[Ohio UZO News] Ukraine: AP (2); Brookings; VOA; KP

Thu Mar 19 11:44:50 EDT 2009

Anyone else have an uneasy feeling about this...? (That's a rhetorical question).  Maybe the focus should be on doing what  needs to be done to obtain the next installment of the $16.4 billion emergency IMF loan first? 

AP

Ukraine PM seeking $5 billion loan from Russia 

By MARIA DANILOVA 

Associated Press Writer

19 March 2009

KIEV, Ukraine (AP) - Prime Minister Yulia Tymoshenko will travel to Russia early next month to seek a $5 billion (euro3.66 billion) loan for Ukraine's collapsing economy, her office said Thursday, defying the pro-Western president who is her bitter political rival.

President Viktor Yushchenko has assailed Tymoshenko over her efforts to secure a loan from Russia, saying it would make Ukraine overly reliant on a huge neighbor determined to bolster its influence over the country and keep it out of NATO.

Tymoshenko and Russian Prime Minister Vladimir Putin are also expected to discuss adjustments to a long-term gas agreement they brokered in January, ending a price dispute that prompted a two-week cutoff of Russian natural gas supplies to Europe via Ukraine.

The agreement, which stipulates how much gas is purchased and delivered to European consumers through pipelines crossing Ukraine, must be changed because Ukraine and European countries have slashed consumption due to the global financial crisis, Tymoshenko's top aide Oleksandr Hudyma said.

Tymoshenko is due in Moscow on April 7-8, Hudyma said. She will seek the loan in order to help cover a huge budget deficit and pay off the debts of the embattled energy giant Naftogaz, he said.

In Moscow, Russian Foreign Ministry spokesman Andrei Nesterenko said Russia had received a request for a $5 billion loan to Ukraine and was considering it.

Tymoshenko's planned trip is likely to deepen her long-standing political confrontation with Yushchenko, a former ally she has vowed to succeed in a presidential election expected late this year. The two teamed up against a Russian-backed presidential candidate in the 2004 Orange Revolution protests that ushered Yushchenko to power, and both favor closer integration with the U.S. and Europe.

But Tymoshenko has proved more willing to negotiate with Russia, and held lengthy talks with Putin in Moscow in January to come up with the deal that ended the embarrassing European gas supply cutoff.

Hudyma insisted that loan she is seeking, with payment over five to 10 years at an annual interest rate of 10-12 percent, will have no political conditions or implications attached.

Ukraine is reeling from the global financial meltdown, which has depressed demand for the steel and chemicals that are crucial sources of its export income. Industrial output fell by nearly one-third in February, year-on-year, the national currency has shed nearly half its value against the U.S. dollar since September and the economy is expected to shrink by 6 percent this year.

Ukraine is struggling to stay afloat without the crucial second installment of a$16.4 billion (euro12 billion) emergency loan from the International Monetary Fund. The IMF withheld the payment last month because of the Tymoshenko's reluctance to trim government spending, and it has yet to come through despite signs of progress toward reviving the deal. 

-----------------------------

This, on the other hand, is potentially a good (and necessary) thing...

AP

US lawmakers back increased funding for IMF 

By CHRISTOPHER S. RUGABER 

AP Economics Writer

349 words

18 March 2009

WASHINGTON (AP) - Two key lawmakers on Wednesday said they support Treasury Secretary Timothy Geithner's call to significantly increase funding for the International Monetary Fund.

Sen. John Kerry, chairman of the Senate Foreign Relations Committee, said there was bipartisan support on the panel for providing additional resources, even as the federal government faces record budget deficits from a $787 billion economic stimulus package and bank bailout spending.

The Massachusetts Democrat spoke at a press conference following a meeting with IMF Managing Director Dominique Strauss-Kahn and World Bank President Robert Zoellick. Indiana Sen. Richard Lugar, ranking Republican on the committee, said he also supported Geithner's proposal.

"We are convinced that the IMF needs additional funding," Kerry said.

Geithner last week proposed that an IMF program which provides financial assistance to troubled countries be expanded tenfold to $500 billion. Geithner said he will seek approval for the increase at the Group of 20 summit in London on April 2.

The G-20 includes both wealthy nations such as the United States, France and Japan, as well as major developing countries such as China, India and Brazil.

Currently, the U.S. contributes 20 percent of the $50 billion fund, known as the New Arrangements to Borrow, which implies the U.S. contribution could grow to $100 billion. Geithner said last week the U.S. share of the expanded fund would have to be worked out. Kerry did not comment on specific numbers.

Kerry said the IMF can provide critical help to countries such as Afghanistan and Pakistan, and to nations in eastern Europe that are suffering from financial crises. The IMF recently has provided rescue loans to Hungary, Latvia and Ukraine as the region struggles with an economic slowdown and growing government debt.

The IMF, World Bank and European Union will provide an emergency loan of about $25 billion to Romania, officials from that nation said Wednesday, to support its struggling banks and prevent its currency from falling so low that it hurts the economy.

The Brookings institution

Foreign Policy Paper Series | Number 13 

Engaging Ukraine in 2009

Ukraine <http://www.brookings.edu/topics/ukraine.aspx> , Europe <http://www.brookings.edu/topics/europe.aspx> , Energy Security <http://www.brookings.edu/topics/energy-security.aspx> , Russia <http://www.brookings.edu/topics/russia.aspx> , International Relations <http://www.brookings.edu/topics/international-relations.aspx> 

Steven Pifer <http://www.brookings.edu/experts/pifers.aspx> , Visiting Fellow, Foreign Policy <http://www.brookings.edu/foreign-policy.aspx> , Center on the United States and Europe <http://www.brookings.edu/cuse.aspx>  
Anders Åslund, Senior Fellow, Peterson Institute for International Economics 
Jonathan Elkind <http://www.brookings.edu/experts/elkindj.aspx> , Nonresident Senior Fellow, Foreign Policy <http://www.brookings.edu/foreign-policy.aspx>  

The Brookings Institution

March 2009 - 

Introduction and Summary 

Ukraine and Ukrainians will be tested over the course of 2009. The global financial and economic crisis already has provoked a deep recession and falling living standards. Kyiv will need to make a real effort to strike a balance between integration into Europe and the Euro-Atlantic community and maintaining stable relations with Russia. Doing so will not be easy, as Russia regards Ukraine's pro-Western policy as inimical to Russian interests, and Ukraine's politics are subject to influence from Moscow. In particular, Ukraine must address its energy security situation, where it remains vulnerable to Russian pressure.

Ukraine is the most democratic state in the post-Soviet space, and its domestic debate is vibrant and open, but its politics are highly dysfunctional. The bitter political feud between President Victor Yushchenko and Prime Minister Yuliya Tymoshenko, former allies in the Orange Revolution, has paralyzed most policymaking. With a presidential election likely to be held in January 2010, the infighting will only get worse. Regions Party head Victor Yanukovych, the main opposition leader, has little incentive to work for good policies, as he stands to gain politically as disapproval of the president and prime minister grows.

All of this makes dealing with Ukraine difficult for the U.S. government, but it also makes working with Ukraine more urgent. It remains in America's interest that Ukraine continue its development as a stable, independent, democratic market economy, with growing links to Europe and the Euro-Atlantic community. In the circumstances of the coming year, however, engaging with Kyiv to advance that goal will prove no easy task.

Washington may be tempted to wait for the leadership in Kyiv to get its act together, given how divided it is. Certainly, President Barack Obama and his administration have plenty of competing demands on their foreign policy plate. But Washington does not have the luxury of waiting; absent strong U.S. engagement, the situation in Ukraine will likely worsen and require greater American attention at a future point. In order for the U.S. government to engage successfully, Ukrainian leaders must overcome some of their divisions, adopt a more coherent policy approach, and be prepared to take difficult decisions. Serious engagement by Washington, however, is necessary to press Ukraine's leaders to adopt such an approach. They are unlikely to do so on their own.

As it organizes its policy toward Ukraine, Washington should focus on four areas:

Structure a bilateral dialogue to have maximum influence with Ukraine's leaders. The Obama administration should establish a regularized, toughminded dialogue with Kyiv. It needs to send an early high-level message, perhaps delivered by Secretary of State Hillary Clinton, of support and the need for Ukraine's leaders to cooperate with one another; she might travel with European Union (EU) Common Foreign and Security Policy High Representative Javier Solana to convey a joint U.S.-EU message. The administration should revive the binational commission that operated between 1996 and 2000, with the vice president chairing the U.S. side and Yushchenko and Tymoshenko co-chairing the Ukrainian side, if that can be made to work. Such a mechanism can deepen the U.S.-Ukrainian relationship, monitor progress on agreed bilateral priorities and the December 2008 U.S.-Ukraine charter, and pass candid messages on sensitive issues. U.S. officials must be blunt: if Yushchenko and Tymoshenko cannot work together, U.S. efforts to help Ukraine cope with the economic crisis, strengthen its energy security, or develop closer relations with Europe will yield minimal results. 

Assist Ukraine in dealing with the financial/economic crisis. Ukraine needs to be and stay in compliance with its International Monetary Fund (IMF) program. Even with help from the IMF, Ukraine will likely face a financing gap in 2009 of about $5 billion. The U.S. government should work with partners such as the European Union, IMF, World Bank and others to address this as a matter of priority, with the objective of a donors' conference that would provide $5 billion in additional financing this year. This should be linked to the established IMF standby arrangement and should have conditions that also link the additional financing to specific energy sector reforms. The U.S. government should consider providing financing as part of this. Washington should also press Ukraine to resume making vitally important economic reforms to position its economy for a faster recovery, and should consider reducing trade barriers to Ukrainian products.

Promote serious actions to strengthen Ukraine's energy security. Ukraine's leaders know what they need to do to improve the country's energy security situation but have steadfastly refused to act. Senior U.S. officials now must impress on them that there is no alternative but to push through reforms that have been thwarted by entrenched vested interests. These reforms include allowing energy prices to consumers to rise, at least to cost-recovery levels, in order to promote energy efficiency and domestic production. Washington should continue programs to promote energy efficiency and advise the Ukrainian government on developing a program of targeted welfare assistance for those unable to pay the higher prices for energy. Given the inherent instability of the January 2009 gas agreements with Russia, the U.S. government and its European partners should undertake a systematic assessment of measures to help stabilize, strengthen, and increase the transparency of the gas operations of Naftohaz, the parastatal oil and gas corporation.

Help Ukraine deepen its relations with the European Union and NATO while avoiding a crisis with Russia. The administration should encourage the European Union to accelerate conclusion of the negotiation underway with Ukraine on an association agreement, including a free trade arrangement. Washington should lead in shaping NATO-Ukraine relations. Given the impossibility of securing Alliance consensus for a membership action plan (MAP), U.S. officials should assist Ukraine in developing an annual national program that contains most, if not all, of the content of a MAP, and work within the Alliance to secure approval of the program. Washington should be clear with Kyiv on how much support it can expect in a stand-off with Russia while cautioning Moscow that Russian efforts to destabilize Ukraine will risk its relations with the West.

This paper briefly discusses U.S. interests in a successful Ukraine and describes four key challenges currently facing Kyiv. It then discusses in more detail the above policy recommendations for strengthening U.S.-Ukrainian relations and for helping Ukraine to meet these challenges and continue its transformation into a modern, successful European democracy. 

For entire report, see: http://www.brookings.edu/papers/2009/03_ukraine_pifer.aspx

Voice of America

David Kramer on Challenges in US-Russia-Ukraine Relations 

Voice of America, Ukrainian Service 
Washington, DC
18/03/2009

Former Deputy Assistant Secretary of State for Europe and Eurasia (for Russia, Ukraine, Belarus and Moldova) David Kramer and former Assistant Secretary of State for Democracy, Human Rights and Labor, in an interview with VOA Ukrainian (in English), comments on challenges the new Obama administration faces in its relationships with Russia and Ukraine. 

http://www.voanews.com/ukrainian/2009-03-18-voa3.cfm

----------------

Some on this list will well recall the numerous efforts of the Ukrainian-American community, U.S. Congress and the Helsinki Commission back in the 1980's on behalf of this great poet and Ukrainian Helsinki Monitor who languished and died in the Soviet Gulag for his human rights activities.  It is unfortunate to read about the real reason that Donetsk authorities killed an initiative to rename Donetsk University for its most famous alumnus:  

Kyiv Post 

Op-Ed

Poet Vasyl Stus, a Soviet dissident, deserved better

Yuri Lukanov

http://www.kyivpost.com/opinion/op_ed/37733

Stus' bio:

http://www.kyivpost.com/opinion/op_ed/37735

-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: application/ms-tnef
Size: 21576 bytes
Desc: not available
URL: <http://clevelanduzo.org/pipermail/uzonews_clevelanduzo.org/attachments/20090319/cf7e16df/attachment.bin>