[Ohio UZO News] Ukraine: WP editorial (must-read)FT; EDM; KP editorial

[Deychak, Orest]

The WP editorial is right on the money (pun intended) and well worth
reading in its entirety. OD

 

The Washington Post

http://www.washingtonpost.com/

 

To the Rescue
The Obama administration wisely pledges to bolster the IMF.

Friday, March 13, 2009; A16 

ADD THE PLIGHT of Eastern Europe to the many threats facing the world
economy. Having boomed in recent years thanks to imported capital, much
of it provided by Western European banks, country after country is now
going bust because of the contraction of credit. This not only poses
risks to global trade and growth; it also raises concerns about their
future survival as democracies within the European Union. In the largest
of the Eastern European states, Ukraine, a former Soviet republic that
does not enjoy the political benefits of E.U. membership, the stakes are
especially high. There, industrial production has plunged by almost a
third since the beginning of the crisis; living standards for 46 million
people are starting to collapse. The weaker and more chaotic Ukraine
becomes, the likelier it is that Russia will attempt to reassert
hegemony over it. A Putinized Ukraine would be a disaster for that
country, Europe and the United States. 

The Obama administration has announced an important step toward
salvaging emerging markets, including Eastern Europe: Treasury Secretary
Timothy F. Geithner's proposal to triple the International Monetary
Fund's resources from their current level of about $250 billion. Of
that, $100 billion would come from the United States. Congress may balk
at this number; already feeling bailout fatigue with respect to U.S.
banks and auto companies, many lawmakers may wonder why they need to aid
other countries. The answer is that the crisis is global, and so the
solution has to be global; Congress must provide funding lest economic
rot spread through not only Eastern Europe but also Asia, Latin America
and Africa. The IMF is the only institution capable of doing the job. 

Other countries must do their share. Some already have: Mr. Geithner was
following the example set by Japan, which is suffering a steeper
downturn than the United States but still found $100 billion to spare.
The Obama administration correctly seeks greater contributions from
cash-rich China and Saudi Arabia. If modifications to IMF governance are
necessary to secure their participation, that should be considered. The
disappointment so far is the European Union, whose Western European
members are not eager to bail out the East. But it will be harder for
them to delay now that the Obama administration has stepped up. Indeed,
Western Europe is likely to come around eventually, if only to prevent
the collapse of the European Union's Eastern half from turning into a
collapse of the alliance itself. 

For Ukraine, however, the United States will have to lead. That includes
encouraging Ukraine's leaders to control the political squabbling
between Prime Minister Yulia Tymoshenko and President Viktor Yushchenko
that so far has thwarted the formulation of a new economic program
necessary to secure international aid. Consequently, the IMF recently
withheld the second installment of a planned $16.4 billion loan.
Washington needs not only to supply money but also to push for political
cohesion and responsibility among the politicians in Kiev. All the IMF
money in the world can't save them unless they can agree on how to help
themselves.

Financial Times

www.ft.com

Putin agrees to waive gas fines in gesture to Ukraine

By Roman Olearchyk in Kiev and Stefan Wagstyl in London 

Published: March 13 2009 

Vladimir Putin, Russia's prime minister, yesterday announced that Moscow
would go easy on Ukraine in enforcing the terms of their bilateral gas
deal, in a surprise sign of improving relations between Moscow and Kiev.

The Russian leader said Gazprom, the Russian state-controlled group,
would not impose penalties on Ukraine for failing to buy as much gas as
it promised when the contract was signed in January, after a dispute
that disrupted Russian gas supplies to the European Union.

The gesture may ease international fears concerning Ukraine's economic
and political stability.

Russia, which has put unremitting pressure on Ukraine since Kiev swung
to the west after the 2004 Orange Revolution, seems to be acting out of
concern that further political or economic assaults could push Ukraine
into chaos.

While Moscow would hate to see a west-oriented democratic Ukraine
succeed, it does not want a complete collapse on its frontiers, with
unpredictable consequences for Russia.

Anders Aslund, senior fellow at the Peterson Institute, a US think-tank,
said: "Previously, Russian policy was to destabilise Ukraine. Now it is
changing."

Mr Putin said: "Ukraine is not taking the contracted volumes [of gas]
and should pay fines. We will forgive these fines because we recognise
the reality: they have nothing to pay with. They are in a pre-bankruptcy
state, and you perfectly understand that you cannot finish off your
partners."

Naftogaz, Ukraine's state gas company, welcomed the news as "pragmatic".

In Ukrainian political circles, Mr Putin's move was seen as a favour to
Yulia Tymoshenko, the prime minister, who has tried hard to harmonise
relations with Moscow without compromising links with the west.

Moscow seems to be focusing its support on Ms Tymoshenko in advance of
presidential elections this year, at the expense of Viktor Yushchenko,
the president, and Viktor Yanukovich, opposition leader, who it
previously backed but now sees as ineffective.

Vadym Karasyov, a Yushchenko adviser, said that by waiving the fines,
"Mr Putin showed favour for Ms Tymoshenko and her presidential
candidacy".

Eurasia Daily Monitor

http://www.jamestown.org/programs/edm/
<http://www.jamestown.org/programs/edm/> 

March 11, 2009

Nalyvaychenko Becomes Ukrainian Security Chief After Two Years in Legal
Limbo

The Ukrainian parliament on March 6 approved President Viktor
Yushchenko's nomination for Security Service of Ukraine (SBU) chief,
Valentyn Nalyvaychenko. Yushchenko's choice was backed by 230 votes in
the 450-seat unicameral body. Nalyvaychenko was supported by a coalition
of Prime Minister Yulia Tymoshenko's bloc (BYT), Parliament Speaker
Volodymyr Lytvyn's bloc, and the pro-Tymoshenko wing of Our
Ukraine-People's Self-Defense (NUNS), as well as its pro-Yushchenko wing
(Ukrainska Pravda, March 6).

This was a surprise vote decided by the BYT, which changed its mind
overnight after threatening to reject Nalyvaychenko. He had been
rejected by parliament several times in the past; but since Yushchenko
was adamant, Nalyvaychenko headed the SBU as acting chief since December
2006 when parliament approved the dismissal of his predecessor, Ihor
Drizhchany. It was probably Nalyvaychenko's unclear status that made him
especially loyal to Yushchenko who could have dismissed him as acting
chief of the SBU at any time, without consulting either Tymoshenko or
parliament.

Unlike his predecessor Leonid Kuchma, who had all the law-enforcement
agencies under his control, Yushchenko, weakened by the constitutional
reform of 2004-2006, can rely only on the SBU. The police are supervised
by Tymoshenko's ally Interior Minister Yury Lutsenko, while Prosecutor
General Oleksandr Medvedko and especially his deputies gravitate toward
the Party of Regions. In addition, the Supreme Court is chaired by Vasyl
Onopenko, another Tymoshenko ally.

By legitimizing Nalyvaychenko's status, Tymoshenko should make him more
institutionally independent from Yushchenko. It is interesting that
Yushchenko withdrew Nalyvaychenko's nomination on January 18 after
submitting it to parliament on January 16 (UNIAN, March 5). First Deputy
Prime Minister Oleksandr Turchynov, who is Tymoshenko's right-hand man,
opined that Yushchenko had recalled the nomination "in order to have a
powerless person and not to have an officially appointed head of the
SBU, as the SBU head should be appointed and dismissed by parliament"
(Ukrainska Pravda, March 4).

Yushchenko submitted Nalyvaychenko's nomination again on March 5, a day
after the SBU had stormed the premises of the Naftohaz Ukrainy national
oil and gas company and arrested customs official Taras Shepitko for
giving Naftohaz customs clearing for gas that had earlier belonged to
RosUkrEnergo. Tymoshenko protested against the arrest and the search,
which she alleged were organized to defend the interests of
RosUkrEnergo's co-owner Dmytro Firtash (Interfax-Ukraine, March 4; see
EDM, March 6). Russia's Gazprom, which owns 50 percent of RosUkrEnergo's
shares, authorized Naftohaz to take that gas from underground storage
facilities in lieu of payment for gas transit in 2009, according to
Tymoshenko. Firtash, however, insists that the gas belongs to
RosUkrEnergo and is destined for consumers in the European Union.
President Yushchenko backed the SBU's actions.

The raid on Naftohaz was apparently conducted when Nalyvaychenko was
away from Kyiv. It was supervised by first deputy SBU chief Valery
Khoroshkovskyi, an opponent of Tymoshenko's and reportedly a partner of
Firtash in the media business. Simultaneously with approving
Nalyvaychenko, parliament passed a motion urging Yushchenko to dismiss
Khoroshkovskyi for the raid and for arresting Shepitko
(Interfax-Ukraine, March 6). Shepitko was later released, and the BYT
explained its support for Nalyvaychenko's nomination by the role he
apparently played in Shepitko's release (Ukrainski Novyny, March 6).

BYT caucus leader Ivan Kyrylenko said, "We gave Nalyvaychenko a chance,
and we believe that as the legitimate head of the SBU he will be fully
controlled by and report to parliament." NUNS deputy Yury Karmazin
offered a different explanation for the BYT's change of heart. According
to Karmazin, Yushchenko was considering appointing Khoroshkovskyi as
acting SBU chief instead of Nalyvaychenko, so by appointing
Nalyvaychenko parliament prevented the appointment of a hard-liner
(Delo, March 10). Another NUNS deputy, Ksenia Lyapyna, an ally of
Yushchenko's, suggested that the BYT had changed its mind about
Nalyvaychenko because during its search at Naftohaz the SBU apparently
found certain documents compromising Tymoshenko's government
(www.liga.net, March 6).

It has been made clear to Nalyvaychenko that he could lose his post if
he does not distance himself from Yushchenko. In addition to requesting
that Nalyvaychenko dismiss Khoroshkovskyi, parliament also advised him
to change his personnel policy in general (Ukrainska Pravda, March 6).
Oleksandr Skybynetsky, a former SBU deputy chief and current BYT deputy,
gave more specific advice, saying that Nalyvaychenko should hire people
from the BYT. Nalyvaychenko is expected to report on his personnel
policy on March 17, and it is not ruled out that parliament will dismiss
him immediately if he does not heed Skybynetsky's recommendation (Delo,
March 10). The BYT is already prepared for that. Just several hours
after his appointment, four BYT deputies who ostentatiously did not vote
for Nalyvaychenko submitted a motion to parliament calling for his
dismissal (Ukrainska Pravda, March 6).

Before coming to the SBU, Nalyvaychenko had been a diplomat. He served
at the Ukrainian Embassy to Finland in the mid-1990s, was Consul-General
in Washington, D.C., from 2001 to 2003, and then served as Ambassador to
Belarus. It is interesting that in his official biography Nalyvaychenko
does not mention the fact that he graduated from the KGB school in
Moscow in the early 1990s (Ukrainska Pravda, March 6; Segodnya, March
10). Speaking in an interview with Ukrainska Pravda on February 17, he
admitted to having been "the last Ukrainian to be trained there."

-Pavel Korduban


Kyiv Post


www.kyivpost.com


Editorial 


Keep the heat on


March 11, 2009

Foreign lenders should impose tough conditions on Ukrainian leaders to
keep them in line.

Attention International Monetary Fund and others thinking of lending
Ukraine money: You may be this nation's best hope for forcing leaders to
behave responsibly and responsively, so drive a hard bargain.

Make those in power squirm before you approve any lines of credit, as
the IMF is apparently doing by holding up a second installment of a
$16.4 billion loan.

Make government leaders adopt realistic budgets and stick to them. If
you can, make them competitively privatize industries held by the state
for too long. Make them live up to free-trade agreements. Make them
clean up, then properly regulate, the freewheeling banking sector. And,
by all means, push for iron-clad transparency and accountability for
every kopeck given.

The people of this great nation still have too little influence over
their government. Not even elections are satisfactory. Top media outlets
are oligarch-owned and offer one-sided coverage. Presidential powers are
constitutionally diluted. Parliamentary elections yield the same tired
old parties who develop their own slate of gilded, unresponsive
candidates.

Increasingly, money and crisis are the only two ways to gain the
attention of Ukraine's leaders, locked as they are in increasingly
erratic feuds over money and power.

International lenders have money to lend and Ukraine's leaders are so
desperate that they are even thinking of turning to the Kremlin for a $5
billion loan. Even as out of touch as they are, Ukraine's leaders must
know discontent is rising. Those who are wondering when the ever-patient
populace will revolt (again) should keep their eyes on two numbers: 10
and 5.

If the hryvnia hits 10 to the dollar and stays there, protests will draw
large crowds. If unemployment reaches 5 million people, up from its
estimated 1 million (officially) to 3 million (unofficially), unrest
will follow.

The real heroes of Ukraine have always been families who, despite their
failed leaders, earn money and show faith in the future by having
children, educating them and helping them to grow up to be strong,
fearless and caring - in other words, to display characteristics in
short supply among government officials and business titans.

We want Ukrainians to get a helping hand through this economic crisis,
especially one that will stabilize the hryvnia. But lenders, such as
IMF, are well within  their rights to ensure that Ukraine's failed
leaders don't get a free pass.

 

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