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vol. 16, issue 5

February 4, 2011

Russian Prime Minister Vladimir Putin and his then-Ukrainian counterpart, Yulia Tymoshenko, attend a signing ceremony in Moscow on Jan. 19, 2009. The agreement ended a gas supply dispute and squeezed Tymoshenko nemesis, Dmytro Firtash, and RosUkrEnergo out of the bilateral gas trade. But the deal disintegrated after the Feb. 7, 2010, election of Viktor Yanukovych as president. Now, RosUkrEnergo co-owner Firtash – in a multi-billion dollar windfall – has reclaimed 11 billion cubic meters in gas seized by Tymoshenko’s government as part of the Moscow deal. Four former Naftogaz and three former state customs officials involved in the gas seizure are in jail. The reversal of fortunes came after Firtash allies – Yanukovych, presidential chief of staff Serhiy Lyovochkin and Energy Minister Yuriy Boyko among them – returned to power.

INSIDE: • Kyiv Post interviews Iryna Akimova, president’s top economic adviser.

Page 10 • More stonewalling in Gongadze case?

Page 18 • Ukraine picks fight with the Czech Republic.

Page 19

Inside:

Editor’s Note: This article by German’s Der Spiegel magazine involves Ukrainian gastrading billionaire Dmytro Firtash, who has filed a libel lawsuit against the Kyiv Post in London for a story published on July 2. The Kyiv Post stands by its story. Repeated attempts to reach Firtash and RosUkrEnergo for comment have been unsuccessful.

BY C HRIS T IAN NEEF © 2011 DER SPIEGEL

The agreement in early 2009 that restarted gas deliveries from Russia via Ukraine to Western Europe was hailed as a success. But since Viktor Yanukovych became Ukrainian president in February, many of those involved in the deal have been arrested. Furthermore, the president’s friends

News Æ 2, 13 – 19 Opinion Æ 4, 5, 12

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have profited handsomely while the state has lost a fortune.

The official address of the Lukyanivska pre-trial detention center, named after the Lukyanivka neighborhood of Kyiv and located just behind the Defense Ministry barracks, is 13 Degtyaryivska Street. It is a whitewashed brick building, complete with watchtowers and barbed wire, a blue steel door and a gray sliding gate. A

harsh winter wind howls along the street, and the women waiting in front of the entrance with packages under their arms are shivering in the cold.

The prison, a building that dates back to the 19th century, is one of the most notorious in Kyiv. Although it was designed to house 2,800 prisoners, it is now overfilled with 4,000 men. One of the prisoners, Ihor Didenko, says that it’s horrible “to so much as touch a spoon or a cup here.”

The 46-year-old was on his way to the dentist when he ended up in Lukyanivska. It was July 9, a Friday, and the weekend was about to begin in a summery Kyiv, but beforeÆ14

Business Æ 6 – 11

Employment/Real Estate/ Lifestyle Æ 21 – 29, 32 Classifieds Æ 30, 31

Editorial staff: +380 44 234-65-00 news@kyivpost.com

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Dmytro Firtash of RosUkrEnergo

FEBRUARY 4, 2011 Vol. 16, Issue 5 Copyright © 2011

by Kyiv Post The material published in the Kyiv Post may not be reproduced without the written consent of the publisher. All material in the Kyiv Post is protected

by Ukrainian and international laws. The views expressed in the Kyiv Post are not necessarily the views of the publisher nor does the publisher carry any responsibility for those views. Газета “Kyiv Post” видається ТОВ “ПаблікМедіа”. Щотижневий наклад 25,000 прим. Ціна за домовленістю. Матерiали, надрукованi в газетi “Kyiv Post” є власнiстю видавництва, захищенi мiжнародним та українським законодавством i не можуть бути вiдтворенi у будь(якiй формi без письмового дозволу Видавця. Думки, висловленi у дописах не завжди збiгаються з поглядами видавця, який не бере на себе вiдповiдальнiсть за наслiдки публiкацiй. Засновник ТОВ “Паблік-Медіа” Головний редактор Брайан Боннер Адреса видавця та засновника співпадають: Україна, м. Київ, 01034, вул. Прорізна, 22Б Реєстрацiйне свiдоцтво Кв № 15261(3833ПР від 19.06.09. Передплатний індекс ДП Преса 40528 Надруковано ТОВ «Новий друк», 02660, Київ, вулиця Магнітогорська, 1, тел.: 559-9147 Замовлення № 11-3315 Аудиторське обслуговування ТОВ АФ “ОЛГА Аудит” З приводу розміщення реклами звертайтесь: +380 44 234-65-03. Відповідальність за зміст реклами несе замовник.

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CORRECTION On Jan. 21, the Kyiv Post has misidentified a person in the paparazzi section of the newspaper as the Indonesian ambassador to Ukraine.

2 News

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February 4, 2011

Vasya out in his underpants?

That’s a no-no during Euro 2012 Reuters – Ukrainians will be asked not to appear scantily clad or hang out underwear to dry on their apartment balconies under a plan aimed at sparing blushes during the Euro 2012 soccer tournament in Kyiv.

With apartment space at a premium in Ukraine, city-dwellers in high-rise blocks traditionally use their balconies to hang out their washing and store sleds, skis and other bric-a-brac.

In summer, many apartment-dwellers relax on their balconies in sandals and dress robes – often wearing a lot less.

Kyiv now fears its plans for a “Switch On Ukraine” campaign to showcase the beauty of its four stadium cities during the European championships it is co-hosting in June 2012 will throw a spotlight on these informal habits and earn ridicule.

“Here we are planning to spend colossal amounts on lighting up build-

ings. But imagine we then have Uncle Vasya out in his underpants on the balcony and there are bowls around the place, sleds and skis – and we will be illuminating all this too,” Kyiv’s main architect, Serhiy Tselovalnik, said.

Tselovalnik, quoted by Ukrinform news agency, is now urging the government to stop anyone living within halfa-kilometer of a Euro 2012 game venue from making an unsightly spectacle of themselves on their balconies.

Lawyers see a problem, however.

“Apartments are private property. I can’t imagine police going into apartments to force people to take in washing from the line or bring in old sleds,” lawyer Tetyana Montyan was quoted

by Ukrinform as saying.

Apart from Kyiv, Lviv, Kharkiv and Donetsk have been chosen as game venues for Euro 2012 which Ukraine will co-host with neighboring Poland.

Activists with Femen women’s movement shout during their topless protest on a balcony in Kyiv on Feb. 1. They are protesting against Kyiv officials’ plans to warn residents not to walk out on their balconies scantily clad and not to hang their underwear out to dry during the Euro 2012 soccer championship.

(Yaroslav Debelyi)

Surkis to stay as soccer federation head after his foes back down to Europe

BY MARK RACH KEV Y CH RACHKEVYCH@KYIVPOST.COM

Rebels within the Ukrainian soccer federation backed out of attempts to oust controversial chief Hryhoriy Surkis after world and European football bosses threatened to bar the country’s teams from international competition.

The International Federation of Association Football (FIFA) and the Union of European Football Associations (UEFA) had stepped in to defend Surkis after what they called government pressure on collective members of the Ukrainian federation to vote him out.

UEFA had even hinted it could strip Ukraine of the right to host the Euro 2012 soccer tournament.

But the renegades backed down on Feb. 2, with 10 executive committee members of the soccer federation pledging in a letter to the international bodies, published on sports website Champion, to withdraw their demand that Surkis step down.

A handful of Ukraine’s soccer-crazed wealthy businessmen and their associates stand accused of trying to force out the longtime soccer boss through their close ties with state authorities.

Political experts tied the moves to attempts by current authorities to bring all power under their control.

Acting on “clear evidence” that “strong pressure was exerted” by government representatives and others on the Football Federation of Ukraine (FFU) before a Dec. 15 meeting, FIFA threatened to suspend Ukraine from soccer unless assurances were given by Feb. 4 that Surkis would be allowed to finish his term through 2012.

FIFA’s Jan. 24 letter of warning coincided with FIFA President Joseph Blatter’s telephone call to Ukrainian President Viktor Yanukovych to raise concerns.

On Feb. 2, Yanukovych said “state bodies didn’t pressure the FFU.” A source close to Surkis, who spoke on condition of anonymity because he is not authorized to comment pub-

licly, said Deputy Prime Minister Borys Kolesnikov was behind the moves to remove the federation president.

Kolesnikov is a childhood friend and close associate of Ukraine’s richest man, billionaire Rinat Akhmetov, who owns Donetsk’s Shakhtar soccer club.

Currently recuperating from surgery, Kolesnikov declined to speak with the Kyiv Post, citing his medical condition.

Akhmetov’s press service didn’t provide answers to Kyiv Post inquiries.

Yet Kolesnikov has never hidden his disdain for Surkis, whom he has publicly blamed for favoring his younger brother’s football club Dynamo Kyiv and using his position as soccer federation president to stifle competition.

The FFU source also identified multimillionaire and Kharkiv Metalist soccer club owner Oleksandr Yaroslavsky as favoring Surkis’ removal. Yaroslavsky’s press service denied exerting any pressure, saying his huge investment in soccer infrastructure “speaks for his support.”

Soccer analysts said the move to

remove Surkis was an attempt by Yanukovych’s business and political backers – a grouping which mostly hails from the eastern industrial heartland of Donetsk – to take over soccer.

“Donetsk wants control over football,” said Ihor Miroshnychenko, a seasoned soccer announcer on television and blogger. “They’ve got everything except this. Kolesnikov wants to destroy Surkis,” Miroshnychenko said.

Surkis now appears safe until at least after the tournament in 2012, when his seat comes up for re-election.

Artem Frankov, chief editor of Ukraine's Football magazine, said that may be a good time for Surkis to depart.

“I don’t rule out the possibility that after the 2012 tournament Surkis will himself resign with the feeling that his mission – bringing and coordinating the 2012 tournament – has been accomplished,” he said.

Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost. com

UEFA kicks off online Euro 2012 ticket sales

BY M A R K R AC H K E VYC H RACHKEVYCH@KYIVPOST.COM

Europe’s top soccer governing body on Feb. 1 announced the ticket-buying process for the Euro 2012 soccer championship, co-hosted by Ukraine and Poland.

Representatives of the Union of European Football Associations announced that fans can now set up an account and prepare ticket applications on the uefa.com website, the only platform through which tickets will be sold.

Ticket applications to all 31 tournament matches – split between Ukraine and Poland with the championship game to be held in Kyiv – will start on March 1 and end March 31. Tickets will then be allocated via a lottery system in April. All notifications will be sent by email.

UEFA officials said tickets will cost between 30 and 600 euros. The lottery includes measures to ensure that a fair share of tickets will be set aside for residents of the eight host cities, four of

which are in each co-host country of Poland and Ukraine, UEFA representatives said.

“The tournament is around the corner. We can feel it. Right now is the perfect time for host countries to buy tickets,” said Martin Kallen, UEFA’s Euro 2012 operations director.

“Roads are being fixed. Airports are being built. You can already feel the excitement.”

Residents of each host city will be allocated 2,000 tickets per match, or 62,000 tickets throughout the tournament. The host cities in Ukraine are Donetsk, Kharkiv, Kyiv and Lviv.

Should a resident of these cities not get chosen during the initial lottery, their application will be considered in the general lottery pool with the rest of applicants.

Around 75 percent of 1.4 million tickets are intended to reach the general public; the rest will be set aside for sponsors, media, UEFA officials and VIP clients, UEFA representatives added.

Five ticket products are being made

available. Fans can apply for tickets to individual matches or choose to follow one team either in the group stage (three matches) or throughout the tournament (three to six matches) as far as their team advances.

Soccer enthusiasts can also opt for the venue series in which they get to watch all the matches at a single venue in the group stage or watch the two playoff matches taking place at a single venue.

People living with disabilities will also be allocated a specific amount of tickets including free tickets to those accompanying them.

UEFA has set up three price categories.

First category tickets are seated in the main and opposite stand of the pitch. Seats in the second category are located in the corners and behind the goals on the upper tier of stadiums.

Third category seats are behind the goals on the lower tier.

A maximum of four tickets will be sold to each applicant.

Ukrainians and Poles will be allowed

Ticket allocation for the Euro 2012 soccer championship Broadcast Partners 1% General Public 41%

ests 2% VIP Guests UEFA Familyy 3% % Hospitality 4% Host Cities 4%

Commercial al Affiliates 13% Participating Natio National Associations 32% Source: Union of European Football Associations

to purchase tickets in their local currencies or in euros via national bank transfers or with credit cards. Residents of other countries will have to exclusively use credit cards.

Complete information can be found at the uefa.com website.

Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost. com

www.kyivpost.com

3

February 4, 2011 Advertisement

European Business Association News

,EADERS 4ALK

*O 'PDVT

Leaders Talk: Maurizio Patarnello, Managing Director of NestlĂŠ in Ukraine and Moldova

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4

ODAY WE TALK TO -AURIZIO 0ATARNELLO THE HEAD OF .ESTLĂ IN 5KRAINE WHICH IS A PART OF A WORLDWIDE LEADING FOOD AND BEVERAGES COMPANY 7ELL REPRESENTED IN MANY CATEGORIES INCLUDING COFFEE CULINARY AND CONFECTION ARY .ESTLĂ IS KNOWN IN 5KRAINE NOT ONLY

BY ITS INTERNATIONAL BRANDS LIKE .ESCAFĂ BUT ALSO BY STRONG LOCAL BRANDS SUCH AS 3VITOCH

4ORCHIN AND -IVINA

-!52):)/ 0ATARNELLO

-ANAGING $IRECTOR OF .ESTLĂ IN 5KRAINE AND -OLDOVA 9OU HAVE WORKED FOR .ESTLĂ FOR YEARS HOW WOULD YOU COMPARE WORKING IN 5KRAINE WITH WORKING IN OTHER COUN TRIES WHERE YOU HAD TO DEVELOP THE .ESTLĂ BRAND

4HEREFORE IN MY OPINION A BIG EFFORT HAS TO BE EMPLOYED TO REFORM THE BUREAUCRACY OF THE COUNTRY TO CHANGE THE CULTURE WHICH IS NOT IN FAVOUR OF BUSINESS HERE )T IS LIFE YOU KNOW %VERY COUNTRY HAS ITS OWN ORIGIN ) CAME FROM THE STATE LIKE $UBAI WHERE YOU CAN OPEN A COMPANY IN A FEW MINUTES WHERE YOU DO NOT HAVE TO KEEP ACCOUNTING RECORDS OR TO PAY CERTAIN TAXES $OING BUSINESS THERE IS THE SIMPLEST THING IN THE WORLD (ERE IT IS DEFINITELY MUCH MORE COMPLICATED BUT THERE ARE REASONS WHY $UBAI IS LIKE $UBAI AND 5KRAINE IS LIKE 5KRAINE (OWEVER THE GOV ERNMENT HAS TO MAKE AN EFFORT TO GO TOWARDS THE BUSINESS )N LIGHT OF THE ABOVEMENTIONED HOW WOULD YOU ASSESS THE CHANCES OF )TALIAN BUSINESS INTEGRATING INTO THE 5KRAINIAN MARKET 4HERE ARE SOME LARGE )TALIAN COMPANIES THAT ARE ALREADY HERE FOR EXAMPLE BANKS AND WELL KNOWN LARGE &-#' COMPANIES 7HAT IS PROBABLY MORE DIFFICULT IS TO ATTRACT SMALL )TALIAN COMPANIES SINCE THEY ARE SIMPLY AFRAID OF WHAT IS GOING TO HAPPEN TO THEIR BUSINESS AND WHAT THE GUARANTEES THAT THEIR INVESTMENTS WOULD BE PROTECTED ARE 3MALL COMPANIES ARE ALSO RELUCTANT TO COME HERE

BECAUSE OF ALL THE DIFFICULTIES IN SETTING UP BUSINESS AND IN BEING COMPLIANT WITH ALL THE OVERLY COMPLEX LAWS AND REGULATIONS 4HE 5KRAINIAN AUTHORITIES HAVE TO MOVE TO THE NEXT STEP TO ATTRACT THE SMALLER AND MEDIUM COMPANIES FROM )TALY %UROPE FROM THE 5 3 AND SO ON THE COMPANIES WHICH ARE WILLING TO COME AND FULLY APPRECIATE THE POTENTIAL OF THE COUNTRY

%ACH PLACE HAS ITS OWN CHALLENGES ) PRE FER NOT TO VISIT THE COUNTRY WHERE ) HAVE TO WORK BEFORE MY ACTUAL TENURE STARTS 4HE FIRST IMPRESSION CAN BE BIASED AND IN REAL ITY ALL THINGS TURN UP TO BE QUITE THE OPPO SITE ) CAME HERE WITHOUT KNOWING MUCH ABOUT 5KRAINE APART FROM WHAT PEOPLE TOLD ME ABOUT THIS COUNTRY 4HE COUNTRY IS BEAUTIFUL p THIS IS MY IMPRESSION ) WAS IMPRESSED BY PEOPLE WELL EDUCATED OPEN

AND FRIENDLY AND WITH THEIR OWN CHARACTER AND MENTALITY 4HE YOUNG GENERATION IS WILLING TO MAKE THINGS HAPPEN AND THERE IS 7HAT POSITIVE SIDES AND ADVANTAGES OF A STRONG ENTREPRENEURSHIP IN THE COUNTRY DOING BUSINESS IN 5KRAINE YOU COULD SHARE MORE THAN ) THOUGHT IT WOULD BE ) WOULD SAY WITH FELLOW BUSINESSMEN WHO CONSIDER THAT ) AM HAPPY WITH THIS EXPATRIATION INVESTING HERE 4HE COUNTRY IS PERFECTLY LOCATED FROM A 5KRAINE IS AS BIG AS )TALY IN TERMS OF ITS GEOGRAPHICAL POINT OF VIEW )T IS VERY CLOSE POPULATION AND IS PROBABLY TWO TIMES BIGGER TO 7ESTERN %UROPE AND AT THE SAME TIME ) THAN )TALY IN TERMS OF SIZE )F YOU WANT YOUR THINK IT IS A GATE TO THE %AST AS WELL ) THINK BUSINESS TO GROW IN )TALY BY YOU HAVE

5KRAINE HAS A GREAT POTENTIAL METAPHORICALLY SPEAKING TO WAKE UP VERY EARLY IN THE MORNING BECAUSE THE MARKET 7HAT REFORMS SHOULD BE INTRODUCED IS TOUGH 7HEN WE COMPARE THE CONSUMP TO REALISE THIS POTENTIAL ESPECIALLY IN TION PER CAPITA OF EACH OF .ESTLĂ CATEGORIES

REGARDS TO BUSINESS DEVELOPMENT DEFINITELY THERE IS HUGE POTENTIAL IN 5KRAINE ) THINK THAT IN ORDER TO ATTRACT BUSINESS COMPARED TO THE WEST %UROPE 4HIS IS ALREADY THE GOVERNMENT HAS TO SIMPLIFY DRAMATI A GOOD REASON TO BE HERE SINCE ALL THE COMPA CALLY THE COUNTRYlS BUREAUCRATIC STRUCTURE NIES ARE LOOKING FOR GROWTH )N ADDITION IF YOU WHICH IS NOT BUSINESS FRIENDLY "USINESS CONSIDER THAT THIS IS A COUNTRY WITH ONE OF THE PEOPLE DO NOT HAVE TO BE SEEN AS A POTENTIAL MOST FERTILE CULTURES WITH NATURAL RESOURCES

HARM TO THE COUNTRY OR POTENTIAL SOURCE OF WITH WELL EDUCATED PEOPLE p IT MAKES A REALLY HEADACHES FOR THE GOVERNMENT )T HAS TO BE ATTRACTIVE PICTURE THE OTHER WAY ROUND

4HINGS TO KNOW EBA Business Morning with World Bank and IMF “Ukraine in 2011.

Prospects and Forecasts�

On 18 February, 2011 the EBA will host a Business Morning “Ukraine in 2011. Prospects and Forecasts�. The event will feature the leading experts in the area of economy and finance who will give valuable insights into current state of affairs in the economy of Ukraine and provide forecasts regarding operations of the financial sector, future credit policy and investment climate in Ukraine.

Max Alier, IMF Resident Representative in Ukraine and Martin Raiser, Head of the World Bank in Ukraine will be the main speakers at the Business Morning.

More experts from the leading Ukrainian companies will share their views and outline challenges facing their respective industry areas to put together the overall picture of investment attractiveness of the country.

www.eba.com.ua

Fake Agrochemicals Outflow into the Market IF DBTFT PG DPVOUFSGFJU BHSPDIFNJDBMT EFUFDUJPO IBWF CFDPNF BMBSNJOHMZ GSF† RVFOU JO 6LSBJOF BOE UIF &#" XPVME MJLF UP XBSO BHSBSJBOT BOE QPQVMBUJPO PG B QSPCBCMF GBLF QFTUJDJEFT PVUGMPX JOUP UIF 6LSBJOJBO NBSLFU In August 2010, in Talne, Cherkassy Oblast, the law enforcement bodies revealed a warehouse, where over 100 tons of counterfeited plant protection products (insecticides, fungicides, herbicides and protectants) were kept packed in containers bearing labels of reputed manufacturers. The warehouse is not certified for storage of chemical substances and is not properly equipped, which poses a threat for the local inhabitants, environment, and ground waters.

According to the information available on the official web-site of the State Tax Administration of Ukraine, as of 24 January 2011, UIF BCPWFNFOUJPOFE DPVOUFSGFJU VODFSUJGJFE QSPE† VDUT BSF CFJOH PGGFSFE GPS TBMF CZ UIF 4UBUF 5BY *OTQFDUJPO JO 5BMOF 3FHJPO with the description of a product based solely on the identified active ingredient.

The incident is highly unacceptable, especially since the products, as proof of violation of IPRs of reputed foreign companies, constitute the main evidence in the criminal investigation opened in November 2010 by the Ministry of Internal Affairs of Ukraine.

In Bila Tserkva, Kyiv Oblast, officers of the special National Security Service’s unit in charge of combating corruption and organized crime discovered 74 tons of pesticides belonging to a company that has no license for pesticide trading. The chemical substances, some of them bearing fake labels, are kept in a warehouse located in a residential area.

The Medved Institute of Ecological Hygiene and Toxicology carried out laboratory tests of the products in question and found that the products are in fact counterfeit. However, no action has been taken so far to withdraw the above-described counterfeits from civil circulation.

The European Business Association hopes that the decisive actions by the law enforcement authorities would be taken to remove from circulation and destroy the fake agrochemical products hazardous for humans and environment.

Managing Director, Bayer Ltd, Ukraine

T

he situation related to the selling of counterfeit pesticides by a state authority is really astonishing. Don’t government officials realize that they violate manufacturers’ intellectual property rights? Don’t they think of the irreversible harm that may be caused to lives and health of people and the environment in general? The carried out laboratory tests identified only the active ingredient in counterfeits’ composition, but failed to reveal other ingredients and admixtures, which often constitute 80% of a fake product. These unknown chemicals eventually penetrate into the TOBIAS Menne food products and after that – into the human body. Nobody can predict the consequences of such experiments.

In relation to the above said, we are asking representatives of the governmental bodies of Ukraine, such as the State Tax Administration, the Ministry of Internal Affairs, the State Customs Service and the Main Inspection for Crop Protection to take a responsible approach to the problem of counterfeiting in the agrochemical sector.

General Director, Syngenta

T

his is an extremely hazardous situation. Clearly, the authorities have no idea on the risk they are placing on the public, farmers and the environment. These products bear counterfeits of manufacturers’ labels, so cannot easily be distinguished by the general public from the real product. Therefore, Syngenta finds the action of placing these products on the market completely irresponsible on the part of the Ukrainian authorities.

NIGEL Thwaites

2%')/.!,.EWS 500 Days till the Start of Euro 2012

T

he 500-days countdown to the 2012 European Football Championship began in all host cities of Ukraine and Poland on January 25.

The city of Donetsk has already planned a series of Championship-dedicated events aimed to encourage the festive mood and raise the local community awareness of the Euro 2012.

On the 5 of May, 2011, four hundred students dressed in uniform with the Championship symbols plan to form a number “400� marking the 400 days till the start.

One year before the start football veterans of the host cities will hold a tournament to symbolically position Donetsk as a football center of Ukraine. Continuing the festivities, in autumn of 2011, the Henri Delaunay Cup presentation will take place in Donetsk within the framework of the Trophy Tour. The 100-days countdown will officially begin on the 29 of January, 2012.

7E LOOK FORWARD TO YOUR FEEDBACK AT

PGGJDF!FCB DPN VB

4 Opinion

www.kyivpost.com

February 4, 2011

Editorials

Ousting dictators Time is running out for Egyptian dictator Hosni Mubarak, just as it ran out for Tunisian dictator Zine el-Abidine Ben Ali, both in power for decades. Hopefully time will run out soon for all authoritarian rulers everywhere, including Belarus’ Alexander Lukashenko and Russia’s Vladimir Putin.

We don’t want Ukrainian President Viktor Yanukovych to be in this category. But his year of rule thus far shows that he is moving towards authoritarianism and dismantling the checks and balances required of a mature democracy.

The most recent example came on Feb. 1, when the discredited Verkhovna Rada decided to postpone parliamentary elections until October 2012. This is coming despite the fact that the 1996 Constitution – which this parliament reverted to last year – envisions a four-year term for lawmakers, requiring elections next month.

Not content with merely monopolizing power, the Yanukovych administration appears intent on making sure that it – and the ruling Party of Regions – stay in power perpetually.

This would be a prescription for the sort of popular unrest that is sweeping the Middle East now. Given the way that the Yanukovych team is running roughshod over the media and political opposition, they are tempting fate.

If this administration continues to tolerate kangaroo courts, a politicized general prosecutor and law enforcement, deep conflicts of interests and the beating of opposition deputies who stand in their way, discontent will rise. It is hard to see how Ukrainians will put up with this sort of heavy-handedness until October 2012, their first opportunity to make any changes at all in their elected leadership.

Yanukovych has demonstrated time and again that he doesn’t even grasp the basic elements of democracy or his nation's constitution. For instance, he repeatedly talks of how criminal suspects should “prove their innocence,” a reversal of the sacred principle of presumption of innocence.

Unfortunately, not all dictators are thrown from office by popular uprisings. Josef Stalin and many other tyrants managed to die without facing the righteous wrath of their victims. And, regrettably, some nations – such as Iran – have replaced one set of tyrants with another after popular uprisings.

Ukraine's leaders should stop talking about European values and start acting on them. That means transparency in government, an end to conflicts of interests, respect for free speech and real checks-and-balances in the creation of independent institutions in parliament, courts and law enforcement.

As long as Yanukovych keeps taking the nation down the wrong road, the future is unpredictable and anything can happen, making the 2004 peaceful Orange Revolution seem like just a dress rehearsal for the real thing.

Prove you weren’t involved in Gongadze’s murder!

Prove your hands never stole anything!

There is nothing to prove. You’re both guilty!

NEWS ITEM. President Viktor Yanukovych repeatedly states that criminal suspects should prove their innocence. His remark betrays a fundamental misunderstanding of jurisprudence, as well as Ukraine’s constitution, which enshrines the principle of presumption of innocence until proven guilty.

Many people regard the nation’s criminal justice system as deeply corrupt and politically subservient. At left, depictions of ex-President Viktor Yushchenko and ex-President Leonid Kuchma argue about unproven allegations dogging both of them – journalist Georgiy Gongadze's murder in Kuchma's case, corruption in Yushchenko's case. (Drawing by Anatoliy Petrovich Vasilenko)

The president is right! Kyiv is beautiful in spring!

Gongadze outrage Adopting President Viktor Yanukovych’s gross misunderstanding of how jurisprudence should work, we might say: “Ex-President Leonid Kuchma and Verkhovna Rada Speaker Volodymyr Lytvyn – prove that you didn’t order journalist Georgiy Gongadze's murder in 2000.”

Of course, Kuchma and Lytvyn – just like all people – are entitled to the presumption of innocence. But they also deserve to be charged and tried for ordering the Sept. 16, 2000, murder of the journalist who had gotten on their nerves for his journalism on the Ukrainska Pravda website. But this week, it appears that Ukraine’s untrustworthy courts and prosecutors have reactivated the cover-up.

The recordings of ex-Kuchma presidential guard Mykola Melnychenko, which allegedly show that both men wanted to get rid of Gongadze, and other evidence are enough to bring criminal charges against Kuchma and Lytvyn, in our view.

But there’s so much more. After former Interior Ministry Gen. Oleksiy Pukach was finally arrested in July 2009 as a suspect, he reportedly gave testimony implicating his former boss, Interior Minister Yuriy Kravchenko (killed by two gunshot wounds to the head on March 4, 2005), Lytvyn and Kuchma.

On Dec. 17, Prosecutor General Viktor Pshonka – a close Yanukovych ally – appeared to be headed down the path of justice with this statement: “The pre-trial investigation has established that, on the night of Sept. 16, 2000, Oleksiy Pukach under instructions from Interior Minister Yuriy Kravchenko and other officials, and in preliminary agreement with a group of persons, committed the premeditated murder of journalist Georgiy Gongadze, because the victim was fulfilling public and journalistic duties.”

This week, troublesome reports surfaced that the court and prosecutor were no longer pursuing whether Pukach was acting on orders and that Pukach might have changed his testimony and retracted statements implicating higher officials. The next day, the prosecutor’s spokesman cautioned against jumping to conclusions, making the disclosures look like a trial balloon.

Any court ruling that Pukach acted alone defies logic and evidence and will be greeted as more injustice in a case that has seen so much of it.

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NEWS ITEM. On Jan. 28 at the World Economic Forum in Davos, President Viktor Yanukovych invited investors to Kyiv in spring. He said that not only the chestnuts are in bloom. Yanukovych said that when it gets warm, women start undressing. “To see this beauty is amazing,” he said. The president – considered by some to be a walking gaffe machine – was criticized for making a sexist remark, while others considered it a harmless compliment to the charms of Ukrainian women. (Drawing by Anatoliy Petrovich Vasilenko)

Yanukovych: Sexist-in-chief MA RIA POPOVA

During last year’s election campaign, presidential candidate Viktor Yanukovych bewildered many with his mysterious Victorian phrase that “a woman should go to the kitchen.” Now, as president, Yanukovych is introducing a policy of sexism to our country.

Yanukovych’s Jan. 28 comment at the World Economic Forum in Davos, Switzerland, became the last straw for Ukrainian women.

To begin with, there is a baffling deficit of women in government. Nowadays, fewer than 8 percent of those who work in the Verkhovna Rada are women.

The Cabinet of Ministers of Ukraine is led by Prime Minister Mykola Azarov, who once said that conducting reforms is not women’s business. So we are unlikely to see a female minister in the near future.

Russian politician Irina Khakamada recently said women are chosen for the Russian parliament on the basis of their appearance. As a result, only hyped-up celebrities get to the governmental body. Unfortunately, the same trend is under way in Ukraine.

And now our country is on the threshold of a global event. There

is no doubt that the Euro 2012 soccer championships will be a boost for development of democracy in Ukraine, if preparations are done properly. However, the president recently showed the other side of uro 2012, and the World Economic Forum in Davos became another failure of Yanukovych and his administration.

As one of the clinchers in favor for investing in Ukraine, our dear president cited “Ukrainian women taking off their clothes in spring.” That was ambiguous.

Such frank presidential calls for another influx of sex tourists are, perhaps, the worst thing Yanukovych could do for the country.

Just for comparison: our Euro 2012 co-host, Poland, passed the gen- Æ18

Feel strongly about an issue? Agree or disagree with editorial positions in this newspaper?

The Kyiv Post welcomes letters to the editors and opinion pieces, usually 800 to 1,000 words in length. Please e-mail all correspondence to Brian Bonner, chief editor, at bonner@kyivpost.com or letters@kyivpost.com. All correspondence must include an e-mail address and contact phone number for verification.

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February 4, 2011

Yanukovych in Davos: Big guy, small agenda O L G A S H U MY L OTA P I O L A

Much ink has been spilled in articles and blogs in Ukraine over the past few days on President Viktor Yanukovych’s purportedly sexist comments in Davos, where he talked about the joys of watching scantily clad women in Kyiv in spring.

As a Ukrainian and a woman I could not help being affected by the president’s statements. Yet, this was a harmless and ill-conceived comment, typical of Ukrainian (and many other post-Soviet) men of a particular generation and class. While much time was dedicated to this incident, shamefully less was dedicated to analyzing the president’s limited vision for this year’s World Economic Forum, and the accordingly modest results he drew from it.

For Ukraine, this year’s World Economic Forum was relatively unimportant. With emerging powers such as China, India and Brazil capturing the limelight, participants gathered in Davos to discuss how to move to adopting more strategic and long-term “shared norms for a new reality.” Yet Kyiv had little to share with the world and even less to learn from it.

In contrast to 2005, when President Viktor Yushchenko brought tears to many eyes when addressing a large audience on democracy in Ukraine, or to 2010, when the country’s presidential hopefuls shared their vision for the future with an expectant audience, this year’s forum had neither tears nor expectations for Ukraine.

For Yanukovych, the forum was essentially another photo opportunity. His goals were rather modest and the agenda underwhelming. He participated in only one formal event, the panel on Europe’s energy policy, where he made surprisingly negative comments on Russia. In private meetings, his two priorities were energy and Chornobyl.

On the energy front, Yanukovych was clearly looking for two things – diversification of Ukraine’s energy resources and a halt to the South Stream pipeline project, which would allow Russia to bypass Ukraine in transiting gas to Western Europe. While diversification is becoming an attainable goal, with two memorandums signed with Azerbaijan in Davos, it is highly unlikely that Russia will give up its plans on alternative transit routes. However, the president will keep pushing these two goals, even at the expense of annoying Moscow.

The president’s meeting with Shell chief executive officer Peter Voser is another encouraging signal for Kyiv’s hopes for diversification, as the company is interested in exploring Ukraine’s shale gas resources.

Yet it is premature to think that this deal is sealed (as some Ukrainian analysts suggest). Ukraine doesn’t have a good track record with investors, and Shell in

Ukrainian President Viktor Yanukovych, Austrian Chancellor Werner Faymann (R) and Secretary-General of the Organisation for European Cooperation and Development (OECD) Angel Gurria (C) pose at the launching of an OECD Central Asia Competitiveness Outlook in a Davos hotel on Jan. 27 during the World Economic Forum. Some 2,500 political and industry leaders gathered in the small alpine village for the forum that ended on Jan. 30. (AFP)

particular will be wary of that.

The 25th anniversary of the Chornobyl disaster this April is rapidly approaching, yet meetings with United Nations Secretary General Ban Ki-moon and European Bank for Reconstruction and Development President Thomas Mirow led to few concrete results.

Although, at the very least, the EBRD has confirmed participation in the anniversary’s conference. Still, the president did not succeed in attracting additional funds for the new phase of Chornobyl’s transformation. A gap of 740 million euros remains and it is unlikely that the West or international organizations will be willing to fill in the gap.

Yanukovych had a chance to talk about the future during the Ukrainian lunch organized by Victor Pinchuk. The president launched the presentation on Euro 2012. He spoke about investment opportunities in Ukraine, focusing on the country’s political stability, economic growth and reforms. Many of the lunch’s guests were apparently unmoved by the president’s performance. However, given the country’s steady decline in all international ratings, including the World Economic Forum’s Global Competitiveness Report, it would have been difficult for even the most skilled speaker to win over the audience.

By identifying three areas – metallurgy, agriculture and innovation – as being key to Ukraine’s recovery, Yanukovych was again sending mixed messages. It has been consistently demonstrated that there is little room for innovation if Ukrainian metallurgy or agriculture is involved. The reference to agriculture was directed at those who still hope that Ukraine

can become the breadbasket of Europe. In reality, recent decisions on grain and land have dimmed those hopes.

The message from this event was resoundingly clear: Ukraine is no longer an attractive location for Western investors. Neither, moreover, did the country manage to attract investment from the big players further east, such as India and China. Russian investors remain the only ones undeterred by Ukraine’s bureaucracy and problems with the rule of law.

Ultimately, the president’s participation in the forum was neither a failure nor a success. He set limited goals and achieved them relatively easily. However, he will need to significantly improve Ukraine’s international standing if he wants the country to become a destination for foreign investment, or to join the G20 within the next 10 years (as he claimed last summer). He will also have to consider adopting a more active and effective approach to Davos, focusing on innovation-driven growth, re-thinking the exploitation of natural resources, the fight against corruption, and the education of tomorrow’s leaders. Some may say that Yanukovych will not be able to cover all these topics alone. However, the solution is simple – bring fewer bodyguards and more analysts and businessmen to Davos.

Olga Shumylo-Tapiola is a visiting scholar at Carnegie Europe in Brussels, where her research focuses on European Union and Russian policy toward Ukraine, Moldova and Belarus. She is a member of the supervisory board and former director of the International Centre for Policy Studies in Kyiv.

European Union fails to see strengths of Ukraine, Turkey AM A N DA PAU L

Once upon a time Turkey and Ukraine were defining the destiny of Europe. Now they have seemingly been sidelined. Both are knocking on the European Union’s door and both are being told, more or less, that they are not welcome.

Apparently they are too different to be part of Europe. While Turkey may be different in terms of religion and culture, it shares and desires the same values and goals as Europe (the values that the EU is

built on and is supposed to stand for) and has been anchored and involved in Western institutions for years, such as the North Atlantic Treaty Organization (NATO) and the Organization for Security and Cooperation in Europe (OSCE).

Ukraine is apparently “too Soviet,” or so I am told. Ukraine may be at the heart of Europe but it seems the mentality and the so-called “Soviet legacy” culture of its people are simply too different and incompatible.

Or perhaps it’s simply because they are both too big. Just thinking of how many seats the two nations would have in the European Parliament is probably a very scary thought for some.

Ukraine and Turkey are different but in many ways they are similar.

Both are big and geo-strategically important and

frequently used as positive examples in their neighborhood. Turkey is always cited as a beacon of democracy in the Muslim world, while Ukraine, in more recent times, has been used as an example for change and democracy in the EU’s eastern neighborhood. In short, models in turbulent and unstable regions.

Of course, as regards relations with the EU there is a big difference. Turkey managed, after decades of effort, to become a candidate country and is already negotiating membership. Ankara is therefore on the right side of the EU door – albeit in a room full of problems.

Ukraine, on the other hand, is still on the wrong side. No matter how much Kyiv rings the doorbell and knocks, the door stays closed. Through the letterbox the EU says get your house in order; Æ12

Opinion 5 VOX populii WITH MARYNA VARLAMOVA

What do you think of President Viktor Yanukovych’s comment on Jan. 28, at the World Economic Forum in Switzerland, urging people to come to Kyiv in the spring “when it gets warm and women in Ukrainian cities begin taking off their clothes?”

Inna Sokolovska, photographer “A few years ago when Belarusian President Alexander Lukashenko came to Kyiv, [former Kyiv Mayor Oleksandr] Omelchenko advised him to come to the city in the summer when 'women do not wear their underwear.' Yanukovych expressed a similar idea. It might be the Ukrainian way that men show their attitude to women. My feelings were not hurt.

I was more surprised at the words, being inappropriate in Davos.”

Vitaly Strak, lawyer: “I believe that the president did not awaken investors’ interest in Ukraine, failing to explain why Ukraine is attractive for them. He made the capital look like a ‘trading post’ of naked women.”

Ludmyla Vovchenko, cyberneticist: “I don’t think that Yanukovych tried to abuse Ukrainian women.

However, I believe that the president must not stoop to such a low level.”

Olha Lukreeva, lawyer: “I think it was nice of the president to notice the beauty of Ukrainian women, but there are a lot of fields in Ukraine which need investors’ support. And women are not in the lead.”

Zinovy Karych, actor: “I believe that Yanukovych’s comment was abusive, as it was unpresidential. As the head of the state, he can’t take such liberties. However, as a man, he was right, because in the spring women show subtle beauty, taking off winter clothes.”

6 Business

www.kyivpost.com

February 4, 2011

President hits Russian plans, inks Azeri deal Reuters – Ukrainian President Viktor Yanukovych clinched energy pacts with Azerbaijan on Jan. 28 and attacked Russia for plans to bypass his country in supplying gas to Europe, reviving market fears of regular spats between Moscow and Kyiv.

Markets were relieved when Yanukovych, perceived as friendlier to the Kremlin than his predecessor, Viktor Yushchenko, was elected Ukraine’s president last year. That followed five years of disputes between the ex-Soviet neighbors, marked by mid-winter cuts in Russian gas supplies to Europe that represent a quarter of the continent’s total needs.

But Yanukovych has played a much less pro-Moscow role than expected since taking office, saying the European Union was an equally or even more important partner than Russia.

Speaking at the World Economic Forum in Davos, the president lashed out at new Russian pipeline projects and signed oil and gas deals with Azerbaijan to cut Ukraine’s reliance on Russia. Yanukovych said Ukraine shared Poland’s concerns about political motives behind the Nord Stream pipeline to supply Russian gas to Western Europe along the Baltic Sea floor, bypassing central European nations. “Another project being discussed today between Russia and Europe

After pumping crude from Russia south to the Black Sea in previous years, Ukraine’s Odessa Brody oil pipeline could soon be used for what it was originally intended – helping Ukraine diversify away from Russian energy imports by pumping crude oil from the Black Sea up into Ukraine and further to other markets. (UNIAN)

is the construction of South Stream.

This possibility is directly related to Ukraine and here I share the position of Poland,� he said, referring to a project to pipe gas under the Black Sea to southern Europe.

Russia ships about 80 percent of its gas exports to Europe through Ukraine now and the remaining 20 percent via

ÆOn the move IGOR SIUSEL has joined Lavrynovych & Partners, a Ukrainian law firm, as an associate partner.

In his new role, Siusel will focus on mergers and acquisitions, corporate law, insurance law and intellectual property. Over the past few years, Siusel has worked as a senior associate with Baker & McKenzie.

Earlier, he held a senior position in Ukraine’s Transport Ministry and at Oranta, a leading Ukrainian insurance company. Siusel has extensive experience in the field of transportation, communications and insurance.

He is a licensed attorney and holds a law degree from the Institute of International Relations at Kyiv National Taras Shevchenko University.

Belarus and says it needs the new projects to boost Europe’s energy security after disruptions in previous years.

Yanukovych said South Stream would cost $25 billion while it would cost much less to upgrade Ukraine’s pipeline system. “Why are our partners today pretending that there is no alternative?

A year ago we proposed a project that would cost five times less – not more than $5 billion, it would come to the same destination points to which South Stream would go. “That’s why we ask the same question, speaking eye-to-eye with our partners, and we are still waiting for an answer.

“If this is a way to exert pressure, not a commercial project, then of course serious questions arise about how we should build our relations today, let alone in the future.�

Yanukovych used the Davos platform to sign a deal with Azeri President Ilham Aliyev to import liquefied natural gas to a planned Ukrainian terminal aimed at reducing the country’s heavy dependence on Russian gas.

The memorandum did not specify volumes for the terminal to be opened in 2015. He also signed a memorandum on cooperation in shipping Azeri oil across Ukraine.

Yanukovych said Ukraine would ship the first million tons of Caspian Sea oil to Europe via the pipeline this year, thus ending its use to export Russian crude to the Mediterranean. “The Odessa-Brody pipeline has been used in various directions. Very soon we will start working according to the original idea, delivering oil from Odessa to European countries,� he said.

Interfax news agency quoted Ukrainian officials as saying the deal covered deliveries of up to 4 million tons a year. Aliyev, who spoke at the same panel, said he was under no pressure from Russia to shun the Nabucco pipeline, seen as a key European Union’s attempt to reduce reliance on Russian gas.

Send On the Move news to otm@kyivpost.com or contact Oksana Faryna at 234-6500. It should include a photograph of the individual who has recently been appointed to a new position, a description of their duties and responsibilities, prior experience as well as education. Note: The Kyiv Post does not charge for publishing these notices or any news material.

NIKOLAY LYSENKO was

ANDREY DETYUK was

appointed senior partner at the Ukrainian office of BDO Consulting, an international audit and consulting firm.

In his new position, Lysenko will head BDO’s consulting practice in Ukraine. Prior to this, Lysenko worked as general director of United Agricultural Company. He has also worked as chief financial officer for Ramburs (United Grain Group) and managing partner for System Business Consulting.

Lysenko graduated from Poltava State Technical University with a degree in enterprise economics and management. He then studied accounting and audit at Kyiv National University of Economics.

CRAIG RICHARDSON

appointed general director at Gorlovskiy Mashinostroitel, part of Gornie Mashyni Group, a Donetsk manufacturer of mining equipment.

Detyuk had been acting director of the enterprise for six months.

Prior to this, Detyuk headed Vinnitsa bearings plant and Novogrodovka Mashzavod.

Detyuk graduated from Donetsk National Technical University, where he studied economics and engineering management.

was appointed head of the tax department in Ukraine for KPMG, one of the world’s so-called “Big Four� auditing and accounting groups.

Richardson’s experience covers indirect tax, corporate tax, tax compliance and financial outsourcing. He has 24 years of practice in South Africa, Hong-Kong and Russia.

Richardson graduated from the University of Johannesburg in South Africa and is a qualified chartered accountant. He has several postgraduate qualifications in the field of taxation, including a higher diploma in tax law, an international tax diploma, as well as a mining tax certificate from the University of South Africa.

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Business 7

February 4, 2011 Advertisement

Egg magnate Bakhmatyuk acquires two leading farm companies: Rise, Dakor Kyiv Post Staff – Oleh Bakhmatyuk, the owner of Ukraine’s top egg producer Avangard, has acquired two of Ukraine’s top agriculture groups – Rise and Dakor.

Analysts said the acquisitions make Bakhmatyuk’s Ukrlandfarming group the largest agricultural landholder in Ukraine and a major player on the sugar market.

Details of the deal have not been made public, but analysts said the companies were struggling with large debts and that Bakhmatyuk could share the stakes in the companies with other major business players.

Bakhmatyuk was the 16th richest Ukrainian with $700 million according to the latest Kyiv Post rich list, published at the end of last year.

Agriculture experts said the deal was part of a trend of smaller companies being acquired by larger players.

Dakor and Rise are, respectively, the sixth- and seventh-largest sugar producers in the country.

A little known figure until a few years ago, Oleh Bakhmatyuk (above) is swiftly establishing himself as one of Ukraine’s richest businessmen and largest players in the nation’s promising agribusiness sector.

TNK-BP could shut oil refinery Kyiv Post Staff – Russian-British oil companyTNK-BP, one of Ukraine’s largest foreign investors, could close its oil refinery in Lysychansk if the government doesn’t step in to help domestic refiners.

In a letter to the presidential administration quoted by Reuters news agency, German Khan, executive director of TNK-BP, half owned by oil major British Petroleum, wrote that an increase in imports had made its Lisichansk refinery loss-making.

Domestic refiners have campaigned for tariffs or quotas to be introduced on imported oil products, the production of which is subsidized in Russia, Belarus and Kazakhstan.

If the government takes the necessary measures to help domestic producers, the management of TNKBP will consider restarting operations, the letter states.

The Energy Ministry earlier in January announced it is considering introducing import duties of 130 euros per ton on petrol and 80 euros per ton on diesel.

Agriculture minister calls for end to grain export curbs in 2011-12 Reuters – The Agriculture Ministry will urge the government to allow unlimited exports of grain in the forthcoming 2011-2012 marketing season, Minister Mykola Prysyazhnyuk told Reuters on Thursday.

“We will insist on there being no export restrictions next season,” he said.

Ukraine, the world’s top barley exporter and a major wheat supplier, introduced export quotas after a drought last summer to prevent a rise in domestic bread prices after neighboring Russia banned grain exports for the whole 2010/11 season.

In October, the government introduced a 2.7 million metric tons grain export quota while in December it extended the quotas until March 31 and increased the total volume to 4.2 million tons.

Ukraine, which consumes 26 million tons of grain per season, har-

vested 39.2 million in 2010 and could sell abroad at least 13 million this season, according to government estimates. A farm ministry official told Reuters that Ukraine had exported 6.9 million tons of grain as of January 25, leaving room for exports of additional 6 million tons by the end of the season.

Prysyazhnyuk said his ministry would propose lifting export curbs for the last quarter of the current season and to boost the volume of quotas for January-March.

“We are considering lifting quotas for maize exports or about increasing them to the maximum. It means exports of additional 2.0 million tons of maize and 1.0 million of wheat,” Prysyazhnyuk said. “From April, I hope, we could get rid of quotas,” he said.

But traders said they needed proper rules on the Ukrainian grain market and guarantees for their current and

future investments.

Ukraine’s largest domestic grain exporter Nibulon said it had failed to win export quotas and had to suspend its investment projects. “Our company is forced to suspend the construction of facilities, suspend the construction of our fleet,” Oleksiy Vadatursky, the head of Nibulon, told an international round table in Kiev.

“We have started an investment project but we have no confidence that we will be able to complete it,” he said. Ukrainian grain traders’ association UZA said that the procedure of distribution of export quotas was not fair and transparent and 10 top grain exporters had been left without quotas.

“There will be no more investments in the Ukrainian agriculture sector if these 10 traders are left without quotas again,” said UZA head Volodymyr Klymenko.

Nation looks to borrow heavily, perhaps as much as $4.5 billion Reuters – Ukraine’s government and corporates will likely look to tap foreign bond investors for billions of dollars this year, capitalizing on the country’s successful IMF loan program and growing demand for emerging market debt.

The government, which needs to repay $3 billion in foreign debt this year, could borrow between $2 billion and $4.5 billion, analysts say. Private sector borrowers, whose credit standing has not improved at the same rate as the state, could account for up to $4.5 billion.

“Interest in emerging market debt is huge and Ukraine, of course, can count on good demand for both sovereign and corporate paper,” said Vitaly Vavrishchyuk, an analyst at brokerage BG Capital.

Ukraine’s benchmark 2020 Eurobond has traded at a yield of about 7.0 percent in recent weeks and sovereign bond spreads, according the JPMorgan EMBI Plus index, have been

hovering at around 400 basis points over Treasuries, compared to around 600 bps last July prior to the standby loan agreement with the IMF. “Economic growth, a long period of exchange rate stability and significant progress in reducing the budget deficit are stimulating foreign investors’ interest,” Vavrishchyuk said.

The government has already announced it will increase the volume of a $500 million bond due in December 2011 by $100 million.

Analysts expect more issuance this quarter as it needs to redeem a $600 million bond on March 4.

“We can expect the first sovereign issues in the first quarter of 2011 that should set the benchmark for future corporate placements,” said Oleksandr Lozovoi, an analyst at Phoenix Capital.

State-run Ukreximbank is meeting investors this week to discuss the idea of issuing a hryvnia-linked bond and Ukraine’s top steel producer Metinvest

has launched a road show for a $500 million bond. Other potential issuers include other banks, especially those controlled by large Western institutions, agricultural producers and Metinvest’s competitor Ferrexpo.

“UkrSibBank may try to refinance two Eurobond issues due in 2011 and some other large banks may seek (fresh) long-term funding,” said Maria Repko of Troika Dialog. UkrSibBank, a subsidiary of BNP Paribas, is due to repay $750 million in Eurobonds this year. The government of Ukrainian capital Kyiv is also expected to tap the market with an issue worth $200-300 million.

Citi analyst Luis Costa said the market no longer viewed Ukrainian sovereign debt issues as out of the ordinary.

“The big deal now is the private sector,” he said. “If the market continues with spread compression ... there’s a natural migration of (capital) flows into lower ratings.”

#64*/&44"%7*4&3

Liberalization of the land market in Ukraine KARL HEPP DE One of the first questions of a foreign investor SEVELINGES coming to Ukraine is acquisition of ownership Partner title or leasehold over the land plot for various purposes. Investors are interested in both using land for industrial and agricultural purposes.

Unfortunately, Ukrainian legislation still contains some overprotective norms that in fact considerably influence the intentions of investors for implementation of projects. Nevertheless, we should underline that legislation is changing rapidly in investors favour and the current forecast for 2012 is very optimistic.

Karl Hepp de Sevelinges, a partner in the international law firm Gide Loyrette Nouel, head of the Kyiv office, will now answer more detailed questions on the development of the legal framework of the real estate sector in Ukraine.

- How to overcome limitations set by the Ukrainian legislation for foreign investors?

First of all, every transaction requires careful structuring and analysis of available options. All newcomers know that some limitations with regard to acquisition of the land may be bypassed through a long term lease or the creation of a third level subsidiary/ acquisition of the Ukrainian legal entity owning the land plot. At the same time very often other small, however, very important issues such as subsequent registration of the lease agreement or title of ownership over the land plot with the State Cadastre, formal approach of state and municipal officials appear to be real obstacles in the way of investors. Hence, our advice is a constant follow-up of all transactions related to a land plot starting from negotiating an agreement and until registration of ownership title/leasehold in the respective state register.

The separate issue is receiving of the land plot for public procurement and public-private partnership projects. We should underline considerable improvements that were introduced last year under which state or municipal authorities are obliged to provide the land plot required for the respective activity without any land auction. However, certain practical issues still arise with regard to formalisation of the leasehold and ownership title due to the fact that the legislation does not provide for simplified procedure for such formalisation. Therefore, the land issues should be among the first that are negotiated by the partners.

-What are the recent developments in the land market that may attract investors?

Among recent developments that considerably facilitate transactions with the land plot we may mention introducing a simplified procedure for acquisition of the privately owned land plots. We would like to remind you that currently the buyer does not need to apply for the new State Ownership Deed and just needs to receive a special note from a notary and the land cadastre department. Moreover, the deadline for the registration to be done by responsible authority is short – 14 days. Earlier, it could take several months. These provisions significantly decrease the time required for commencement of construction and hence, commencement of business in Ukraine.

Another important novelty is considerable modernisation of the Land Cadastre systems. As you probably know starting from 2011 the Land Cadastre will be in both electronic and paper version.

This step will greatly facilitate the procedure of receiving information about the land plot that is required, for instance, for its selling.

However, the positive results of such changes will be available only in spring. Currently, the procedure of transferring files causes some practical problems and delays in the registration of title of ownership.

In general, we would like to underline positive changes in the Ukrainian legislation that are aimed at attracting foreign investors.

The Ukrainian government prepared several draft laws that allow foreign investors to acquire land plots outside inhabited areas, facilitating the procedure for allocating land for energy purposes, etc. Ukraine still has a room for improvement; however, the current tendencies inspire to wait for considerable changes.

GIDE LOYRETTE NOUEL KYIV 56, Bohdana Khmelnytskoho, 01030 Kyiv - Ukraine

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8 Business Focus

www.kyivpost.com

February 4, 2011

Wanted: Business-friendly climate, more investment

BY K AT E RY N A PA N OVA PANOVA@KYIVPOST.COM

President Viktor Yanukovych began his term in office promising to make Ukraine one of the world’s most attractive destinations for investment. Results so far are, at best, mixed.

Experts praise the government for bring stability to policymaking after years of squabbling under former President Viktor Yushchenko and his Prime Minister Yulia Tymoshenko. They also gave the thumbs up to attempts to begin economic reforms, such as the new tax code and cutting bureaucracy when opening a business.

But critics point out that there has been no advance in the rule of law or the fight against corruption, despite assurances from the leadership that these are priorities. Foreign direct investment is inching back up, but is still down on pre-crisis levels – and miniscule compared to the investment pouring into to other developing economies.

To start with the good news: The stability of the current authorities has brought some confidence back to investors.

The European Business Association’s investment attractiveness index has crawled upward since the presidential election last year, and has now reached the level of 2008, before the crisis hit.

Anna Derevyanko, executive director of the EBA, puts this down to the sta-

Net Foreign Direct Investment Inflows to Ukraine ($ billion)

8.8%

9.2

7.5

FDI, $ billion FDI, % of Gross Domestic Product

9.9

6.4% 5.5%

4.9% 5.3

4.0%

5.7 4.1%

4.7

2.6% 1.7 2004

2005

2006

2007

2008

2009

2010

Sources: Dragon Capital

ble platform provided by the authorities. “This is a vote of confidence in the new government,” she said.

“Now you see that president and government are pulling the strings in the same direction. This gives certain confidence,” added Julian Ries, head of Beiten Burkhardt law firm in Kyiv.

The International Monetary Fund renewed work with Ukraine last year, which provides a strong stimulus for reforms, according to Jorge Zukoski, President of the American Chamber of

Commerce in Ukraine.

While the process and result was far from perfect, adoption of the new tax code last year and introduced at the start of this year, fueled much debate and dialogue about how such legislation should look.

The authorities have also worked on deregulating business, eliminating 18 licenses right away According to the World Bank’s Doing Business report for 2011, dealing with construction permits in Ukraine will take an average

of 374 days comparing to 535 days last year. Companies on average spend 657 hours per year dealing with taxes, 79 hours less than last year.

But that’s only part of the story.

The government has been accused of moving at a snail’s pace on reforms and favoring its own big business backers.

The country’s largest foreign investor, ArcelorMittal last year found itself fighting off what they called an attempt by the state to re-nationalize the largest steel mill in the country, which it

Æ Foreign direct investment is inching up, but no progress seen in curbing corruption bought through a privatization tender in 2005 for a whopping $4.8 billion.

Problems with value added tax refunding persist, and critics link them to a lack of transparency and outright corruption.

British Ambassador Leigh Turner spoke out on Feb. 1, saying: “Some companies receive it quickly, some receive it slowly, and some companies do not receive them at all. Unfortunately, there is an opinion, that how quickly you receive the VAT refund may be influenced either by political connections or corruption. Clearly, this is a catastrophic situation for business climate.” Æ11

Raiser: ‘A lot more has to be done’ to attract foreign investment in Ukraine

BY K AT E RY N A PA N OVA PANOVA@KYIVPOST.COM

As economies continue to recover from the devastating 2009 global recession, the fight among emerging markets for investment is intense. The government of Ukraine, whose economy was one of the hardest hit by recession, has pledged to improve its investment climate making the nation more attractive for foreign capital, improving transparency, anticorruption measures and the rule of law.

The Kyiv Post turned to Martin Raiser, World Bank country director for Belarus, Moldova and Ukraine, to get his opinions on what has been done, how much progress has been made and what needs to be done.

Kyiv Post: Have you seen any improvements in Ukraine’s investment climate last year?

Martin Raiser: We’ve seen an improvement in the macro-economic situation in the world, and evidently this meant that investors are looking again at Ukraine (as they are at other

emerging markets) with a little bit more optimism.

If we look at the actual measures to attract investment – policies, regulations, and so on – I would say that if Ukraine wanted to tell the world that it is ready for foreign investment, a lot more has to be done.

KP: Looking at the results of last year, the net amount of foreign direct investment (FDI) in Ukraine was only $ 5.7 billion and has not reached the precrisis level. Every year since the crisis FDI is as smaller percent of the country’s GDP. Is it a bad sign – or rather a typical situation for Eastern Europe?

MR: A decline in the percent of net FDI to GDP from a very high level to 5-6 percent is what is happening in the region. But I do think that Ukraine – out of all the countries in the region – has the potential to significantly increase, indeed double, FDI in nominal U.S. dollar terms and significantly increase its share in GDP.

KP: What are the major problems investors are facing in Ukraine?

MR: The number one problem is the uncertainty of the business environment, the second one is corruption.

If you are going to put a lot of money into the country, you want to make sure that your contracts are safe and you can enforce them in the courts and that the courts will look at them objectively.

KP: But was has been done by the government so far – any results?

MR: We have seen some improvements in the area of technical regulations. There has been a reduction in the number of activities subject to licensing and in the amount of minimum capital that is required to open a business. There has been legislation that introduces silent consent as the principle for issuing permits. Ukraine has also increased the number of taxpayers who filed their taxes voluntarily through electronic filing. These are all

tax refunds. And it is important for the government to signal real commitment to fight corruption.

KP: What kind of signal for investors is the new tax code?

MR: Investors were happy with the consultation process – particularly in the end, when they could solve a number of issues. But they still have underlined fiscal risks and are looking at how this is going to work in practice.

We think it is a missed opportunity.

The tax code still has too many exemptions to create an unlevel playing field and lower revenues, and the complexity of the rules on tax administration remains too high.

Martin Raiser

measures that improve the business climate in particular for small and medium enterprises.

But these steps are not enough.

There are issues investors were unhappy about – for example grain export quotas and the issue with value-added

KP: You are country director not only for Ukraine, but Belarus and Moldova as well. Could you compare: are these countries more effective than Ukraine in attracting investment?

MR: It is difficult to compare.

Moldova is a small country, but they have been very active last year Æ9

www.kyivpost.com

Business Sense

February 4, 2011

Editor’s Note: Business Sense is a feature in which experts explain Ukraine’s place in the world economy and provide insight into doing business in the country. To contribute, contact chief editor Brian Bonner at bonner@kyivpost.com

WITH OLEKSANDR LOZOVYI

Economy in 2011: Hopeful prospects to brighten outlook The Ukrainian economy still faces many challenges to recover from the deep crisis of 2008-09: The business climate is still arduous, bank lending is dormant and the government needs to work hard to combat corruption.

One positive story for the economy this year looks set to be an increase in domestic demand. The crucial industrial sectors will continue to gather pace in 2011, but this will be accompanied by enhanced activity in consumeroriented sectors such as light industry, retail trade and food processing.

Signs that consumer-related sectors are picking up were already recorded at the end of 2010, with retail trade experiencing double-digit growth in December. Similar dynamics were recorded in the construction industry.

We expect this trend will continue in the coming year.

As the crisis has subsided, people’s real disposable income – the cash in their pockets – has stabilized and started to creep up. This happened primarily as nominal wages increased while consumer inflation was contained at a single-digit level.

The stability of the hryvnia over the past year at around Hr 8 to the U.S. dollar also contributed to growing retail purchases as significant portion of households’ basket is imported.

A stable hryvnia, therefore, passes through to stable import prices.

People will increase purchases across the board, from clothes to leisure equipment, home appliances to cars. With more money available and a greater willingness to spend it as negative impressions of the economic situation fade, there is good potential for a robust increase in consumer spending in 2011 after the dramatic fall of 2009. This domestic demand should help strengthen and expand Ukraine’s economic growth, which previously had relied on commodity exports such as steel.

The recovery in consumer spending in 2011 will be to a much lesser extent driven by loans compared to what was observed prior to the crisis. However, the influence of credit on the economy

Customers stand outside a Bank Kyiv office on March 3, 2009. The nation’s banks still face strains from the global recession. Dragon Capital investment bank estimates non-performing loans at 12 percent, while two troubled banks – Nadra and Rodovid – still owe depositors nearly $2 billion. (AP)

will strengthen in the second half of the year, as we expect commercial banks to boost activity in the retail loan segment.

Following more than two years of loss-making, Ukraine’s banking industry in 2011 should be marked by a gradual return to profitability. Banks are expected to gradually shrug off bad loans amassed in the last two years and start offering more credits to companies and individuals. The process, however, will take an extended period of time.

Looking further ahead, Ukraine’s economic recovery should accelerate and reach 6 percent growth in 2012.

By 2013, the economy is expected to recoup losses resulting from the slump of crisis-hit 2009. Growth across the Central and Eastern European region will boost Ukraine’s development.

Domestic demand will also play a role, as individual wealth converges with the

regional average in the longer run.

The speed and breadth of the recovery depends largely on the government’s reform program, particularly in fighting corruption. The ability of the government to combat corruption and preserve its commitments to democracy will be decisive in its attempts to attract foreign investment, which can help to cement and expand the economic recovery.

The administrative reform launched late last year is the government’s main policy towards combating corruption in Ukraine. However, success or failure of the policy will be evident only in a few years. The government has more levers to reduce the level of corruption in Ukraine and should be more active in designing policies.

Oleksandr Lozovyi is an analyst at Kyiv-based investment bank Phoenix Capital. He can be reached at Oleksandr. lozovyi@phnx.com.ua

In case you missed them, read the last five Business Sense columns by experts online at kyivpost.com Jan. 28 with Oleksiy Chernyavskiy, director of Energobusiness, a Kyiv-based consultancy: “Subsidized oil imports harm Ukraine”

Jan. 21 with Slava Vlasov, partner with the tax and legal department at PricewaterhouseCoopers in Ukraine: “Implications of new tax code still unknown”

Jan. 14 with Jorge Zukoski, president of the American Chamber of Commerce in Ukraine: “Grain export quota allocation lacks transparency, fairness”

Dec. 3 with Sergey Kuun, oil and fuel market expert at A-95 Consulting Group: “Import schemes in energy market cost state dearly”

Nov. 12 with Michael Lee, independent agricultural specialist: “Nation should not be in rush to lift moratorium on sale of farmland”

Oct. 22 with Dario Marchetti, chief executive officer of Danone Ukraine: “Helping milk-producing ‘babushkas’ organize”

Business Focus 9

Raiser: Ukraine ‘way at the bottom’ of most international rankings Æ8 and have done a lot in areas of trade and business regulation. Belarus has also done well in improving its Doing Business ratings although it faces some serious challenges. The concern for Ukraine, however, is that investors would rather go to emerging markets like Romania, Poland, Indonesia, Mexico or Brazil than to Ukraine. These are Ukraine's real peers.

Ukraine just has to look at international rankings of international competitiveness, transparency and corruption. And where is Ukraine? It is way at the bottom.

KP: Well, Ukrainian officials say they have lots of plans and even a special program on how to attract investors. Plans include creation of a special bank and fund for attracting investment in innovation projects. Will these help fight corruption – or will such moves create new opportunities for corruption?

MR: In a lot of areas things that were written in the government reform program for 2010–2014 were not done – or were done with delays.

That is something investors worry about. They want to see that when the government commits, there is actually implementation. There is a perfect expression about it in English: Are you going to walk the walk or talk the talk? I hope that we will see the answer in 2011.

KP: Are you saying that there

Æ Investor rights need protecting is no need for a special bank or fund to boost investment?

MR: No. Most serious investors have access to international funding.

And Ukraine has a fairly developed banking and financial system. They will find financing. The question is how secure are these projects and how costly is it to invest in Ukraine.

The key challenges for the government are in protecting legal rights of investors, harmonizing regulations, and so on. Look where Ukraine is in the Doing Business ranking. Ukraine is number 145. Ukraine should be aiming to get into the top 100 in 2011, and then focus on getting into the top 60. Other countries from the region showed that it is perfectly possible.

Georgia is a good example.

KP: Which sectors of Ukraine’s economy could attract more investors?

MR: Other countries have to be choosy, but Ukraine has many combinations of attractive resources and has potential in a lot of areas. But obviously, the sector everybody is looking at now is agriculture. Ukraine could be one of the biggest food exporters and attract lots of investment if the policy is right.

10 Business Focus

www.kyivpost.com

February 4, 2011

Top presidential aide admits to shortcomings, pledges better results this year

BY V L A D L AV R OV LAVROV@KYIVPOST.COM

Almost a year after President Viktor Yanukovych came to power with promises of swift reforms to create an investor-friendly business climate, Ukraine’s economic miracle still seems very far away.

The foreign direct investment per capita numbers are still low even compared to its closest neighbor Belarus. Ukraine’s ranking in the World Bank’s Doing Business report for 2011, while having moved up two places to 145th place, still remains below not only the rest of Eastern Europe, but also such countries as Tajikistan, Sierra Leone and the West Bank and Gaza.

Meanwhile, during the recent World Economic Forum in Davos, Yanukovych tried to lure potential investors to Ukraine with promises of more radical reforms. Ukraine, currently relying on International Monetary Fund lending to cover its budget deficit, desperately needs more FDI to help revitalize its ailing economy.

Meanwhile, according to the Investment Sentiment Survey published in January 2011 by the Bleyzer Foundation, foreign companies already working in Ukraine hardly consider it a safe haven.

The survey, covering over 100 large Ukrainian and foreign companies working in Ukraine, shows that while the majority of them have reported macroeconomic stabilization and improvements in corporate governance and the financial sector, Ukraine’s corruption, political risks and bad image, business regulations and lack of judicial transparency are crippling factors to the development of their businesses in Ukraine.

To discuss the upcoming reforms and the challenges faced by businesses working in Ukraine, the Kyiv Post met with Iryna Akimova, deputy head of the presidential administration in charge of developing Yanukovych’s economic policy.

Æ Akimova: Ukraine will soon be in top 100 investor destinations Kyiv Post: What reforms should businesses working in Ukraine as well as potential investors expect from the government in the near future?

Iryna Akimova: We should start with the second half of 2010, when a number of very important legislative acts were implemented. For example, the new tax code that was passed, not without problems, contains a number of points very beneficial not only for foreign investors, but also for Ukrainian businesses.

We started to decrease profit tax, the overall number of taxes, we improved the value-added tax (VAT) refund system and introduced fines that the state has to pay in case of delays. There is also an automatic VAT refund system for exporters that meet certain criteria.

All of these make the rules of play more transparent and attractive for both potential and current investors. Another important issue is decreasing the number of permits, licenses and controlling bodies.

Implementation of these laws is our biggest task this year. In addition, by early 2012 we want to complete land reform that will allow the moratorium on agricultural land sales to be removed.

In addition, there are a number of important laws on voluntary exit from

business and bankruptcy. Also, we want to impose stricter regulations on the paid services provided by the governmental bodies, and further decrease the number of permits necessary to do business, which also will apply to construction industry.

KP: Will foreigners be able to buy agricultural land after the planned reform?

IA: Foreigners can already purchase non-agricultural land. The issue of letting or not letting foreigners buy agricultural land is a sensitive one.

Some countries allow it, while others don’t. This matter needs to be further discussed publicly until a consensus is reached.

This decision cannot be forced upon society.

KP: What progress does the government expect by the end of 2011. Particularly, what ranking in the Doing Business Report 2012 are you counting on?

IA: Well, of course top 10, preferably next to Singapore (laughs).

But realistically, I agree with the World Bank forecasts that we will achieve about 4 percent of GDP growth, with about 12 percent inflation. Also, we will stop increasing the sovereign debt and start decreasing it.

As for the Doing Business report, we went up from 147 to 145 rank, which of course is not something to be satisfied with. But keep in mind that this report is done mainly based on the results from the first six months, while the main reforms in Ukraine took place in the second half of 2011.

I’m sure this will move Ukraine up the list next year.

Our task is to enter the top 100 in the next few years. Even moving up from 147 to 100 in rank is no small achievement. But it will also depend on what other countries are doing.

KP: Most of the surveys of

Major obstacles to the expansion of business and investment in Ukraine 82% 61%

82%

76%

Beginning of 2010 End of 2010

81% 73%

61%

Business regulations

Political risks and image

Legal

Public governance

73%

71% 64% 64%

59%

52%

48%

Corruption

67%

63% 50%

Cross border trade and capital

Financial sector

Corporate governance

46%

Macro

Note: The survey shows a combined percentage of respondents indicating that the factor is a binding and serious constraint.

Source: Bleyzer Foundation.

Iryna Akimova, deputy head of Ukraine’s presidential administration, is Viktor Yanukovych’s top adviser on economic policy.

investors’ sentiment compiled recently show fiscal and macroeconomic stabilization on the positive side, while corruption and lack of transparency in the legal system were named among the biggest obstacles hurting their businesses here. Just recently, such a powerful brand as Rafaello could not defend its brand in Ukraine, the only country in the region, as the court virtually allowed its copying, which was a very negative sign to the business community. How are you going to answer the investors’ worries?

IA: I think we simply need to move forward. Judicial reform already started last year. And battling corruption wasn’t quick and easy anywhere. One thing we are doing is anti-corruption legislation with clear definition of what is corruption.

On the other hand, we will keep deregulating. If no permit is needed, there is no stimulus for corruption.

Another corrupt spot is customs, and we are going to speed up and ease up the customs procedures, as the necessary legislation has already been through first reading in parliament.

All of these measures are likely to improve Ukraine’s ratings both in Doing Business and the Transparency International rankings.

KP: How does all this correspond with the grain export restrictions and quotas which hit the international companies working in Ukraine very hard?

IA: The quota decisions were partially justified. By the way, this is similar to what the United States and France did as well.

What worried the president is how transparently these quotas have been issued. And I think the problems with that which occurred in 2010 will not happen again. I also hope that this is the last year which such quotas are introduced, even though the WTO rules allow for this.

KP: It seemed to me that the only way such a major international company as ArcelorMittal could solve their problems in Ukraine [it said the state was attempting to renationalize its steel mill] was by having the French president Nicolas Sarkozy intervene during Yanukovych’s visit to France. Do you think this is a normal situation?

IA: When a large investor is having big problems, of course, this is a very stressful situation, which is better to avoid, if possible, or solve successfully.

There were a number of difficult issues for ArcelorMittal last year. But we ended last year by solving most of the painful issues for this company and for other foreign investors. The government has managed to solve this issue: Hr 24 billion [in VAT debt] was given back in cash, while the remainder was given as the bonds, which was accepted.

Another problem that we have recently solved was involving multinational oil and gas giant Shell [which had some court cases and tax issues pending]. We met with the company representatives in Davos to solve all the problems and reached an agreement to start exploration of shale gas deposits in Ukraine.

KP: Was the issue of Livella, a little-known enterprise that got the right to import oil products to Ukraine tax and duty free, raised during the talks with Shell [also operating a network of gas stations]?

IA: No, we discussed future cooperation, particularly the development of shale gas.

As for the issue you mentioned, in the life of every country there can be a number of very stressful situations.

That’s life. This can be very painful to realize.

But the only reaction to this is that cases like that need to be solved.

Nobody wants to say that things will become perfect immediately. Of course, there are some private and mercenary interests that from time to time get reflected in some of the decisions made.

But people in the government are there to make the decisions to have the country moving forward.

KP: What do you think will happen with the privatization of Ukrtelecom?

IA: It needs to move forward. You know, there has been a tender with only one buyer, so after the company has been valued further, the privatization has to move on.

KP: Perhaps there was a problem with tender conditions, so that many interested companies could not take part?

IA: If somebody had any complaints, this potential buyer could have appealed through court. Since there were no complaints, the “one buyer” procedure came into effect, so the privatization will move on. Practice shows that the state is almost never a better owner than a private company.

Kyiv Post staff writer Vlad Lavrov can be reached at lavrov@kyivpost.com

www.kyivpost.com

Much more expected from Yanukovych’s team Æ8

Foreign investors were dismayed at the government’s decision to limit grain exports after a poor weather reduced a still big harvest, and then distribute quotas in a nontransparent way, ignoring the applications of leading grain-trading companies, such as Cargill and Louis Dreyfus Commodities.

Investors consistently mention corruption and the lack of rule of law as the two biggest problems in Ukraine, and perception of these even got worse, according to the EBA index.

Derevyanko from the EBA said the investment attractiveness index was creeping up, but could easily reverse if the much-discussed overhauls didn’t take place or took too long.

“In order to keep investors in the country, as well as attracting new ones, [the government] needs to tackle corruption and bring order to the legal system, so that people trust it,” said Derevyanko.

Ukraine did move up the World Bank’s Doing Business ranking last year, but only by two places, remaining in a dismal 145th out of 183 countries, between Syria and Gambia. This compares with other former Soviet bloc countries as Azerbaijan in 54th, Lithuania in 23rd and Georgia in an impressive 12th.

Many critics say that despite lots of talk, the government is yet to make real headway toward attracting more muchneeded investment.

“The lack of meaningful reforms to improve conditions for investors means that investors continue to face the same issues they had in the past, such as over-regulation, an inadequate legal system with unpredictable court rulings and insecurity of the ownership rights,” said Andrey Tsymbal, a partner at consulting firm KPMG. Ukraine did receive 21 percent more net foreign direct investment last year than in 2010, but 40 percent of that total was money pumped into foreignowned banks by their head offices. The fresh injections were needed to keep the banks solvent amidst double-digit non-performing loan levels and other financial problems.

As the world recovers slowly from the 2009 global recession, the amount of foreign investment available is limited, meaning countries – including

Business Focus 11

February 4, 2011

What advice will Yanukovych get from his newly formed investors’ council of 28 business representatives?

BY K ATE RY N A PA N OVA PANOVA@KYIVPOST.COM

Eastern Europe & Central Asia Ease of Doing Business *Singapore

1

Lithuania

12 17 23

Latvia

24

Georgia Estonia

Cyprus Macedonia, FYR Kyrgyz Republic Armenia Bulgaria Azerbaijan Romania Kazakhstan

President Viktor Yanukovych has appointed a new investors’ council of 28 businessmen and top managers, including the country’s richest man, billionaire Rinat Akhmetov, Lukoil president Vagit Alikperov, Ernst & Young managing partner Karl Johansson, billionaire Lakshmi Mittal and Microsoft chief executive officer Steve Ballmer.

The Kyiv Post asked a few council members, or their representatives in Ukraine, for their top tip to improve the investment climate in Ukraine.

37 38 44 48 51 54 56 59

Turkey Montenegro Belarus Albania Croatia Serbia Moldova Bosnia and Herzegovina Kosovo Russian Federation Tajikistan Ukraine Uzbekistan

Dmitry Shymkiv, general manager at Microsoft Ukraine: “All international investors are looking towards the government to introduce much-needed reforms while preserving overall stability and achieving economic growth. I expect that Ukraine will fix its perception as a country with a poor protection of intellectual property and will encourage international and local investors to allocate more resources in research and development in order to capitalize on our country’s enormous intellectual and academic potential.”

65 66 68 82 84 89 90 110 119 123 139 145

Tomas Fiala, chief executive officer of Dragon Capital “Reduction of corruption and introduction of the rule of law. Without improvement on this front most reforms will remain on paper. Their actual impact will be low.”

150

Note: Economies are ranked on their ease of doing business, from 1 - 183, with first place being the highest. The ease of doing business index averages the economy's percentile rankings on 9 topics, made up of a variety of indicators, giving equal weight to each topic. The rankings are from the Doing Business 2011: Making aDifference for Entreprenuers report, covering the period June 2009 to June 2010. * Singapore is shown as a benchmark.

Source: International Finance Corporation and World Bank.

Ukraine with its notoriously horrible investmetn climate – will have to work harder to attract it.

“Given choice, foreign direct investors will tend to converge on those economies that offer the best investment environment, the best (low) tax regime, lower levels of corruption, less red tape and bureaucracy. On nearly all these accounts, Ukraine scores poorly,” said Timothy Ash, head of emerging markets research at the Royal Bank of Scotland in London.

“Ukrainian policy makers will hence have to work that much harder to offer Ukraine as an attractive place to do business,” he added.

“Business understands that there are no quick results – but some results have to be there,” said Derevyanko from the EBA. “By the third quarter of this year we will definitely see whether the government is eager to implement reforms and fulfill their promises,” she added.

– Maria Shamota contributed reporting to this article.

Oleksandr Yaroslavsky, owner of DCH Group “It is simple. You have to work, work a lot. Not just talk about the investment climate.”

Jorge Zukoski, President of the American Chamber of Commerce in Ukraine “One overarching issue that impacts every single person in the country and all industry sectors is corruption and weak rule of law. The bottom line is that senior decision makers should define and implement a credible plan for addressing the ever-present issue of corruption and take concrete steps to strengthen the rule of law.”

Rinat Starkov, chief executive officer in Ukraine for ArcelorMittal, co-owned by Lakshmi Mittal “Full compliance with the current legislation and complete value-added tax refunds.”

12 Opinion

www.kyivpost.com

February 4, 2011

Soviet-era judicial system retards nation’s progress AD R I A N K A R AT N Y C K Y

Recent weeks have seen a proliferation of statements attesting to growing international concern about the erosion of democratic freedoms in Ukraine.

Declarations issued by the U.S. Department of State and comments

by European Union Enlargement Commissioner Stefan Fuele indicate the democratic world is increasingly alarmed at what it perceives are politically selective prosecutions in anti-corruption and abuse of power cases opened up against former Prime Minister Yulia Tymoshenko as well as an erosion of press freedoms. One of my former colleagues, Tom Melia, a key U.S State Department official on democracy issues, has asserted that relations with Ukraine could be “complicated” by democratic backsliding.

The recent downgrading by Freedom House of Ukraine from “Free” to “Partly Free” is further evidence. So, too, is the recent decision by Czech authorities to grant political asylum to Tymoshenko ally and former Economy Minister Bohdan Danylyshyn. The Czech Republic is widely regarded as a beacon of democracy in the postCommunist world and its views will be crucial in Ukraine’s future hopes of EU membership.

It is, therefore, quite clear that Ukraine’s current leadership has a serious problem in its relationships with the democracies of Europe and North America. At the same time, despite these growing concerns, it also clear that Ukraine is very far from becoming an authoritarian state.

Freedom to protest is widely respected. On Jan. 22, Ukraine’s major opposition parties openly and freely, assembled and protested in Kyiv and throughout Ukraine. There were no reported instances of harassment at the protest venues, although there were warnings from the Ministry of Interior in what was a clear attempt to dissuade citizens from exercising their constitutional rights.

Protests held in early December against the new tax code by small business led to a dialogue with President Viktor Yanukovych, his veto of the legislation, and the eventual removal from offending provisions in the newly

enacted code. And while some oppositionists point to investigations of some protesters, these are appear to be focused on alleged damage done to Kyiv’s central square and do not constitute wide-ranging reprisals against most protest leaders and participants.

In October, too, spontaneous student protests against the imposition of new education fees proceeded freely and openly.

Similarly, the major television networks are filled with leading opposition voices, and populated by journalists and analysts who sharply criticize the government. This is particularly the case on the marathon weekly political talk shows hosted by Savik Shuster, Evgeniy Kiselyov, and Andriy Kulikov, each of whom began 2011 with an impressive 13-16 percent share of viewers in their prime time slots.

Media critics rightly point the absence of hard-hitting reporting on the nightly news programs. This shortcoming, in large measure, is compensated by the enormous role played by the political talk shows.

Print media, while far less important, also reflects a wide range of viewpoints. Of the wide array of newsweeklies, none can said to be slavishly progovernment and several are openly oppositional. The business weeklies, while less hard-hitting, are filled with objective coverage.

Æ President shows willingness to correct mistakes A cursory look at the top 20 internet news sites shows that around half are strongly critical of those in power, another six or seven are balanced in their newsgathering and analysis, and only three or four tilt toward those in power.

Civic life, too, is vigorous. And public opinion polls show that while Yanukovych remains the country’s most popular leader, there is little evidence of the kind of political uniformity found in Russia. In short, pluralism is alive and well, and is nurtured in part by the high degree of diversity in the media and civic life.

Furthermore, on the plus side, a

People march behind a huge Ukrainian flag during a rally by several nationalist parties outside President Viktor Yanukovych’s office in Kyiv on Jan. 14. Protesters demanded an end to political repression against opposition figures tied to ex-Prime Minister Yulia Tymoshenko. (Joseph Sywenkyj)

new, progressive law on public access to government information has been passed, There is also ample reason for Europe and the U.S. to welcome Yanukovych’s economic stewardship of Ukraine. Corporate tax rates have been reduced. New hotel and light industry businesses are being given a five-year tax holiday. The value added tax rate is headed downward in 2014, and painful but necessary pension reform is on the way. There is also the welcome news of deep cuts in the bloated state bureaucracy, as well as some modest steps toward deregulations.

Yet instead of benefiting from acknowledgement for this generally positive state of affairs and for his positive economic steps, Yanukovych is instead being subjected to increased international criticism.

Why, then, is Yanukovych and Ukraine’s leadership facing such severe criticism? The short answer is: the country’s dysfunctional judicial system and a security and police system that retains many of the habits of the Soviet era (a state of affairs that regrettably was never seriously or systematically addressed by the former Orange government).

In such a context, doubts and concerns over the investigations and cases of former Tymoshenko government officials will remain despite the fact that similar corruption and abuse of power cases have been opened against members of Yanukovych’s political party and key political allies. This list includes the

former Regions’ Party speaker of the Crimean parliament, a former deputy environment minister from the current government, an official from the current presidential administration, and numerous high-ranking officials from the Kyiv city administration, whose leadership backed Yanukovych in last year’s presidential election.

Doubts also persist despite the fact that the Yanukovych administration and Prime Minister Mykola Azarov’s government hired Western investigators to document corruption and abuse of power under the former government.

Moreover, the very fact that the government is pursuing cases in the U.S. and the U.K. against offshore and foreign companies linked to allegation of fraud in the purchase of antiviral drugs, vans, and automobiles makes it clear that the government believes it and its investigators have uncovered credible instances of such violations.

Nevertheless, the reality is that while Western governments continue to exhort Ukraine to confront corruption, until the justice and prosecutorial systems are restructured in a fashion that advances their independence, Western skepticism of corruption charges against high-ranking opposition leaders will remain.

Nor is the credibility of the government’s prosecution bolstered by the unreasonably rough treatment of officials suspected of relatively minor infractions (former Interior Minister Yuriy Lutsenko) or by onerous limitations on the domestic and international

travel of opposition leaders, especially Tymoshenko.

In such a context, Ukraine’s current leadership should: a) undertake a wideranging reform of the criminal code; b) enlist eminent European and North American experts as advisers in a process aimed at depoliticizing Ukraine justice system; c) decriminalize the offense of bringing material damage to the government unless malicious intent can be proven by making it a civil offense; d) refrain from imprisoning those being investigated for nonviolent crimes, provided there is no proven evidence of attempts or plans to flee the country; e) allow leading opposition figures freedom of movement in the pursuit of their political activities.

Such steps would not remove all doubts about political motives behind the recent spate of criminal cases opened against members of the former government. They would, however, open to door for a more balanced view in the West of the motives cases under investigation and set in motion a process of mutual give and take between Ukraine and the democratic world.

In the end, Yanukovych’s practical approach to relations with Europe, his strategic aim of European integration, his serious pursuit of free trade with Europe, his support for bringing Ukrainian law and regulations into conformity with European standards and the recommendations of the Venice commission, his recent comments about the harshness of police and prosecutorial actions, and his admission in Davos that a "post-Soviet mentality” is responsible for “stifling democratic reforms” are all indications of his openness to criticism and his willingness to correct mistakes.

Still, it is clear that Ukraine and the Yanukovych presidency are at a crossroads. The message from the European Union is clear: there can be no compromises on the European values of democracy and the rule of law.

It would be a shame if the significant progress Yanukovych is making on the economic front were to be obscured and his aim of advancing Ukraine’s integration into Europe were to be undermined by a crude justice system.

It is important that Yanukovych and his government take positive steps to address this challenge.

Adrian Karatnycky is a senior fellow at the U.S.-based Atlantic Council. For more than a decade, he was executive director and president of the U.S.-based human rights group Freedom House.

Paul: Turkey, Ukraine will make EU stronger Æ5 carry out reforms – reforms that are actually not very different to those being carried out by countries already negotiating membership. After you have done this long, long list of things, the EU says, we might one day give you a membership perspective.

Ukraine is presently negotiating an association agreement with the EU that includes a deep and comprehensive free trade agreement. There were hopes that in the final stages of the negotiations the EU may – in light of the ongoing reform process in the country – be ready to add a membership perspective. However, EU sources tell me this is not going to happen.

And so, Ukraine should stop talking about it.

It’s a tricky situation because without the goal of membership it becomes difficult to carry out increasingly sensitive reforms. Only increased engagement – which the EU is seemingly not ready to do – will keep the process of modernization and democracy alive in Ukraine.

Of course, there is also the Russia element. Of all the former states of the Soviet Union, Ukraine is the most precious to Moscow. While the Kremlin accepts Ukraine having closer ties with the EU and claims it does not want to control the country, they almost certainly would not be happy with Kyiv as an EU member. This fact also clearly contributes to the EU position on Ukraine.

Both Ankara and Ukraine also desire

a free visa regime with the EU. Ukraine received an action plan to this end and is now carrying out farreaching reforms to meet EU requirements. However, even if it succeeds it will still require a political decision from the EU’s 27 members for paper to be turned into something real.

Turkey is working to finalize a readmission agreement with the EU – a precondition for a negotiating a visafree regime. However, as with Ukraine there are a number of member states that are far from comfortable with the idea of offering this to populous Turkey.

Both countries are also moving towards a reciprocal lifting of visa requirements themselves. Turkey may

do this quicker than Ukraine as Ukraine will probably not give final agreement until Turkey has finalized and implemented its readmission agreement with the EU. These days, both nations are moving to build up economic and political ties. Earlier this month, Turkish Prime Minister Recep Tayyip Erdogan visited Ukraine with a big delegation of Turkish businessmen eager to do business with their counterparts. It was a successful trip that ended with a joint declaration on the creation of a strategic high level council. They hope to build on this, quickly consolidating their relations both politically and economically.

Where this will eventually lead

remains to be seen. However, one thing is for sure, and that is that both Turkey and Ukraine could be key for the future of Europe and for global developments. If they succeed in joining the EU, the union will become a stronger and more effective global power. Rather than viewing their being different negatively, the EU should see it positively.

Being different is a strength. As the EU slogan says, strength in diversity.

Amanda Paul is a policy analyst at the European Policy Center, a Brusselsbased think tank. She can be reached at a.paul@epc.eu. This article first appeared in Today’s Zaman on Jan. 30 and is reprinted with the permission of the author.

www.kyivpost.com

News 13

February 4, 2011

Leaders pick fight with Czechs over Danylyshyn, further straining ties with Europe

BY Y U R I Y ON YS H K I V ONYSHKIV@KYIVPOST.COM

Stung by Western criticism of his commitment to democratic principles, President Viktor Yanukovych and his allies went on the attack this week, slamming the Czech Republic for its decision to grant political asylum to a former government minister accused of abuse of office.

Kyiv’s sharp reaction comes as relations with the European Union look increasingly strained, after Brussels censured the Ukrainian authorities for their apparent desire to jail opposition politicians, and raised concerns about the erosion of democratic freedoms.

Prague earlier this month rejected Ukraine’s request to extradite Bohdan Danylyshyn, who served as economy minister in the previous government of Yulia Tymoshenko, on charges of causing Hr 14 million losses to the state during a tender. Instead, he was freed and offered asylum in a move widely seen as an indictment of what the Ukrainian authorities call a crackdown on corruption.

This crackdown has seen the detention or investigation of at least 12 officials from Tymoshenko’s government, including the opposition leader herself.

Tymoshenko claims the moves are political persecution aimed at wiping out opposition. The United States and the European Union have in recent weeks raised concerns that investigations appear politically motivated. The authorities deny this.

U.S. Deputy Assistant Secretary of State for Democracy, Human Rights and Labor Thomas Melia told reporters in Brussels Jan. 19 that the Czech government’s decision should be seen as a signal showing how the EU and the international community views these processes, Interfax-Ukraine reported.

After Danylyshyn was granted asy-

Exclusivity Price!

Foreign Minister Kostyantyn Gryshchenko

Former Economic Minister Bohdan Danylyshyn, who won political asylyum in the Czech Republic, dances on Independence Square on Oct. 24, 2009. (UNIAN)

lum in Prague, the Ukrainian Ministry of Foreign Affairs sent a note to the Czech Republic asking to provide a copy of the official decision. Prague refused, citing the International Convention on the Status of Refugees, signed by both countries, which prevents countries from making asylum decisions public because of the right to privacy.

The Ukrainian authorities have now hit back, barely concealing their fury at the decision. Foreign Minister Kostyantyn Gryshchenko said Danylyshyn had chosen the Czech Republic as it was an easy place to get asylum. Yanukovych said the case against Danylyshyn couldn’t be political because he wasn’t a politician.

“The Czechs did everything perfectly according to the correct procedures,” said one senior European diplomat in Kyiv, adding that Europe was unimpressed by the Ukrainian authorities’ posturing.

But on Jan. 29 the Wall Street

Æ Kyiv spat with Prague unlikely to help efforts to integrate with EU

AVAILABLE FOR RENT NOW!

Journal published an interview with Yanukovych in which he appeared to go further, complaining “about the Czech Republic’s decision to grant political asylum to an economic minister for the previous administration who is accused of abuse of power, suggesting the protection was bought.”

Vit Kolar, a spokesman for the Czech Ministry of Foreign Affairs said these

allegations were “unfair and baseless.”

“It is either necessary to bring some proof about such allegations or remain silent,” he said. He added, however, that ties between Prague and Kyiv would not be harmed.

Viorel Ursu, a senior policy officer at the Open Society institute in Brussels, said the Czech decision to offer asylum made things “complicated,” as it indirectly meant Prague recognizes that political persecution is happening in Ukraine.

“The attempts by the Ukrainian authorities to argue with the decision are aimed for internal consumption,” he added, as the government attempts to save face by arguing it was right.

The spat comes amid increasing Western disquiet about Ukraine’s commitment to reforms to secure deeper European integration. Negotiations of an association agreement and visa-free travel for Ukrainians to the 27-nation bloc are proceeding slowly. European

diplomats in Kyiv say the government has got a lot to do to convince Brussels it is committed to pushing through the overhauls needed to achieve its avowed aim of closer European integration.

A senior European diplomat in Kyiv said he “does not see any definite signals from the Yanukovych administration that Ukraine is actually moving toward Europe.”

Amanda Paul, a policy analyst at the Brussels-based at the European Policy Center, said the EU would be unlikely to take any drastic steps, such as calling off talks on the visa-free regime.

She said, however, that it could respond if the impression of selective justice became clearer.

“The most likely scenario would be a slowing down of negotiations on the association agreement with Ukraine,” Paul said.

Kyiv Post staff writer Yuriy Onyshkiv can be reached at onyshkiv@kyivpost. com

14 News

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February 4, 2011

Firtash wins, nation loses in Stockholm

Former Nafogaz deputy chief Ihor Didenko in Kyiv on July 20, 2010. (UNIAN)

Æ1 Didenko could mount the stairs to the dentist’s office, he was lying on the asphalt in the middle of the courtyard.

Masked men had thrown him to the ground, tied his hands together and pushed him into a car. They were members of the “Alpha” special forces unit, an elite group within the Ukrainian intelligence service SBU (Security Service of Ukraine). He was treated like a dangerous criminal when they took him to Lukyanivska, where he has now been imprisoned for almost six months.

There were petitions for clemency after his arrest. Filaret, the patriarch of the Orthodox Church, put in a good word for him, as did Leonid Kravchuk, Ukraine’s first president, three dozen members of parliament, businesspeople and scientists. But the petitions have been ignored.

‘After my blood’ Why was someone like Didenko so important to the government that he was arrested like some Mafia boss?

Why does Didenko believe that it is possible “that agitated political groups are after my blood in prison,” as he shouted into the courtroom from the caged area where he was being held during his arraignment? And why is Yulia Tymoshenko, the prime minister of Ukraine until March of this year, claiming that Didenko’s arrest proves “that the country has fallen into the hands of criminal organizations?”

There is nothing particularly exciting about Didenko’s biography. He was born near Vinnytsia in central Ukraine in 1964. He studied commercial information technology and eventually became a businessman. For more than a decade, he served as vice president of Naftogaz, the large stateowned gas company, and even headed the company for a long time. He has

Security Service of Ukraine (SBU) masked police in combat gear occupy the headquarters of the state gas company Naftogaz in Kyiv on March 4, 2009 as part of a criminal inquiry into the Yulia Tymoshenko government’s seizure of 11 billion cubic meters in gas on behalf of the state from RosUkrEnergo. As prime minister, Tymoshenko took control of the gas following a Jan. 19, 2009, agreement with Russia that ended a nearly three-week shutoff of gas supplies.

RosUkrEnergo, however, filed a claim with a Stockholm arbitration court and won a ruling to reclaim the gas – worth up to $5.4 billion, depending on the market price. (AFP)

a wife and children, and a house in Kyiv’s upscale “Golden Gate” residential neighborhood.

“Didenko was a respected professional, a manager,” says Serhiy Vlasenko, a lawyer and a member of parliament, who is working with Didenko’s attorneys. “He wasn’t a politician.”

Nevertheless, the Didenko case is highly political. It reveals the inner workings of Ukraine: How some multimillionaires are using this country – which many non-Ukrainians only associate with the TV images of brawls

in parliament — as a vehicle for their business deals; and how the legal culture of Ukraine, a country seeking European Union membership, is being increasingly undermined.

A giant budgetary hole Didenko’s story is the tale of a major deal that has to be of interest to the West, because it suffers every winter as a result of turbulence in Ukraine, even though it has trouble understanding the underlying causes. The deal involves 12 billion cubic meters of

natural gas, worth billions of dollars, and an arbitration award that has torn a giant hole into the country’s budget.

Billionaire Dmitro Firtash, 45, is one of the lead actors in this drama.

He is one of the most powerful men in Ukraine and has been successful in the gas and chemical business for years. Valeriy Khoroshkovsky, 41, also plays a leading role. He is a media mogul, a former economics minister and steel magnate. Khoroshkovsky is also head of the Ukrainian security service, an intelligence agency which

also has policing and public prosecutor duties -- a total of 30,000 employees. Finally, Viktor Yanukovych plays a leading role. The 60-year-old is a former transportation depot manager was convicted in his younger days of participation in a robbery and assault before rising to become prime minister in 2002. Since February, he has been Ukraine’s president.

Ihor Didenko is the final character of note.

The story began in January 2009.

Only 12 hours into the new year, Russia had declared a gas war on neighboring Ukraine. On Jan. 1, at 11:48 a.m., Moscow time, the chief engineer at a compressor station near Kursk in western Russia closed a valve on a pipeline.

His boss, the head of Russia’s Gazprom Group, had ordered him to cut off the flow of gas to Ukraine -- in the middle of an icy winter.

The sudden shutdown of the pipeline didn’t just affect Ukraine. Within a few days, the rest of Europe, dependent as it is on Russian gas -- some 80 percent of which is delivered via Ukraine -- likewise felt the squeeze. Poland, Hungary and Bulgaria reported a drastic drop in pressure, and Slovakia declared a state of emergency on Jan. 6. “The Kremlin is letting Europe freeze,” the papers wrote.

Trying patience The continent had become accustomed to the Russian-Ukrainian gas wars, which regularly flared up in the dead of winter. But this time the conflict lasted almost three weeks, severely trying the patience of Western Europeans.

Once again, Moscow and Kyiv had been unable to agree on a new delivery price. The Russians had demanded $450 (344) per 1,000 cubic meters, while the cash-strapped Ukrainians felt that $235 was more appro- Æ15

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News 15

February 4, 2011

Tymoshenko eager to get rid of RosUkrEnergo ‘feeding trough’ Æ14 priate. “You are taking millions of citizens in Europe hostage,” a Bulgarian member of the European parliament shouted at Russian and Ukrainian representatives.

But a surprise ceasefire agreement was reached on Jan. 19. Then Ukrainian Prime Minister Tymoshenko had scored a coup in Moscow. She returned from a meeting with Russian Prime Minister Vladimir Putin with a 10-year agreement on future gas deliveries in hand. Putin’s concession was a 20 percent discount on the global market price.

But two other documents, each with substantial appendices, were also signed in Moscow, documents that were long kept secret from the public. They applied to RosUkrEnergo, or RUE, the intermediary that had handled the gas deals between Russia and Ukraine until then.

RosUkrEnergo is the company that would put Ihor Didenko in prison.

A lot of money involved RosUkrEnergo’s business model had been relatively straightforward until then: The company bought cheap gas from the Central Asian country of Turkmenistan and had Gazprom deliver it to the Ukrainian border, where the lion’s share was sold at a favorable price to the state-owned Ukrainian company Naftogaz, and the rest to European customers at the global market price. The rest of Ukraine’s demand for gas was supplied by Gazprom from Russian sources, again using RUE as the intermediary.

Everyone benefited from the arrangement. It allowed the Ukrainians to buy gas inexpensively, the Russians could claim to be charging world market prices, and intermediary RUE earned healthy profits – extremely healthy, in fact.

RUE is a typical product of the early days of post-Soviet Eastern Europe, but also one of the most mysterious.

Gazprom -- the Russians, that is -owns 50 percent of the company. The Ukrainian oligarch Dmitry Firtash owns 45 percent, while a partner owns the remaining 5 percent. RUE is headquartered in the Swiss canton of Zug, while Firtash controls his shares through a company called Centragas Holding, with its offices on Schwindgasse in Vienna.

The intermediate gas trade is not very transparent, but hardly anyone doubts that a lot of the money involved disappears into Ukrainian and Russian pockets. But how much, and where does it go?

Firtash, whose father was a chauffeur and whose mother worked in a sugar factory, never attended university. Nevertheless, as he says himself, he has a “good nose” for business. His life as a “biznesmen” began after the fall of the Soviet Union, when he exported preserves to Central Asia. Several wholesalers made it possible for him to enter the gas trade, a “dangerous” industry at the time, as Firtash would later admit. Firtash says that he was acquainted with Semion Mogilevich, the presumed Russian crime boss who the FBI accuses of many offenses involving fraud.

An eight hour debate Both then Prime Minister Tymoshenko and Gazprom had a strong interest in moving Firtash, a man with a closely cropped, gray beard, out of the profitable gas business. Even though the Russian monopoly Gazprom was his partner in RUE and had been collecting substantial profits in the lucrative sale of gas to Western markets, it was in an awkward situation in early 2009. The profits it had been earning on gas exports had declined sharply.

Former U.S. Ambassador to Ukraine William Taylor and former Prime Minister Yulia Tymoshenko shake hands in Kyiv on Nov. 11, 2009. (UNIAN)

People carry collected wood for their heating in Miskolc (180 km/110 miles east of Budapest), Hungary, on Jan. 11, 2009. Russia’s gas shipments to Europe via Ukraine froze for about two weeks after the two countries had a dispute on pricing and transit fees. Also centering in the dispute was the role of middleman gas traders in the multi-billiondollar gas trade between both countries. Swiss-registered RosUkrEnergo was removed as an intermediary as part of the agreement that ended the January 2009 dispute, but it has reappeared under President Viktor Yanukovych. (AP)

Æ In Jan. 19, 2009 gas deal, Tymoshenko and Putin agreed to eliminate RosUkrEnergo as gastrading intermediary Gazprom needed money, but Firtash owed the company $1.7 billion, for gas that Moscow had already delivered but that the oligarch was keeping in storage in Ukraine, with the intention of exporting it to Poland and Romania.

During the Jan. 19 negotiations in Moscow, Tymoshenko and Putin agreed that RosUkrEnergo had to go. The heated debates went on for eight hours, but by the end of the meeting the negotiators had indeed found a way to eliminate the middleman: Gazprom would transfer RUE’s debts to Naftogaz, which would then pay Moscow the $1.7 billion. In return, Naftogaz would receive access to the 11 billion cubic meters of gas that Firtash’s RUE was keeping in Ukrainian government storage tanks.

Under the agreement, the governments in Moscow and Kyiv would conduct their gas dealings directly with each other in the future.

The agreement, together with its appendices, was such an elaborate deal that the heads of the two companies involved, Gazprom's Alexei Miller and Naftogaz's Oleh Dubyna, both had to sign it. But the stress of the last few days had taken its toll on Dubyna, who had a heart attack and was hospitalized. As a result, the deputies of the two men signed the agreement instead: Gazprom Deputy CEO Valery Golubev and Naftogaz Deputy Chairman Ihor Didenko.

The documents were not published, and only later did it become clear that

Security Service of Ukraine chief Valery Khoroshkovsky during Independence Day celebrations in Kyiv on Aug. 24. (UNIAN)

Gazprom had structured the deal on its own.

While the pecuniary benefits of the deal were important to Gazprom, Tymoshenko was more interested in what it could do for her politically.

Firtash was the most important financial backer of opposition leader Viktor Yanukovych, her biggest rival. She hoped to be able to drain his biggest source of funding, which she described as a “large feeding trough, the shadow treasury of all of Ukraine’s presidents.”

Elections were around the corner, and both Tymoshenko and Yanukovych were eager to capture the presidency.

'Questionable character’ The Ukrainian prime minister, Russian Prime Minister Putin and the Western Europeans all celebrated the agreement with Moscow. Even the U.S. Embassy, which described Firtash as a “questionable character,” wrote in a cable to Washington that the elimination of RUE could introduce “transparency and accountability” into the gas trade.

The U.S. Embassy cables published

by WikiLeaks reveal what a devastating blow the deal was to Firtash, and how furious it made him. He met with U.S. Ambassador to Ukraine William Taylor, who, in his reports to Washington, wrote that Firtash believed that the new gas agreement between Tymoshenko and Putin was “criminal” and the “most stupid contract in Ukraine’s history.” According to the ambassador, Firtash would have supported Tymoshenko’s immediate arrest. Taylor’s dispatch notes that the oligarch told him that if anyone else had signed such an agreement, “he would have already been hanging from the street lights.”

Other Tymoshenko adversaries, like Yury Boyko, energy minister in the opposition’s shadow cabinet and a former member of the coordinating council of RUE, called the agreement a “betrayal of national interests.” They insinuated that the prime minister had generally accepted a price that was too high for future gas deliveries from Russia, had kept the transit fees too low and had agreed to unacceptable payment arrangements – all with the goal of eliminating Firtash.

There were also direct threats.

Tymoshenko told SPIEGEL that Naftogaz deputy chief Didenko had received threatening calls from Kyiv while he was in Moscow, attending the negotiations, warning him that he would “do time” if he signed the agreements. Tymoshenko stressed that Didenko “merely carried out my Æ16 instructions.”

16 News

www.kyivpost.com

February 4, 2011

Naftogaz reversal costly to nation Æ15 Arbitration in

that the same thing won’t happen again tomorrow, in another case?”

Stockholm

The most exciting chapter in the drama surrounding RUE and the 11 billion cubic meters of gas began on March 24, 2009. Firtash and his backers were determined to exact revenge, and they wanted to regain control over the gas. Firtash had already filed nine complaints in Ukrainian courts, but now he turned to the Arbitration Institute of the Stockholm Chamber of Commerce.

The Institute, at Jakobs Torg 3 in Stockholm, is almost 100 years old and considered one of the most renowned arbitration courts worldwide. The Swedes accepted the case, but needed time to process it. All parties involved issued their statements. Firtash felt that the Moscow deal was illegal because of certain clauses and previous agreements that were still valid, while Naftogaz and the Ukrainian government defended it as legal. The outcome seemed open. The Ukrainian government, however, felt confident that it would win the case, because Naftogaz, and not RUE, had paid for the gas.

Then the government changed hands in Kyiv.

Tymoshenko’s rival, Yanukovych, whom the Orange Revolution six years earlier deprived of the office of president, which he was convinced he would win, became president in February 2010, even though only one in three Ukrainians voted for him.

An about face What a triumph it was for Tymoshenko’s rivals! Oligarch Firtash, who the Americans believed was one of the key financial backers of the new president, was suddenly part of the inner circle of the powerful in Kyiv. Many of Firtash’s associates were appointed to government posts. Two of his friends, Yury Boyko and 38-year old Serhiy Lyovochkin, whose father had years earlier headed Ukraine's prison system, became energy minister and the president’s chief of staff, respectively. His confidant Valeriy Khoroshkovsky, owner of the Inter media empire, for which Firtash owned a purchase option until recently, was made head of the state security organization.

With Khoroshkovsky’s help, European Union monitors tour Russia’s Sudzha gas pumping station on Jan. 11, 2009, during the nearly three-week shutoff of Russian natural gas supplies to Europe through Ukraine.

(AP)

Facing imprisonment

Opposition members of parliament block the rostum in Kyiv on July 8 in protest of President Viktor Yanukovych’s heavy-handed control of parliament. A sign at left says: “Yanukovych + Firtash + Khoroshkovsky = Gas Mafia,” a reference to the president, Ukrainian billionaire and RosUkrEnergo co-owner Dmytro Firtash and Security Service of Ukraine chief Valeriy Khoroshkovsky, all three closely allied. (UNIAN)

Yanukovych had ministers and top officials in the former government arrested. But nowhere was the purge as radical as at the state-owned Naftogaz, where the entire management team was replaced. Didenko also left the company, “of his own will.”

The new president needed only a few months to gain control over the executive, the majority of the parliament and most of the judges, who were already corrupt. The “ancient human instinct of fear has to be activated to a much greater degree again,” said his prime minister, who replaced the hated Tymoshenko after her election defeat.

Ukraine was on its way to becoming an authoritarian country again.

At this point, things began moving quickly in Stockholm as well. Naftogaz now reported to the Yanukovych administration, which meant that the two parties facing each other before the arbitration court were no longer enemies but friends. Effectively, they were one and the same party. On the one side of the table, Firtash was negotiating in the interest of RUE, while the Ukrainian government was on the

other side: Energy Minister Boyko, representing Yanukovych, with both men closely allied to Firtash. The case had turned into a farce.

A catastrophe It ended on June 8, 2010, with a clear verdict: the Swedes ruled in favor of RUE. The state-owned Ukrainian gas company was to return the disputed 11 billion cubic meters of gas to Firtash’s RUE, as well as another 1.1 billion cubic meters of gas as compensation for lost profits.

RUE asked to be paid the cash equivalent of the 12.1 billion cubic meters, and demanded the market price for the gas, not the special price of $1.7 billion to which Gazprom had once agreed. Based on RUE’s calculations, the value of the gas had suddenly tripled to $5.4 billion.

This is a catastrophe for Ukraine.

If Kyiv returns the gas, the country will no longer have enough for the winter. If it agrees to pay the several billion dollars, the government will have to pay Naftogaz’s debts. But Kyiv itself is broke and has survived

on International Monetary Fund (IMF) loans since the worldwide financial crisis began.

But why did Naftogaz suffer such a clear defeat in Stockholm, especially after the initial prospects for the stateowned company were not considered half bad? The Swedes are refusing to comment on the issue, citing the confidentiality of arbitration court rulings. The Yanukovych government also refuses to make any statements.

Commercial interests SPIEGEL has since been able to review copies of the Stockholm decision. A passage on page 4, under item 4, reads: “Although Naftogaz initially claimed, during the course of this arbitration, that the procurement of the 11 billion cubic meters of gas was sufficiently justified from a legal standpoint, it now states that this was not the case.” In a different passage, Naftogaz suddenly admits that this gas “belongs to and has always belonged to RUE.” As dry as these sentences sound, they are also incredibly explosive. It now becomes clear why the new leadership did not publish the arbitration court’s decision: Naftogaz, despite being in a difficult financial position, reversed its legal position by 180 degrees after the change of government in Kyiv. The company itself pushed the Stockholm court to reach a decision that was unfavorable for Ukraine. Besides, as SPIEGEL has also learned, Naftogaz removed the names of the relevant Gazprom officials from statements. The Russian company, which had facilitated the January 2009 deal, was hardly even mentioned in the proceedings.

Some have reached this conclusion: Viktor Yanukovych, the president of Ukraine, served the commercial interests of an oligarch with whom he has close ties, at the expense of his own country. And, in doing so, he also did Moscow a favor.

Serhiy Vlasenko, the lawyer and parliamentarian, calls this “cynical.” He is sitting in the bar of the Riviera, a four-star hotel in Kyiv’s historic Podil district, looking out at the banks of the Dnipro River. “What is the guarantee

Vlasenko has drawn a diagram of the empire of Dmitry Firtash onto a yellow paper napkin. The drawing resembles the tentacles of an octopus. “Firtash’s profits from the Stockholm affair are likely to be immense,” he says. To divert attention away from this process, says Vlasenko, Firtash’s friend, security chief Khoroshkovsky, launched an anti-corruption campaign that solely targeted leading members of the previous government. In addition to former Naftogaz deputy chief Didenko, his main accountant, the head of the Ukrainian customs agency and other government officials were arrested.

Two former ministers were also arrested. In a separate case, the former head of the Interior Ministry was also recently arrested. Criminal action was initiated against former Prime Minister Tymoshenko on Dec. 15, and she was forbidden to leave the country. Five days later, Tymoshenko was charged with misuse of state funds, and she too could now face imprisonment.

The conclusion is unavoidable that these charges and arrests constitute political payback. “Didenko was charged, under Article 191 of the Criminal Code, with misappropriation of assets on a large scale,” says Vlasenko with a bitter smile. “That’s absurd. Last year a Kyiv court ruled that Didenko had acted legally in Moscow. Now, after the change of government, the court decisions are, of course, different. Now he is even expected to suffer for the fact that the government has to pay for the deal between Naftogaz and Gazprom.”

The meeting at the Riviera took place at the end of October. On Nov. 24, Ukraine’s highest court upheld the Stockholm decision. On Dec. 6, oligarch Firtash announced that he had repaid his debts with Naftogaz and Gazprom and, in return, had received the 11 billion cubic meters of gas plus the additional 1.1 billion cubic meters, which the Stockholm court had awarded him as an “injury award.”

Firtash claims that he has since sold all of the gas to Gazprom, although he has declined to specify the price.

Experts have calculated that the Ukrainian government lost about $1 billion in this process of shifting 12.1 billion cubic meters of gas back and forth. Firtash, however, is raking in a huge profit at current prices. The 12.1 billion cubic meters are now worth $3 billion. The oligarch denies that Ukraine came up short in the deal, and that the gas reserves are no longer sufficient for this winter.

The Kyiv newspaper Kommersant disagrees, writing that half of the 24 billion cubic meters currently being stored in tanks is now gone, corresponding to about a quarter of annual requirements. This, the paper writes, creates the risk of an energy collapse.

Didenko, for his part, remains in Lukyanivska Prison. A Kyiv appeals court extended his pre-trial detention on Dec. 9. What is happening here, says Didenko, is “a political trial in the interest of dirty economic groups.” He could face several years in prison.

Translated from German by Christopher Sultan. The Der Spiegel article can be found online at http:// www.spiegel.de/international/ europe/0,1518,736745,00.html.

www.kyivpost.com

News 17

February 4, 2011

Nation’s gas trade has volatile history rife with murky dealings

Anatoliy Makarenko (R), former Customs Service head, has been jailed since June for his involvement in the disputed 11 billion cubic meters of gas. (Ukrainian Photo)

Anti-corruption drive or political vendettas?

Nation can take its pick

July 24, 2004

Former Ukrainian President Leonid Kuchma and his Russian counterpart, Vladimir Putin, agree on using RosUkrEnergo as intermediary in the gas trade, replacing Eural Trans Gas, a Hungarian-based intermediary used between 2002-2004.

July 29, 2004

Ukraine’s state-run oil and gas monopoly Naftogaz Ukraine signs contracts with RosUkrEnergo for the import and transit of gas from Central Asia to Ukraine and Europe.

Jan. 23, 2005

Viktor Yushchenko becomes Ukraine’s third president after the Orange Revolution overturned rigged 2004 presidential elections in favor of Viktor Yanukovych.

Sept. 8, 2005

Yushchenko sacks Yulia Tymoshenko as prime minister and dismisses her government. Tymoshenko and her ally, former Security Service of Ukraine chief Oleksandr Turchynov, had accused Yushchenko of protecting RosUkrEnergo’s status as an intermediary for gas deals with Russia.

Jan.1, 2006

Russia’s state-controlled oil and gas monopoly, Gazprom, cuts off gas supplies to Ukraine.

Jan. 4, 2006

Gas supplies are restored after Yushchenko's administration increases RosUkrEngro's role in supplying Ukraine with gas.

June 21, 2007

Ukrainian billionaire Dmytro Firtash, co-owner of RosUkrEnergo along with Russia's Gazprom, consolidates his assets into a new holding company called Group DF.

Sept. 30, 2007

Snap parliamentary elections are held giving Yulia Tymoshenko’s bloc the opportunity to form a shaky majority coalition with some members of Yushchenko’s Our Ukraine political grouping.

Dec. 18, 2007

Yulia Tymoshenko is re-appointed as prime minister. She vows to eliminate gas trading middelmen.

Dec. 24, 2007

Valeriy Khoroshkovsky appointed head of Customs Service.

Nov. 1, 2008

World financial crisis hits Ukraine, causing a sharp devaluation of the hyrvnia and leading the central bank to refinance many of the country’s top banks.

Dec. 11, 2008

Group DF issues a press release confirming its intention to buy controlling stake in one of the country’s largest troubled banks, Nadra Bank, which receives billions of hryvnia in refinancing from the central bank.

Dec. 8, 2008

Firtash allegedly meets with U.S. Ambassador to Ukraine William Taylor. He allegedly criticizes Tymoshenko, describes Yushchenko as a friend and says he is trying to forge an alliance between Yushchenko and Viktor Yanukovych.

Jan. 1, 2009

Russia’s Gazprom cuts off gas shipments to Ukraine (and Europe) after failing to renegotiate a new, higher price for gas supplies to Ukraine.

Jan. 6. 2009

Slovakia declares a state of emergency because of gas cutoffs.

Other central European countries, such as Bulgaria and Serbia, complain.

Jan. 8, 2009

Russian Prime Minister Vladimir Putin says top Ukrainian officials are fighting to keep intermediaries in gas trade.

Jan. 19, 2009

Tymoshenko and Putin sign new gas accord in Moscow providing for the elimination of RosUkrEnergo as an intermediary.

Jan. 20, 2009

Gazprom transfers $1.7 billion to Naftogaz as an advance payment for the transiting natural gas to Europe.

Jan. 20, 2009

Naftogaz buys 11 billion cubic meters of gas previous controlled

by RosUkrEnergo from Gazprom for $1.7 billion ($153 per thousand cubic meters).

Jan. 28, 2009

Government sacks Valeriy Khoroshkovsky as Customs Service head after he refuses to custom clear the gas transfer.

Jan. 28, 2009

Yushchenko appoints Khoroshkovsky as deputy SBU chief.

Jan. 28, 2009

Government appoints Anatoliy Makarenko Customs Service chief.

Jan. 30, 2009

Khoroshkovsky requests documentation from Naftogaz about disputed gas.

Feb. 5, 2009

Tymoshenko orders transfer of 11 billion cubic meters of gas to Naftogaz citing agreement between Naftogaz and Gazprom.

March 2, 2009

SBU arrests Taras Shepitko, deputy head of energy department of Ukraine’s Customs Service.

March 4, 2009

SBU “Alpha” special forces unit raids Naftogaz central offices in Kyiv.

March 5, 2009

SBU “Alpha” special forces unit raids Ukrtransgaz officies in Kyiv.

BY P E T E R B Y R N E BYRNE@KYIVPOST.COM

By the time U.S. and European Union officials started publicly expressing concern about political persecution under President Viktor Yanukovych, some of the first alleged victims – former Customs Service chief Anatoly Makarenko and former Naftogaz deputy head Ihor Didenko – had already been languishing in prison for six months.

The statements, first by the U.S. Embassy on Dec. 30 followed by an EU statement of concern on Jan. 11, came too late for Makarenko and Didenko. The two men are among a growing number of political opponents, most with ties to ex-Prime Minister Yulia Tymoshenko, who may only be guilty of following her orders while in power.

Yanukovych describes the arrests and criminal investigations as part of an anti-corruption drive to restore law and order. In an interview at the World Economic Forum in Davos, Switzerland, Yanukovych flatly denied any political motives behind the investigations of Tymoshenko allies. “This is not true,” Yanukovych said in a recent interview with the Washington Post.

“The country has started a broad campaign against corruption and violation of the law. It is not a selective

Excerpt from Ukrainian Constitution: Article 62 A person is presumed innocent of committing a crime and shall not be subjected to criminal punishment until his or her guilt is proved through legal procedure and established by a court verdict of guilty. No one is obliged to prove his or her innocence of committing a crime. An accusation shall not be based on illegally obtained evidence as well as on assumptions. All doubts in regard to the proof of guilt of a person are interpreted in his or her favour. In the event that a court verdict is revoked as unjust, the state compensates the material and moral damages inflicted by the groundless conviction.

That was then...this is now “Isn’t this a flagrant conflict of interest? [Security Service of Ukraine chief Valeriy Khoroshkovsky] has already admitted in an interview with Ukrainska Pravda that he is a business partner of [Dmytro] Firtash. And yet he is fully in charge and has inserted himself into an investigation directly involving Firtash. This is pure corruption. Doesn’t Khoroshkovsky think it would be appropriate for him to remove himself from this case altogether?

If I were a small-town prosecutor, I would open a case against Khoroshkovsky for corruption.

And if I were higher up in the prosecutor’s office, Khoroshkovsky today would be detained and brought before a court on charges of abuse of office.”

– Andriy Portnov on March 5, 2009, when he was a parliamentarian in Yulia Tymoshenko’s bloc.

approach based on political reasons.

This campaign affects representatives [regardless of] political party.”

However, to others it looks like Makarenko and Didenko are simply the latest victims of a political feud between Tymoshenko and Yanukovych.

Now, with power having shifted decisively to the president, his allies have all the tools and agencies at their disposal to exact revenge – if those are the feelings they have been nursing during years in opposition to Tymoshenko.

Independent analysts and human rights activists say the arrests and pretrial confinement of Makarenko and Didenko appear designed to punish those who threatened the interests of the president’s inner circle and his billionaire backers two years ago in a dispute over 11 billion cubic meters of gas – worth more than $3 billion.

Yevhen Zakharov, head the Kharkiv Human Rights Group, said unclear accusations, excessive pretrial restrictions, arbitrary selection of evidence and failure to follow legal norms are all signs of political persecution. “These men define the term,” Zakharov said.

“Recent repeated statements by the president calling on former officials ‘to prove their innocence in court’ contradict the presumption of innocence and should be setting off alarm bells. They run counter to what’s written in the constitution and give the impression

Andriy Portnov switched sides from Yulia Tymoshenko and is now in charge of judicial reform for President Viktor Yanukovych.

this case is more about retribution than justice.”

Serhiy Taran, a political analyst and director of the Kyiv-based International Democracy Institute, said it looks like scores are being settled. “Two years ago, Makarenko and Didenko were instrumental in taking away what Yanukovych and backers valued the most: wealth and influence.”

Taran was referring to the deal reached between by former Prime Minister Yulia Tymoshenko and her counterpart Vladimir Putin on Jan. 19, 2009, to remove Swiss-based RosUkrEnergo as intermediary in lucrative gas deals between Ukraine and Russia. Gazprom owns 50 percent of RosUkrEnergo, while Ukrainian businessmen Dmitry Firtash and Ivan Fursin reportedly control 45 and 5 percent stakes.

Tymoshenko and Putin agreed in writing to use RosUkrEnergo’s $1.7 billion debt to Russia’s Gazprom for gas already transported as advance payment for transiting future Russian gas supplies to Europe. In return, stateowned Naftogaz acquired ownership of 11 billion cubic meters of gas belonging to RosUkrenergo.

While the deal was hailed in the West, former President Viktor Yushchenko, Yanukovych and the president’s allies – Dmytro Firtash and Valery Khoroshkovsky – criticized the Æ19

March 24, 2009 Arbitration Institute of the Stockholm Chamber of Commerce hears RosUkrEnergo’s case against Naftogaz.

Feb. 25, 2010

Viktor Yanukovych becomes president Tymoshenko in a Feb. 7 an election.

after

defeating

June 8, 2010

The Swedish Arbitration Tribunal rules Naftogaz must return 11 billion cubic meters to RosUkrenergo, plus 1 billion cubic meters in penalties. In its plea to the court, Ukraine admitted that the gas belonged to RosUkrEnergo.

June 23, 2010

Former Customs chief Anatoliy Makarenko is arrested.

July 9, 2010

Former Deputy Naftogaz chief Ihor Didenko is arrested by SBU “Alpha” special forces in Kyiv.

July 21, 2010

SBU re-arrests Taras Shepitko, deputy head of the energy department of Ukraine’s Custom’s Service.

Nov. 24, 2010

Ukraine’s High administrative court upholds ruling by Swedish Arbitration Tribunal.

Dec. 15, 2010

Criminal case opened against former Prime Minister Yulia Tymoshenko.

Jan. 26, 2011

Ukrainian government promises to return 12 billion cubic meters of natural gas to RosUkrEnergo during 2011.

18 News

www.kyivpost.com

February 4, 2011

Gongadze disclosures raise fears anew of cover-up by authorities

BY O K S A N A G RY T SEN KO GRYTSENKO@KYIVPOST.COM

The investigation of one of Ukraine’s most notorious crimes – the murder of journalist Georgy Gongadze on Sept.

16, 2000 – took a new twist this week.

A Kyiv court on Jan. 31 upheld the prosecutor’s decision to alter the charge against Gongadze’s alleged killer, Oleksiy Pukach, from carrying out a “contract murder” to following a “criminal order.”

Valentyna Telychenko, a lawyer for Gongadze’s widow, has appealed the change, fearing that it could “end all lines of investigation” involving former Interior Minister Yuriy Kravchenko, Pukach’s former supervisor. Kravchenko died from two gunshot wounds to the head on March 4, 2005, in a death ruled a suicide. Prosecutors accuse him of ordering the murder.

Prosecutors said the description of charges against Pukach “cannot be considered final.”

Critics for years have accused Ukraine’s top officials, including exPresident Leonid Kuchma and his then chief of staff Volodymyr Lytvyn, now the speaker of parliament, of ordering the murder. Both have consistently denied involvement.

Prosecutors also mysteriously accuse “people whose identities haven’t been determined by the investigation” of having ordered the murder along with Kravchenko.

Ex-Interior Minister Yuriy Kravchenko (L), killed by two gunshot wounds to the head in 2005, and former Interior Ministry Gen. Oleksiy Pukach.

Tetiana Kravchenko, widow of the ex-interior minister, claims her husband didn’t have any motive for killing the journalist.

Telychenko questioned why the investigation identifies Kravchenko but doesn’t name other suspects. “The investigator’s conclusion on Kravchenko’s guilt was based on Pukach’s evidence, but Pukach then mentions the other names. Why does the investigation consider those people not to have been determined?” she said.

Telychenko told the Kyiv Post that in September she reviewed testimony given by Pukach. That review, she said, implicated Kuchma, Lytvyn as well as Leonid Derkach, ex-head of Ukraine’s security service, and Eduard Fere, a high-ranking interior ministry official under Kuchma.

Voices resembling those of Kuchma and Lytvyn are heard discussing what to do with Gongadze on recordings allegedly made by Mykola Melnychenko, Kuchma’s ex-bodyguard. The authenticity of the tapes is in dispute.

“The withdrawal of the ‘contract murder’ from the Pukach accusations was an attempt to avoid implicating Kuchma in this case,” Oleksandr Zhyr, a former lawmaker who headed parliament’s investigation into the Melnychenko tapes, said.

Oleg Musienko, a former lawyer for Pukach, claimed last October that Pukach’s testimony proved the guilt of Kuchma and Lytvyn. Since then, he has retracted this claim, citing other evidence showing that Kravchenko, Kuchma, Lytvyn and others men-

tioned by Pukach are not guilty, but that someone else ordered the killing.

He refused to provide the evidence to the Kyiv Post.

The Gongadze murder has always been politically charged. General Prosecutor Viktor Pshonka said earlier that Gongadze was killed over his “professional and public activity” as a journalist.

Gongadze, who founded the Internet news website Ukrainska Pravda, was frequently critical of Kuchma and other officials.

Both Kuchma’s successor as president, Viktor Yushchenko, and President Viktor Yanukovych, pledged to make solving the case a priority.

Yulia Tymoshenko, a former prime minister who now leads the opposition to Yanukovych, has accused the president of taking part in the cover-up of the investigation to protect Kuchma and Lytvyn, whom she believes ordered Gongadze’s murder.

Telychenko said she believed prosecutors were acting on orders to send Pukach’s case to court without fully investigating who ordered the murder.

Telychenko said she would appeal the court decision changing the charges against Pukach. If the court again rules against her, she said she would take the case to Europe.

Kyiv Post staff writer Oksana Grytsenko can be reached at grytsenko@kyivpost.com

Popova: When will sexism at top ever end? Æ4 der quota bill. Now in Poland, each political party must have at least 30 percent women. And what do we have here? The spring striptease for investors.

Attracting foreign investment is a good move. However, when the emphasis is not on the country’s investment climate, but on investors’ base instincts, the whole process becomes a farce.

Chrystia Freeland, a famous journalist and the host of the Davos Ukrainian Lunch where Yanukovych’s words were pronounced, could not help noticing the blatant political incorrectness of the president’s remarks. “Unfortunately, political correctness has not reached Ukraine yet,” Freeland said with nervous laughter.

And she was absolutely right.

Of course, the Femen activist group is pleased to have been granted practically official permission “to take off our clothes,” but the main point is not about naked women. A civilized country would have responded long ago to repeated sexist comments from the president, the guarantor of constitutional rights, and voted for impeachment.

However, the position of women is quite poor in Ukraine. In fact, they do not have the right to vote – neither in parliament, nor society nor in culture.

Isn’t it time to change the situation?

Maria Popova is a member of Femen, a women’s organization that has gained international attention for topless protests against sex tourism and other social and political ills in Ukraine.

Tatars carry on decades-long struggle to reclaim Crimean land taken away

BY S V I T L A N A T U C H YN S KA TUCHYNSKA@KYIVPOST.COM

Alie Vedutova, an ethnic Tatar, lives in a shack with no running water and electricity on the outskirts of Simferopol on Ukraine’s Crimean peninsula. Water tanks come once every three days. “For electricity we bought a generator with neighbors,” said Vedutova, describing her way of life. Since her husband died, she shares a hut of 28 square meters with her mother, a paralyzed father, son, daughter, grandchild and daughter-in-law.

Seventy other neighbors – all Tatars – live in similar conditions, squatting illegally on plots of land. In Crimea, a total of 1,400 hectares of land are occupied by 15,000 Crimean Tatars who have failed to obtain parcels legally.

While high-ranking officials and well-connected individuals have no problem obtaining hectares of valuable land in Crimea, ethnic Tatars are becoming fed up with broken promises. Now Crimean authorities are promising to resolve the land conflicts in less than a month. But Tatars fear that officials may solve the problem by kicking them off the land – again.

It has happened before. Soviet dictator Joseph Stalin deported nearly 200,000 Crimean Tatars from Crimea in May 1944 to Uzbekistan and Kazakhstan for “desertion from the Soviet army” during World War II. They could not return to their homeland until the 1980s in the waning days of the Soviet empire. Then, tens of thousands returned, only to find their lands taken.

Vedutova’s parents returned in 1987.

Their former house in the Belhorod district was occupied by another family.

“We were promised that new apartments will be built for those coming back from deportation. But it was a lie,” Vedutova said bitterly.

Most Tatars found it impossible to buy land and an unofficial ban on selling houses to them was in place.

That’s when the illegal land squatting started.

According to the Mejlis, an unofficial parliament of Crimean Tatars, the ethnic minority is demanding 3,000 hectares on the peninsula. “There are 61 areas in Crimea with some 15,000 people demanding this land,” said Zevzhet Kurkumetov, head of the land commission of Mejlis.

Successions of presidents – Leonid Kuchma, Viktor Yushchenko and now Viktor Yanukovych – have promised action, but it hasn’t come.

The prime minister of the autonomous republic, Vasyl Dzharty, said Tatars do not face discrimination in obtaining land. “The problem is there are many so-called ‘businessmen’ among squatters,” Dzharty said.

“Acquisition became a business for them. They have seized numerous parcels and hope they will have them legalized now. That is not going to happen.”

According to Dzharty, there is no crisis at all: All Tatars have been given parcels and are simply trying to get more for their children.

However, Tatars say more than 60 percent of them have never received any land and have no place to live.

“In every village, they have lists of those deported and it is very easy to check who among them have received

A Crimean Tatar woman is blowing the whistle in front of the government building in Kyiv during a protest held on Aug. 7 2009. Tatars have held numerous protests both in Kyiv and Crimea and are now threatening to carry out a mayor hunger strike. (UNIAN)

parcels and who have not,” Zevzhet Kurkumetov said.

“Tatars will give up their demands for 100 square meters of land only after the government will make oligarchs and high ranking officials give up their hectares of land in Crimea obtained illegally,” said deputy Mejlis head Refat Chubarov.

Like many things in Ukraine, who controls what land in Crimea is unclear.

“As in the rest of the country, there is no land cadastre available to the general public, and the map of land of Crimea is probably the most secret document on the peninsula,” said Ihor Semyvolos, head of the Association of Middle East Studies, who is researching the issue on the peninsula.

Ex-speaker of the Crimean

Parliament, Anatoliy Grytsenko, was detained on Jan. 24 and accused of abuse of power by giving away 4,800 hectares of land illegally. Another criminal case was opened later involving land fraud with resort lands in Yalta.

Previously, a criminal case was opened against the head of the state company Livadia, accused of giving away 20.5 hectares of land.

“Authorities simply cannot stand the thought of giving up those valuable parcels to Tatars for free while they could have been sold for huge money,” said the head of the Mejlis, Mustafa Dzhemilev.

Consequently, squatters such as Vedutova say they are threatened with summons, eviction and fines from police.

Some Tatars are trying to act law-

fully, but without success. “In 2003 village council in Livadia gave 6 hectares of land to 50 Tatar families. However, later we found that the land was given to a Donetsk-based firm,” says Ibrahim Voyenny, head of Koidyshler Tatar organization. Since then Tatars issued numerous complaints, but to no avail.

Dzharty, the Crimean prime minister, promises the situation with Tatar land in Crimea will be resolved within a month with the findings of a special commission. Tatars remain skeptical.

“There have been numerous commissions over the last 20 years,” says Mejlis head Dzhemilev. “The last one was in 2009. It produced recommendations to the government. But nothing happened,” Dzhemilev said.

Meanwhile, authorities continue trying to persuade Tatars to spare the most valuable parcels of land, he added.

Experts say more delay in solving land issues could trigger unrest.

“The whole issue should have been resolved in the 1990s, when deported Tatars started to come back to Crimea.

If not to resolve the problem now, the tension will only grow and that can spur anything –to violence – on the peninsula,” Ihor Semyvolos said.

Tatars like Vedutova say they will stay put.

“We have seized ownerless abandoned land,” she said. “We did not go to fight for our houses taken from our parents,” Vedutova said. “But we have nowhere to go from this land now.

So we will fight for this land until we win.”

Kyiv Post staff writer Svitlana Tuchynska can be reached at tuchynska@kyivpost.com

www.kyivpost.com

News 19

February 4, 2011

Where is the Kyiv mayor?

BY S V I T L A N A T U C H YN S KA TUCHYNSKA@KYIVPOST.COM

Has anyone seen eccentric Kyiv Mayor Leonid Chernovetsky? The city’s nominal chief, stripped of most of his duties by the President Viktor Yanukovych administration, has been out of the public eye for several months.

Now even the prime minister claims to be wondering where he’s got to.

Mykola Azarov told the head of the city administration, Oleksandr Popov, to “bring him back to work.” Azarov had earlier said Chernovetsky’s role had become similar to that of the “Queen of England,” after Popov was effectively appointed to run the city by Yanukovych.

Insiders at city hall say Chernovetsky is not even in the country. Analysts suggest a deal has been struck with Yanukovych’s ruling Party of Regions that he disappear from public view in exchange for immunity from prosecution in connection with various accusations of corruption. Chernovetsky’s inner circle members have repeatedly denied that he or his team has any reason to hide or did anything that could be considered corrupt.

Known for his extravagance, including hosting a press conference in swimming trunks and offering to sell kisses to fill the city budget, Chernovetsky was in the spotlight until Popov was made deputy of the city administration in June 2010, effectively taking over city management.

In November, Chernovetsky was

Eccentric Kyiv Mayor Leonid Chernovetsky (L), whose nickname is “Cosmos,” and head of the city administration, Oleksandr Popov, in Kyiv on June 15.

(UNIAN)

dismissed as head of the city administration by a parliamentary decision that separated the posts of Kyiv city’s elected mayor and head of city administration. The decision left him with a mostly ceremonial role of a city mayor.

But months before this, Chernovetsky disappeared from public eye. Today, his whereabouts appear to be a mystery even to Azarov.

“Are Kyivans dreaming of him coming back?” Azarov asked journalists

who raised the question. “In this case, I ask Popov to find the mayor. Tell him Kyivans miss him and ask him to come back to work.”

However, Chernovetsky has still failed to appear, and Popov said he has no information on his whereabouts.

“I saw Chernovetsky before the New Year holidays. After that I spoke to him on the phone. He is alive and well,” he said.

A city administration employee, speaking on condition of anonymity

Officials involved in gas dispute sitting in jail Æ17 seizure of RosUkrEnergo gas.

RosUkrEnergo filed a claim in the Stockholm arbitration court and, once in power, it appeared that the new Ukrainian government dropped its claim to the gas – allowing it to go back to RosUkrEnergo.

That wasn’t enough, evidently, to satisfy the new administration.

Khoroshkovsky, who had business interests with Firtash in the nation’s most watched television station Inter, led criminal investigations as Security Service of Ukraine chief into officials involved in carrying out Tymoshenko’s order to seize the gas – which she says she had Moscow’s permission to claim, as part of the Jan. 19, 2009, accords. And that includes Makarenko and Didenko, who participated in the transfer of ownership of the gas from RosUkrEnergo to state monopoly Naftogaz.

After Khoroshkovsky stepped down as Customs Service chief on Jan. 28, 2009, Yushchenko promptly appointed him deputy chief of the Security Service.

The premier law enforcement agency promptly launched an investigation into the gas transfer. Masked SBU agents in March 2009 stormed the offices of Naftogaz and its subsidiary, Ukrtransgaz, to seize records. A Kyiv court quashed the probe, which was reactivated after Yanukovych won the 2010 presidential election and gave Khoroshkovsky the top job at the Security Service. Makarenko was summoned for questioning.

SBU agents called Makarenko this summer to ask him to cut short his family vacation abroad and return for questioning. He complied. A day after

returning to Kyiv on June 22, he was summoned for questioning at SBU headquarters and arrested.

Next came Didenko, who was tackled a week later in Kyiv by members of the SBU’s elite “Alpha” special forces unit. Five more lower-ranking officials, three from the Customs Service and two from Naftogaz, were next called in for questioning and charged with various offenses. State prosecutors, meanwhile, announce criminal investigations against at least a dozen former government officials, including Tymoshenko.

Makarenko’s lawyer, Yuriy Sukhov, said SBU agents prevented his client from leaving the SBU headquarters building after the initial interrogation.

“They conferred with their superiors for a couple hours before bundling him off him to a temporary holding facility for convicted criminals in Kyiv’s Podil district,” he said.

Sukhov said Makarenko was subsequently transferred to the Lukyanivska pretrial detention center after Kyiv’s Pechersk district court ruled that he might flee trial or improperly influence the investigation. Makarenko was held on suspicion of dereliction of duty for the first five months of his pretrial detention. The SBU on Sept.

30 dropped those charges, accusing him instead of abuse of office - a more serious offense. Initially charged with embezzlement, Didenko is now accused of exceeding his authority.

SBU spokeswoman Marina Ostapenko said her agency completed its pretrial probe of seven former Customs Service

and Naftogaz officials on Oct. 8, 2010.

She said the SBU is carrying out the pretrial investigation because the law enforcement agency was the first to find evidence of wrongdoing. However, according Article 112 of the Criminal Procedural Code, the state prosecutor’s office is obliged to conduct investigations “in all cases related to crimes committed by high-ranking officials” – a description that fits the cases of Makarenko and Didenko.

“The entire case is based on the imagination of investigators - not testimony from witnesses or independent experts about any crime allegedly committed,” Sukhov said.

Serhiy Baturin, a lawyer representing Didenko, echoed the sentiment. “It’s Kafkaesque,” he said. “The fact that the SBU, which is headed by someone with ties to Firtash, is running the investigation is in and of itself a travesty,” Baturin said.

Yuriy Yakymenko, an expert at Kyiv's Razumkov think tank, said the cases show the nation continues to be hobbled by “a dysfunctional judicial system and a security apparatus that retains many habits of the Kuchma era, a problem Yushchenko said he recognized but did little to fix. This doesn’t mean former officials, including Makarenko and Didenko, didn’t commit illegal acts.

But it does mean it will be very difficult for them to get a fair trial.”

“Recent surveys show that very few people believe the arrests are part of a sincere effort to battle corruption,” Yakymenko added. “These cases only reinforce that sentiment.”

because she is not authorized to comment, said: “Nobody here has seen him in at least one and a half months.”

Sources close to the mayor told the Kyiv Post that he spends most of his time abroad, dividing his time between vacationing in Switzerland and visiting his wife’s relatives in Georgia.

According to officials at the city council, which Chernovetsky heads, documents are regularly delivered to him by plane to sign. “Sometimes we are asked to prepare the documents faster as we are told ‘the plane is leaving tomorrow morning,’” says a city council employee.

Meanwhile it is not clear if Chernovetsky is on sick leave or vacation or if he is being paid salary. “I simply do not ask him these questions,” said Marta Grimska, an adviser to Chernovetsky.

The press service of Kyiv’s city administration declined to comment.

Experts say the situation with city mayor is absurd and undermines democracy. “This so-called search for Chernovetsky is a farce, as it is obvious that his absence is a part of the deal with Party of Regions,” said Oleksiy Haran, a political science professor at Kyiv Mohyla Academy.

Experts have questioned the legitimacy of the decision to replace Chernovetsky, as Popov was never elected by Kyivans and the decision was never considered by the Constitutional Court.

Political analysts said the deal seemingly struck with the ruling Party

of Regions could protect him from prosecution.

Several of his subordinates have been detained on charges of fraud and embezzlement and remain in custody.

However, none of his closest allies face any charges and no cases have been launched against Chernovetsky himself.

Since he became city mayor in 2006, political opponents have accused Chernovetsky of mismanaging the city and its resources. Most allegations involve massive land fraud in which valuable parcels were sold at privileged prices to companies whose ownership remains hazy.

Political analyst Volodymyr Fesenko, head of the Penta think tank, said Chernovetsky is likely to remain in the shadows for awhile. “Now is not the right time [for Yanukovych’s party] to hold elections in Kyiv. Water and gas tariffs have just gone up and Popov does not have enough support to win yet,” he said.

But the future may not be so rosy for Chernovetsky. The Party of Regions will most likely have Popov running for mayor in 2012, at which time Chernovetsky might become a useful fall guy.

“To arrest Chernovetsky on accusations of fraud might become a good PR strategy before the mayoral elections,” Fesenko said. “Or at least they might issue a warrant and let him flee abroad.”

Kyiv Post staff writer Svitlana Tuchynska can be reached at tuchynska@kyivpost.com

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Arizona Barbeque (25 NaberezhnoKhreshchatytska St.) ATZUMARI (17/52 Bohdana Khmelnytskoho St.) AutPab (3/25 Kominterna St.) Babuin (10 Kominterna St.) Babai beer Club (4 SoďŹ ivska St.) Bar BQ (10/1 Horodetskoho St.) BeerBerry (17/52 Bohdana Khmelnytskoho St.) Belle Vue (7 Saksahanskoho St.) Belvedere (1 Dniprovsky Uzviz) Bierstube (20 Velyka Vasylkivska St.) Bochka Pyvna (3B Bohdana Khmelnytskoho St.; 19A Khreshchatyk St.; 128 Borshchahivska St.; 19 Mezhyhirska St.) Brasserie Jean-Claude (2 Besarabska Square) Bulvar Cafe/Shaliapin (44 Velyka Vasylkivska St.) Cabaret 'Paradise' (5-7/29 Taras Shevchenko Blvd. ) Ciro`s Pomodoro (12 Shota Rustaveli St.) Coffee Life (22 Yaroslaviv Val St., 40 Uritskoho St., 2 Turhenevska St.) Dim Kavy (15 Khreshchatyk St., Passage) Dom Bergonie (17 Pushkinska St.) DOUBLE COFFEE (42 Bohdana Khmelnytskoho; 34B Moskovskyi Avenue St., 6 Mykhailivska St.; 1/2 Konstantynivska St.) Dubki (1 Stetsenko St.) Dva Bobra (91 Komarova St., village Mila) ETNO (23A Prorizna St., 25 Pushkinska St., 8/14 Velyka Zhytomyrska St.) Fellini (5 Horodetskoho St.) Fish Market (24A Volodymyrska St.) Fluger (18D Artema St.) Fridays (5A Besarabska Square) Goodman Steak House (75 Zhylians'ka St.) Grandal (24B Polyova St.) Hameleon –5 (82 Turhenevska St.) Himalai (23 Khreshchatyk St.) IQ bar (25 L.Tolstogo St.) IL Patio (112 Saksahanskoho St., 5A Besarabska Square, 5/13 NaberezhnoKhreshchatytska St., 57/3 Velyka Vasylkivska St.) Izumi (24A Mykhailivska St., 46/2 Moskovska St.) John Bull Pub (36 Saksahanskoho St.) Kaffa (3 Shevchenko prov., 22 Saksahanskoho St.,5 Skovorody St.) Klovsky (16A Mechnykova St.) Korifey (6 Horodetskoho St.)

Kraina Kavy (5 Spas'ka St.) La Bodeguita del Medio (21/20 Yaroslaviv Val St.) La Casa Del Habano (13 Klovskiy Spusk) Le Cosmopolite (47 Volodymyrska St.) Leo Club (20 Parkova Doroha) Leonardo (2 Besarabska Square) Luciano (33V Dehtiarivska St.) Lun Van (26 Bohdana Khmelnytskoho St.) MaLLina (27B Sahaidachnoho St.) Marokana (24 Lesi Ukrainki Blvd.)

Marmaris (40 Hlybochyts'ka St.) Metropolis (12 Amosova St.) Monako (20A Velyka Zhytomyrska St.) NatĂźrlich (3 Bohdana Khmelnytskoho St.) New Bombey Palace (33A Druzhby Narodiv Blvd.)

News cafÊ (6 Hetmana St.) O’Brien’s (17A Mykhailivska St.) O’Connor`s (15/8 Khoriva St.) O’Panas (10 Tereshchenkivska St.) Oliva (34 Velyka Vasylkivska St., 25A Druzhby Narodiv Blvd., 5 Kominterna St.) Panda (76 Saksahanskoho St.) Panorama (3 Sholudenko St.) Pantagruel (1 Lysenko St.) Pizza Vezuvio (25 Reitarska St.) Planet-Sushi (68 Saksahanskoho, 12 Khreshchatyk St., 57/3 Velyka Vasylkivska St.,) Potato House (6/5 Zhytomyrska St.) Repriza (40/25 Bohdana Khmelnytskoho St.; 38 Velyka Zhytomyrska St.; 26 Chervonoarmiyska St.) Route 66 (87/30 Zhylianska St.) Schnitzel Haus (51 Saksahanskoho St.) Shastra (126A Chervonozorianiy Prosp.)

Shokoladnitsa (53/80 Saksahanskoho St., 48 Velyka Vasylkivska St., 1/2 Baseina St., 31/27 B.Khmelnitskogo St. 4 Lunacharskoho St., 33 Dniprovska Naberezhna, 12 Luhova St., 58/2A Artema St.) Shooters (22 Moskovska St.) Soho (82 Artema St.) Stina (2 Besarabska Square) Suare (11 Artema St.) Sunduk (22A Prorizna St.) Sutra Bar (3 TymoďŹ ivoi St.) Svitlytsia (13B Andriivskyi Uzviz) Teatro (53 Bohdana Khmelnytskoho St.) Tike (31A Sahaidachnoho St.) Timeout (50 Horkoho St.) To Dublin (4 Raisa Okipna St.)

Trans Force (34B Moskovsky Prosp.)

Tsarske Selo (42/1 Ivan Mazepa St.) Under Wonder (21 Velyka Vasylkivska St.) Uruk (11 Yaroslaviv Val St.) Varenichna Pobeda (14 SoďŹ ivska St.) Verona Pizza (71E Konstantinivska St.; 1 Lv.Tolstogo St.) Videnski Bulochky (25B Sahaidachnoho St.; 14/1 Instytutska St., 14 Mechnykova St.; 1-3/5 Pushkinska St.; 107/47 Saksahanskoho St.; 34 Lesi Ukrainki Blvd.; 20 Esplanadna St.) Viola’s Bar (1A Taras Shevchenko Blvd.)

Warsteiner Pub (4B Horodetskoho St.) Wolkonsky Keyzer (15 Khreshchatyk St., 5/7-29 Taras Shevchenko Blvd.)

Yakitoria (27A Taras Shevchenko Blvd.; 27 Lesi Ukrainki Blvd.)

3PORT #LUBS 5 Element (29 Elektrykiv St.) Favorit (6 Muzeiniy Lane) Kiev Sport Club (5 Druzhby Narodiv Blvd.)

Planeta Fitnes (10 Kropyvnytskoho St.)

(OTELS Adria (2 Raisa Okipna St.) AttachĂŠ Hotel (59 Zhylianska St.) Diarso (5 Velyka Kiltseva Doroha) Domus Hotel (19 Yaroslavskaya St.) Express (38/40 Taras Shevchenko Blvd.)

Gorniy Ruchey (66 Michurina St., village Gora, Boryspil region) Hotel Dnipro (1/2 Khreshchatyk St.) Hyatt (5A Alla Tarasova St.) Impressa Hotel (21 Sahaidachnoho St.) Intercontinental (2A Velyka Zhytomyrska St.) Kozatsky (1/3 Mykhailivska St., 2/32 Antonova St.) Kozatsky Stan (Boryspilske Shose, 18 km) Khreschatyk hotel (14 Khreshchatyk St.) Lybid (1 Peremohy Prosp.)

Mir (40-richya Zhovtnya Av.) Opera Hotel (53 Bohdana Khmelnytskoho St.) Oselya (11 Kameniariv St.) President Hotel (12 Hospitalna St.) Premier Palace (5-7/29 Taras Shevchenko Blvd.)

To inquire about distribution of the Kyiv Post, please contact Serhiy Kuprin at kuprin@kyivpost.com or by phone at 234-6409

Radisson Blu (22 Yaroslaviv Val St.) Riviera (15 Sahaidachnoho St.) Rus (4 Hospytalna St.) Salyut (11B Sichnevogo Povstannia St.) Senator Apartments (6 Pirohova St., 62/20 Dmitrievska St.) Slavutych (1 Entuziastiv St.)

%DUCATIONAL ESTABLISHMENTS Business School MIM-Kyiv (10/12B Shulyavska St.) British skylines (16 Khreshchatyk St., 10G Larysy Rudenko St.) DEC school (19 Obolonska Naberegnaya) International Institute of Business (8A Brest-Litovskyi Highway) Kyiv International School (3A Sviatoshynsky Lane) Master Klass (34 Ivan Mazepa St.) Pechersk International School (7A Viktora Zabily St.) Runov school (30 Velyka Vasylkivska St.) Speak Up (14 Kotsiubynskoho St. 25B Sahaidachnoho St., 4 Lunacharskoho St., 136 Peremohy Prosp., 14 Vasylkivska St., 26 Lesi Ukrainki Blvd., 3-a Gryshka St.) Sterling Business School (7 Nesterivskiy prov.)

The London School of English (39 Polytehnichna St.) Valerie’s school (14 Mykhailivska St.)

"USINESS #ENTERS Arena (2A Baseina St.) Artem (4 Hlybochytska St.) Cubic Cente (3 Sholudenko St.) Diplomat Hall (59 Zhylianska St.) Eurasia Ukraine (73-79 Zhylianska St.) Evropa (4 Muzeiniy Lane) Evropa Plaza (120 Saksahanskoho St.) GOOIOORD B.V. (34/33 Ivana Franka St., 36 Ivana Franka St.,11 Mykhailivska St., 52B Bohdana Khmelnytskoho St.) Horizon Park (12 Amosova St., 4 Grinchenko St.) Illinsky (8 Illinska St.) Khreshchatyk Plaza (19A Khreshchatyk St.) Kiev-Donbass (42/4 Pushkinska St.) Podol Plaza (19 Skovorody St.)

Lifestyle

Some 7,000 kilometers from Ukraine, life in Laos is simple, spiritual and measured.

February 4, 2011

Play | Food | Entertainment | Sports | Culture | Music | Movies | Art | Community Events

Ukrainian love for astrology

A man rests next to a lantern shaped as a rabbit in Taipei on Feb. 1. The rabbit is the star of the Chinese lunar calendar. Many Ukrainians believe in astrological predictions (AFP)

BY N ATA L I YA H OR B AN HORBAN@KYIVPOST.COM

With a horoscope in the morning and a prayer in the evening, Ukrainians are an odd mix when it comes to believing in things supernatural. You’d be surprised how many of them actually consume astrological forecasts together with their coffee – instead of news – in the morning.

As the Chinese around the world prepare for the Lunar New Year, which starts on Feb. 3, many Ukrainians have already stocked up on its symbol – the rabbit. From simple desk calendars to toy bunnies, business has been going well for astrological entrepreneurs. Glossy magazines give generous chunks of space to the 2011 listings of ups and downs as told by the stars.

The trend is so ubiquitous – you can read your forecast on flat screens in the metro. Many Christian Orthodox believers partake in the custom, hardly

questioning the clash. Some argue that this cultural trait actually helps to explain why Ukrainians lack initiative and are often complacent with the political order.

However, for Olena Afanasenkova, the chief designer at the small toy factory Anna, Ukrainian addiction to astrology means business. “For half a year we barely make ends meet. But in winter, we catch up thanks to all the [astrology-related] toys,� said Afanasenkova.

From October to December, orders tripled, she said, while rabbits made up 70 percent of all toys produced at the factory based in the Kyiv suburbs.

Purchasing images or toys is one way to warm up to a rabbit. But if you are really serious, astrologists can draft a life plan for the year ahead. Chemical engineer-turned-astrologist Pavlo Mikhlin from Kyiv said he charges $50 per hour of forecasting depending on how complex your request is.

For an individual horoscope, prices

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start from $100. Ukrainians are most curious “about career first, followed by personal life, business partners, and real estate,� said Mikhlin who’s been in business for over a decade.

For a daily free portion of unearthly matters, it’s enough to go online or pick up a newspaper. But professional starreaders, in the words of Mikhlin, think that those blurbs spoil “the respectable science of astrology.� And they have a reason to believe so.

Editorial staff: +380 44 234-65-00 news@kyivpost.com

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Æ Horoscopes are found all over Kyiv, even on television screens in the city’s metro

A journalist from a major Ukrainian daily, who asked to remain anonymous in fear of losing his job, said he used to write a horoscope page by himself. “We had a professional astrologist, but he often failed to submit his work on time. We didn’t want to look for anyone new, so I had to use my imagination,� he explained. The impersonator said that the easiest way to write them was by asking his colleagues what they wanted in the future. “Some asked for more love, while others needed money.

My horoscopes did not always come true, but nobody complained,� he said laughing.

From paganism to Christianity with a flavor of communism in between, Ukrainians find it hard to let go of the supernatural. “They tend to believe that there are many things beyond their control so they look for clues to avoid danger in any way they can.

It is mostly a self-fulfilling prophesy, though,� said psychologist Æ26

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Food Critic WITH NATALIYA HORBAN A AN HORBAN@KYIVPOST.COM

Editor’s note: Eating out in Ukraine is a gamble. To bring you honest food reviews, Kyiv Post writers go to restaurants unannounced, pay for their own meals and never accept favors from restaurateurs.

Roll House offers great sushi for delivery via its friendly website If eating out in Kyiv is a gamble, ordering food online is even a riskier venture. Ukrainians trust a virtual cook only with things like sushi and pizza. But even with these dishes, it can be a hit and miss experience. And if it’s a failure, what can you do? Apart from berating the person who took your order over the phone or making your friends vow they’d never order from this shop, there is hardly any other way to get your money back.

After numerous epic failures in sushi bars – whether over price or quality, I have migrated online. Keeping my expectations low, I came across the Roll House website and was pleasantly surprised.

In the ocean of sushi pages, I stopped by the Roll House thanks to their user-friendly design.

Decidedly one of the company’s stronger points, it grabs your attention from the first click. When you point at any picture, it automatically expands giving you a better view of your future meal.

If you forget what you’ve already added to your basket, there’s no need to reload the page. Just point at your shopping bag with a mouse, and the image pops up immediately. They promise to call you back in half an hour to confirm the order, but my phone beeped in three minutes after I logged out.

The lady on the other end of the line sounded polite and got my order right. The only downside was that she asked me, in a truly Ukrainian fashion, to prepare cash that wouldn’t require change.

The Roll House has a wide selection of moderately priced rolls, sushi, soups, hot Asian dishes, as well as deserts and drinks. You can also order customized sushi by mixing and matching different ingredients, sauces and pastes.

California rolls with shrimp (Hr 54.95) had tiger shrimp, avocado, and tobico caviar in generous supply. Our second choice was triangle maki, or rolls, with tuna fish and cucumber, covered with sesame seeds and Japanese mayonnaise – lighter in flavor compared to its traditional version (Hr 31.95).

We also chose individual sushi, made with smoked eel, cucumber, avocado and tofu, which came up to Hr 43 for eight pieces. Everything arrived fresh and delicious. Æ25

(www.memegenerator.net)

Saturday, Feb.5

www.kyivpost.com

February 4, 2011

Bob Marley’s birthday

This guy with dreadlocks taught the wisdom of “No Woman No Cry.” His “Could You Be Loved” and “Jamming” became hymns to free love and individuality. Bob Marley still lives in the hearts of millions of people 30 years after his death.

One of the world’s best-loved reggae musicians died at the age of 36 from skin cancer. The album “Legend” released after Marley’s death sold 20 million copies. He is known not only for his chilled and soulful music but take-iteasy lifestyle. Marley smoked cannabis for spiritual experiences and preached love and peace through his songs. His great talent was marked in many ways, with Grammy Lifetime Achievement Award perhaps being the greatest recognition. His 66th birthday will be celebrated all over the world and Kyiv is not an exception. The Kyiv Post tracked down two big Marley parties: Saturday, Feb.5, 8 p.m., Art-club 44, 44 Khreshchatyk St., 279-4137. Tickets: Hr 80-100.

Saturday, Feb. 5, 7 p.m., Club Lenin, 7 Izyumska St., metro Demiyivska, www.leninclub.com. Tickets: Hr 30.

(hautgarrigue.com)

Apply till Feb. 15

(www.raveline.de)

22 Entertainment Guide

Friday, Feb. 4

DJ Oliver Koletzki & singer-sidekick Fran Oliver Koletzki is a German DJ who shot to fame some six years ago with the popular track “Der Muckenschwarm.” The techno world was impressed. Koletzki suddenly woke up to scores of awards and invitations. With his own label “Stir vor Talent,” he records in minimal techno, tech house and electro styles. In 2010, the DJ started collaborating with singer Fran, whose charming soft voice diluted his hardcore beats growing into romantic electro pop.

Friday, Feb. 4, 11:30 p.m., Crystal Hall, 1 Dniprovsky Uzviz, 538-0100, www.crystalhall.com.ua. Tickets: Hr 200-700.

Sunday, Feb. 13

Classes for French wine lovers

(www.simfonia.net)

Best classical concert picks Saturday, Feb. 5 – “Viva, Mozart!” concert marks the 255th anniversary of Mozart’s birth at 7 p.m., Budynok Aktora, 7 Yaroslaviv Val St., 235-2081, www.actorhall.com.ua. Tickets: Hr 15-40.

Monday, Feb. 6 – National Bandura Players’ Capella, 7 p.m., National philharmonic, 2 Volodymyrsky Uzviz, 278-1697, www.filarmonia.com.ua.

Tickets: Hr 10-60.

(www.jazzonstage.nl)

If you speak French, love good wine and want to learn more about it, sign up for a professional class. Olivier Duffour, the head of French wine boutique Vinolioub, will take you through a five-lecture course, starting February through June. The focus is on French wines only.

Beginners and more advanced wine connoisseurs are welcome. They will be separated in two groups taking a class each month on Wednesdays or Thursdays at 7 p.m.

The French are famous for their Pinot Noir, Chardonnay, Bordeaux and other grape varieties native to their land. Learn their history, difference in taste and proper glassware at the French Cultural Center. French nibbles will be provided for the advanced learners.

Apply till Feb. 15, French Cultural Center, 84 Honchara St., 482-2371, www.ifu.com.ua. Price: Hr 530 for beginners, Hr 1,050 for advanced drinkers.

Dutch jazz feast Michiel Borstlap is a Dutch jazzman. The piano has been his companion from the age of four. Now, with nearly four decades of experience, he writes music, improvises on stage and writes soundtracks for movies. When he is not playing, he contributes to Esquire magazine as a columnist.

Borstlap collaborated with many of the worlds’ famous musicians, from Herbie Hancock to members of the bands Genesis and Yes. He also wrote one of the first operas in the Arabic language, “Aviccena.” Other well-known jazzmen, double-bass player Ark Ovrutski and drummer Erik Kooger will accompany Borstlap in Kyiv.

Sunday, Feb. 13, 7 p.m., National music academy, 11 Khreshchatyk St., 067430-7306. Tickets: Hr 100-300.

Wednesday, Feb. 9 – Organist Iryna Kalynovska plays works by Mendelson, Bach, Pachebel at 7:30 p.m., the House of Organ Music, 77 Velyka Vasylkivska St., 528-3186, www.organhall.kiev.ua. Tickets: Hr 20-50.

Compiled by Nataliya Horban

www.kyivpost.com

February 4, 2011

Movies

Entertainment Guide 23 Live Music Band Selo i Liudy, or village and people, sings cover versions of popular English songs.

A scene from the French drama Enter the Void. (www.4.bp.blogspot.com)

ENTER THE VOID Language: English with Ukrainian subtitles Drama/Thriller. France (2009) Directed by Gaspar NoÊ Starring Nathaniel Brown, Paz de la Huerta and Cyril Roy Drug dealer Oscar and stripper Linda are new to Tokyo. Yet shortly after they settle in, Oscar is shot during a police raid. His spirit, however, soon reappears to watch over Linda, his sister. A strange erotic whirlpool of Oscar’s memories haunts the rest of the picture oddly mixing the past with the present.

Born in Argentina, French filmmaker Gaspar Noe is clearly inspired by Stanley Kubrick often quoting him in his works. His 2002 film “Irreversible� starring Monica Bellucci and Vincent Cassel featured a nine-minute long rape scene. “Irreversible�, as well as “Enter the Void,� were nominated for best picture in the Cannes International Film Festival.

THE INTRUDER Language: French with Ukrainian subtitles Drama. France (2004) Directed by Claire Denis Starring Michel Subor, GrÊgoire Colin and Yekaterina Golubeva Louis is an old man pushing his 70’s, with a lot of regret on his shoulders. After a heart surgery, he decides to leave his refuge in

the mountains and mend a few things.

Traveling from the French-Swiss border to Tahiti, he is on a mission to find his long- forgotten son. Memories of the past torment his present. It turns out that Louis was quite heartless and rude to his son all these years. But the young man didn’t hold it against him and even named one of his two sons after their grandfather.

The film was based on the autobiographical essay by philosopher Jean-Luc Nancy.

ILLUSION TRAVELS BY STREETCAR Language: Spanish with Russian subtitles Comedy/Adventure/Drama.

Mexico (1954) Directed by Luis BuĂąuel Starring Lilia Prado, Carlos Navarro and Fernando Soto Learning that their beloved streetcar #133 is going to be written off, two workers of the Municipal Transit get drunk and steal it to go for one last ride.

However, the last round turns out to be an all-night and all-day voyage, during which the workers find themselves in bizarre situations and, of course, cannot return the car on time.

PAINT YOUR WAGON Language: English with English subtitles Comedy/Musical/Romance. USA (1969) Directed by Joshua Logan

Starring Lee Marvin, Clint Eastwood and Jean Seberg The story takes place in a small goldmining town in California in 1840s – long before California became a state. Two unlikely prospector partners buy and share a wife, hijack a stage and kidnap six prostitutes. They also drink, sing and gamble a lot, but still find time to look for gold.

In the movie Eastwood and Marvin do their own singing. The film was released at the time, when musicals were going out of fashion. But young Eastwood managed to keep the genre afloat for a bit longer.

ZHOVTEN 26 Kostyantynivska St., 205-5951 Enter the Void Feb. 4-9 at 8:40 p.m.

MASTERCLASS CINEMA CLUB 34 Mazepy St., 594-1063 Illusion Travels by Streetcar Feb. 8 at 7 p.m.

Paint Your Wagon Feb. 10 at 7 p.m.

BUDYNOK KINO 6 Saksaganskogo St., 287-7557 The Intruder Feb. 7 at 7 p.m.

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DOCKER’S ABC 15 Khreshchatyk St., 278-1717, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m.

Feb. 4 Chilibombers, Karnavalnaya Zhara, Hr 70 Feb. 5 Tabula Rasa, Partizanskie Vytivky, Hr 70 Feb. 6 Vostochny Express, free admission Feb. 7 Animals Session, free admission Feb. 8 Tres Deseos Latino Party, Hr 20 Feb. 9 Rockin’ Wolves, Hr 30 DOCKER PUB 25 Bohatyrska St., metro Heroyiv Dnipra, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m.

Feb. 4 Mad Heads XL, Red Rocks, Hr 70 Feb. 5 The Beatles Party: Dans Ramblers (Russia), More Huana, Feb. 6 Bartender’s Day: More Huana, Red Rocks Feb. 7 Mojo Jo Jo, free admission Feb. 8 Second Breath, free admission Feb. 9 The Magma, free admission Feb. 10 Ruki V Briuki Rockabilly Party,

PORTER PUB 3 Mazepy St., 280-1996, www.porter.com.ua Concerts traditionally start at 7:30 p.m.

Feb. 4 Yuhym Dym Feb. 5 Midnight Blues Feb. 6 D.D.Cvartet Feb. 9 Ivan Bliuz Feb. 10 Dikie Liudi BOCHKA PYVNA ON KHMELNYTSKOHO 4B-1 Khmelnytskoho St, metro Teatralna, 390-6106, www.bochka.com.ua Concerts traditionally start at 9-10 p.m.

Feb. 4 L.A., Tres Deseos Feb. 5 G Sound, Hot Guys Feb. 9 Root Boys Feb. 10 Lucky Band JAZZ DO IT 76A Velyka Vasylkivska St., 599-7617, www.jazz-doit.com.ua Concerts traditionally start at 8:30 p.m.

Feb. 4 Tetyana Arefieva Duo Feb. 5 Jazz Inside Duo Feb. 9 Dmitriy Garkavenko Other live music clubs: GOLDEN GATE IRISH PUB, 15, Zolotovoritska St., 235-5188, http://goldengatepubkiev.com/ TO DUBLIN IRISH PUB, 4 Raisy Okipnoi St., 569-5531, http://www.to-dublin.com.ua/ PIVNA NO.1 ON BASEYNA, 15 Baseyna St., 287-44-34, www.pivna1.com.ua DRAFT 1/2 Khoryva St., metro Kontraktova Ploshcha, 463-7330 KHLIB CLUB 12 Frunze St., www.myspace.com/xlibclub CHESHIRE CAT 9 Sklyarenko St., 428-2717 O’BRIEN’S 17A Mykhaylivska St., 279-1584 DAKOTA 14G Heroyiv Stalinhrada St., 468-7410 U KRUZHKI 12/37 Dekabrystiv St., 562-6262.

Compiled by Alexandra Romanovskaya and Svitlana Kolesnykova

alcohol

NEW BOMBAY PALACE

ART CLUB 44 44B Khreshchatyk St., 279-4137, www.club44.com.ua Concerts traditionally start at 8 – 10 p.m.

Feb. 4 Selo I Liudy, Hr 50 Feb. 5 Bob Marley Birthday & International Reggae Festival: Vibronics (UK), Hr 100 Feb. 6 Soiuz 44 Jam Session, free admission Feb. 7 Bla-Bla Radio, free admission Feb. 8 Winter Jazz Nights: New Generation & Alexei Bogoliubov Trio, Feb. 9 Drymba ta Dzyga, free admission Feb. 10 Balkan Party, Hr 20

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24 Lifestyle

www.kyivpost.com

February 4, 2011

Poor but charming Laos offers relaxing stop in Southeast Asia

BY S V I T L A N A T U C H YN S KA

A group of Laotian monks line up for their daily alms in Vientiane.

Buddhism is the national religion of this quiet Laotian capital along the Mekong River where people wait on the street in the early mornings to offer food to much-revered monks.

(AFP)

TUCHYNSKA@KYIVPOST.COM

Editor’s note: After eventful journeys through Sri Lanka and Malaysia, the Kyiv Post moves on to Laos in the third of a four-part trip around Asia.

Arriving into the capital of Laos’s tiny airport, you are struck immediately by its relaxed attitude and laid-back atmosphere. Vientiane is an unusual capital city. When you get to the center of it, the first thing you’ll notice is that few buildings, except for some government ones, are over three stories in height.

The city’s population is less than a million.

The Mekong River, the largest in Southeast Asia, runs through the city, separating Vientiane from Thailand.

Mekong wharf is a lovely place to go for a walk or even exercise – free gym equipment is installed there for everyone to use.

Red flags with hammers and sickles fly in the air outside hospitals, schools and administrative buildings – a constant reminder that the country is run by the Communist government and has virtually no freedom of press.

The history of Laos traces its roots to the Kingdom of Lan Xang, or the Land of a Million Elephants, which existed until the 18 century but then fell under French rule. Laos became independent in 1954 as a constitutional monarchy, but the king didn’t last long.

The communists came to power in 1975 after a civil war.

If you expect to see elephants, as the country’s name suggests, you have to go hiking in the jungle. A lot of them had been gunned down for precious ivory and skin. Illegal hunting continues to this day.

Laos remains poor, and the vast majority of people’s lives seem to have changed little over the centuries. I was charmed by the Sinh – a traditional Lao skirt worn by practically all women

in the country. It’s a simple wrap up tube skirt made of Lao silk, cotton, or a mix of both, and comes in a variety of colors and designs.

This and much more can be bought at the large market situated next to the main avenue Lane Xang. Virtually anything from cell phones and laptops to clothes and bags can be bought there

The twilight draws over the Nam Khan River near the ancient royal capital town of Luang Prabang in northern Laos. (Svitlana Tuchynska)

at an affordable price. Do not forget to bargain, starting off by cutting the price they offer at least in half.

Numerous Chinese and Lao cafes near the market offer a decent and large meal for $3. If you are lucky to come at the right time, you can also see chefs cooking, which is a show in itself.

In the evening, a part of the wharf becomes an open air restaurant where you get to sit at a low table on floor cushions and taste Laotian specialties – barbequed meat, vegetables, sticky sweet rice and local beer Beerlao.

Lao cuisine is not as rich as Malaysian and Indian but is very similar to that of southern China and Cambodia. Apart from the white rice, locals eat sticky rice, which is sweet and brown. Herbs and greenery are vital ingredients almost in any meal. Local delicacies include tam mak hoong, a spicy green papaya salad, noodle soups, spring rolls wrapped in rice paper, and duck and fish stewed in banana leaves or with bamboo.

Like every other city in the country, Vientiane is filled with temples and Buddhist monasteries. Monks of all ages, clad in orange, fill the streets around 5.30 a.m. for an alms-giving ceremony. People bring food and drinks to them, which is considered a great merit by Buddhists.

It’s worth spending several hours in the 16th-century Ho Phra Keo and Sa Si Ket temples in the city center enjoying ancient statues, murals and facades decorated with wood and gold carving.

Virtually every temple in Laos has dragon statues painted golden and red reflecting a belief that these reptiles guard people and the buildings.

From Vientiane I headed to Luang Prabang, the old royal capital of the country. As there is no railway in Laos, you have the choice of either a bus or a plane. While flying is more expensive,

it’s still better than busing through poor Lao roads. I still decided to travel by bus for an insider’s look at the country and was rewarded with marvelous landscapes. It turned out that Lao roads are quite similar to those of rural Ukraine. Some places have no asphalt and are impossible to travel during a monsoon.

If you like hippie places where young backpackers hang out, stop for a couple of days in the lovely mountain village Vang Vieng. I did not stop there and headed straight to Luang Prabang, a picturesque place in the heart of the mountains. Two big rivers – Mekong and Nam Khan – cut it in half and are used for fishing and passenger and cargo transportation on small boats.

The center of town looks like resorts in Italy and Spain – it is very fancy and packed with tourists lazing in Westernlike cafes and restaurants. However, if you stay outside this area, in the narrow, maze-like streets of the old city center, you can get the same quality accommodation at a more reasonable price.

Travel agencies offer a wide variety of tours – from kayaking to riding elephants and hiking in the jungle for up to eight days. For a daytrip, take a boat to Pak Ou Caves – believed to be home to spirits, and Kuang Si Falls.

For the least touristy place, just take a regular boat to villages on the opposite side of the Mekong.

If you have rented a bike or are a good hiker, go through villages to watch locals working in the fields, children playing and women weaving.

Saying the Laotian phrase “Sabai dee!” which means “How are you?” immediately breaks the ice and makes people smile and wave.

For more spiritual landmarks, visit Wat Xieng Thong and tiny Wat Pa Huak temples, which I found the most beautiful of them all. I spent a lot of

time looking at colorful ancient murals depicting the life in the city.

After an active day of walking, try a traditional Lao body massage, which is a combination of stretching and pressing. Although painful, it gives you a great feeling of relaxation afterwards and flexibility in joints like after a good hour of yoga.

From Luang Prabang, I headed to China. You can take a bus to Luang Namtha, an ancient town in northern Lao and from there take a bus directly to China.

At the border, I was reminded that Ukraine and Laos have something more in common than just bad roads.

Waiting for the immigration to open at 8.30 a.m., I was told by a Chinese man to prepare 30,000 kip (around $2.50) as a “present” to please the Laotian border guard. But I decided there would be no presents and handed only my passport. Apparently the guard was too shy to ask for money and let me through.

Kyiv Post staff writer Svitlana Tuchynska can be reached at tuchynska@kyivpost.com

Trip budget • Flight Kuala Lumpur – Vientiane $80120 • Double room in Vientiane downtown $10-20 • Meal in Vientiane $3-6 • Traditional silk skirt $30 • Bus from Vientiane to Luang Prabang $18 • Double room in Luang Prabang – $10 • Lao traditional massage – $5 for one hour • Bottle of traditional vodka Lao-Lao (500 mg) – $3 • Bus from Luang Prabang to Borten (Chinese border) -$10

www.kyivpost.com

Lifestyle 25

February 4, 2011

Book cafes great places to hang out, read a bit

BY A L E X A N D R A R O MAN OVS KAYA ROMANOVSKAYA@KYIVPOST.COM

Good news for those who love nothing more than enjoying a cup of coffee or even a meal while they delve into books – book cafes are starting to appear in Kyiv.

Babuin cafe reopened in December last year, three years after it closed down. The cafe had developed into the center of cultural life in Kyiv, a place where creative people hang out, talk, eat, read and enjoy concerts of popular bands.

The traditional style is preserved in the new, larger cafe located on Symona Petlyury St. (former Kominterna St.), with its ceiling covered with newspapers, cages for chandeliers, old domestic stuff and paintings on the walls.

For a coffee shop, the drinks menu was not particularly impressive, so we opted for some tea for Hr 35.

The herbal mix from the Carpathians, served with dried apples, was particularly good, especially accompanied with a fresh and light apple strudel for Hr 30. The potato and meat pie ordered by my friend for Hr 48 was disappointingly dry, as if had had been cooked the previous day. Thankfully, it is served with chicken or fish broth.

The place is definitely bigger than before, consisting of four rooms – Bar, Concert Hall, Gallery and Library.

Books can be found in the latter only, though the diversity is impressive.

Lighting is a big problem here in the evenings, as the rooms are quite dark.

One big plus is that the smoking and non-smoking areas are situated in different rooms, unlike in most Kyiv cafes where the division is purely symbolic.

There’s a huge variety of literature in Babuin for all tastes – from colorful children’s stories to serious classics and the latest hits. The only bad news is for foreigners – there are just a few books here that are not in Ukrainian or Russian, mostly fashion catalogs and books.

Babuin also has a little something for art lovers, including a permanent exhibition by the cafe’s co-owner and

Salmon rolls with tofu and cucumber for Hr 60 at Roll House.

Food Critic: Roll House is the place to go if you want great sushi without leaving your home Æ21 I was very impressed and happy

Azbuka cafe on Saksaganskogo has a nice interior but no English-language books.

(By Joseph Sywenkyj)

old photographs on the shelves and windowsills. Twenty-one photos by photographer Oleksandr Boyko will be on display from Jan. 24, displaying famous Ukrainian journalists with their thoughts on freedom of speech in Ukraine.

Babuin isn’t the only book café in the city. Azbuka, meaning “Alphabet,” opened in 2009 and has since opened two more places. The original cafe is on Saksahanskoho St., slightly below ground level.

The main room is like a school library, with white walls and ceiling and high book cases. It feels warm, relaxed and cozy. There are three small niches off the side of the room – ideal for a more quiet and private atmosphere. The place is small and, thankfully, non-smoking but only until 4 p.m.

There’s a wide range of Russian and Ukrainian books, but the only English book I found there was a heavy Russian-English dictionary.

The coffee wasn’t great – the menu was short and my latte tasted overroasted. Annoyingly, some items on

the menu weren’t available. I tried the cheese cake, whose light and sweet flavor was just perfect for breakfast.

The prices here are rather low compared to other Kyiv coffee shops. Tea and coffee cost Hr 17, main courses range between Hr 49 – 69, a bottle of wine goes for Hr 99 and desserts – Hr 33. There’s also a special menu for those watching their weight.

I also checked out the newest Azbuka café on Shota Rustaveli Street.

The service was poor and the interior looked tired and rather Soviet.

The books there, though, were excellent. I had a great time checking out the Luxury Hotels of the World, as it was one of the few English books there.

The menu here is longer than in the original Azbuka. I had a Greek mussaka, a spicy shepherd’s pie with meat and cheesy cream. It costs Hr 49, the same price as the burrito my friend decided to have. The cafe also offers some Italian cuisine.

The mocha coffee was not so good here either and the cheese cake seemed dry, as if they’d used too much there, but my friend said the tiramisu

was the best he’d ever had. Again, some items weren’t available.

Despite the reading designation of the mentioned cafes, there probably won’t be too many readers there anyway. Babuin seems more as a place to hang and grab a drink after work.

Reading a book here is more a way to pass the time, while waiting for your friend to arrive. Azbuka, though, is more of a place to read. The cuisine and prices make it perfect for a quick business lunch. It would be my favorite of all three places to spend a Sunday afternoon with a new book.

Kyiv Post staff writer Alexandra Romanovskaya can be reached at romanovskaya@kyivpost.com Babuin book cafe 10 Symona Petlyury (former Kominterna,) 235 73 16, www.babuin.ua Open 11 a.m. till the last visitor Azbuka cafes can be found on: 38 Saksaganskogo St., 287-4166 13 Pymonenko St. 15 Shota Rustaveli St.

to order again.

The fact that delivery was faster than expected – in just 45 minutes, was perhaps due to a slow road traffic on a Saturday afternoon, but nevertheless a pleasant surprise. This was the third time I ordered but the first time when the courier was polite and attentive.

Other times delivery men acted like vending machines – money in, order delivered, job done.

Apart from sushi, we also had desserts. Besides regular Ukrainian cakes, there are three Japanese sweet entries on the menu: chocolate and cashew or fresh fruit rolled inside a thin crepe, and hurumaki – a banana wrapped inside a thin rice dough. Soaking in honey and sugar, the banana dessert only had two small pieces, which wasn’t probably the best deal for the money (Hr 32.95), but still nice.

The drinks on offer have no trace of Japanese beverage industry in them and include soda, mineral water, juice and beer for the price just a little more expensive than in a supermarket.

For free delivery, place an order above Hr 80. Mind the working hours: 10 a.m. – 10 p.m. Good news for the English-speakers: the website has an Enlish language version: www.rollhouse.com.ua.

If you don’t have a computer handy, the order can be placed by phone: 222-5151.

Kyiv Post staff writer Nataliya Horban can be reached at horban@kyivpost.com

26 Lifestyle

February 4, 2011

www.kyivpost.com

International ice-fishing contest starts in Kharkiv

Many start their day with celestial predictions

BY M A R K R AC H K E VYC H

Æ21 Nataliya Lysenko, admitting

RACHKEVYCH@KYIVPOST.COM

that she also believes in horoscopes to an extent.

This blind addiction was explored by 1948 by an American psychologist Bertram Forer. He conducted a study, during which he first asked his students to fill out personality tests but then handed out identical results to them saying they were individually tailored. Students reported that his evaluations were 85 percent correct on average. Forer’s statements, however, were mishmash collected from various horoscopes featuring statements like: “At times you have serious doubts as to whether you have made the right decision,” or “Some of your aspirations tend to be rather unrealistic.” The phenomenon was named a Forer effect and is now used as an explanation why we are more vulnerable to suggestions when the subject matter is us.

Another scientific attack on astrology occurred in January when reputable American astronomer Parke Kunkle said that the zodiac signs have long changed due to the Earth’s wobbly orbit. The sun and the earth are constantly moving, so the stars, which determine one’s sign, are no longer where they were 3,000 years ago. In addition, the Earth moves through 13 constellations, not 12, so there should be an additional sign added, Ophiuchus, which falls on Nov. 29 – Dec. 1, shifting all the zodiac dates.

But this is old news. Ancient astrologists are believed to have talked about this since 500 B.C. but no one changed the zodiac signs. Ukrainian astrologist Mikhlin, however, strongly opposes this theory together with other star-readers. “There is a fundamental base to any science and astrology is not an exception,” he said.

Talking about Ukraine’s fate for 2011, Mikhlin advised to lower expectations. “Both politics and the economy will be getting worse. But you don’t need to be an astrologist to see this,” he concurred.

Kyiv Post staff writer Nataliya Horban can be reached at horban@ kyivpost.com

When the American ice fishing team touched down in Boryspil on Jan. 31, gathered their fishing gear in baggage claim and hurried through customs, sightseeing in Kyiv couldn’t have been further from their minds.

“Spend the night in Kyiv?” asked team captain Mike McNett rhetorically.

“Hell no, we want to fish, that’s what we came here to do.”

The group of mostly Midwesterners was eager to hop on their waiting bus to Kharkiv Oblast where they’ll defend their world ice fishing title on Feb. 5-6 on a manmade lake 60 kilometers east of the regional capital.

Tournament coordinator Vitaliy Levchenko said he expects 150 spectators to descend on Pechenizke Lake to watch 70 anglers fish for the first place trophy.

“There’s no cash prize, it’s just like the Olympics,” said McNett.

This is the first time Ukraine is hosting the fishing contest. Levchenko estimated that there are five million ice fishermen in Ukraine.

The Americans are fielding the same team that took world honors in 2010 in Rhinelander, Wisconsin. They’ll fish against 13 other national teams including host Ukraine, Poland, Estonia, Latvia, Lithuania, Finland, Russia, Belarus, Sweden, Bulgaria, the Czech Republic, Kazakhstan and Moldova.

But to repeat as winners, a feat no team has accomplished in the seven years that the tournament has been held, the U.S. team will have to contend with the Ukrainian team, which took world honors in Poland in 2009.

“This is their home turf, they have all the advantages,” said Chicagoan McNett.

Still, McNett has set a lofty goal for his squad of anglers.

“Our first goal is to medal [in gold, silver or bronze], and our second goal is to win the tournament,” he said.

The fish are smaller and swim deeper here so some fishermen will use European-style palm rods and make adjustments as necessary, the captain said.

Myron Gilbert of the U.S. team waits for a nibble to hook a fish. (Courtesy)

Mike McNett shows a big bluegill.

(Courtesy)

During the event anglers compete according to international rules that prohibit power augers, fish finders, cameras or any other electronic devices.

“This is going to be old school fishing,” said McNett. “We’ll use smaller jigs for the minnows we’ll be catching and

the small perch that swim in the lake.”

Ablet, roach, bream, silver bream, perch and ruff swim in Pechenizke Lake.

In the meantime, the tournament participants will have three days of practice to test the water beneath the ice outside the competition’s fishing zone.

On the first competition day, five anglers from each country draw for positions in five sectors. Points are then awarded as to where each angler finishes in each sector based on the weight of their catch. Day two of competition begins with a new draw for the second five sectors. The two-day points are combined for both individual and team honors.

The Americans, according to McNett, will drill two or three holes as soon as they get to a chosen fishing spot.

This approach resembles old Western homesteaders who literally run to stake a flag to the ice where they want to fish on a first come, first fish basis.

“Then we’ll fish the holes moving from one to the next if there are no fishes … sometimes you have to drill 20 holes until you find fish,” he said.

Tournament regulations give each angler 30 square meters of fishing space and allow them to fish only with worms and maggots. Ice shacks and other amenities aren’t allowed, so they fish exposed to the elements and are required to hold their fishing rods at all times and with only one hand.

The 14 teams will fish three hours per competition day.

“Sometimes your hole will be right over a school of fish and you will have action all day. Other times, the fish will come and go, as they travel around,” was how McNett described the “hit or miss” reality of ice fishing.

Asked who the tournament favorite is, Ukrainian organizer Levchenko said “of course, we’re the favorites.”

Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost. com.

www.kyivpost.com

Photo Story 27

February 4, 2011

They were clearly not enjoying it. Some 145 cats hoarded for the Ukraine Championship on Jan. 30 were hissing at each other and giving nasty looks to their owners for putting them through this circus (2). Put in separate cages, some waited impatiently to be inspected by judges while others – with astonished eyes – gazed at hundreds of visitors who paid Hr 20 to look at them (3). British shorthair, Scottish fold, Bambino and Sphynx cats were among the many types who competed (5). Hair (if any), eyes, ears and even character were taken into the account to win a ribbon trophy. Girls competed with boys – a nice sign of gender equality, at least in the animal world. Bred in 2004, Ukrainian Levkoy – a hairless type with twisted ears -- was on display as well.

You could buy three-month old baby Lulu on the spot for $300 (4). In the atmosphere of general fatigue, the only place where cats seemed to relax was a photo booth (1).

Placed in a rather professional small studio, they posed with feathers and balls for some 20 minutes for family albums and portrait shots. For more information, go to: www. rolandus.org/eng.

Story by Yuliya Popova Photos by Joseph Sywenkyj

Pussycats on parade

1

3

4

2

5

28 Paparazzi

February 4, 2011

www.kyivpost.com

Kyiv Post honors best talent during Best of Kyiv awards

Oleh Skrypka lights up the party with his jazz band Zabava.

Natalie Jaresko, head of Horizon Capital private equity fund (C) and Myron Wasylyk, the head of PBN Ukraine (R).

Master of Ceremonies DJ Pasha welcomes guests.

No fine reception goes without champagne.

InterContinental Kyiv hotel at St. Michael’s Square.

www.kyivpost.com

Paparazzi 29

February 4, 2011

Æ

Kyiv Post readers and experts put the best to the test during the 10th annual Best of Kyiv awards.

The winners converged on the InterContinental Hotel on Jan. 27 for an evening of prizes, fine dining and entertainment. The invitationonly event attracted 200 stellar guests. Representatives of 88 leading companies, non-governmental organizations and governments mingled during the memorable evening. Master of Ceremonies DJ Pasha hosted the event, while the Kyiv Post's editorial team joined him on stage to announce winners in 21 business categories, chosen by online voters and an expert panel. Individual awards for 10-Year Achievement, Business Person of the Year and Spirit of Kyiv, chosen by the Kyiv Post, were also given. Singer Oleh Skrypka played Ukrainian jazz with his band Zabava and sang all-time hits. Online voters won prizes by lottery, while business card drawings left a few lucky guests with gifts. The Kyiv Post makes no money from the tradition designed to honor leading members of the community. (Photos by Joseph Sywenkyj)

Some 200 guests enjoy the four-course dinner at InterContinental hotel.

A glass of champagne helps put the guests in a networking mood before the festive dinner.

Tomas Fiala, head of Dragon Capital investment fund and winner of the 10-Year Achievement Award, thanks the audience.

Guests dance up a storm to the beat of Oleh Skrypka.

Winners among online voters in Best of Kyiv contest were drawn from a lottery at the awards ceremony on Jan. 27 in the InterContinental Hotel. They are: Yuliya Kulyk, winner of a certificate for a luxury weekend for two persons in Boutique Hotel Riviera; Maryna Alexandrovych, winner of a certificate for a dinner up to Hr 400 at Goodman steakhouse; Mykhailo Yermolenko, winner of a certificate for a dinner up to Hr 400 at Goodman steakhouse.

Anna Derevyanko of the European Business Association wins the Spirit of Kyiv award.

30 Employment

Looking for an exciting international career in Hospitality or qualified personnel for your Hotel?

The International Finance Corporation (IFC) promotes private sector development in emerging capital markets. IFC does this by investing in the private sector and providing advisory services in partnership with donors.

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IFC is recruiting an Investment Officer for financial markets investment and supervision activities in Ukraine. The position is based in Kyiv and is subject to local recruitment.

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careers@richmondra.co.uk

WWW KYIVPOST COM

February 4, 2011

Investment Officer – Financial Markets Responsibilities: • Help to identify, develop and structure new IFC debt, equity and other investments with financial markets companies that meet IFC business and developmental criteria. • Process IFC investment projects through the internal approvals including investment committees and board approval. • Proactively monitor the operational and financial performance of portfolio investments, and participate in related discussions/negotiations. • Serve as a resource in support of IFC’s overall financial markets strategy, including technical assistance. • Keep abreast of regulatory and market developments and other potential impact on IFC investment activity.

Qualifications: • MBA degree and/or ACCA/CFA/CPA certification and 4 to 8 years of professional experience in banking or finance. • Strong financial analysis skills and business judgment. • Excellent written and verbal communication and interpersonal skills. • Team player, with capacity to mentor/train more junior staff. • Fluency in English, Ukrainian and Russian.

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VACANCY ANNOUNCEMENT United Nations Development Programme (UNDP) invites applications from highly qualified, energetic, proactive and experienced professionals for the posts of

PROGRAMME ASSISTANT

Office Manager to join Kyiv office team (starting April 1, 2011)

Responsibilities: financial management and financial reporting for all business activities in the NIS countries Requirements: minimum 5 years of professional experience, fluent English and Russian, degree in accounting or a related degree and relevant professional experience, some work experience in an international environment, some travel to Madrid and among the NIS countries will be required

&

Commercial Developer Responsibilities: development and coordination of commercial proposals and commercial materials for work in NIS countries Requirements: minimum 5 years of professional experience in the development of written commercial materials, fluent English and Russian, excellent written English and Russian communication skills, university degree, some experience in the development/writing of proposals for IFIs (World Bank, EBRD, EU) preferred, strong knowledge of MS Word, Excel, Power Point required Competitive salary and conditions.

Please send English CVs to daspleaf@eptisa.com

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REQUIRED QUALIFICATIONS: t ZFBST XPSL FYQFSJFODF BT BO PGGJDF NBOBHFS PS FYFDVUJWF BTTJTUBOU t .JOJNVN CBDIFMPS T EFHSFF t 4USPOH DPNNBOE PG TQPLFO BOE XSJUUFO (FSNBO BOE &OHMJTI FYQFSJFODF BT JOUFSQSFUFS XPVME CF BO BEWBOUBHF t 4USPOH PSBM BOE XSJUUFO DPNNVOJDBUJPO TLJMMT t 1SPGJDJFOU JO .JDSPTPGU 0GGJDF UPPMT J F 0VUMPPL 8PSE &YDFM 1PXFS1PJOU FUD

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This job description is not limited to the responsibilities listed and the incumbent may be requested to perform other relevant duties as required by business needs.

Recruitment for this position will be on a local basis. Travel, relocation and expatriation benefits do not apply.

Native English Professional MINI

s !CCOUNTING &INANCE %CONOMICS OR Business education/background. s %XCELLENT COMPUTER SKILLS %8#%, s &LUENT WITH READING %NGLISH s 4HE POSITION WILL ENTAIL ANALYZING AND compiling earnings report, data on publicly traded companies & meeting deadlines. s HOUR WORK WEEK s #OMPETITIVE 3ALARY Send CV to fcedge@zoominternet.net calls taken at 724-323-4166

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For detailed job descriptions and application for these and other vacancies please visit http://undp.org.ua/jobs, complete the UN PERSONAL HISTORY FORM* (P-11) and attach it to the on-line application.

UNDP Office in Ukraine 1, Klovskiy uzviz, Kiev 01021

Looking for Game Writer!

KOTRA is looking for person for the position of

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Visit: www.pershastudia.com www.nikitova.com E-mail: hr@pershastudia.com

• Marketing and sales for Korean companies • Making market research reports • Searching for key business partners in Ukraine and performing pin-point matchmaking QUALIFICATION • Excellent skills in English, particularly in writing • Native level of Ukrainian and Russian in speaking and writing • Proactive, self-motivated and customeroriented work attitude • High skills of communication and analysis • Computer literate (MS Office) • University degree or post-graduate degree • 24-30 years old Qualified candidates should submit CV and cover letter written in English by e-mail to: kievkbc@gmail.com and hamink@gmail.com http://www.kotra.net.ua

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A leading European engineering and environmental consulting firm is seeking

KfW is Germany's leading promotional bank for the domestic economy and for developing and transition countries. With a total balance sheet of over EUR 450 billion KfW is one of Europe's largest banks. Since 2003 KfW has been implementing Financial Cooperation with Ukraine on behalf of the German federal government. Being a promotional bank we assist developing countries by offering advice and by investing in their economic and social infrastructure, in environmental protection and in financial systems. Further information can be found at www.kfw.de.

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(FTA, GLOBAL ENVIRONMENT FACILITY – SMALL GRANTS PROGRAMME) Ukraine Who will be responsible for effective day-to-day substantive, administrative and financial support to the national SGP team and the National Steering Committee to ensure the smooth operation and management of the GEF-SGP programme portfolio, timely and efficient response to queries from different grantees and stakeholders, closely monitoring the achievement of the national annual SGP delivery and co-financing targets, and updating of relevant databases.

DEADLINE FOR APPLICATIONS IS 09/02/2011

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Employment/Education 31

February 4, 2011

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Please email your CV, cover letter noting relevant experience, and contact information to ukraineagroinvest@chemonics.com. No telephone inquiries, please. Finalists will be contacted.

is seeking for qualified candidates for the following position in Simferopol:

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DEADLINE FOR APPLICATIONS IS 07/02/2011

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Tarasovskaya 7 280 5000 SALE OFFICE Il’yns’ka 4 71 175000

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Petropavlovska Borshahivka • 430m2, 3 bedrooms, 2 baths, 2 toilets • garage for 2 cars • sauna • satellite for GB and Am channels • HS internet.

Householders speak English. $4500/month.

120 3500 105 1900

B. Khmel’nytskogo 5 5

• 3-storey house at

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TEL: 098-486-7715

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EUROPEAN QUALIT Y OFFICE 230 sq.m.

CBD Direct from owner

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AN APARTMENT BUILDING CONSISTING OF 11 ONE, TWO AND THREE ROOM APARTMENTS IS AVAILABLE FOR LONG-TERM RENT. Centre, Arsenalna metro station.

Elegant, contemporary design • full-featured kitchen • broadband • security • 24H surveillance • parking.

Contact: +38067 465 5747 or +38067 9091630

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HOUSE FOR RENT

4&37*$&

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Visa consultation services for Ukr citizens/residents to travel abroad on: business matters, friend/family visit, sporting/cultural event etc. elenakalyu@yandex.ru.

Reply quickly.

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Immigration & work in Canada Visit www.saskimmigration.com Contact Warren Green greenw@telusplanet.net (044) 278 61 24 Member of Canadian Society of Immigration Consultants

British English teacher needed.

Preferably with teaching certificates.

Tel.: 0672851576

THAI COOKING COURSE Learn to prepare authentic Thai dishes - it's simple, easy and we use only fresh, local ingredients!

Small group lessons, 3-hour course.

Cook, eat, enjoy!

Email UkeyThai@gmail.com to enroll.

Đ&#x;рОкат ĐźĐľŃ€Ń ĐľĐ´ĐľŃ ĐžĐ˛ Ń Đ˛ĐžĐ´Đ¸Ń‚ĐľĐťĐľĐź и поровОдчикОП Cars for rent: Mercedes E, Bus-Sprinter with driver, translator.

Autovermietung, loyer.

Tel.: +38 067 305 0055 +38 093 558 5050

Interpreter, pretty female 30y.o.

Guide. Assistant. Help in any business.

Daily rent apartments.

Transfer Kiev/Ukraine. +38 093 185 80 94 Irina

Teacher of Russian language for foreigners. Teacher of English language. +380 67 734-93-74

AUSTRALIAN COUNCIL in Podol ENGLISH LANGUAGE LEARNING CENTRE NEW SCHOOL, Tuition, Training, Clubs, (Psychology, Films, Discussions – Various Themes) NATIVE SPEAKERS Some FREE Events Tel 050 5688403 greenbananas.ua@gmail.com

Driver-interpreter with own car 10 eur/hour, 60 eur/day airport transfer 20 eur trips around Ukraine alex.all-transport@yandex.ua tel. +38067 8731686

Work Permits for Non-Residents, Residency Permits, Tax IDs, Company Registration, Nominal Directors, Legal Support, Tax Reporting & Accounting info@megaprime.com.ua +380-50-070-2126, Perfect English

Euroconcierge Any kind of service in Ukraine.

EURO 2012.

Personal assistant. www.euroconcierge.com.ua +38-067-230-68-75

The

IS LOOKING FOR A

NEWS EDITOR

THE IDEAL CANDIDATE SHOULD: Have fluency in English, Ukrainian and Russian.

Show good news judgment and have the ability to work quickly under deadline.

Have experience in news editing.

Please send CV, three writing or editing samples and an explanation of why you want to work for the Kyiv Post, one of Ukraine’s top news sources, to:

Brian Bonner, chief editor, Kyiv Post at bonner@kyivpost.com

32 Paparazzi

February 4, 2011

M17 modern art gallery hosts Yin exhibition.

India celebrates Republic Day Indians invited the Kyiv diplomatic community to the presidential residence near Mariyinsky Park on Jan. 26 to celebrate in color the Republic Day of India. On this day 61 years ago India enacted its Constitution replacing the Government of India Act, which regulated Indian relationships with its colonizer – Great Britain. Republic Day is one of the three largest national holidays. The other two are Independence Day and Mahatma Gandhi’s birthday.

While Republic Day is celebrated in India with massive parades and dancing, the embassy in Kyiv brought the “taste of India” to guests with its spicy food, charming Indian dancers and a large cake. (Olexiy Boyko)

A collage by Oleksandra Chichkan.

Indian Ambassador to Ukraine Jyoti Swarup Pande (C).

Women in fashion and art present 10 years of work Æ A model fashions Olena Ivanova’s collection.

Yin exhibition – about women and by women – opened in M17 art gallery on Jan. 27. From paintings to ceramics, art work by 26 Ukrainian women are on display and for sale through Feb. 22. Five female fashion designers incorporated modern art tendencies into their collections and presented them on the catwalk during the opening. Due to expressive sexuality and brutality of some of the sculptures and paintings, entrance is limited to people ages 16 and older. Organizers said that a quarter of proceeds collected from sales will be donated to the Fund in Support of Youth Olympic Swimming. Find out more at www.m17.com.ua. (Courtesy)

www.kyivpost.com

Women in traditional saris attend the celebration.

Anna Smirnova from Nakshatra dance club.