn dipped 2.2 per cent to $5.86 a bushel this week. Rice traded at record levels with indicative prices for Thai medium-quality white rice, the global benchmark, quoted above $1,000 a tonne. Exporters offering rice to Japan at $1,300 a tonne were rejected.
http://search.ft.com/nonFtArticle?id=080426000121&ct=0
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Friday, April 25, 2008
Russia heats up frozen conflict
Quote: The trouble with frozen conflicts is that they seldom stay that way. The unrecognised rebel region of Abkhazia looks like being the latest that could easily tip back into violence.
Georgia and Russia are at loggerheads over the territory, once the holiday playground of Moscow's elite. Georgia accuses Russia of creeping annexation, Abkhazia accuses Georgia of provocation and Russia is merrily exploiting their antagonism to demonstrate that it remains the dominant power.
Moscow has chosen an acutely sensitive moment, when Georgia is in the throes of a hotly disputed parliamentary election, to step up its formal ties with the secessionist republic. Tbilisi is incensed; the US, Nato and the European Union have expressed concern. That was before Monday, when a Georgian unmanned reconnaissance aircraft was shot down - allegedly by a Russian MiG-29 - over Abkhazia. Yesterday the United Nations Security Council held a closed session at Georgia's request to hear the claims and counter-claims.
"It's a very bad game that Moscow is playing," says Giorgi Baramidze, Georgia's deputy prime minister. "It is very dangerous and provocative. Russia is flexing its muscles. It is a challenge for the west."
Vladimir Putin, Russia's president, says he is being reasonable and legal, acting to protect Russian citizens in those regions. He adds that Georgia should never be flying aircraft over Abkhazia, in terms of the UN-secured ceasefire there.
Yet the Russian action is also a deliberate response to two other western moves in recent weeks, seen as hostile in Moscow: the US-backed decision by Kosovo, supported by most of the EU, to declare unilateral independence from Russia's ally Serbia; and the tentative agreement by Nato allies at their Bucharest summit to open the door to eventual membership for both Georgia and Ukraine.
It may well be more. Mr Putin seems to have opted to back hard-liners in Moscow, who favour de facto annexation of Abkhazia while stopping short of recognising independence, presenting a fait accompli to his successor, Dmitry Medvedev. Cooler Russian analysts have argued against any action that would appear to encourage self-determination for a former Soviet region. After all, just such an action was the excuse for two wars in Chechnya.
The Abkhazian conflict goes back to the 19th century, when thousands of Abkhazians were deported or forced to flee when they resisted Moscow's rule. In the Soviet era, Stalin subjected them to forced Georgianisation, closing Abkhaz language schools, and then encouraged further mass migration of other minorities to repopulate the region.
After the collapse of the Soviet Union, resurgent nationalism tipped Georgia and Abkhazia into a civil war. Today there are still at least 200,000 refugees in Georgia. For Tbilisi, it is a burning issue of national pride: no party in the election is prepared to defend Abkhazian independence, or Russia's actions. They are convinced that Russia is stirring it up.
Mikheil Saakashvili, the Georgian president, has offered a form of federal state, with a guaranteed post of vice-president for Abkhazia, and a veto on any changes to the constitution. But it seems it is too late. The Abkhaz population is trapped between a desire to escape Georgia, and fear of being sucked back into Russia.
http://search.ft.com/nonFtArticle?id=080424000213&ct=0
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Georgia and Russia are at loggerheads over the territory, once the holiday playground of Moscow's elite. Georgia accuses Russia of creeping annexation, Abkhazia accuses Georgia of provocation and Russia is merrily exploiting their antagonism to demonstrate that it remains the dominant power.
Moscow has chosen an acutely sensitive moment, when Georgia is in the throes of a hotly disputed parliamentary election, to step up its formal ties with the secessionist republic. Tbilisi is incensed; the US, Nato and the European Union have expressed concern. That was before Monday, when a Georgian unmanned reconnaissance aircraft was shot down - allegedly by a Russian MiG-29 - over Abkhazia. Yesterday the United Nations Security Council held a closed session at Georgia's request to hear the claims and counter-claims.
"It's a very bad game that Moscow is playing," says Giorgi Baramidze, Georgia's deputy prime minister. "It is very dangerous and provocative. Russia is flexing its muscles. It is a challenge for the west."
Vladimir Putin, Russia's president, says he is being reasonable and legal, acting to protect Russian citizens in those regions. He adds that Georgia should never be flying aircraft over Abkhazia, in terms of the UN-secured ceasefire there.
Yet the Russian action is also a deliberate response to two other western moves in recent weeks, seen as hostile in Moscow: the US-backed decision by Kosovo, supported by most of the EU, to declare unilateral independence from Russia's ally Serbia; and the tentative agreement by Nato allies at their Bucharest summit to open the door to eventual membership for both Georgia and Ukraine.
It may well be more. Mr Putin seems to have opted to back hard-liners in Moscow, who favour de facto annexation of Abkhazia while stopping short of recognising independence, presenting a fait accompli to his successor, Dmitry Medvedev. Cooler Russian analysts have argued against any action that would appear to encourage self-determination for a former Soviet region. After all, just such an action was the excuse for two wars in Chechnya.
The Abkhazian conflict goes back to the 19th century, when thousands of Abkhazians were deported or forced to flee when they resisted Moscow's rule. In the Soviet era, Stalin subjected them to forced Georgianisation, closing Abkhaz language schools, and then encouraged further mass migration of other minorities to repopulate the region.
After the collapse of the Soviet Union, resurgent nationalism tipped Georgia and Abkhazia into a civil war. Today there are still at least 200,000 refugees in Georgia. For Tbilisi, it is a burning issue of national pride: no party in the election is prepared to defend Abkhazian independence, or Russia's actions. They are convinced that Russia is stirring it up.
Mikheil Saakashvili, the Georgian president, has offered a form of federal state, with a guaranteed post of vice-president for Abkhazia, and a veto on any changes to the constitution. But it seems it is too late. The Abkhaz population is trapped between a desire to escape Georgia, and fear of being sucked back into Russia.
http://search.ft.com/nonFtArticle?id=080424000213&ct=0
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Kiev move sees cost of wheat fall
Quote: Wheat prices fell to a six-month low yesterday after Ukraine, one of the world's largest exporters of the grain, cut back its restrictions on exports.
Ukraine's return to the global market came on top of prospects of a bumper crop in breadbasket areas such as the Black Sea basin, Canada and the European Union, prompting some analysts to say the worst of the wheat price inflation was now over.
In Chicago, wheat prices fell to $8.04½ a bushel, the lowest level since November and 40 per cent below the $13.49½ a bushel record set in February. In Paris, milling wheat dropped to €187.25 a tonne, the lowest level since July.
However, wheat prices remain 70 per cent above their level a year ago and well above their historical average of $3-$4 a bushel. Executives from the food industry said it was unlikely consumers would benefit soon from the drop in wholesale costs as bread companies had not yet passed on previous price increases.
Ukraine said it would allow exports of 1.2m tonnes in the next two months, up from a previous quota of just 200,000 tonnes.
Sorin Vaslobal, of Paris-based cereals broker Plantureux, said Kiev's decision could trigger a domino effect. "We see Ukraine's move as applying pressure on Russia to remove its 40 per cent export tax," he said. Argentina and Kazakhstan have also restricted their wheat exports.
The International Monetary Fund and the World Bank have asked agriculture commodities exporters to scrap or at least ease their foreign sales restrictions.
The International Grains Council yesterday said the global wheat crop will hit a record 645m tonnes this year, up from 603.5m tonnes in 2007, as weather improves and farmers sow more wheat at the expense of crops such as corn. Luke Chandler, a cereal analyst at Rabobank in Sydney, said: "Wheat prices are expected to ease in the second half of 2008 as a potential record-breaking world wheat crop looms."
http://search.ft.com/nonFtArticle?id=080425000167&ct=0
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Ukraine's return to the global market came on top of prospects of a bumper crop in breadbasket areas such as the Black Sea basin, Canada and the European Union, prompting some analysts to say the worst of the wheat price inflation was now over.
In Chicago, wheat prices fell to $8.04½ a bushel, the lowest level since November and 40 per cent below the $13.49½ a bushel record set in February. In Paris, milling wheat dropped to €187.25 a tonne, the lowest level since July.
However, wheat prices remain 70 per cent above their level a year ago and well above their historical average of $3-$4 a bushel. Executives from the food industry said it was unlikely consumers would benefit soon from the drop in wholesale costs as bread companies had not yet passed on previous price increases.
Ukraine said it would allow exports of 1.2m tonnes in the next two months, up from a previous quota of just 200,000 tonnes.
Sorin Vaslobal, of Paris-based cereals broker Plantureux, said Kiev's decision could trigger a domino effect. "We see Ukraine's move as applying pressure on Russia to remove its 40 per cent export tax," he said. Argentina and Kazakhstan have also restricted their wheat exports.
The International Monetary Fund and the World Bank have asked agriculture commodities exporters to scrap or at least ease their foreign sales restrictions.
The International Grains Council yesterday said the global wheat crop will hit a record 645m tonnes this year, up from 603.5m tonnes in 2007, as weather improves and farmers sow more wheat at the expense of crops such as corn. Luke Chandler, a cereal analyst at Rabobank in Sydney, said: "Wheat prices are expected to ease in the second half of 2008 as a potential record-breaking world wheat crop looms."
http://search.ft.com/nonFtArticle?id=080425000167&ct=0
.
Nick Louth: A bread and better punt
Quote: Food supplies across the world have become very tight. With 30 per cent of this year’s US maize crop disappearing into vehicle fuel tanks – aided by a federal biofuel subsidy – farmers there have been rushing to grow maize instead of soyabeans, wheat and other cereals. The result has been soaring prices, which have proved catastrophic for poorer nations.
Piling into commodity futures might yield a profit, but I wouldn’t feel comfortable helping raise prices. What I’d like is to invest in a company that helps increase the supply of cereals to ease the shortages.
That is what attracted me to Landkom, an Aim-listed Ukrainian farming group, in which I bought shares at 78p in January. Landkom is destined to be the largest grain producer in Europe and will drag Ukrainian farming practices and output into the 21st century.
In 1991, when Ukraine got independence, the government split up land ownership, allocating a hectare per person, with disastrous results. Access to capital was poor, many farms fell into disuse and output slumped. As a result, 40 per cent of Ukraine’s fertile black soil has been lying fallow for eight to 10 years, according to Libertas Capital, Landkom’s broker. Wheat output from the former “bread basket” plummeted from 50m tonnes at the end of the Soviet era to 20m tonnes in 2000.
Landkom has spent years stitching together rental agreements to turn a patchwork of smallholdings into a 62,500ha farm. With modern machinery and practices, it is expecting a 47,000 tonne harvest of wheat and rapeseed oil in 2008. This will increase to 1.2m tonnes in 2013.
Based on prices of $225 per tonne for wheat and $438 for rapeseed oil, revenues are expected to soar from $16.2m in 2008 to $317m in 2013. These are now very conservative figures. The May 2008 delivery futures prices for wheat and rapeseed oil are $320 and $620 per tonne respectively, 50 per cent above assumed projections. And though the world price of wheat has recently fallen, Ukraine’s decision this week to end an export ban is good news for Landkom as it gives the company access to these higher global prices.
Farming isn’t rocket science, but costs can be hard to control. I took a hard look at Landkom’s projections. Land rental is very cheap in the Ukraine, $50 per ha has been agreed in the first year, and $35 in subsequent years. In Canada or Australia, you would be talking about $60-$70.
Labour is much cheaper in Ukraine than in rival regions, so overall costs are competitive. According to the Scottish Agricultural College, average production costs per hectare for wheat (aside from land) are $100 in Ukraine, compared with $160 in the UK or US.
A bigger risk is politics. Landkom needs to stay on the right side of local politicians. By offering to pay a 25 per cent tax and employ 900 staff it has made a good start.
http://www.ft.com/cms/s/0/fc70c588-12e4-11dd-8d91-0000779fd2ac.html
.
Piling into commodity futures might yield a profit, but I wouldn’t feel comfortable helping raise prices. What I’d like is to invest in a company that helps increase the supply of cereals to ease the shortages.
That is what attracted me to Landkom, an Aim-listed Ukrainian farming group, in which I bought shares at 78p in January. Landkom is destined to be the largest grain producer in Europe and will drag Ukrainian farming practices and output into the 21st century.
In 1991, when Ukraine got independence, the government split up land ownership, allocating a hectare per person, with disastrous results. Access to capital was poor, many farms fell into disuse and output slumped. As a result, 40 per cent of Ukraine’s fertile black soil has been lying fallow for eight to 10 years, according to Libertas Capital, Landkom’s broker. Wheat output from the former “bread basket” plummeted from 50m tonnes at the end of the Soviet era to 20m tonnes in 2000.
Landkom has spent years stitching together rental agreements to turn a patchwork of smallholdings into a 62,500ha farm. With modern machinery and practices, it is expecting a 47,000 tonne harvest of wheat and rapeseed oil in 2008. This will increase to 1.2m tonnes in 2013.
Based on prices of $225 per tonne for wheat and $438 for rapeseed oil, revenues are expected to soar from $16.2m in 2008 to $317m in 2013. These are now very conservative figures. The May 2008 delivery futures prices for wheat and rapeseed oil are $320 and $620 per tonne respectively, 50 per cent above assumed projections. And though the world price of wheat has recently fallen, Ukraine’s decision this week to end an export ban is good news for Landkom as it gives the company access to these higher global prices.
Farming isn’t rocket science, but costs can be hard to control. I took a hard look at Landkom’s projections. Land rental is very cheap in the Ukraine, $50 per ha has been agreed in the first year, and $35 in subsequent years. In Canada or Australia, you would be talking about $60-$70.
Labour is much cheaper in Ukraine than in rival regions, so overall costs are competitive. According to the Scottish Agricultural College, average production costs per hectare for wheat (aside from land) are $100 in Ukraine, compared with $160 in the UK or US.
A bigger risk is politics. Landkom needs to stay on the right side of local politicians. By offering to pay a 25 per cent tax and employ 900 staff it has made a good start.
http://www.ft.com/cms/s/0/fc70c588-12e4-11dd-8d91-0000779fd2ac.html
.
Thursday, April 24, 2008
Ukraine feels strain as inflation soars
Quote: Vasyl Kuznetsov, a cash-strapped Ukrainian pensioner, makes no bones about his views of spiralling food prices as he shops for groceries in Kiev’s Volodymyrsky market.
“This bazaar should be demolished and those responsible for these prices jailed,” says the 77-year-old, standing in front of a meat counter. “How can we survive and buy meat when it has doubled in the past year to nearly $10 per kilogram? Everything has gone up – cooking oil, my electricity and gas bills. I can’t even afford to buy meat for this week’s Easter holidays.”
While inflation is re-emerging as an economic threat around the world, it is hitting Ukraine particularly hard. At 26 per cent year-on-year, last month’s jump in consumer prices was Europe’s biggest and among the highest in the world, excluding crisis-stricken states such as Zimbabwe.
Among stable economies only Venezuela, with 29 per cent, saw higher inflation. Asia’s largest increase was Vietnam’s 11 per cent rise.
Ukraine is not unique in central and eastern Europe. Inflation is high in some of the European Union’s new member states, including the Baltic states (11-17 per cent last month) and Bulgaria (14 per cent). In Russia, the region’s biggest economy, it is 13 per cent. Hans-Jörg Rudloff, chairman of Barclays Capital, told a Russia business conference: “Inflation clearly is a bigger problem right now than the slowdown of economic activity around the world.”
Like other countries, the region’s high-inflation states also face rising global food and energy prices. But it is clear that domestic economic developments are adding fuel to the flames. Some neighbouring countries have so far managed to keep a tighter lid on prices – in Poland, last month’s inflation was just 4.1 per cent.
To an extent, Ukraine is a victim of its own success – its high inflation is partly a by-product of rapid economic growth, which has averaged nearly 8 per cent annually since 2000, despite the political upheavals associated with the Orange Revolution. Economic growth has been accompanied by rapid credit growth, with the money supply rising at 50 per cent a year since 2004 as companies boost investment and householders spend on everything from cars to kitchens.
Moreover, successive governments have struggled to control inflation in the face of pressures to boost public spending. This year, the government is budgeting for a 43 per cent social spending increase, including a 37 per cent pensions’ rise and a 32 per cent increase in the minimum wage. While overall budget deficits have been kept in check, thanks to soaring tax revenues, cash has flowed into consumers’ pockets.
These effects have been compounded by a foreign exchange regime under which the hryvnia is tied to the US dollar. To prevent currency appreciation against a fast-depreciating dollar, the central bank has bought dollars and sold hryvnia, importing inflation. The foreign exchange reserves are up from $9.5bn in 2004 to about $35bn (€22bn, £18bn).
As elsewhere in the region, the global credit crunch is now damping credit growth. Economic growth is forecast to ease this year to about 5 to 5.5 per cent and inflation to slow in the second half. But it may still end the year near 20 per cent – far above the official 9.6 per cent target.
The authorities are taking action, with the central bank raising the discount rate from 10 to 12 per cent this week, tightening bank lending controls and preparing to widen the hryvnia’s trading band against the dollar.
Meanwhile, the government is cutting the planned budget deficit from 2 per cent to 1.5 per cent of gross domestic product. The International Monetary Fund wants bigger cuts but, with presidential elections due in late 2009, politicians are loath to squeeze the economy hard.
“This government is taking action and has the experience to cope with the situation,” a senior government official says.
But Kamen Zahariev, Kiev head of the European Bank for Reconstruction and Development, says: “Inflation remains a huge worry for everybody.”
It is a particular worry for the poor, who are especially exposed to upswings in food and energy prices. Ukrainian food prices have risen even faster than general prices – climbing 42 per cent in the year to March. While other European countries are also seeing such effects, the impact is hardest in Ukraine since food accounts for a bigger part of household spending than in richer states.
So far, like Mr Kuznetsov in the market, Ukrainians are complaining about prices but not coming out on the streets.
http://www.ft.com/cms/s/0/2a6c78cc-1233-11dd-9b49-0000779fd2ac.html?nclick_check=1
.
“This bazaar should be demolished and those responsible for these prices jailed,” says the 77-year-old, standing in front of a meat counter. “How can we survive and buy meat when it has doubled in the past year to nearly $10 per kilogram? Everything has gone up – cooking oil, my electricity and gas bills. I can’t even afford to buy meat for this week’s Easter holidays.”
While inflation is re-emerging as an economic threat around the world, it is hitting Ukraine particularly hard. At 26 per cent year-on-year, last month’s jump in consumer prices was Europe’s biggest and among the highest in the world, excluding crisis-stricken states such as Zimbabwe.
Among stable economies only Venezuela, with 29 per cent, saw higher inflation. Asia’s largest increase was Vietnam’s 11 per cent rise.
Ukraine is not unique in central and eastern Europe. Inflation is high in some of the European Union’s new member states, including the Baltic states (11-17 per cent last month) and Bulgaria (14 per cent). In Russia, the region’s biggest economy, it is 13 per cent. Hans-Jörg Rudloff, chairman of Barclays Capital, told a Russia business conference: “Inflation clearly is a bigger problem right now than the slowdown of economic activity around the world.”
Like other countries, the region’s high-inflation states also face rising global food and energy prices. But it is clear that domestic economic developments are adding fuel to the flames. Some neighbouring countries have so far managed to keep a tighter lid on prices – in Poland, last month’s inflation was just 4.1 per cent.
To an extent, Ukraine is a victim of its own success – its high inflation is partly a by-product of rapid economic growth, which has averaged nearly 8 per cent annually since 2000, despite the political upheavals associated with the Orange Revolution. Economic growth has been accompanied by rapid credit growth, with the money supply rising at 50 per cent a year since 2004 as companies boost investment and householders spend on everything from cars to kitchens.
Moreover, successive governments have struggled to control inflation in the face of pressures to boost public spending. This year, the government is budgeting for a 43 per cent social spending increase, including a 37 per cent pensions’ rise and a 32 per cent increase in the minimum wage. While overall budget deficits have been kept in check, thanks to soaring tax revenues, cash has flowed into consumers’ pockets.
These effects have been compounded by a foreign exchange regime under which the hryvnia is tied to the US dollar. To prevent currency appreciation against a fast-depreciating dollar, the central bank has bought dollars and sold hryvnia, importing inflation. The foreign exchange reserves are up from $9.5bn in 2004 to about $35bn (€22bn, £18bn).
As elsewhere in the region, the global credit crunch is now damping credit growth. Economic growth is forecast to ease this year to about 5 to 5.5 per cent and inflation to slow in the second half. But it may still end the year near 20 per cent – far above the official 9.6 per cent target.
The authorities are taking action, with the central bank raising the discount rate from 10 to 12 per cent this week, tightening bank lending controls and preparing to widen the hryvnia’s trading band against the dollar.
Meanwhile, the government is cutting the planned budget deficit from 2 per cent to 1.5 per cent of gross domestic product. The International Monetary Fund wants bigger cuts but, with presidential elections due in late 2009, politicians are loath to squeeze the economy hard.
“This government is taking action and has the experience to cope with the situation,” a senior government official says.
But Kamen Zahariev, Kiev head of the European Bank for Reconstruction and Development, says: “Inflation remains a huge worry for everybody.”
It is a particular worry for the poor, who are especially exposed to upswings in food and energy prices. Ukrainian food prices have risen even faster than general prices – climbing 42 per cent in the year to March. While other European countries are also seeing such effects, the impact is hardest in Ukraine since food accounts for a bigger part of household spending than in richer states.
So far, like Mr Kuznetsov in the market, Ukrainians are complaining about prices but not coming out on the streets.
http://www.ft.com/cms/s/0/2a6c78cc-1233-11dd-9b49-0000779fd2ac.html?nclick_check=1
.
Wednesday, April 23, 2008
Svoboda Activists Throw Eggs At Regions Party Members During Ground-Breaking Ceremony For Building Monument To OUN-UPA Victims In Luhansk
April 23 activists of the All-Ukrainian Union Svoboda threw eggs at the Regions Party members during a ground-breaking ceremony for building a monument to victims of the organization of Ukrainian nationalists and the Ukrainian insurgent army (OUN-UPA) in the Moloda Hvardia public garden in the centre of Luhansk.
While MPs Oleksandr Yefremov and Viktor Tikhonov and also chair of Luhansk regional council Valerii Holenko delivered speeches at the stone laid for future monument to OUN-UPA victims, a column of Svoboda representatives began to approach them.
They were carrying the party flags and crying out: "Glory to Ukraine, glory to the heroes!".
Some of the Regions Party members immediately stood in file in order not to let the column to the improvised stage and to the stone.
The Regions Party representatives, in order to howl down Svoboda slogans, began to sign the song Victory Day and also accuse the opponents of betraying their Motherland.
Then the file of the Regions Party members with some policemen began to press back Svoboda activists.
During this, the opponents were outraging each other and Svoboda representatives threw several eggs at the Regions Party file.
Police stepped in to the conflict and prevented the scuffle.
Before long Svoboda representatives left the public garden.
http://www.ukranews.com/eng/article/119043.html
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While MPs Oleksandr Yefremov and Viktor Tikhonov and also chair of Luhansk regional council Valerii Holenko delivered speeches at the stone laid for future monument to OUN-UPA victims, a column of Svoboda representatives began to approach them.
They were carrying the party flags and crying out: "Glory to Ukraine, glory to the heroes!".
Some of the Regions Party members immediately stood in file in order not to let the column to the improvised stage and to the stone.
The Regions Party representatives, in order to howl down Svoboda slogans, began to sign the song Victory Day and also accuse the opponents of betraying their Motherland.
Then the file of the Regions Party members with some policemen began to press back Svoboda activists.
During this, the opponents were outraging each other and Svoboda representatives threw several eggs at the Regions Party file.
Police stepped in to the conflict and prevented the scuffle.
Before long Svoboda representatives left the public garden.
http://www.ukranews.com/eng/article/119043.html
.
Razumkov Center Poll: Tymoshenko Bloc, Party Of Regions, Our Ukraine - People's Self-Defense, Communist Party, Lytvyn Bloc Enter Rada
Quote: Respondents were asked what party or bloc they would vote for if elections to Verkhovna Rada held soon.
28.3% said they would vote for the BYT, 26.8% for the Party of Regions, 8.4% for OU-PSD, 5.8% for the Communist Party, and 5.1% for the Lytvyn Bloc.
1.7% would vote for the Socialist Party, 1% for the All-Ukrainian Union Svoboda, and 0.4% for the Progressive Socialist Party.
1.9% of the pollees would support some other party or bloc, 9.2% would vote against all, and 11.4% failed to answer.
As Ukrainian News earlier reported, according to a poll the Razumkov Center conducted early in February, 30.2% of respondents were ready to support the BYT at a parliamentary election, 23.1% the Party of Regions, 10.1% OU-PSD, 5.1% the Communist Party, and 3.7% the Lytvyn Bloc.
http://www.ukranews.com/eng/article/118752.html
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28.3% said they would vote for the BYT, 26.8% for the Party of Regions, 8.4% for OU-PSD, 5.8% for the Communist Party, and 5.1% for the Lytvyn Bloc.
1.7% would vote for the Socialist Party, 1% for the All-Ukrainian Union Svoboda, and 0.4% for the Progressive Socialist Party.
1.9% of the pollees would support some other party or bloc, 9.2% would vote against all, and 11.4% failed to answer.
As Ukrainian News earlier reported, according to a poll the Razumkov Center conducted early in February, 30.2% of respondents were ready to support the BYT at a parliamentary election, 23.1% the Party of Regions, 10.1% OU-PSD, 5.1% the Communist Party, and 3.7% the Lytvyn Bloc.
http://www.ukranews.com/eng/article/118752.html
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Monday, April 21, 2008
RUSSIA AGREES WITH UNJUSTIFIED COMPROMISES;
Quote: NATO eastward expansion and the possible entrance of Ukraine into the alliance worries the Russian authorities. Defense and foreign ministers of Russia spoke about this topic after the summit in Bucharest in a harsh way. It was stated clearly that NATO eastward expansion was not in the interests of Russia and our country would respond to such actions adequately and not necessarily with military methods alone. Meanwhile, it seems that Moscow does not abandon the hopes that Kiev will revise its plans of possible membership in NATO. This aspect and other problems of the Russian-Ukrainian relations (border demarcation, status of the Kerch Strait, trading economic cooperation, Black Sea Fleet, Russian language etc) was in the focus of attention of Russian and Ukrainian foreign ministers Sergei Lavrov and Vladimir Ogryzko during their meeting in Moscow last week.
Despite the hot rhetoric in relations between Moscow and Kiev after the summit in Bucharest, as well as the actions of nationalists in Ukrainian parliament demanding early withdrawal of the Russian Black Sea Fleet from the Crimea, before the beginning of negotiations both foreign ministers announced that there were no problems in bilateral relations that could not be solved in a diplomatic way. Problems of the Russian-Ukrainian relations were discussed for about three hours. However, no certain results were achieved. Along with this, there is an impression that Moscow has evidently made some concessions. For example, against the background of the harshness towards a possible membership of Ukraine in NATO demonstrated by Russia previously, the Russian Foreign Minister decided to compromise and agreed to discuss the topic of entrance of Ukraine into the alliance further. Commenting on the NATO problems discussed during the meeting with Ogryzko, Lavrov said that in the future, the parties would conduct additional consultations dedicated to this topic.
Lavrov said, "At the consultations our experts will be prepared to outline the Russian concerns in detail to the maximum extent and to try to make Ukrainian authorities hear these concerns and to take them into account in practical actions." Thus, Moscow demonstrates a stance that the issue of possible eastward expansion of NATO is settled already and it is concerned only about taking Russia's interests into account in this. Ogryzko promised that these interests would be taken into account and that membership of Ukraine in NATO "does not threaten" Moscow with anything. According to him, this was the main goal of the dialogue.
In the past, Gorbachev was given assurances that after breaking the Berlin Wall and reunion of the two German states, NATO would not expand and would not threaten Moscow too. However, this did not happen.
Observers also noticed the fact that in Moscow, the Ukrainian Foreign Minister acted actively and defended his interests firmly. A day after the negotiations in Moscow, it became known that in the course of negotiations Kiev imposed on Moscow discussion of a memorandum on withdrawal of military units of the Russian Black Sea Fleet from their permanent bases on the territory of Ukraine until May 28 of 2017. Kiev actually hinted to Moscow that after that time Russia would have no chances to leave its fleet in Crimea. So far, there has been no reaction of the Russian party to this memorandum but officials of the Ukrainian Foreign Ministry are convinced that consultations with the Russian Foreign Ministry about this document may begin already in July of 2008.
Incidentally, while the Russian-Ukrainian negotiations were going on in Moscow, in Sevastopol, Ukrainian nationalists picketed the headquarters of the Black Sea Fleet demanding early withdrawal of the Russian fleet from the territory of the Ukraine. Such demands fit the plans of the incumbent Ukrainian authorities aimed at accelerated entrance into NATO because the Ukraine will hardly be admitted to the alliance if a foreign fleet is based on its territory.
During the meeting of the foreign ministers, the Ukrainian party also manifested harshness with regard to other issues, for example, during the discussion of the maritime borders in the Azov and Black seas and the status of the Azov Sea.
The Ukrainian Foreign Minister announced, "We proceed from a very simple truth: the state border should be drawn in the Kerch Strait. After that will be the issue of establishing a corporation that will work on the issues related to activities of this channel." Meanwhile, Russia does not consider the Kerch Strait to be a channel. Lavrov says that "such terms as "channel" and "corporation" can be taken as a hint at privatization of the Kerch Strait. It turns out that we are offered to pay for the passage of ships through the Kerch Strait." Officials of the Russian Foreign Ministry say that this should not be.
Commenting on the situation regarding the Kerch Strait, Lavrov announced that "We advocate that, like in case of the Azov Sea waterways, the decision be based on the principles coordinated in the agreement of the presidents fixed in the document of 2003. For us it is fundamental to have our waterway in the Kerch Strait to ensure unopposed sailing in Russian waters for Russian ships from the Black Sea to the Azov Sea. This is a mandatory condition for the provision of our security."
Meanwhile, there are grounds to presume that Ukraine will hinder the discussion of the issue of the Kerch Strait deliberately. It has a sufficiently strong argument for this that is not discussed in public but is present during discussions a priori. This is the existence of significant oil and gas reserves in the Kerch Strait. American company Vanco is currently doing geological exploration of the seabed of 12,960 square kilometers in the Kerch Strait in a unilateral manner according to an order of Kiev. Vanco promises that if the geological exploration is successful, the hydrocarbon reserves will fully guarantee energy independence of Ukraine. According to forecasts, reserves of the seabed in the Kerch Strait are estimated at approximately 300 billion cubic meters of gas and 136 million tons of oil. At any rate, are these reserves fully Ukrainian?
The Russian Foreign Ministry reported that the stance of Ukraine with regard to regulation of the issues related to the Kerch Strait is the following: between the former Soviet republics of Russian Soviet Federative Socialist Republic and the Ukraine was a kind of administrative border in the Kerch Strait. Russia said that in the Soviet Union no administrative borders were drawn between the union republics on inland sea waters. Hence, there were no legitimate documents of union or republican level fixing the separating line in waters of the Azov Sea and the Kerch Strait. Hence, Russia cannot recognize the so-called "line of guarding of the state border" established by the Ukrainian party in 1999 in a unilateral way in these waters. Moscow proceeds from the provision of the treaty on cooperation in use of the Azov Sea and Kerch Strait of 2003 saying that these waterways are historically inland waters of Russia and the Ukraine. If these are inland waters of the two countries they should divide the natural resources equally.
http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=574&topicId=100007539&docId=l:778671756&start=31
.
Despite the hot rhetoric in relations between Moscow and Kiev after the summit in Bucharest, as well as the actions of nationalists in Ukrainian parliament demanding early withdrawal of the Russian Black Sea Fleet from the Crimea, before the beginning of negotiations both foreign ministers announced that there were no problems in bilateral relations that could not be solved in a diplomatic way. Problems of the Russian-Ukrainian relations were discussed for about three hours. However, no certain results were achieved. Along with this, there is an impression that Moscow has evidently made some concessions. For example, against the background of the harshness towards a possible membership of Ukraine in NATO demonstrated by Russia previously, the Russian Foreign Minister decided to compromise and agreed to discuss the topic of entrance of Ukraine into the alliance further. Commenting on the NATO problems discussed during the meeting with Ogryzko, Lavrov said that in the future, the parties would conduct additional consultations dedicated to this topic.
Lavrov said, "At the consultations our experts will be prepared to outline the Russian concerns in detail to the maximum extent and to try to make Ukrainian authorities hear these concerns and to take them into account in practical actions." Thus, Moscow demonstrates a stance that the issue of possible eastward expansion of NATO is settled already and it is concerned only about taking Russia's interests into account in this. Ogryzko promised that these interests would be taken into account and that membership of Ukraine in NATO "does not threaten" Moscow with anything. According to him, this was the main goal of the dialogue.
In the past, Gorbachev was given assurances that after breaking the Berlin Wall and reunion of the two German states, NATO would not expand and would not threaten Moscow too. However, this did not happen.
Observers also noticed the fact that in Moscow, the Ukrainian Foreign Minister acted actively and defended his interests firmly. A day after the negotiations in Moscow, it became known that in the course of negotiations Kiev imposed on Moscow discussion of a memorandum on withdrawal of military units of the Russian Black Sea Fleet from their permanent bases on the territory of Ukraine until May 28 of 2017. Kiev actually hinted to Moscow that after that time Russia would have no chances to leave its fleet in Crimea. So far, there has been no reaction of the Russian party to this memorandum but officials of the Ukrainian Foreign Ministry are convinced that consultations with the Russian Foreign Ministry about this document may begin already in July of 2008.
Incidentally, while the Russian-Ukrainian negotiations were going on in Moscow, in Sevastopol, Ukrainian nationalists picketed the headquarters of the Black Sea Fleet demanding early withdrawal of the Russian fleet from the territory of the Ukraine. Such demands fit the plans of the incumbent Ukrainian authorities aimed at accelerated entrance into NATO because the Ukraine will hardly be admitted to the alliance if a foreign fleet is based on its territory.
During the meeting of the foreign ministers, the Ukrainian party also manifested harshness with regard to other issues, for example, during the discussion of the maritime borders in the Azov and Black seas and the status of the Azov Sea.
The Ukrainian Foreign Minister announced, "We proceed from a very simple truth: the state border should be drawn in the Kerch Strait. After that will be the issue of establishing a corporation that will work on the issues related to activities of this channel." Meanwhile, Russia does not consider the Kerch Strait to be a channel. Lavrov says that "such terms as "channel" and "corporation" can be taken as a hint at privatization of the Kerch Strait. It turns out that we are offered to pay for the passage of ships through the Kerch Strait." Officials of the Russian Foreign Ministry say that this should not be.
Commenting on the situation regarding the Kerch Strait, Lavrov announced that "We advocate that, like in case of the Azov Sea waterways, the decision be based on the principles coordinated in the agreement of the presidents fixed in the document of 2003. For us it is fundamental to have our waterway in the Kerch Strait to ensure unopposed sailing in Russian waters for Russian ships from the Black Sea to the Azov Sea. This is a mandatory condition for the provision of our security."
Meanwhile, there are grounds to presume that Ukraine will hinder the discussion of the issue of the Kerch Strait deliberately. It has a sufficiently strong argument for this that is not discussed in public but is present during discussions a priori. This is the existence of significant oil and gas reserves in the Kerch Strait. American company Vanco is currently doing geological exploration of the seabed of 12,960 square kilometers in the Kerch Strait in a unilateral manner according to an order of Kiev. Vanco promises that if the geological exploration is successful, the hydrocarbon reserves will fully guarantee energy independence of Ukraine. According to forecasts, reserves of the seabed in the Kerch Strait are estimated at approximately 300 billion cubic meters of gas and 136 million tons of oil. At any rate, are these reserves fully Ukrainian?
The Russian Foreign Ministry reported that the stance of Ukraine with regard to regulation of the issues related to the Kerch Strait is the following: between the former Soviet republics of Russian Soviet Federative Socialist Republic and the Ukraine was a kind of administrative border in the Kerch Strait. Russia said that in the Soviet Union no administrative borders were drawn between the union republics on inland sea waters. Hence, there were no legitimate documents of union or republican level fixing the separating line in waters of the Azov Sea and the Kerch Strait. Hence, Russia cannot recognize the so-called "line of guarding of the state border" established by the Ukrainian party in 1999 in a unilateral way in these waters. Moscow proceeds from the provision of the treaty on cooperation in use of the Azov Sea and Kerch Strait of 2003 saying that these waterways are historically inland waters of Russia and the Ukraine. If these are inland waters of the two countries they should divide the natural resources equally.
http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=574&topicId=100007539&docId=l:778671756&start=31
.
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