Cabinet of Ministers of Ukraine will provide UAH 75 million from the stabilization fund for the construction of Kharkiv metropolitan and UAH 25 million for Dnipropetrovsk underground.
The Cabinet of Ministers passed a relevant decision at a special meeting on Monday, the government's press service reported.
Prime Minister Yulia Tymoshenko instructed the Finance Ministry to transfer the funds to the regions this day.
As reported, the government has approved a project for the construction of a 3.51 kilometer-long section of the Oleksiyivska line of Kharkiv Metropoliten from Metrobudivnykiv Vaschenko station to Odeska station, with a cost of UAH 1.359 billion.
In June, Dnipropetrovsk regional state administration said that the city's Metropoliten is being financed far interior to its needs. A total of UAH 314,000, including 246,000 from local budgets and 67,600 from the national budget, have been provided for the construction of Dnipropetrovsk underground over the year so far.
Monday 31 August 2009
Russia 'kills al-Qaeda operative'
Russian forces have killed an al-Qaeda militant in the increasingly volatile North Caucasus region of Dagestan, officials say.
The Algerian national, known as "Doctor Mohammed", was killed when police stormed a house near Chechnya on Sunday night, an unidentified official said.
Correspondents say a violent Islamist insurgency is growing in the region.
The official announced the deaths in a televised address, dressed in combat gear with his back to the camera.
"A representative of an international terrorist organisation in the North Caucasus tasked to oversee terrorist acts in Dagestan was neutralised during a combat operation," he told Russia's Vesti-24 news channel.
A second militant was also killed as police raided the house in Khasavyurt, near the border with Chechnya, he added.
Violence has flared in the North Caucasus in recent months, with dozens of militants and members of the security forces being killed in Dagestan, neighbouring Chechnya and Ingushetia.
Russia says the insurgency is being funded by foreign-based extremist Islamist organisations.
Russian forces have fought two wars against Islamist separatists in the mainly Muslim republic of Chechnya since 1994. The conflicts claimed more than 100,000 lives and left much of Chechnya in ruins.
The Algerian national, known as "Doctor Mohammed", was killed when police stormed a house near Chechnya on Sunday night, an unidentified official said.
Correspondents say a violent Islamist insurgency is growing in the region.
The official announced the deaths in a televised address, dressed in combat gear with his back to the camera.
"A representative of an international terrorist organisation in the North Caucasus tasked to oversee terrorist acts in Dagestan was neutralised during a combat operation," he told Russia's Vesti-24 news channel.
A second militant was also killed as police raided the house in Khasavyurt, near the border with Chechnya, he added.
Violence has flared in the North Caucasus in recent months, with dozens of militants and members of the security forces being killed in Dagestan, neighbouring Chechnya and Ingushetia.
Russia says the insurgency is being funded by foreign-based extremist Islamist organisations.
Russian forces have fought two wars against Islamist separatists in the mainly Muslim republic of Chechnya since 1994. The conflicts claimed more than 100,000 lives and left much of Chechnya in ruins.
Putin condemns Nazi-Soviet pact
Russian Prime Minister Vladimir Putin has condemned the Nazi-Soviet pact signed a week before Germany's 1939 invasion of Poland as "immoral".
In a piece for the Polish paper Gazeta Wyborcza, he also expressed sorrow over the massacre of Polish army officers by Soviet forces at Katyn in 1940.
His words are seen as a bid to ease tensions with Poland over World War II.
But he also argued the Munich agreement signed by France and Britain wrecked efforts to build an anti-Nazi alliance.
Mr Putin is among several statesmen attending a service in the Polish port city of Gdansk on Tuesday to mark the 70th anniversary of Poland's invasion.
"Our duty is to remove the burden of distrust and prejudice left from the past in Polish-Russian relations," said Mr Putin in the article, which was also published on the Russian government website.
"Our duty... is to turn the page and start to write a new one."
Memories of the 1939 pact - in which the Soviet Union and Nazi Germany essentially agreed to carve up Poland and the Baltic States between them - have long soured Moscow's relations with Poland and other east European states.
Within a month of the pact being signed, Soviet troops had invaded and occupied parts of eastern Poland.
"It is possible to condemn - and with good reason - the Molotov-Ribbentrop pact concluded in August 1939," wrote Mr Putin, referring to the two foreign ministers who signed the pact at the Kremlin.
It was clear today, he said, that any form of agreement with the Nazi regime was "unacceptable from the moral point of view and had no chance of being realised".
"But after all," he added, "a year earlier France and England signed a well-known agreement with Hitler in Munich, destroying all hope for the creation of a joint front for the fight against fascism."
The Munich Agreement of September 1938, widely seen as the low point of British Prime Minister Neville Chamberlain's policy of appeasement, allowed Germany to annex Czechoslovakia's Sudetenland region.
Mr Putin added that Russian people understood "all too well the acute emotions of Poles in connection with Katyn".
In 1940 Soviet secret police massacred more than 21,000 army officers and intellectuals on Stalin's direct orders in the Katyn forest near the city of Smolensk.
Moscow only took responsibility for the killings in 1990, having previously blamed the massacre on the Nazis.
In a piece for the Polish paper Gazeta Wyborcza, he also expressed sorrow over the massacre of Polish army officers by Soviet forces at Katyn in 1940.
His words are seen as a bid to ease tensions with Poland over World War II.
But he also argued the Munich agreement signed by France and Britain wrecked efforts to build an anti-Nazi alliance.
Mr Putin is among several statesmen attending a service in the Polish port city of Gdansk on Tuesday to mark the 70th anniversary of Poland's invasion.
"Our duty is to remove the burden of distrust and prejudice left from the past in Polish-Russian relations," said Mr Putin in the article, which was also published on the Russian government website.
"Our duty... is to turn the page and start to write a new one."
Memories of the 1939 pact - in which the Soviet Union and Nazi Germany essentially agreed to carve up Poland and the Baltic States between them - have long soured Moscow's relations with Poland and other east European states.
Within a month of the pact being signed, Soviet troops had invaded and occupied parts of eastern Poland.
"It is possible to condemn - and with good reason - the Molotov-Ribbentrop pact concluded in August 1939," wrote Mr Putin, referring to the two foreign ministers who signed the pact at the Kremlin.
It was clear today, he said, that any form of agreement with the Nazi regime was "unacceptable from the moral point of view and had no chance of being realised".
"But after all," he added, "a year earlier France and England signed a well-known agreement with Hitler in Munich, destroying all hope for the creation of a joint front for the fight against fascism."
The Munich Agreement of September 1938, widely seen as the low point of British Prime Minister Neville Chamberlain's policy of appeasement, allowed Germany to annex Czechoslovakia's Sudetenland region.
Mr Putin added that Russian people understood "all too well the acute emotions of Poles in connection with Katyn".
In 1940 Soviet secret police massacred more than 21,000 army officers and intellectuals on Stalin's direct orders in the Katyn forest near the city of Smolensk.
Moscow only took responsibility for the killings in 1990, having previously blamed the massacre on the Nazis.
Africans 'under siege' in Moscow
Nearly 60% of black and African people living in Russia's capital Moscow have been physically assaulted in racially motivated attacks, says a new study.
Africans working or studying in the city live in constant fear of attack, according to the report by the Moscow Protestant Chaplaincy.
A quarter of 200 people surveyed said they had been assaulted more than once. Some 80% had been verbally abused.
But the number of assaults was down from the MPC's last survey in 2002.
Many of the African respondents said they:
Avoided using the Moscow metro
Were also careful to avoid crowded public places
Did not go out on Russian national holidays or on days when there were football matches
Many of the attacks on Africans were pre-meditated and extremely violent, the report found.
One Nigerian migrant had been repeatedly stabbed in the back and then shot.
Another man said his attacker had attempted to remove his scalp.
Officially there are some 10,000 Africans living in Moscow, but far more are believed to live there illegally - many as economic migrants.
The Moscow Protestant Chaplaincy is an English-speaking interdenominational Christian congregation that has ministered to Moscow's foreign community since 1962.
Africans working or studying in the city live in constant fear of attack, according to the report by the Moscow Protestant Chaplaincy.
A quarter of 200 people surveyed said they had been assaulted more than once. Some 80% had been verbally abused.
But the number of assaults was down from the MPC's last survey in 2002.
Many of the African respondents said they:
Avoided using the Moscow metro
Were also careful to avoid crowded public places
Did not go out on Russian national holidays or on days when there were football matches
Many of the attacks on Africans were pre-meditated and extremely violent, the report found.
One Nigerian migrant had been repeatedly stabbed in the back and then shot.
Another man said his attacker had attempted to remove his scalp.
Officially there are some 10,000 Africans living in Moscow, but far more are believed to live there illegally - many as economic migrants.
The Moscow Protestant Chaplaincy is an English-speaking interdenominational Christian congregation that has ministered to Moscow's foreign community since 1962.
Senior Military Officer Gets 6 Years for Spying for Georgia
A senior military officer was sentenced to six years in a maximum-security prison in the Krasnodar region on Friday for spying for Georgia ahead of last year’s brief war.
Lieutenant Colonel Mikhail Khachidze, an ethnic Georgian, was convicted of passing Russian military secrets over the Internet to Georgian secret services in June and July 2008, Itar-Tass reported.
“He was found guilty of treason,” said an official with the North Caucasus Regional Military Court, Itar-Tass reported.
Khachidze, who was arrested in August 2008, contacted Georgian officials from the town of Georgiyevsky in the Stavropol region, where he served as the deputy commander of a military unit, Itar-Tass said.
The North Caucasus Regional Military Court, which is located in Rostov-on-Don, also stripped Khachidze of his military rank.
The Criminal Code envisages from 12 to 20 years in prison for spying, but the court took into account the fact that Khachidze had admitted his guilt, cooperated with investigators and had young children, Itar-Tass said.
The Federal Security Service said earlier that Khachidze had gathered secret information for Georgia about his fellow servicemen and the preparedness of Russian troops.
He was recruited by Georgian intelligence in late 2007 while he was stationed in a Russian unit based on Georgian territory, the FSB said. News reports said he was paid several thousand dollars for the secrets.
Russia fought a five-day war with Georgia in August 2008 after Tbilisi tried to seize its breakaway region of South Ossetia by force.
In 2006, Georgia arrested several Russian military officers whom it accused of being spies, causing a diplomatic spat that prompted Moscow to sever transportation and trade ties with Georgia.
Lieutenant Colonel Mikhail Khachidze, an ethnic Georgian, was convicted of passing Russian military secrets over the Internet to Georgian secret services in June and July 2008, Itar-Tass reported.
“He was found guilty of treason,” said an official with the North Caucasus Regional Military Court, Itar-Tass reported.
Khachidze, who was arrested in August 2008, contacted Georgian officials from the town of Georgiyevsky in the Stavropol region, where he served as the deputy commander of a military unit, Itar-Tass said.
The North Caucasus Regional Military Court, which is located in Rostov-on-Don, also stripped Khachidze of his military rank.
The Criminal Code envisages from 12 to 20 years in prison for spying, but the court took into account the fact that Khachidze had admitted his guilt, cooperated with investigators and had young children, Itar-Tass said.
The Federal Security Service said earlier that Khachidze had gathered secret information for Georgia about his fellow servicemen and the preparedness of Russian troops.
He was recruited by Georgian intelligence in late 2007 while he was stationed in a Russian unit based on Georgian territory, the FSB said. News reports said he was paid several thousand dollars for the secrets.
Russia fought a five-day war with Georgia in August 2008 after Tbilisi tried to seize its breakaway region of South Ossetia by force.
In 2006, Georgia arrested several Russian military officers whom it accused of being spies, causing a diplomatic spat that prompted Moscow to sever transportation and trade ties with Georgia.
Traffic Cop Runs Over Woman, Hides Body, Investigates Self
As someone who pays close attention to such cases, I’ve noticed a disproportionately high number of incidents over the past year of law enforcement officials behind the wheel mowing down pedestrians. This latest deadly accident in the Vladimir region, however, has an interesting twist: The traffic cop suspected of running down a female cyclist, hiding her body in a ditch and fleeing the scene of the crime — well, he apparently was investigating the crime for two days before his involvement was revealed.
On the evening of Aug. 14, Yevgeny Spitsyn, a road safety officer in the Vladimir region city of Gus-Khrustalny, was driving his own vehicle when he ran over a 49-year-old woman riding her bicycle on the same side of the road, regional investigators said in a statement.
The investigators’ statement gives just the bare details: The woman’s body was discovered the next morning in a ditch next to the road covered with tree branches; an autopsy showed that she died from her injuries at the scene of the accident; the driver fled the scene; Spitsyn was driving too fast; vehicular manslaughter case opened; investigation is ongoing. As it turns out, Spitsyn “actively took part in operations” to locate the driver, “questioning witnesses and trying, together with his colleagues, to establish the identity of the guilty party,” regional police told Gazeta.ru. Two days after the accident, with investigators closing in on him, Spitsyn confessed his role in the woman’s death, the web site cited investigators as saying. Spitsyn has quit the force though he has still not been taken into custody, Gazeta.ru reported. The victim, investigators said, was cycling to work when she was struck and killed, effectively leaving her family without a breadwinner. To quote Pete Seeger: When will they ever learn, when will they ever learn?
On the evening of Aug. 14, Yevgeny Spitsyn, a road safety officer in the Vladimir region city of Gus-Khrustalny, was driving his own vehicle when he ran over a 49-year-old woman riding her bicycle on the same side of the road, regional investigators said in a statement.
The investigators’ statement gives just the bare details: The woman’s body was discovered the next morning in a ditch next to the road covered with tree branches; an autopsy showed that she died from her injuries at the scene of the accident; the driver fled the scene; Spitsyn was driving too fast; vehicular manslaughter case opened; investigation is ongoing. As it turns out, Spitsyn “actively took part in operations” to locate the driver, “questioning witnesses and trying, together with his colleagues, to establish the identity of the guilty party,” regional police told Gazeta.ru. Two days after the accident, with investigators closing in on him, Spitsyn confessed his role in the woman’s death, the web site cited investigators as saying. Spitsyn has quit the force though he has still not been taken into custody, Gazeta.ru reported. The victim, investigators said, was cycling to work when she was struck and killed, effectively leaving her family without a breadwinner. To quote Pete Seeger: When will they ever learn, when will they ever learn?
Yelling ‘Beat Blacks’ Not Ethnic Hatred
St. Petersburg investigators said Friday that the severe beating of a Kyrgyz teenager in February was not motivated by ethnic hatred, even though the attackers shouted “Beat the Blacks!” and “Russia for Russians!”
Stunned human rights activists accused investigators of incompetence and voiced concern that nationalists might point to the case to justify their use of similar slogans.
A linguistic expertise ordered by investigators into the Feb. 14 beating of ninth-grader Tagir Kerimov found “no signs of extremism or national hatred in the actions of the attackers,” the St. Petersburg branch of the Investigative Committee said in a statement posted Friday on its web site.
The statement provided no further details of the attack, and a spokeswoman for the St. Petersburg branch, Yulia Kazakova, refused to elaborate, citing the ongoing investigation and “enormous public attention” to the case.
Gazeta.ru reported that a group of 25 to 30 young men attacked Kerimov and a friend, also a native of Kyrgyzstan, on a street in St. Petersburg, shouting the derogatory word “khuch,” which is used by nationalists to refer to migrants from Central Asia and the North Caucasus, Gazeta.ru reported, citing a lawyer for Kerimov’s family, Dmitry Dinze.
The attackers, shouting “Kill the khuch” and “Beat the khuch,” as well as “Beat the Blacks” and “Russia for Russians,” knocked Kerimov down to the ground and kicked him repeatedly in the head, causing a severe brain injury that left the teenager in a coma for several months, Gazeta.ru reported.
Five suspected attackers have been detained, Gazeta.ru said.
Repeated calls to Dinze’s cell phone went unanswered.
At the request of investigators, an expert with the Center for Forensic Expertise for the northwestern federal district, Yelena Kiryukhina, examined the slogans for signs of ethnic hatred.
Kiryukhina concluded that she could not say for sure whether the slogans were xenophobic because she lacked information about the “motives” of the attackers, a co-worker of hers told The Moscow Times. Kiryukhina refused to comment on the case.
Alexander Brod, head of the Moscow Bureau for Human Rights, accused both investigators and Kiryukhina of unprofessionalism and cautioned that nationalists could use the findings to defend themselves in court.
Nikolai Svanidze, who heads the Public Chamber’s commission on ethnic relations, promised that his commission would study the case.
Alexander Verkhovsky, head of the Sova Center, which tracks hate crimes, said investigators violated the Criminal Procedural Code by asking a linguistic expert to examine the slogans. “Such things are done to shift the responsibility onto somebody else,” he said.
Stunned human rights activists accused investigators of incompetence and voiced concern that nationalists might point to the case to justify their use of similar slogans.
A linguistic expertise ordered by investigators into the Feb. 14 beating of ninth-grader Tagir Kerimov found “no signs of extremism or national hatred in the actions of the attackers,” the St. Petersburg branch of the Investigative Committee said in a statement posted Friday on its web site.
The statement provided no further details of the attack, and a spokeswoman for the St. Petersburg branch, Yulia Kazakova, refused to elaborate, citing the ongoing investigation and “enormous public attention” to the case.
Gazeta.ru reported that a group of 25 to 30 young men attacked Kerimov and a friend, also a native of Kyrgyzstan, on a street in St. Petersburg, shouting the derogatory word “khuch,” which is used by nationalists to refer to migrants from Central Asia and the North Caucasus, Gazeta.ru reported, citing a lawyer for Kerimov’s family, Dmitry Dinze.
The attackers, shouting “Kill the khuch” and “Beat the khuch,” as well as “Beat the Blacks” and “Russia for Russians,” knocked Kerimov down to the ground and kicked him repeatedly in the head, causing a severe brain injury that left the teenager in a coma for several months, Gazeta.ru reported.
Five suspected attackers have been detained, Gazeta.ru said.
Repeated calls to Dinze’s cell phone went unanswered.
At the request of investigators, an expert with the Center for Forensic Expertise for the northwestern federal district, Yelena Kiryukhina, examined the slogans for signs of ethnic hatred.
Kiryukhina concluded that she could not say for sure whether the slogans were xenophobic because she lacked information about the “motives” of the attackers, a co-worker of hers told The Moscow Times. Kiryukhina refused to comment on the case.
Alexander Brod, head of the Moscow Bureau for Human Rights, accused both investigators and Kiryukhina of unprofessionalism and cautioned that nationalists could use the findings to defend themselves in court.
Nikolai Svanidze, who heads the Public Chamber’s commission on ethnic relations, promised that his commission would study the case.
Alexander Verkhovsky, head of the Sova Center, which tracks hate crimes, said investigators violated the Criminal Procedural Code by asking a linguistic expert to examine the slogans. “Such things are done to shift the responsibility onto somebody else,” he said.
Bill Introduces Separation Between Citizen and State
The Economic Development Ministry has drafted a bill on state services that lays out the ideal relationship between citizens and bureaucrats: There shouldn’t be one.
The bill would standardize services on all levels of government, including 500 federal services and 120 each at the regional and municipal levels, according to a copy of the legislation obtained by Vedomosti. Everything from birth and marriage registration to receiving citizenship and registering for pensions would be covered, as would business services such as licensing, registration, accreditation, and appraisals.
The bill would not affect hospitals, schools or kindergartens, because they are not classified as state services, said Maxim Parshin, deputy head of the ministry’s state regulation department.
A Cabinet source said the bill was being eagerly awaited. “It’s a priority and part of the national plan for the war on corruption. We will do everything to make sure the bill goes through the ministerial conciliation and approval process very quickly,” he said.
The Economic Development Ministry hopes the law will be passed this year and go into effect in 2010.
Under the law, citizens would receive all state services in multifunctional centers, rather than directly from the state.
“With this law we are separating people from the bureaucrats who make the decisions, Parshin said.
The centers, which will be established by the state bodies that provide the services, will process requests and distribute prepared documents to them.
Additionally, the state body will be expected to maintain the center using funds saved from passing off some of its work, the ministry said. Currently, all state authorities get a subsidy from the federal budget for services rendered.
“It’s doubtful we can save enough money to open several dozen multifunctional centers at a time of falling incomes,” said a governor of a region where there is already such a center.
A Finance Ministry source said the bill did not offer spending estimates.
Parshin said the cost of state services wouldn’t change, however. “Individuals and businesses will pay fees set by the government. … Throughout the country there are already about 37 multifunctional centers in 35 regions,” he said.
“The multifunctional center probably made our work simpler, but it hasn’t defeated corruption,” said an official in the Lipetsk regional government.
The quality of state services should grow thanks to the Internet. Services will be entered into a register on a single portal, the legislation says.
But the law must set very clear standards for the services so that individuals and businesses will be able to challenge decisions in court, said Lev Yakobson, provost at the Higher School of Economics.
The legislation only affirms general principles and requirements, but, as before, the agency providing a service will develop the standards, he said. “Such a principle discredits the idea of administrative reform,” he said.
The bill would standardize services on all levels of government, including 500 federal services and 120 each at the regional and municipal levels, according to a copy of the legislation obtained by Vedomosti. Everything from birth and marriage registration to receiving citizenship and registering for pensions would be covered, as would business services such as licensing, registration, accreditation, and appraisals.
The bill would not affect hospitals, schools or kindergartens, because they are not classified as state services, said Maxim Parshin, deputy head of the ministry’s state regulation department.
A Cabinet source said the bill was being eagerly awaited. “It’s a priority and part of the national plan for the war on corruption. We will do everything to make sure the bill goes through the ministerial conciliation and approval process very quickly,” he said.
The Economic Development Ministry hopes the law will be passed this year and go into effect in 2010.
Under the law, citizens would receive all state services in multifunctional centers, rather than directly from the state.
“With this law we are separating people from the bureaucrats who make the decisions, Parshin said.
The centers, which will be established by the state bodies that provide the services, will process requests and distribute prepared documents to them.
Additionally, the state body will be expected to maintain the center using funds saved from passing off some of its work, the ministry said. Currently, all state authorities get a subsidy from the federal budget for services rendered.
“It’s doubtful we can save enough money to open several dozen multifunctional centers at a time of falling incomes,” said a governor of a region where there is already such a center.
A Finance Ministry source said the bill did not offer spending estimates.
Parshin said the cost of state services wouldn’t change, however. “Individuals and businesses will pay fees set by the government. … Throughout the country there are already about 37 multifunctional centers in 35 regions,” he said.
“The multifunctional center probably made our work simpler, but it hasn’t defeated corruption,” said an official in the Lipetsk regional government.
The quality of state services should grow thanks to the Internet. Services will be entered into a register on a single portal, the legislation says.
But the law must set very clear standards for the services so that individuals and businesses will be able to challenge decisions in court, said Lev Yakobson, provost at the Higher School of Economics.
The legislation only affirms general principles and requirements, but, as before, the agency providing a service will develop the standards, he said. “Such a principle discredits the idea of administrative reform,” he said.
LUKoil’s Q2 Profit Beats Expectations
LUKoil, 20 percent owned by ConocoPhillips, on Friday beat profit forecasts in its second quarter as it took advantage of tax breaks and played a winning hand in the oil market.
LUKoil, one of the few Russian oil companies to boost output in the second quarter, said its net profit for the period fell 44 percent to $2.32 billion, from $4.13 billion in the previous year, because of plummeting oil prices.
A poll of 10 analysts gave an average forecast of $1.8 billion.
The bottom line was still 2.5 times higher than $905 billion in the first quarter, when the energy sector suffered an even harsher blow from the fall in oil prices.
LUKoil’s top rival, state-run Rosneft, is expected to show worse profitability than Russia’s second-largest producer when it reports results this week.
Analysts expect Rosneft to post a net profit of more than $1.7 billion in the second quarter, less than LUKoil in absolute terms even though Rosneft produces about 20 percent more crude.
LUKoil said an increase in production and trading had raised its first-half sales by 36 percent in terms of volumes. It attributed the increase in crude oil extraction to the start of production at the Yuzhnoye Khylchuyu oil field in August 2008.
LUKoil vice president Leonid Fedun told a news conference that the company was “disappointed” with the reserves of Yuzhnoye Khylchuyu, which is located some 2,000 kilometers northwest of Moscow. It is owned 30 percent by Conoco and 70 percent by LUKoil.
“The initial studies [for valuation of the reserves] were bigger than we had in the end, but this difference is not material,” he said. LUKoil has said the field has reserves of 500 million barrels of oil.
Fedun also complained that the state is not active enough in auctioning off new fields, which he said might lead to an oil output decline in the future.
Instead, he said LUKoil — which owns 49 percent of Italian refiner ERG’s Isab di Priolo refinery and in June acquired a stake in a Dutch refinery from France’s Total —was set to increase its foreign operations.
Fedun said the company might increase investments in its foreign projects in the fourth quarter. He did not elaborate.
Svetlana Grizan, analyst at VTB Capital, said the company managed to save $300 million from tax breaks in the Timan-Pechora oil province, where it was exempt from paying the mineral extraction tax.
Denis Borisov, an analyst at Solid brokerage, said LUKoil also benefited from a lower income tax. “For the first quarter the rate was 26 percent, but for the second quarter it fell to 22 percent,” he said.
LUKoil shares finished 3.8 percent higher on the MICEX exchange, outperforming the broader index, which rose 2.9 percent.
The company said its earnings before interest, taxation, depreciation and amortization shrank 34 percent in the second quarter to $4.12 billion, while analysts projected a deeper fall to $3.53 billion.
LUKoil, one of the few Russian oil companies to boost output in the second quarter, said its net profit for the period fell 44 percent to $2.32 billion, from $4.13 billion in the previous year, because of plummeting oil prices.
A poll of 10 analysts gave an average forecast of $1.8 billion.
The bottom line was still 2.5 times higher than $905 billion in the first quarter, when the energy sector suffered an even harsher blow from the fall in oil prices.
LUKoil’s top rival, state-run Rosneft, is expected to show worse profitability than Russia’s second-largest producer when it reports results this week.
Analysts expect Rosneft to post a net profit of more than $1.7 billion in the second quarter, less than LUKoil in absolute terms even though Rosneft produces about 20 percent more crude.
LUKoil said an increase in production and trading had raised its first-half sales by 36 percent in terms of volumes. It attributed the increase in crude oil extraction to the start of production at the Yuzhnoye Khylchuyu oil field in August 2008.
LUKoil vice president Leonid Fedun told a news conference that the company was “disappointed” with the reserves of Yuzhnoye Khylchuyu, which is located some 2,000 kilometers northwest of Moscow. It is owned 30 percent by Conoco and 70 percent by LUKoil.
“The initial studies [for valuation of the reserves] were bigger than we had in the end, but this difference is not material,” he said. LUKoil has said the field has reserves of 500 million barrels of oil.
Fedun also complained that the state is not active enough in auctioning off new fields, which he said might lead to an oil output decline in the future.
Instead, he said LUKoil — which owns 49 percent of Italian refiner ERG’s Isab di Priolo refinery and in June acquired a stake in a Dutch refinery from France’s Total —was set to increase its foreign operations.
Fedun said the company might increase investments in its foreign projects in the fourth quarter. He did not elaborate.
Svetlana Grizan, analyst at VTB Capital, said the company managed to save $300 million from tax breaks in the Timan-Pechora oil province, where it was exempt from paying the mineral extraction tax.
Denis Borisov, an analyst at Solid brokerage, said LUKoil also benefited from a lower income tax. “For the first quarter the rate was 26 percent, but for the second quarter it fell to 22 percent,” he said.
LUKoil shares finished 3.8 percent higher on the MICEX exchange, outperforming the broader index, which rose 2.9 percent.
The company said its earnings before interest, taxation, depreciation and amortization shrank 34 percent in the second quarter to $4.12 billion, while analysts projected a deeper fall to $3.53 billion.
The St. Petersburg Tower
The United Nations on Friday renewed its warning that St. Petersburg was jeopardizing its status as a World Heritage site, ahead of final public hearings on Gazprom Neft’s plans to build a 400-meter skyscraper visible from within the historic center.
In a statement published Friday, UNESCO expressed its “grave concern that the proposed Okhta Center tower could affect the outstanding universal value of the property.” The organization also asked that the state-run company halt work and submit modified plans, “in accordance with federal legislation and accompanied by an independent environmental impact assessment.”
Preservationists, who have long contended that the tower would be an eyesore amid St. Petersburg’s historic architecture, say the government is trying to ram through approval without the necessary oversight or public discussion.
On Aug. 12, a city commission tentatively approved the tower and scheduled the hearings to discuss the Okhta Center project, designed by Britain-based RMJM Architects.
But protesters — including from Yabloko and the Communist Party — have filed a complaint with the Krasnogvardeisky District Court challenging the scheduling. They say City Hall printed its official announcement in a special issue of the small daily newspaper Nevskoye Vremya, which was only released on the day of the hearings.
The lawsuit also says the city has failed to establish a special land-use commission, which is supposed to be included in the hearings.
The court has yet to rule on the challenge.
“City authorities adopted two laws this year that contradict Gazprom Neft’s plans,” said Antonina Yeliseyeva, an activist of the Zhivoi Gorod movement. “The first, adopted in February, regulates the usage of city land and building policies, the second, adopted in March, determines the architectural protection areas.”
The laws limits buildings’ height to 100 meters and lists a number of places around the city from which no new construction can be visible, she said.
“If the city makes an exception for Gazprom Neft, it will be a dangerous precedent,” she said. “Then we are going to see numerous skyscrapers in the nearest future.”
Gazprom Neft could not be reached for comment Friday, but it has previously alleged that the protesters are being paid by unidentified opponents.
St. Petersburg was originally supposed to finance 49 percent of the project, but because of budgetary problems, state oil producer Gazprom Neft agreed to cover 100 percent of the costs, estimated at 60 billion rubles ($1.9 billion).
“The project is absolutely legitimate because we won it through a fair, architectural competition, and it was chosen by a jury, including the governor and city architect,” said Philip Nikandrov, chief architect on the Okhta Center and director of RMJM’s office in St. Petersburg. “The concept will be discussed Tuesday, during public hearings, and if we get approval, then we will go ahead with the project.”
The development must still be approved by several committees and federal building regulators, a process that could take several months, he said.
“UNESCO’s protest is about emotions, while they should be pointing out specific instances where the law was breached,” he said. “The building is supposed to go up outside the city’s central area.”
The disagreement stems from the fact that St. Petersburg has changed the borders of its historical center since it was included as a UNESCO site in 1990. The tower, which UNESCO says is being built in a buffer zone, now falls outside that area according St. Petersburg’s newly adopted development plan, Nikandrov said.
He also brushed off concerns that the skyscraper would be visible from some of the 130 points specified in the new law.
“If seen from Vasilyevsky Island, for instance, it will look two times lower than Peter and Paul Fortress,” he said.
He compared the debate around the project with the controversies over the construction of the 324-meter Eiffel Tower in the late 1880s.
“Lots of people were opposed to it then, now it has become the landmark of Paris,” he said. “So time will judge, who was right and who was wrong.”
Removing a site from the World Heritage list doesn’t happen every day, UNESCO spokesman Roni Amelan said in e-mailed comments, making it clear that the move was still viewed as a last resort.
It has only happened twice: at the Arabian Oryx Sanctuary in Oman and the Dresden Elbe Valley in Germany because the sites lost their “outstanding universal qualities,” he said.
Unless changes are made, the historic center of St. Petersburg and related monuments will be put on UNESCO’s danger list.
The development, located on the banks of the Okhta River on the city’s eastern edge, sparked controversy almost as soon as details were announced in December 2006.
The building’s design, reminiscent of an ear of corn, immediately earned it a wealth of unflattering nicknames, most frequently Gazochlen (a reference to its phallic shape), Gazoskryob, or Gas-scraper, and Matviyenko’s Cucumber, in honor of its chief advocate, Governor Valentina Matviyenko.
City Hall maintains that the project would help develop St. Petersburg as a business center and bring Gazprom Neft, a big taxpayer, to the city.
In a statement published Friday, UNESCO expressed its “grave concern that the proposed Okhta Center tower could affect the outstanding universal value of the property.” The organization also asked that the state-run company halt work and submit modified plans, “in accordance with federal legislation and accompanied by an independent environmental impact assessment.”
Preservationists, who have long contended that the tower would be an eyesore amid St. Petersburg’s historic architecture, say the government is trying to ram through approval without the necessary oversight or public discussion.
On Aug. 12, a city commission tentatively approved the tower and scheduled the hearings to discuss the Okhta Center project, designed by Britain-based RMJM Architects.
But protesters — including from Yabloko and the Communist Party — have filed a complaint with the Krasnogvardeisky District Court challenging the scheduling. They say City Hall printed its official announcement in a special issue of the small daily newspaper Nevskoye Vremya, which was only released on the day of the hearings.
The lawsuit also says the city has failed to establish a special land-use commission, which is supposed to be included in the hearings.
The court has yet to rule on the challenge.
“City authorities adopted two laws this year that contradict Gazprom Neft’s plans,” said Antonina Yeliseyeva, an activist of the Zhivoi Gorod movement. “The first, adopted in February, regulates the usage of city land and building policies, the second, adopted in March, determines the architectural protection areas.”
The laws limits buildings’ height to 100 meters and lists a number of places around the city from which no new construction can be visible, she said.
“If the city makes an exception for Gazprom Neft, it will be a dangerous precedent,” she said. “Then we are going to see numerous skyscrapers in the nearest future.”
Gazprom Neft could not be reached for comment Friday, but it has previously alleged that the protesters are being paid by unidentified opponents.
St. Petersburg was originally supposed to finance 49 percent of the project, but because of budgetary problems, state oil producer Gazprom Neft agreed to cover 100 percent of the costs, estimated at 60 billion rubles ($1.9 billion).
“The project is absolutely legitimate because we won it through a fair, architectural competition, and it was chosen by a jury, including the governor and city architect,” said Philip Nikandrov, chief architect on the Okhta Center and director of RMJM’s office in St. Petersburg. “The concept will be discussed Tuesday, during public hearings, and if we get approval, then we will go ahead with the project.”
The development must still be approved by several committees and federal building regulators, a process that could take several months, he said.
“UNESCO’s protest is about emotions, while they should be pointing out specific instances where the law was breached,” he said. “The building is supposed to go up outside the city’s central area.”
The disagreement stems from the fact that St. Petersburg has changed the borders of its historical center since it was included as a UNESCO site in 1990. The tower, which UNESCO says is being built in a buffer zone, now falls outside that area according St. Petersburg’s newly adopted development plan, Nikandrov said.
He also brushed off concerns that the skyscraper would be visible from some of the 130 points specified in the new law.
“If seen from Vasilyevsky Island, for instance, it will look two times lower than Peter and Paul Fortress,” he said.
He compared the debate around the project with the controversies over the construction of the 324-meter Eiffel Tower in the late 1880s.
“Lots of people were opposed to it then, now it has become the landmark of Paris,” he said. “So time will judge, who was right and who was wrong.”
Removing a site from the World Heritage list doesn’t happen every day, UNESCO spokesman Roni Amelan said in e-mailed comments, making it clear that the move was still viewed as a last resort.
It has only happened twice: at the Arabian Oryx Sanctuary in Oman and the Dresden Elbe Valley in Germany because the sites lost their “outstanding universal qualities,” he said.
Unless changes are made, the historic center of St. Petersburg and related monuments will be put on UNESCO’s danger list.
The development, located on the banks of the Okhta River on the city’s eastern edge, sparked controversy almost as soon as details were announced in December 2006.
The building’s design, reminiscent of an ear of corn, immediately earned it a wealth of unflattering nicknames, most frequently Gazochlen (a reference to its phallic shape), Gazoskryob, or Gas-scraper, and Matviyenko’s Cucumber, in honor of its chief advocate, Governor Valentina Matviyenko.
City Hall maintains that the project would help develop St. Petersburg as a business center and bring Gazprom Neft, a big taxpayer, to the city.
Social Ills Still Plague Ukraine’s Fields Of Dreams
ZHOVTNEVE, Ukraine -- Combine harvesters buzz across sunny fields of golden wheat - a picture of rural bliss in Ukraine, a fertile former Soviet republic once known as the bread basket of Europe.
But while Ukraine has seen its farming sector grow this year despite its worst economic crisis since the collapse of the Soviet Union, a legacy of social ills and under-funding in the countryside is proving hard to overcome.“Villages are dying, young people have all gone to the towns. We’ve leased some land and bought harvesters but the manpower is missing,” said Grygori Kovalenko, an agronomist at Ukrainian-Austrian farming company Zernyatko.The people harvesting Zernyatko’s fields in Zhovtneve, a village some 220km north of the capital Kiev, are mostly seasonal workers brought in for short periods of time - not year-round farmers.Fedir Goncharuk, co-owner of another company, Dibrivka-Agroservice, based 170 kilometres south of the capital, paints an even bleaker picture.“I bus in people from 18 places nearby, otherwise I wouldn’t have any workers. There’s a distillery in the village. It’s worse than a nuclear bomb - most of the people here are alcoholics,” he said.Despite these difficulties, the farming sector still managed to grow 3.8% in the first seven months of the year on a 12-month comparison, while industrial output plunged 31.1% in the first half of 2009.Agriculture’s share in Ukrainian exports, traditionally dominated by metals and chemicals, has also risen. Grain made up 9.4 % of total exports in the first half of the year compared to 3.1% at the same time last year.“Agriculture is the economy’s main hope for its balance of payments,” said Mykhailo Salnykov, an expert from investment fund Sokrat Capital.“It is preventing an even more severe devaluation of the national currency,” the hryvnia, which has fallen some 40% against the dollar, he said.Weekly business news magazine Kontrakty put it more succinctly. “Agriculture was the only sector to grow in Ukraine this year,” it said in a recent issue.Farming has also managed to recover in the past few years to make Ukraine the fifth biggest grain exporter in the world and the country in 2008 had its biggest harvest since the Soviet collapse of 1991 - 53.3mn tons.Experts however say the agriculture sector should be doing far better. Ukraine has 42mn hectares of agricultural land, making up 22% of Europe’s total. The climate is suited to farming and two-thirds of Ukraine is covered in “black earth” considered among the most fertile in the world.Apart from the problems with manpower, producers also complain about the predominantly poor Soviet-era equipment and a lack of grain storage capacity, as well as broader inefficiencies in the grain market.“We can’t make forecasts, policy is changing all the time and prices too. We can never achieve what we’ve planned in our business plan,” Goncharuk said.“If the harvest is good, prices plunge. We buy barley seed for 3,000 hryvnias ($360) per ton and after the harvest we can only sell it at 600 hryvnias. So what’s the point of growing it?” he said.“In the West, the state subsidises agriculture and controls the grain market. Here, not at all,” he added.The lack of silos for storing grain forces producers to accept any price offered by intermediaries and banks are reluctant to give companies credit to build new silos because of the economic crisis, Goncharuk said. Ukraine has 650 to 700 silos with a total capacity of just 30mn tons.The crippling economic crisis has also hit other aspects of farming. “Last year we were using 150kg of manure per hectare and this year only 50kg because of a lack of money,” Kovalenko said.Still the fertile soil appears to compensate for these problems.The average grain yield in Ukraine rose to 3.5 tons per hectare in 2008 compared to 4.5 tons per hectare in the European Union and is still going up. Experts say the harvest in the next few years could reach 95mn tons.Pointing to his luxury offroad Lexus car, Goncharuk smiled and said: “I won’t tell you about our profits but look at my car and our American tractors and draw your own conclusions.”
But while Ukraine has seen its farming sector grow this year despite its worst economic crisis since the collapse of the Soviet Union, a legacy of social ills and under-funding in the countryside is proving hard to overcome.“Villages are dying, young people have all gone to the towns. We’ve leased some land and bought harvesters but the manpower is missing,” said Grygori Kovalenko, an agronomist at Ukrainian-Austrian farming company Zernyatko.The people harvesting Zernyatko’s fields in Zhovtneve, a village some 220km north of the capital Kiev, are mostly seasonal workers brought in for short periods of time - not year-round farmers.Fedir Goncharuk, co-owner of another company, Dibrivka-Agroservice, based 170 kilometres south of the capital, paints an even bleaker picture.“I bus in people from 18 places nearby, otherwise I wouldn’t have any workers. There’s a distillery in the village. It’s worse than a nuclear bomb - most of the people here are alcoholics,” he said.Despite these difficulties, the farming sector still managed to grow 3.8% in the first seven months of the year on a 12-month comparison, while industrial output plunged 31.1% in the first half of 2009.Agriculture’s share in Ukrainian exports, traditionally dominated by metals and chemicals, has also risen. Grain made up 9.4 % of total exports in the first half of the year compared to 3.1% at the same time last year.“Agriculture is the economy’s main hope for its balance of payments,” said Mykhailo Salnykov, an expert from investment fund Sokrat Capital.“It is preventing an even more severe devaluation of the national currency,” the hryvnia, which has fallen some 40% against the dollar, he said.Weekly business news magazine Kontrakty put it more succinctly. “Agriculture was the only sector to grow in Ukraine this year,” it said in a recent issue.Farming has also managed to recover in the past few years to make Ukraine the fifth biggest grain exporter in the world and the country in 2008 had its biggest harvest since the Soviet collapse of 1991 - 53.3mn tons.Experts however say the agriculture sector should be doing far better. Ukraine has 42mn hectares of agricultural land, making up 22% of Europe’s total. The climate is suited to farming and two-thirds of Ukraine is covered in “black earth” considered among the most fertile in the world.Apart from the problems with manpower, producers also complain about the predominantly poor Soviet-era equipment and a lack of grain storage capacity, as well as broader inefficiencies in the grain market.“We can’t make forecasts, policy is changing all the time and prices too. We can never achieve what we’ve planned in our business plan,” Goncharuk said.“If the harvest is good, prices plunge. We buy barley seed for 3,000 hryvnias ($360) per ton and after the harvest we can only sell it at 600 hryvnias. So what’s the point of growing it?” he said.“In the West, the state subsidises agriculture and controls the grain market. Here, not at all,” he added.The lack of silos for storing grain forces producers to accept any price offered by intermediaries and banks are reluctant to give companies credit to build new silos because of the economic crisis, Goncharuk said. Ukraine has 650 to 700 silos with a total capacity of just 30mn tons.The crippling economic crisis has also hit other aspects of farming. “Last year we were using 150kg of manure per hectare and this year only 50kg because of a lack of money,” Kovalenko said.Still the fertile soil appears to compensate for these problems.The average grain yield in Ukraine rose to 3.5 tons per hectare in 2008 compared to 4.5 tons per hectare in the European Union and is still going up. Experts say the harvest in the next few years could reach 95mn tons.Pointing to his luxury offroad Lexus car, Goncharuk smiled and said: “I won’t tell you about our profits but look at my car and our American tractors and draw your own conclusions.”
Medvedev Blasts Ukraine, Baltic States Over WWII
MOSCOW, Russia -- Russian President Dmitry Medvedev on Sunday criticised Ukraine and the Baltic states for glorifying “Nazi accomplices”, speaking ahead of the 70th anniversary of the start of World War II.
“We are seeing some astounding trends,” Medvedev said in an interview with the Rossia state television channel. “Governments in the Baltic states and even Ukraine are now essentially pronouncing former Nazi accomplices to be their national heroes who fought for the liberation of their nations. “Of course, everyone knows what really happened, but everyone looks down in shame, so as to avoid souring relations.”Russia has repeatedly criticised former Soviet republics Ukraine, Estonia, Latvia and Lithuania for seeking to rehabilitate anti-Communist groups that in some cases collaborated with the Nazis.Resolution: Medvedev also lashed out at a resolution passed in July by the parliamentary assembly of the Organisation for Cooperation and Security in Europe (OSCE) which condemned both Nazism and Stalinism.Medvedev said the resolution had pronounced Nazi Germany and Stalin’s Soviet Union “to be equally responsible for World War II” and said: “Now this, quite frankly, is a flat-out lie.” He appeared to be referring to the resolution’s assertion that both regimes brought about genocide and war crimes, and its call to establish a Europe-wide memorial day on August 23, the anniversary of a notorious Nazi-Soviet pact.Berlin and Moscow signed the Ribbentrop-Molotov Pact in 1939, paving the way for a joint invasion of Poland days later and Moscow’s seizure of Lithuania, Latvia and Estonia, which remained Soviet republics until 1991.Despite the pact, the Soviet Union was invaded by Nazi Germany in 1941 and lost tens of millions of people in the conflict.Present-day Russia regards the Soviet role in World War II as heroic and bristles at attempts to equate the totalitarian systems of Adolf Hitler and Joseph Stalin.Tuesday marks the 70th anniversary of the Nazi German invasion of Poland on September 1, 1939, widely regarded as the start of World War II. Soviet troops invaded and occupied eastern parts of Poland less than three weeks later.
“We are seeing some astounding trends,” Medvedev said in an interview with the Rossia state television channel. “Governments in the Baltic states and even Ukraine are now essentially pronouncing former Nazi accomplices to be their national heroes who fought for the liberation of their nations. “Of course, everyone knows what really happened, but everyone looks down in shame, so as to avoid souring relations.”Russia has repeatedly criticised former Soviet republics Ukraine, Estonia, Latvia and Lithuania for seeking to rehabilitate anti-Communist groups that in some cases collaborated with the Nazis.Resolution: Medvedev also lashed out at a resolution passed in July by the parliamentary assembly of the Organisation for Cooperation and Security in Europe (OSCE) which condemned both Nazism and Stalinism.Medvedev said the resolution had pronounced Nazi Germany and Stalin’s Soviet Union “to be equally responsible for World War II” and said: “Now this, quite frankly, is a flat-out lie.” He appeared to be referring to the resolution’s assertion that both regimes brought about genocide and war crimes, and its call to establish a Europe-wide memorial day on August 23, the anniversary of a notorious Nazi-Soviet pact.Berlin and Moscow signed the Ribbentrop-Molotov Pact in 1939, paving the way for a joint invasion of Poland days later and Moscow’s seizure of Lithuania, Latvia and Estonia, which remained Soviet republics until 1991.Despite the pact, the Soviet Union was invaded by Nazi Germany in 1941 and lost tens of millions of people in the conflict.Present-day Russia regards the Soviet role in World War II as heroic and bristles at attempts to equate the totalitarian systems of Adolf Hitler and Joseph Stalin.Tuesday marks the 70th anniversary of the Nazi German invasion of Poland on September 1, 1939, widely regarded as the start of World War II. Soviet troops invaded and occupied eastern parts of Poland less than three weeks later.
Sunday 30 August 2009
Can anyone stop Yanukovych from being elected the next president of Ukraine?
Polls suggest that leader of the Party of the Regions can collect more than the combined votes of his main challengers, making him the most likely fourth president of Ukraine.
Two recent opinion polls monitoring Ukraine’s presidential election campaign in the lead-up to the January 2010 vote indicate that Regions Party leader Victor Yanukovych is well ahead.
The Kyiv Research and Branding Group, which canvassed respondents between Aug. 4 and 14, has Yanukovych with 26 percent, followed by Prime Minister Yulia Tymoshenko at 16.5 percent and Arseniy Yatsenyuk with 12.6 percent. Angus Reid reported on Aug. 12 that Yanukovych has the support of 29.9 percent, with Tymoshenko at 15 percent and Yatseniuk with 12.8 percent.
The latter poll is the first to suggest that Yanukovych could poll more than the combined votes of his main challengers.
Ukrainians have often mocked the self-styled “Proffesor” (as the word was misspelled in his campaign literature in 2004). But in 2006, he managed to expunge from the record his incarceration for assault during his youth. And, while electors seem weary of familiar faces in political life, the 59-year old lawyer and engineer still looks the likely winner in January.
It is only five years since Yanukovych ran for president against current incumbent Victor Yushchenko. In that campaign, not only did he have implicit backing from Vladimir Putin, but also Russia (partly through Gazprom) allegedly helped to fund his campaign. In Moscow his campaign posters were everywhere, and 560,000 Ukrainians resident in Russia signed his support list for presidential candidacy. At a Congress of the Ukrainian diaspora in Moscow, Mayor Yuri Luzhkov and then First Deputy Prime Minister Dmitry Medvedev endorsed him as the next president of Ukraine.
During the 2004 campaign, Yanukovych used the benefits of the prime minister’s office for his campaign refusing to resign his post, promised to make Russian the second state language of Ukraine, and offered dual citizenship to ethnic Russians. During the protests in Kyiv that followed the rigged vote count of the run-off, Yanukovych supporters said that a referendum on the autonomy of Donetsk and Luhansk regions would be held if Yushchenko became president.
Many observers considered that Yanukovych’s political career was over when Yushchenko won the rerun second round of the election in December 2004 and became Ukraine’s third president.
However, in the 2006 parliamentary elections, Yanukovych staged a comeback and once again became prime minister. His Regions party won more than 45 percent of the vote in nine districts of Ukraine, all in the east and south of the country.
How did he achieve such a revival of fortunes?
First, his party had financial support from several businessmen, including Ukraine’s richest tycoon, born and raised in Donetsk, Rinat Akhmetov. Second, his party’s organization was centralized and even autocratic, prohibiting any factionalism. Third, the Orange coalition had split and its leaders were fighting each other. Lastly, he promised that his party would focus on economic issues and rectify problems promptly. He had little chance to do so because another parliamentary election followed in 2007 and a new Orange coalition was formed.
Yanukovych has always had solid backing. As the former governor of Donetsk Oblast, he is assured of overwhelming support from Ukraine’s eastern industrial regions. His backers control the country’s leading banks, machine-building and metallurgical factories, steelworks, and coal mines.
Western Ukrainians and Ukrainians in the diaspora hold Yanukovych in low esteem. His sycophantic responses to Russia’s attacks on the presidency of Victor Yushchenko suggest he will quickly move Ukraine into the Russian sphere of influence. Nation-building will end and the pro-European direction will be halted. Yanukovych has promised a referendum on Ukraine’s membership of NATO, and although he favors trade with the European Union, he does not endorse full membership.
However, no Ukrainian president can change course so abruptly. In 1994, Leonid Kuchma became president on a platform of moving Ukraine closer to Russia. But once in office he maintained a firm distance. Belarus’ president, Alyeksander Lukashenko, sought a union with Russia in 1997, but today promotes independence and distance from Moscow. In the current climate, friendship with Moscow means being a client state.
Conversely, Ukraine’s path to the EU is closed as long as Germany and France persist in blocking it. Germany’s close economic ties to Russia preclude any short-term change of direction. The EU’s Eastern Partnership notwithstanding, Brussels has been a big disappointment from Ukraine’s perspective. Its major players have made a mockery of Yushchenko’s goals of joining European structures.
The economic and political climate today does not allow for a radical change of direction. The current path to reduce dependency on gas supplies from the Russians will likely be maintained. Most voters are concerned primarily about jobs, wages, and pensions.
Ukrainians have reservations about NATO but they have no wish to become a pawn of Russia. A solution must also be found to the constant wrangling over power between president and parliament, likely through amendments to the Constitution.
As Ukraine celebrates 18 years of independence, it is at a difficult stage both economically and in its political evolution. To Western observers it seems unthinkable that voters would choose Yanukovych as the next president. The lack of suitable alternatives suggests, nonetheless that it could happen.
Two recent opinion polls monitoring Ukraine’s presidential election campaign in the lead-up to the January 2010 vote indicate that Regions Party leader Victor Yanukovych is well ahead.
The Kyiv Research and Branding Group, which canvassed respondents between Aug. 4 and 14, has Yanukovych with 26 percent, followed by Prime Minister Yulia Tymoshenko at 16.5 percent and Arseniy Yatsenyuk with 12.6 percent. Angus Reid reported on Aug. 12 that Yanukovych has the support of 29.9 percent, with Tymoshenko at 15 percent and Yatseniuk with 12.8 percent.
The latter poll is the first to suggest that Yanukovych could poll more than the combined votes of his main challengers.
Ukrainians have often mocked the self-styled “Proffesor” (as the word was misspelled in his campaign literature in 2004). But in 2006, he managed to expunge from the record his incarceration for assault during his youth. And, while electors seem weary of familiar faces in political life, the 59-year old lawyer and engineer still looks the likely winner in January.
It is only five years since Yanukovych ran for president against current incumbent Victor Yushchenko. In that campaign, not only did he have implicit backing from Vladimir Putin, but also Russia (partly through Gazprom) allegedly helped to fund his campaign. In Moscow his campaign posters were everywhere, and 560,000 Ukrainians resident in Russia signed his support list for presidential candidacy. At a Congress of the Ukrainian diaspora in Moscow, Mayor Yuri Luzhkov and then First Deputy Prime Minister Dmitry Medvedev endorsed him as the next president of Ukraine.
During the 2004 campaign, Yanukovych used the benefits of the prime minister’s office for his campaign refusing to resign his post, promised to make Russian the second state language of Ukraine, and offered dual citizenship to ethnic Russians. During the protests in Kyiv that followed the rigged vote count of the run-off, Yanukovych supporters said that a referendum on the autonomy of Donetsk and Luhansk regions would be held if Yushchenko became president.
Many observers considered that Yanukovych’s political career was over when Yushchenko won the rerun second round of the election in December 2004 and became Ukraine’s third president.
However, in the 2006 parliamentary elections, Yanukovych staged a comeback and once again became prime minister. His Regions party won more than 45 percent of the vote in nine districts of Ukraine, all in the east and south of the country.
How did he achieve such a revival of fortunes?
First, his party had financial support from several businessmen, including Ukraine’s richest tycoon, born and raised in Donetsk, Rinat Akhmetov. Second, his party’s organization was centralized and even autocratic, prohibiting any factionalism. Third, the Orange coalition had split and its leaders were fighting each other. Lastly, he promised that his party would focus on economic issues and rectify problems promptly. He had little chance to do so because another parliamentary election followed in 2007 and a new Orange coalition was formed.
Yanukovych has always had solid backing. As the former governor of Donetsk Oblast, he is assured of overwhelming support from Ukraine’s eastern industrial regions. His backers control the country’s leading banks, machine-building and metallurgical factories, steelworks, and coal mines.
Western Ukrainians and Ukrainians in the diaspora hold Yanukovych in low esteem. His sycophantic responses to Russia’s attacks on the presidency of Victor Yushchenko suggest he will quickly move Ukraine into the Russian sphere of influence. Nation-building will end and the pro-European direction will be halted. Yanukovych has promised a referendum on Ukraine’s membership of NATO, and although he favors trade with the European Union, he does not endorse full membership.
However, no Ukrainian president can change course so abruptly. In 1994, Leonid Kuchma became president on a platform of moving Ukraine closer to Russia. But once in office he maintained a firm distance. Belarus’ president, Alyeksander Lukashenko, sought a union with Russia in 1997, but today promotes independence and distance from Moscow. In the current climate, friendship with Moscow means being a client state.
Conversely, Ukraine’s path to the EU is closed as long as Germany and France persist in blocking it. Germany’s close economic ties to Russia preclude any short-term change of direction. The EU’s Eastern Partnership notwithstanding, Brussels has been a big disappointment from Ukraine’s perspective. Its major players have made a mockery of Yushchenko’s goals of joining European structures.
The economic and political climate today does not allow for a radical change of direction. The current path to reduce dependency on gas supplies from the Russians will likely be maintained. Most voters are concerned primarily about jobs, wages, and pensions.
Ukrainians have reservations about NATO but they have no wish to become a pawn of Russia. A solution must also be found to the constant wrangling over power between president and parliament, likely through amendments to the Constitution.
As Ukraine celebrates 18 years of independence, it is at a difficult stage both economically and in its political evolution. To Western observers it seems unthinkable that voters would choose Yanukovych as the next president. The lack of suitable alternatives suggests, nonetheless that it could happen.
Ukrainians face hurdles going abroad
European visas remain difficult to obtain for Ukrainians, despite an agreement to ease restrictions.
Ukrainians still have trouble getting into Europe as visas remain difficult to obtain. The number of refusals is high and the process is expensive and time-consuming, including long lines outside some consulates. Some embassies turn down up to a quarter of the applicants, often for no obvious reason.
“Those [European] countries could be protecting their labor market, using not legal, but rather discriminating methods. But we don’t know reasons for the refusals. We can only guess,” said Iryna Sushko, manager of Europe Without Barriers, a consortium of non-governmental organizations on visa policy of European Union countries.
There is an estimated 4.5 million Ukrainians working abroad, many illegally.
The number of Ukrainians travelling to EU countries has decreased at least 2.6 times after admission of new EU countries (Poland, Slovakia, Hungary, Romania and Lithuania) to the Schengen Zone in 2008. An estimated 70 percent of Ukrainians travelling to the EU go to these new members of the 27-nation bloc.
The leaders in terms of visa refusals are the embassies of Spain (22.5 percent), Czech Republic (11.9 percent) and France (10 percent), according to a recent report by the Center for Peace, Conversion and Foreign Policy of Ukraine, a think tank. Germany appears to be the most hospitable with just 2.5 percent in refusals. The research also indicates some improvements, such as a general decrease in visa refusals for Ukrainians and introduction of new visa processing technologies.
“The number of refusals varies greatly from one embassy to another. The Spanish embassy is one of the most difficult ones. We get about 30 percent of refusals always,” confirms Anna Suprun, general manager at BTL business travel agency.
After the Orange Revolution, the 2004 democratic uprising that overturned a rigged presidential election, Ukraine relaxed visa requirements for Europeans and North Americans, hoping for reciprocation. And although Ukraine and the EU have signed the agreement on facilitation of the issuance of visas and it came to force in 2008, most Ukrainians have not felt its effects.
“From my practice [of more than a decade] I can say that improvements coming from the agreement apply to multi-visas only [now they are given out for two years, instead of one]. This is the only improvement. Regarding the list of documents, I think it even got worse,” said Suprun.
Borys Tarasyuk, head of the Committee of European Integration and former Minister of Foreign Affairs, sees the situation in a more positive light. “The situation is changing for the better. Particularly, the number of visa refusals is decreasing and the treatment of Ukrainian citizens is improving. In my opinion the tendency is positive,” he told the Kyiv Post in an interview on Aug. 21.
Valentina Maley, a retired school teacher, disagrees. She has recently been in the media spotlight for refusing to accept bad treatment from the Greek consul, and going public with her story.
Maley’s application for a visa was turned down for an unclear reason. “We had already paid for our stay there and for the flight, we couldn’t cancel. I almost lost 1,500 euro, but my daughter went there instead to save the money,” recalls Maley.
Besides, Greek consul Dimitrios Mikhalopulos “smacked my passport on the table, hit the table by his hand. Suddenly the consul pulled out his neck, and start making faces at me, stretched his mouth and eyes with his fingers. Then he jumped to the glass window between us and started punching air in front of it as if he was hitting me.”
Maley told the Kyiv Post that during her 30-years high school teaching career, she “always managed to avoid conflicts dealing with different people. Nobody ever made faces at me.”
Sushko of Europe Without Barriers said they had noticed an increase of complaints about the Greek embassy. “Ukrainian citizens usually don’t address these problems publicly,” she added.
The Greek Embassy said investigation of Maley's case is still under way.
Sometimes Ukrainians choose unusual ways for protest. Recently the British embassy had a performance of folk dance troupe Smerechyna in front of their windows after the dancers were refused visas to perform at Bellingham International Folklore Festival. But the dance failed to convince the ambassador, who upheld the consul’s decision, according to the British Embassy’s website.
British Ambassador Leigh Turner recommended in his online blog that the dance troupe appeal his consul's refusal to issue visas.
The French embassy had a children’s ensemble dance in front of the embassy for three hours in the protest for the same reason. Similar incident happened at the German embassy which refused to issue visas to a children’s choir. The French and Spanish Embassies refused to comment.
Ukrainians still have trouble getting into Europe as visas remain difficult to obtain. The number of refusals is high and the process is expensive and time-consuming, including long lines outside some consulates. Some embassies turn down up to a quarter of the applicants, often for no obvious reason.
“Those [European] countries could be protecting their labor market, using not legal, but rather discriminating methods. But we don’t know reasons for the refusals. We can only guess,” said Iryna Sushko, manager of Europe Without Barriers, a consortium of non-governmental organizations on visa policy of European Union countries.
There is an estimated 4.5 million Ukrainians working abroad, many illegally.
The number of Ukrainians travelling to EU countries has decreased at least 2.6 times after admission of new EU countries (Poland, Slovakia, Hungary, Romania and Lithuania) to the Schengen Zone in 2008. An estimated 70 percent of Ukrainians travelling to the EU go to these new members of the 27-nation bloc.
The leaders in terms of visa refusals are the embassies of Spain (22.5 percent), Czech Republic (11.9 percent) and France (10 percent), according to a recent report by the Center for Peace, Conversion and Foreign Policy of Ukraine, a think tank. Germany appears to be the most hospitable with just 2.5 percent in refusals. The research also indicates some improvements, such as a general decrease in visa refusals for Ukrainians and introduction of new visa processing technologies.
“The number of refusals varies greatly from one embassy to another. The Spanish embassy is one of the most difficult ones. We get about 30 percent of refusals always,” confirms Anna Suprun, general manager at BTL business travel agency.
After the Orange Revolution, the 2004 democratic uprising that overturned a rigged presidential election, Ukraine relaxed visa requirements for Europeans and North Americans, hoping for reciprocation. And although Ukraine and the EU have signed the agreement on facilitation of the issuance of visas and it came to force in 2008, most Ukrainians have not felt its effects.
“From my practice [of more than a decade] I can say that improvements coming from the agreement apply to multi-visas only [now they are given out for two years, instead of one]. This is the only improvement. Regarding the list of documents, I think it even got worse,” said Suprun.
Borys Tarasyuk, head of the Committee of European Integration and former Minister of Foreign Affairs, sees the situation in a more positive light. “The situation is changing for the better. Particularly, the number of visa refusals is decreasing and the treatment of Ukrainian citizens is improving. In my opinion the tendency is positive,” he told the Kyiv Post in an interview on Aug. 21.
Valentina Maley, a retired school teacher, disagrees. She has recently been in the media spotlight for refusing to accept bad treatment from the Greek consul, and going public with her story.
Maley’s application for a visa was turned down for an unclear reason. “We had already paid for our stay there and for the flight, we couldn’t cancel. I almost lost 1,500 euro, but my daughter went there instead to save the money,” recalls Maley.
Besides, Greek consul Dimitrios Mikhalopulos “smacked my passport on the table, hit the table by his hand. Suddenly the consul pulled out his neck, and start making faces at me, stretched his mouth and eyes with his fingers. Then he jumped to the glass window between us and started punching air in front of it as if he was hitting me.”
Maley told the Kyiv Post that during her 30-years high school teaching career, she “always managed to avoid conflicts dealing with different people. Nobody ever made faces at me.”
Sushko of Europe Without Barriers said they had noticed an increase of complaints about the Greek embassy. “Ukrainian citizens usually don’t address these problems publicly,” she added.
The Greek Embassy said investigation of Maley's case is still under way.
Sometimes Ukrainians choose unusual ways for protest. Recently the British embassy had a performance of folk dance troupe Smerechyna in front of their windows after the dancers were refused visas to perform at Bellingham International Folklore Festival. But the dance failed to convince the ambassador, who upheld the consul’s decision, according to the British Embassy’s website.
British Ambassador Leigh Turner recommended in his online blog that the dance troupe appeal his consul's refusal to issue visas.
The French embassy had a children’s ensemble dance in front of the embassy for three hours in the protest for the same reason. Similar incident happened at the German embassy which refused to issue visas to a children’s choir. The French and Spanish Embassies refused to comment.
Ukraine's foreign debt up to $15.7 billion
Ukraine's Foreign Debt 25.5% Up To USD 15.7 Billion In July; Domestic Debt 21.4% Up To UAH 63.8 .
The Finance Ministry announced this in a statement.
Ukraine's direct domestic debt increased by 21.4% or UAH 11,232 billion to UAH 63,781.4 million (USD 8,285.5 million) in July.
The total size of Ukraine's direct national debt in July increased by 24.8% or UAH 36,730.1 million to UAH 184,952.4 million (USD 24,026.0 million), from UAH 148,222.3 million (USD 19,425.5 million) as of June 30.
The total size of the guaranteed national debt was UAH 71,097.4 million (USD 9,235.8 million) as of July 31, compared with UAH 70,638.3 million (USD 9,257.6 million) as of June 30.
This includes the guaranteed foreign debt of UAH 60,454.4 million (USD 7,853.3 million) as of July 31, compared with UAH 60,628.3 million (USD 7,945.7 million) as of June 30, and the guaranteed domestic debt of UAH 10,643.0 million (USD 1,382.6 million) as of July 31, compared with UAH 10,009.9 million (USD 1,311.9 million) as of June 30.
The direct and guaranteed national debt amounted to UAH 256,049.8 million (USD 33,261.9 million) as of July 31, compared with UAH 218,860.6 million (USD 28,683.1 million) as of June 30.
As Ukrainian news earlier reported, Ukraine foreign debt increased by USD 42.3 million or 0.3% in June to amount to USD 12,538.6 million, and domestic debt by 3.7% or UAH 1,888.9 million to UAH 52.549.2 million (USD 6.886.9 million).
In 2008 Ukraine's foreign debt increased by 5.5% from USD 10,591.7 million to USD 11,171.5 million, its direct domestic debt increased by 250.8% from UAH 17,806.4 million (USD 3,526.0 million) to UAH 44,666.5 million (USD 5,800.9 million), and the total amount of direct national debt increased by 83.3% from UAH 71,294.3 million (USD 14,117.7 million) to UAH 130,686.9 million (USD 16,972.3 million).
The Finance Ministry announced this in a statement.
Ukraine's direct domestic debt increased by 21.4% or UAH 11,232 billion to UAH 63,781.4 million (USD 8,285.5 million) in July.
The total size of Ukraine's direct national debt in July increased by 24.8% or UAH 36,730.1 million to UAH 184,952.4 million (USD 24,026.0 million), from UAH 148,222.3 million (USD 19,425.5 million) as of June 30.
The total size of the guaranteed national debt was UAH 71,097.4 million (USD 9,235.8 million) as of July 31, compared with UAH 70,638.3 million (USD 9,257.6 million) as of June 30.
This includes the guaranteed foreign debt of UAH 60,454.4 million (USD 7,853.3 million) as of July 31, compared with UAH 60,628.3 million (USD 7,945.7 million) as of June 30, and the guaranteed domestic debt of UAH 10,643.0 million (USD 1,382.6 million) as of July 31, compared with UAH 10,009.9 million (USD 1,311.9 million) as of June 30.
The direct and guaranteed national debt amounted to UAH 256,049.8 million (USD 33,261.9 million) as of July 31, compared with UAH 218,860.6 million (USD 28,683.1 million) as of June 30.
As Ukrainian news earlier reported, Ukraine foreign debt increased by USD 42.3 million or 0.3% in June to amount to USD 12,538.6 million, and domestic debt by 3.7% or UAH 1,888.9 million to UAH 52.549.2 million (USD 6.886.9 million).
In 2008 Ukraine's foreign debt increased by 5.5% from USD 10,591.7 million to USD 11,171.5 million, its direct domestic debt increased by 250.8% from UAH 17,806.4 million (USD 3,526.0 million) to UAH 44,666.5 million (USD 5,800.9 million), and the total amount of direct national debt increased by 83.3% from UAH 71,294.3 million (USD 14,117.7 million) to UAH 130,686.9 million (USD 16,972.3 million).
Ukraine eyes gas direct from Central Asia
ASHGABAT, Aug 25 (Reuters) - Ukraine wants to bypass Russia in its natural gas supplies from Central Asia and hopes to start talks with Turkmenistan soon on direct purchases, Ukraine's envoy to the Central Asian state said in an interview.
"Turkmenistan, a key exporter, and Ukraine, a key importer, could initiate talks on direct purchases," Viktor Maiko, Ukraine's ambassador to the Caspian nation, told Reuters. "That would be fair and logical."
Most of Ukraine's gas imports come from Russia which buys the commodity from Turkmenistan -- Central Asia's biggest exporter. Kiev, which has often rowed with Moscow over gas prices and supplies, has long sought to change the arrangement.
"We are ready to start three-way talks (including Russia) on the possibility of starting direct purchases of Turkmen gas. ... Perhaps that could involve 10-15 billion cubic metres of gas (a year)," Maiko said.
He did not elaborate on the details and did not say how it would be technically possible to supply gas directly to Ukraine since Russian gas monopoly Gazprom buys most of Turkmen gas production and controls its exports routes.
Turkmenistan itself has said before it remains committed to its earlier gas delivery agreement with Russia until 2025.
Ukrainian President Viktor Yushchenko and Russia's Dmitry Medvedev are both expected to visit Turkmenistan next month for talks certain to focus on natural gas supplies.
Turkmenistan itself, its budget dependent on Russian gas purchases, has sought to diversify exports away from its former Soviet overlord and forge closer ties with Western buyers.
Its pro-Western rhetoric has intensified since an explosion in April on a key Turkmen-Russia gas pipeline which Turkmenistan has blamed on Russia -- a charge Moscow denied.
The pipeline has since been repaired but the two sides still cannot agree on new terms of sales as Russia's Gazprom needs less gas than in the past.
Maiko said it could take up to a year to finalise a new arrangement for direct Turkmen purchases but gave no details. Turkmenistan's government could not be reached for comment.
Ukraine plays a key role in EU energy supply security, with about a fifth of Europe's gas coming from Russia via its territory, and Europe supports ways of securing steadier gas supplies.
Ukraine's latest dispute with Russia in January led to gas supplies to Europe being severed for more than two weeks.
In a blow to Gazprom, already struggling with lower prices and depressed exports to western Europe, Ukraine has cut gas imports from Russia due to a slowdown in its economy. Maiko said however that a fall in imports was temporary.
"Things are picking up already," he said. "The recession may continue for some time ... but Ukraine's main energy consuming industries such as metals and chemicals are picking up again." (Writing by Maria Golovnina)
"Turkmenistan, a key exporter, and Ukraine, a key importer, could initiate talks on direct purchases," Viktor Maiko, Ukraine's ambassador to the Caspian nation, told Reuters. "That would be fair and logical."
Most of Ukraine's gas imports come from Russia which buys the commodity from Turkmenistan -- Central Asia's biggest exporter. Kiev, which has often rowed with Moscow over gas prices and supplies, has long sought to change the arrangement.
"We are ready to start three-way talks (including Russia) on the possibility of starting direct purchases of Turkmen gas. ... Perhaps that could involve 10-15 billion cubic metres of gas (a year)," Maiko said.
He did not elaborate on the details and did not say how it would be technically possible to supply gas directly to Ukraine since Russian gas monopoly Gazprom buys most of Turkmen gas production and controls its exports routes.
Turkmenistan itself has said before it remains committed to its earlier gas delivery agreement with Russia until 2025.
Ukrainian President Viktor Yushchenko and Russia's Dmitry Medvedev are both expected to visit Turkmenistan next month for talks certain to focus on natural gas supplies.
Turkmenistan itself, its budget dependent on Russian gas purchases, has sought to diversify exports away from its former Soviet overlord and forge closer ties with Western buyers.
Its pro-Western rhetoric has intensified since an explosion in April on a key Turkmen-Russia gas pipeline which Turkmenistan has blamed on Russia -- a charge Moscow denied.
The pipeline has since been repaired but the two sides still cannot agree on new terms of sales as Russia's Gazprom needs less gas than in the past.
Maiko said it could take up to a year to finalise a new arrangement for direct Turkmen purchases but gave no details. Turkmenistan's government could not be reached for comment.
Ukraine plays a key role in EU energy supply security, with about a fifth of Europe's gas coming from Russia via its territory, and Europe supports ways of securing steadier gas supplies.
Ukraine's latest dispute with Russia in January led to gas supplies to Europe being severed for more than two weeks.
In a blow to Gazprom, already struggling with lower prices and depressed exports to western Europe, Ukraine has cut gas imports from Russia due to a slowdown in its economy. Maiko said however that a fall in imports was temporary.
"Things are picking up already," he said. "The recession may continue for some time ... but Ukraine's main energy consuming industries such as metals and chemicals are picking up again." (Writing by Maria Golovnina)
Vadim Grib sets up Ukraine's first distressed fund
Vadim Grib's TEKT investment group, with 14 years on the market one of Ukraine's oldest, is marking the seismic downgrade of Ukraine's economic reality by putting its asset management funds up for sale in August and switching its focus to a private equity fund for distressed assets, Ukraine's first distressed asset fund. While TEKT is not the first company to quit the moribund Ukrainian stock market, it's the first to go the whole hog and open a private equity fund for distressed assets. "I've always been more interested in investing in specific projects rather than finance, and I focus on a company's profitability instead of capitalization," says Grib, chairman and owner of TEKT. Grib is one of Ukraine's most colourful, even controversial, investment figures, who once caused outrage by admitting on national TV to having offered half a million dollars to a regional official to help buy a stake in a company. Speaking 11 years to the day from the Russian economic collapse of 1998, he recalls that, "the 1998 crash confirmed my approach - in 1994 I lost a lot of money in banks, and in 1998 I lost nothing, and made use of the chance to make some very profitable acquisitions. And this is what I intend to do now." Distressed and depressed According to Grib, TEKT Private Equity Fund I is looking to take controlling stakes in distressed companies that are either crisis-proof or likely to respond quickest to the start of an economic recovery. "Our approach is very simple: we are mainly interested in companies with stable operating revenues, but crippled by a heavy debt burden," he says. The surging amount of non-performing loans in Ukraine "opens significant opportunities for distressed assets funds. We can offer companies capital instead of debts." Grib is planning a small, but highly profitable, closed-end distressed assets fund. For each of the around 10 holdings, Grib specifies a minimal annualized return of 45% and a target of 100%. Grib says he generally exits projects within 18 months after a 150% annual return. TEKT will only buy controlling stakes in companies, with each deal in the region of €1.5m-8m. The fund's target volume is UAH500m (€43m). Grib's distressed asset fund differs in crucial aspects from worldwide equivalents. In Ukraine, there is no legal framework for a key worldwide investment technique - buying companies' debts off banks at a discount. On the other hand, loopholes in Ukraine's legislation let TEKT pay out on exited projects immediately, without waiting for the fund to close after its four-year term expires. This fits with Grib's project-focused approach. He says he prefers to talk with potential investors about projects rather than about the fund's overall strategy and profit algorithm. "You just end up talking hot air about abstract concepts and philosophy when the crucial thing is implementation," says Grib, who is not known for mincing his words. "In general, investors here know me and my reputation of at least 50% annualized returns." He also admits he is not particularly interested in foreign investors who will require detailed explication of the fund's technology. "There are plenty of resources in Ukraine for investment, so foreign investors are not a priority at the moment." Grib says it took him only one week to raise the fund's UAH500m and that with only talking to 20% of the people on his list. "25% of the money is mine, and the rest belongs to private individual investors," he says. Grib lists companies that are niche monopolists as primary acquisition targets. "No land or real estate," he says. "Also no agriculture - there is simply not the institutional framework." In contrast to most private equity funds, Grib's fund will settle for nothing less than a controlling stake in any of the companies. "This has simply always been my philosophy never to trust anyone. Ukraine suffers from bad corporate governance, and without a controlling stake you will find your investment may be worthless." Ukraine's media have often accused Grib of "raiding," and indeed some list him as Ukraine's number-one raider. Grib is having none of it. "One man's investor is another man's raider. I simply buy first, and then insist on my rights. Obviously in the case of a hostile takeover, it is easy for the losing side to cry 'raider', but I have never used blackmail or illicit methods."
Eric back in Kiev from Odessa
After spending two years in exile in Odesa, Eric Aigner opens a new club in Kyiv.
The man largely credited with establishing Kyiv’s affordable and unpretentious restaurants and nightclubs in the 1990s has returned to the capital after more than a two-year hiatus in Odesa.
Eric Aigner is back with his trademark Ho Chi Minh beard and easygoing smile. And he brought with him a team of bartenders and servers from Odesa to open a nightclub on Aug. 24 at the Ultramarine entertainment complex.
Banking on the reputation he earned in his heyday for managing places with fun staffs and informal Western-style service, it’s no surprise why the club is called Friends of Eric. As the venue opened its doors on Ukraine’s 18th birthday, club-goers, consisting mostly of Aigner’s friends and acquaintances, were asked to write words of greeting on bricks as they were stacked diagonally using cement.
Located on the mezzanine floor of the complex, the club has an elongated lounge area of sofa chairs standing on plush red carpeting, and has an identical second floor accessible on both sides by spiraling chairs. According to Aigner, the joint is designed to imbue a relaxed atmosphere of conversation and down-to-earth fun.
The same goes for the service. Aigner said he brought a team of employees with him from Odesa because people there are more laid back and it’s not beneath them to talk to clients. “I don’t need bartenders twirling and tossing mixing glasses or bottles,” Aigner said. “The idea is to be happy. It’s very important to create an atmosphere where people could meet other people, tell jokes and converse.”
He says fun is what brought him back to Kyiv. He says the happy atmosphere is missing here. “I never thought my friends would say that they miss my clubs. This is an honor to come back and run a club they’d like to visit,” the 46-year German native said.
The timing of the club’s opening is questionable in an already saturated market and given the financial crisis, which might heat up again in autumn. “I don’t need rich people coming here,” Aigner said. “I’m not afraid of the crisis, we have reasonable prices; it’s very important to have middle class level people.”
Not everyone is glad to see Aigner in Kyiv again. Former partner Ken Carter of New Zealand said Aigner defrauded him of $42,500. Carter filed civil charges last year and has subsequently won a court decision in May 2008 ordering Aigner to pay him that amount.
“I want justice, I want to stop Eric’s dishonest ways and to put him behind bars,” Carter said. “He’s a criminal.”
Aigner has called the ordeal with Carter a “farce” and said Carter ran their businesses, Tapas Bar and Blues Bar, into the ground. “He [Carter] wanted to be the director. I said we’re partners.”
The restaurateur has had tumultuous histories with former partners, dating to his first partner Ihor Pazepa, with whom he opened his two first bars in 1996. They had a falling out in 2000 stemming from a dispute revolving around their bar, Al Capone in the Podil district.
Pozepa said he locked Aigner out of the club after a series of disputes over money and personal matters.
In an archived interview with Kyiv Post, Aigner contended that Pozepa had been increasingly reluctant to pay him his part of the profits. Both sides went their separate ways after that.
“I don’t believe in contracts,” Aigner said back then in a Kyiv Post article. “Here, they mean nothing. They are just something to flush down the toilet.”
Soon thereafter, Aigner hooked up with his most longstanding partners to expand the Eric’s Family chain of restaurants and clubs which eventually numbered up to 18 different ventures. The chain has been renamed to Love and Hunger (Lyubov i Golod, www.skukakaput.com.ua). Many of its restaurants have come and gone but others still are running: Art Cafe 44, Bierstube, The Cave, Shnitzel Haus and others.
Partners Vladyslav Maksimov, Oleksandr Trush and Vitaliy Dubenko publicly divorced Aigner late in 2006 in an effort to change the brand’s image and attract new clients. According to news reports, Dubenko said Aigner couldn’t fulfill his responsibility as Eric’s Family’s manager, which lead to losses of hundreds of thousands of dollars.
This is when Aigner launched the New Eric’s Family brand, which also sputtered culminating with disagreements with Carter. Other former friends and clients of Aigner’s said he had borrowed money from them to open new restaurants in Kyiv, only to see them flop. He admitted he borrowed money from friends and said he will pay back as soon as he can. “This is what friends are for,” he said.
Odesa was next on Aigner’s list where he spent over two years on various ventures. There he wrote a book called Mein Quest (available at www.predmet.com) about his life in the former Soviet Union dating to his business travels to Russia in the early 1990s, and printed two thousand copies in Ukrainian.
He also ran Oreshek (The Little Nut) for six months modeled after a bar in Kyiv called Orekh (The Nut). He soon had a dispute with his partner’s wife who he said came back from a Kyiv business seminar and thought “she was the sole director of the place.”
It was during this time that Aigner launched the Tango & Eric Party Service in Odesa, an event and catering company, which – again – faltered once the financial crisis hit in full swing and orders plunged rendering the venture unprofitable.
Aigner said Ultramarine’s owners are his partners in his newest endeavor. He said he does everything from managing the club to being its creative director. “They’ve given me complete freedom,” he said.
“All I want once a person leaves my club is for them to feel completely relaxed, filled with positive " Aigner Said.
The man largely credited with establishing Kyiv’s affordable and unpretentious restaurants and nightclubs in the 1990s has returned to the capital after more than a two-year hiatus in Odesa.
Eric Aigner is back with his trademark Ho Chi Minh beard and easygoing smile. And he brought with him a team of bartenders and servers from Odesa to open a nightclub on Aug. 24 at the Ultramarine entertainment complex.
Banking on the reputation he earned in his heyday for managing places with fun staffs and informal Western-style service, it’s no surprise why the club is called Friends of Eric. As the venue opened its doors on Ukraine’s 18th birthday, club-goers, consisting mostly of Aigner’s friends and acquaintances, were asked to write words of greeting on bricks as they were stacked diagonally using cement.
Located on the mezzanine floor of the complex, the club has an elongated lounge area of sofa chairs standing on plush red carpeting, and has an identical second floor accessible on both sides by spiraling chairs. According to Aigner, the joint is designed to imbue a relaxed atmosphere of conversation and down-to-earth fun.
The same goes for the service. Aigner said he brought a team of employees with him from Odesa because people there are more laid back and it’s not beneath them to talk to clients. “I don’t need bartenders twirling and tossing mixing glasses or bottles,” Aigner said. “The idea is to be happy. It’s very important to create an atmosphere where people could meet other people, tell jokes and converse.”
He says fun is what brought him back to Kyiv. He says the happy atmosphere is missing here. “I never thought my friends would say that they miss my clubs. This is an honor to come back and run a club they’d like to visit,” the 46-year German native said.
The timing of the club’s opening is questionable in an already saturated market and given the financial crisis, which might heat up again in autumn. “I don’t need rich people coming here,” Aigner said. “I’m not afraid of the crisis, we have reasonable prices; it’s very important to have middle class level people.”
Not everyone is glad to see Aigner in Kyiv again. Former partner Ken Carter of New Zealand said Aigner defrauded him of $42,500. Carter filed civil charges last year and has subsequently won a court decision in May 2008 ordering Aigner to pay him that amount.
“I want justice, I want to stop Eric’s dishonest ways and to put him behind bars,” Carter said. “He’s a criminal.”
Aigner has called the ordeal with Carter a “farce” and said Carter ran their businesses, Tapas Bar and Blues Bar, into the ground. “He [Carter] wanted to be the director. I said we’re partners.”
The restaurateur has had tumultuous histories with former partners, dating to his first partner Ihor Pazepa, with whom he opened his two first bars in 1996. They had a falling out in 2000 stemming from a dispute revolving around their bar, Al Capone in the Podil district.
Pozepa said he locked Aigner out of the club after a series of disputes over money and personal matters.
In an archived interview with Kyiv Post, Aigner contended that Pozepa had been increasingly reluctant to pay him his part of the profits. Both sides went their separate ways after that.
“I don’t believe in contracts,” Aigner said back then in a Kyiv Post article. “Here, they mean nothing. They are just something to flush down the toilet.”
Soon thereafter, Aigner hooked up with his most longstanding partners to expand the Eric’s Family chain of restaurants and clubs which eventually numbered up to 18 different ventures. The chain has been renamed to Love and Hunger (Lyubov i Golod, www.skukakaput.com.ua). Many of its restaurants have come and gone but others still are running: Art Cafe 44, Bierstube, The Cave, Shnitzel Haus and others.
Partners Vladyslav Maksimov, Oleksandr Trush and Vitaliy Dubenko publicly divorced Aigner late in 2006 in an effort to change the brand’s image and attract new clients. According to news reports, Dubenko said Aigner couldn’t fulfill his responsibility as Eric’s Family’s manager, which lead to losses of hundreds of thousands of dollars.
This is when Aigner launched the New Eric’s Family brand, which also sputtered culminating with disagreements with Carter. Other former friends and clients of Aigner’s said he had borrowed money from them to open new restaurants in Kyiv, only to see them flop. He admitted he borrowed money from friends and said he will pay back as soon as he can. “This is what friends are for,” he said.
Odesa was next on Aigner’s list where he spent over two years on various ventures. There he wrote a book called Mein Quest (available at www.predmet.com) about his life in the former Soviet Union dating to his business travels to Russia in the early 1990s, and printed two thousand copies in Ukrainian.
He also ran Oreshek (The Little Nut) for six months modeled after a bar in Kyiv called Orekh (The Nut). He soon had a dispute with his partner’s wife who he said came back from a Kyiv business seminar and thought “she was the sole director of the place.”
It was during this time that Aigner launched the Tango & Eric Party Service in Odesa, an event and catering company, which – again – faltered once the financial crisis hit in full swing and orders plunged rendering the venture unprofitable.
Aigner said Ultramarine’s owners are his partners in his newest endeavor. He said he does everything from managing the club to being its creative director. “They’ve given me complete freedom,” he said.
“All I want once a person leaves my club is for them to feel completely relaxed, filled with positive " Aigner Said.
Ukrainian President Says Murder Investigation Will Impact Election
KIEV, Ukraine -- Ukraine's president says finding those who ordered the killing of prominent independent journalist Heorhiy Gongadze is a crucial issue for the whole society, RFE/RL's Ukrainian Service reports.
Talking to journalists on August 28, Viktor Yushchenko said that finding and punishing all of those who organized the killing of Gongadze would show that "the law in this country is equal for everyone."He added that those who ordered the murder are still sitting in "big armchairs," and that therefore he, as president, is under "huge political pressure."He also said that the investigations of the case and their results would influence the presidential election scheduled for January next year.Gongadze, a co-founder of online "Ukrayinska Pravda" news resource, was abducted in September 2000. Two months later his decapitated body was found in Kyiv Oblast.On March 4, 2005, former Interior Minister Yury Kravchenko was found dead with gunshots to the head just hours before his testimony as a witness in the case.Three former officials of Ukraine's Interior Ministry were found guilty of involvement in Gongadze's murder and sentenced to long prison terms in March 2008.A fourth former top official of the Ukrainian police, General Oleksiy Pukach was arrested on July 22 this year as a suspect in the murder. He has given investigators a location where Gongadze's severed head might be.Forensics experts in Ukraine confirmed on August 27 that the fragments of a human skull found at the site are the remains of Gongadze.Gongadze's widow Myroslava Gongadze believes that the masterminds of her husband's assassination are still at large.
Talking to journalists on August 28, Viktor Yushchenko said that finding and punishing all of those who organized the killing of Gongadze would show that "the law in this country is equal for everyone."He added that those who ordered the murder are still sitting in "big armchairs," and that therefore he, as president, is under "huge political pressure."He also said that the investigations of the case and their results would influence the presidential election scheduled for January next year.Gongadze, a co-founder of online "Ukrayinska Pravda" news resource, was abducted in September 2000. Two months later his decapitated body was found in Kyiv Oblast.On March 4, 2005, former Interior Minister Yury Kravchenko was found dead with gunshots to the head just hours before his testimony as a witness in the case.Three former officials of Ukraine's Interior Ministry were found guilty of involvement in Gongadze's murder and sentenced to long prison terms in March 2008.A fourth former top official of the Ukrainian police, General Oleksiy Pukach was arrested on July 22 this year as a suspect in the murder. He has given investigators a location where Gongadze's severed head might be.Forensics experts in Ukraine confirmed on August 27 that the fragments of a human skull found at the site are the remains of Gongadze.Gongadze's widow Myroslava Gongadze believes that the masterminds of her husband's assassination are still at large.
Saturday 29 August 2009
Why August is Russia’s tragic month
Last week, in the space of less than 24 hours, Russia was hit by a troika of tragedies - the suicide attack on a police station in Nazran that left at least 24 dead, a disastrous flooding of a power station in southern Siberia and a midair collision at the MAKS air show near Moscow.
The incidents left many people once again scratching their heads as to how Russia always seems to suffer its worst tragedies in August, the sleepy holiday month when everything that can go wrong - from war in the Caucasus to attempted coups and financial meltdowns
In the wake of the Ingush bombing, news reports immediately picked up on the fact that the authorities had been aware of the fact that a GAZel van was being prepared for use in a terrorist attack.
President Dmitry Medvedev immediately slammed local authorities. "This attack could have been prevented," RIA Novosti reported him as saying. "This happened not only because of terrorist activities, but because of the poor work of the law-enforcement authorities in Ingushetia." He dismissed the Ingush Interior Minister the same day. Three days later, a criminal investigation for negligence was opened.
In the case of the power station accident, experts said it was highly likely to happen, considering that the facility was working at peak capacity and in dire need of modernisation.
Mattias Westman, chief investment officer of Prosperity Capital Management, which manages investments in the Russian energy sector, warns that such disasters may happen with increasing frequency unless the funding-starved sector gets tariffs which will allow them to maintain equipment properly and replace old parts.
"This is a terrible accident and should serve as a reminder that both management systems and market mechanisms need to develop much further," he said in e-mailed comments.
Russia seems to be especially prone to disasters in the month of August. The easy explanation is that many people are on vacation, but it goes deeper than that, experts say.
"Not all these disasters are related, much of it is bad luck, but vacation and inattention were certainly key factors in the Nazran terrorist attack," said Yevgeny Nadorshin, chief economist at Trust Bank. Many, including those in the security forces, take vacation during the summer, and terrorists and malefactors could exploit that weakness in the system.
That has been proven in the past, said Ivan Ivanchenko, an analyst at VTB. He gave as an example the attempted hardline Stalinist coup in August 1991. "It is a fact that most people, including the political elite, traditionally take their vacations in August and leave the capital. A void is gravitational, and sucks in challengers to step in."
However, many people around the globe take vacation in August, yet few countries seem to be as cursed in August as Russia is.
Westman remarked that besides the issue of inadequately maintained and ageing facilities, there is also a lack of functional management systems. "Often people in Russia do not want to make decisions without consulting the boss, and at the same time they do not want to disturb the boss on holiday," he said. This could lead to a problem being left to exacerbate, and an avertable accident happening.
"They hope for the best but it turns out as usual," Westman said.
Month of misery - timeline of tragedies
2009
August 17 - Suicide bomb attack on police station in Nazran, kills at least 24 people, injures at least 200
August 17 - Accident at Sayano-Shushenskaya hydroelectric power station in Khakasia. 69 dead, 6 missing presumed dead
August 17 - Two planes collide during rehearsals for the MAKS air show in Moscow. 2 dead, 3 injured
2008
August 8-12 - War in South Ossetia with Georgia
2007
August 13 - Bomb derails train between Moscow and St. Petersburg
2006
August 22 - Commercial plane carrying 170 crashes, all dead
2005
August 5 - Submarine with seven crew members trapped in fishing nets off the Kamchatka Peninsula, rescued by Britain's Royal Navy
2004
August 31 - Suicide bomb kills 10 at Rizhskaya metro station in Moscow
August 24 - Two planes flying from Moscow's Domodedovo airport hijacked and crash, 89 dead
2003
August 29 - Russian submarine sinks in Arctic, 9 dead, 1 survivor
August 1 - Suicide bomber drives a truck with explosives into a military hospital in North Ossetia. 44 dead, 79 wounded
2002
August 19 - Russian military helicopter crashes in Chechyna,
115 servicemen dead
2000
August 27 - A fire at Ostankino TV tower leaves the city's screens blank
August 12 - Russian submarine Kursk sinks in the Arctic, killing all 118 crew members
August 8 - Bomb kills 12 in underground passage at Moscow's Pushkin Square
1999
August 31 - Bomb in the Manezh shopping centre kills 1, injures 40
August - Second Chechen war begins
1998
August 17 - Financial crisis in Russia
1991
August 19-21 - Attempted Stalinist coup d'etat
The incidents left many people once again scratching their heads as to how Russia always seems to suffer its worst tragedies in August, the sleepy holiday month when everything that can go wrong - from war in the Caucasus to attempted coups and financial meltdowns
In the wake of the Ingush bombing, news reports immediately picked up on the fact that the authorities had been aware of the fact that a GAZel van was being prepared for use in a terrorist attack.
President Dmitry Medvedev immediately slammed local authorities. "This attack could have been prevented," RIA Novosti reported him as saying. "This happened not only because of terrorist activities, but because of the poor work of the law-enforcement authorities in Ingushetia." He dismissed the Ingush Interior Minister the same day. Three days later, a criminal investigation for negligence was opened.
In the case of the power station accident, experts said it was highly likely to happen, considering that the facility was working at peak capacity and in dire need of modernisation.
Mattias Westman, chief investment officer of Prosperity Capital Management, which manages investments in the Russian energy sector, warns that such disasters may happen with increasing frequency unless the funding-starved sector gets tariffs which will allow them to maintain equipment properly and replace old parts.
"This is a terrible accident and should serve as a reminder that both management systems and market mechanisms need to develop much further," he said in e-mailed comments.
Russia seems to be especially prone to disasters in the month of August. The easy explanation is that many people are on vacation, but it goes deeper than that, experts say.
"Not all these disasters are related, much of it is bad luck, but vacation and inattention were certainly key factors in the Nazran terrorist attack," said Yevgeny Nadorshin, chief economist at Trust Bank. Many, including those in the security forces, take vacation during the summer, and terrorists and malefactors could exploit that weakness in the system.
That has been proven in the past, said Ivan Ivanchenko, an analyst at VTB. He gave as an example the attempted hardline Stalinist coup in August 1991. "It is a fact that most people, including the political elite, traditionally take their vacations in August and leave the capital. A void is gravitational, and sucks in challengers to step in."
However, many people around the globe take vacation in August, yet few countries seem to be as cursed in August as Russia is.
Westman remarked that besides the issue of inadequately maintained and ageing facilities, there is also a lack of functional management systems. "Often people in Russia do not want to make decisions without consulting the boss, and at the same time they do not want to disturb the boss on holiday," he said. This could lead to a problem being left to exacerbate, and an avertable accident happening.
"They hope for the best but it turns out as usual," Westman said.
Month of misery - timeline of tragedies
2009
August 17 - Suicide bomb attack on police station in Nazran, kills at least 24 people, injures at least 200
August 17 - Accident at Sayano-Shushenskaya hydroelectric power station in Khakasia. 69 dead, 6 missing presumed dead
August 17 - Two planes collide during rehearsals for the MAKS air show in Moscow. 2 dead, 3 injured
2008
August 8-12 - War in South Ossetia with Georgia
2007
August 13 - Bomb derails train between Moscow and St. Petersburg
2006
August 22 - Commercial plane carrying 170 crashes, all dead
2005
August 5 - Submarine with seven crew members trapped in fishing nets off the Kamchatka Peninsula, rescued by Britain's Royal Navy
2004
August 31 - Suicide bomb kills 10 at Rizhskaya metro station in Moscow
August 24 - Two planes flying from Moscow's Domodedovo airport hijacked and crash, 89 dead
2003
August 29 - Russian submarine sinks in Arctic, 9 dead, 1 survivor
August 1 - Suicide bomber drives a truck with explosives into a military hospital in North Ossetia. 44 dead, 79 wounded
2002
August 19 - Russian military helicopter crashes in Chechyna,
115 servicemen dead
2000
August 27 - A fire at Ostankino TV tower leaves the city's screens blank
August 12 - Russian submarine Kursk sinks in the Arctic, killing all 118 crew members
August 8 - Bomb kills 12 in underground passage at Moscow's Pushkin Square
1999
August 31 - Bomb in the Manezh shopping centre kills 1, injures 40
August - Second Chechen war begins
1998
August 17 - Financial crisis in Russia
1991
August 19-21 - Attempted Stalinist coup d'etat
Shevchuk Sings for the Preservation of Moscow
On stage, he dances bare-chested, reads poetry out loud and cracks sarcastic political jokes.
Yury Shevchuk, 52, the charismatic leader of DDT, is an unusual Russian rock star, a lone crusader against low-quality pop music and corrupt politicians, a Russian Bono who is adored by his fans.
Shevchuk will headline a concert in defense of Moscow’s architectural heritage Sept. 2 at the VVTs, or All-Russia Exhibition Center, a Soviet landmark that celebrates its 70th anniversary this year and which is under threat from development.
“It was our childhood, our own Disneyland, and we all were very glad to go there to see all those cows, those achievements,” he said, speaking about the center, which hosted pavilions dedicated to the agricultural and industrial achievement of the 15 former Soviet republics. During the concert in the capital, Shevchuk will play songs from his new album, “Lost Without a Trace.”
Shevchuk added that the idea for the concert came from his friend, architect Sergei Morozov, a defender of the city’s historical landscapes who said the reconstruction will destroy the center. Development is due to begin in 2010. Shevchuk also said he is concerned about the fate of the center’s iconic statue, “The Worker and Collective Farm Girl” by Vera Mukhina, which was dismantled and taken away from the center and whose restoration has been continuously delayed.
The singer is known as a fervent defender of his hometown St. Petersburg. He chaired a panel during this year’s St. Petersburg Economic Forum dedicated to the topic of preservation, where he showed more than 100 pictures of buildings demolished in the city since 2003.
“We are losing the city where we live. We will leave nothing to the younger generation,” he said at the time.
Shevchuk is closely associated with the northern city, and he has dedicated many songs to it, including one of his most famous songs “Cherny Pyos Petersburg,” or “Petersburg, a Black Dog,” from 1993. The song imagines a dog running through the streets: “At night, I smell your smell of stone, I drink the names of your streets, blocks and trains.”
Raised in Ufa, the capital of Bashkortostan, Shevchuk studied graphic design as a student and soon began performing in student bands. He started playing in the early 1980s, when underground rock music started to grow in force in the Soviet Union. He often clashed with the authorities, who disliked his lyrics and music at the time. Even the name of the group, DDT, after the pesticide used on Soviet farms, was a challenge to the system.
DDT was one of the most famous rock bands under perestroika, and in 1989 they were allowed to record their first official album “Ya Poluchil Etu Rol” (“I Have Received This Role”). There have been dozens of albums since, but the songs of the first album remain Shevchuk’s most popular because of their apt lyrics. The song “Don’t Shoot!” is about the owner of a shooting gallery and is clearly a song about Afghanistan, the Soviet Union’s last war.
Shevchuk would later dedicate songs to the conflict in Chechnya, but unlike other rock musicians he avoided nationalistic sentiment, preferring to focus on the human casualties of both sides. “War is the most outrageous part of human relationships,” Shevchuk has said. He spent time with troops and locals in Chechnya and locals and wrote about the
experience in a series of short stories.
Shevchuk has said rock ‘n’ roll for him is “spirit and freedom,” and his fame protects him in some ways, but still a number of his songs are banned from state television.
One of his most recent songs includes the lyric, “When the oil runs out, dry, our president will die,” and although it is popular on YouTube it is little-known to the general public.
“Among the older rock singers, he is the one who produces the least interesting material,” said music critic Yevgeny Levkovich, a regular contributor to the Russian edition of Rolling Stone. “However, while many of his colleagues have turned into servants of the current administration, he remains an incorruptible man.”
Yury Shevchuk, 52, the charismatic leader of DDT, is an unusual Russian rock star, a lone crusader against low-quality pop music and corrupt politicians, a Russian Bono who is adored by his fans.
Shevchuk will headline a concert in defense of Moscow’s architectural heritage Sept. 2 at the VVTs, or All-Russia Exhibition Center, a Soviet landmark that celebrates its 70th anniversary this year and which is under threat from development.
“It was our childhood, our own Disneyland, and we all were very glad to go there to see all those cows, those achievements,” he said, speaking about the center, which hosted pavilions dedicated to the agricultural and industrial achievement of the 15 former Soviet republics. During the concert in the capital, Shevchuk will play songs from his new album, “Lost Without a Trace.”
Shevchuk added that the idea for the concert came from his friend, architect Sergei Morozov, a defender of the city’s historical landscapes who said the reconstruction will destroy the center. Development is due to begin in 2010. Shevchuk also said he is concerned about the fate of the center’s iconic statue, “The Worker and Collective Farm Girl” by Vera Mukhina, which was dismantled and taken away from the center and whose restoration has been continuously delayed.
The singer is known as a fervent defender of his hometown St. Petersburg. He chaired a panel during this year’s St. Petersburg Economic Forum dedicated to the topic of preservation, where he showed more than 100 pictures of buildings demolished in the city since 2003.
“We are losing the city where we live. We will leave nothing to the younger generation,” he said at the time.
Shevchuk is closely associated with the northern city, and he has dedicated many songs to it, including one of his most famous songs “Cherny Pyos Petersburg,” or “Petersburg, a Black Dog,” from 1993. The song imagines a dog running through the streets: “At night, I smell your smell of stone, I drink the names of your streets, blocks and trains.”
Raised in Ufa, the capital of Bashkortostan, Shevchuk studied graphic design as a student and soon began performing in student bands. He started playing in the early 1980s, when underground rock music started to grow in force in the Soviet Union. He often clashed with the authorities, who disliked his lyrics and music at the time. Even the name of the group, DDT, after the pesticide used on Soviet farms, was a challenge to the system.
DDT was one of the most famous rock bands under perestroika, and in 1989 they were allowed to record their first official album “Ya Poluchil Etu Rol” (“I Have Received This Role”). There have been dozens of albums since, but the songs of the first album remain Shevchuk’s most popular because of their apt lyrics. The song “Don’t Shoot!” is about the owner of a shooting gallery and is clearly a song about Afghanistan, the Soviet Union’s last war.
Shevchuk would later dedicate songs to the conflict in Chechnya, but unlike other rock musicians he avoided nationalistic sentiment, preferring to focus on the human casualties of both sides. “War is the most outrageous part of human relationships,” Shevchuk has said. He spent time with troops and locals in Chechnya and locals and wrote about the
experience in a series of short stories.
Shevchuk has said rock ‘n’ roll for him is “spirit and freedom,” and his fame protects him in some ways, but still a number of his songs are banned from state television.
One of his most recent songs includes the lyric, “When the oil runs out, dry, our president will die,” and although it is popular on YouTube it is little-known to the general public.
“Among the older rock singers, he is the one who produces the least interesting material,” said music critic Yevgeny Levkovich, a regular contributor to the Russian edition of Rolling Stone. “However, while many of his colleagues have turned into servants of the current administration, he remains an incorruptible man.”
Activists Denounce Stalin in Station
The freshly renovated Kurskaya metro station reopened this week as the newest front in a bitter controversy over the legacy of Soviet leader Josef Stalin, whose name was returned to the facade after more than 50 years.
The entrance hall of the Circle Line station once again bears a verse from the 1944 version of the Soviet anthem: “Stalin raised us to be loyal to the nation; He inspired us to work and be heroic.”
Human rights activists condemned the reference to Stalin as distasteful and said it was part of broader effort to soften history’s depiction of him, while the Moscow metro maintains that it was just trying to be faithful in its restoration of a historical monument.
“Recreating the original station with Stalin’s name is the same as restoring a Nazi memorial with Hitler’s name on a swastika,” Oleg Orlov, head of human rights organization Memorial and an outspoken critic of the Stalinist terror, told The Moscow Times.
Stalin ordered mass executions during the Great Terror in the 1930s and beyond. The disputed inscription — penned by Soviet poet Sergei Mikhailkov, who died Thursday at the age of 96 — was removed after Stalin’s successor, Nikita Khrushchev, launched a campaign against his personality cult in the mid-1950s.
The verse was replaced by another from the anthem: “The sun of freedom shone through thunder, and great Lenin lit up our path.”
Alexander Cherkasov, also from Memorial, said Stalin’s return to the station might have been encouraged by the current political establishment. Last year, the Education and Science Ministry approved a new history textbook for Russian schools, which argues that Stalin’s terror was justified as an “instrument of development.”
Metro spokesman Pavel Sukharnikov said such accusations were flimsy. Metroinzhrekonstruktsiya, the company that managed the renovation, merely sought to restore the station’s original appearance, he said.
“We went by the project that was used in 1949,” he said. “We wanted to stay true to history.”
Although controversial, Stalin is a part of Russia’s past, said Sergei Obukhov, a Communist State Duma deputy, who does not see Stalin’s role as outright negative.
“It would be wrong to compare him with the Nazis, as we did not have an equivalent of the Nuremberg Trials, where Nazi crimes were recognized by the international community,” he said.
The Kurskaya metro station, Obukhov said, should be protected like any other historical monument.
Sergei Nikitin, head of the Moscow branch of Amnesty International, argued that restoring the citation was a curiosity more than a scandal.
“I understand that some people are outraged, but I also think that it was important to preserve the original architecture with all the decorations,” he said. “After all, references to Stalin and also Lenin can be found at many other stations of the metro, not just Kurskaya.”
While Stalin’s name returned, a statue of the Soviet leader did not. Sukharnikov said the original was lost in the 1950s. The station had been closed since July 3, 2008, for a thorough renovation and reconstruction.
The entrance hall of the Circle Line station once again bears a verse from the 1944 version of the Soviet anthem: “Stalin raised us to be loyal to the nation; He inspired us to work and be heroic.”
Human rights activists condemned the reference to Stalin as distasteful and said it was part of broader effort to soften history’s depiction of him, while the Moscow metro maintains that it was just trying to be faithful in its restoration of a historical monument.
“Recreating the original station with Stalin’s name is the same as restoring a Nazi memorial with Hitler’s name on a swastika,” Oleg Orlov, head of human rights organization Memorial and an outspoken critic of the Stalinist terror, told The Moscow Times.
Stalin ordered mass executions during the Great Terror in the 1930s and beyond. The disputed inscription — penned by Soviet poet Sergei Mikhailkov, who died Thursday at the age of 96 — was removed after Stalin’s successor, Nikita Khrushchev, launched a campaign against his personality cult in the mid-1950s.
The verse was replaced by another from the anthem: “The sun of freedom shone through thunder, and great Lenin lit up our path.”
Alexander Cherkasov, also from Memorial, said Stalin’s return to the station might have been encouraged by the current political establishment. Last year, the Education and Science Ministry approved a new history textbook for Russian schools, which argues that Stalin’s terror was justified as an “instrument of development.”
Metro spokesman Pavel Sukharnikov said such accusations were flimsy. Metroinzhrekonstruktsiya, the company that managed the renovation, merely sought to restore the station’s original appearance, he said.
“We went by the project that was used in 1949,” he said. “We wanted to stay true to history.”
Although controversial, Stalin is a part of Russia’s past, said Sergei Obukhov, a Communist State Duma deputy, who does not see Stalin’s role as outright negative.
“It would be wrong to compare him with the Nazis, as we did not have an equivalent of the Nuremberg Trials, where Nazi crimes were recognized by the international community,” he said.
The Kurskaya metro station, Obukhov said, should be protected like any other historical monument.
Sergei Nikitin, head of the Moscow branch of Amnesty International, argued that restoring the citation was a curiosity more than a scandal.
“I understand that some people are outraged, but I also think that it was important to preserve the original architecture with all the decorations,” he said. “After all, references to Stalin and also Lenin can be found at many other stations of the metro, not just Kurskaya.”
While Stalin’s name returned, a statue of the Soviet leader did not. Sukharnikov said the original was lost in the 1950s. The station had been closed since July 3, 2008, for a thorough renovation and reconstruction.
Mikhalkov, Author of Soviet and Russian Anthem, Dead at 96
Sergei Mikhalkov, author of the lyrics of the Soviet and Russian national anthems and a Rolls-Royce of Soviet poetry for more than four decades, died Thursday in a Moscow hospital. He was 96. "He died of old age. He simply fell asleep," said his grandson, film producer Yegor Konchalovsky, RIA-Novosti reported. President Dmitry Medvedev and Prime Minister Vladimir Putin offered condolences to his family, including his two sons, prominent film directors Oscar-winning Nikita Mikhalkov and Andrei Konchalovsky. Both of his sons were abroad at the time of his death, news reports said. Mikhalkov was hospitalized after suffering from a heart attack in February but celebrated his 96th birthday the next month back home with his family. Born in Moscow on March 13, 1913, Mikhalkov wrote his first lyrics at the age of 9 and published his first song in 1928 in a Rostov-on-Don literature magazine, the poet wrote in his 1995 autobiography "I Was a Soviet Writer." He rose to national prominence in 1935 with the publication of his popular children's book "Uncle Styopa," known as "Uncle Steeple" in the English version. The book is a simple rhythmic poem about an extra-tall Muscovite who becomes a police officer and carries out a series of charitable and heroic deeds, one after another. But it was not "Uncle Styopa," beloved by generations of children born in the Soviet Union and translated into 40 languages, that made Mikhalkov famous. In 1936, Mikhalkov won a powerful patron in Soviet leader Josef Stalin, who liked a poem titled "Svetlana" that he had published that year, Mikhalkov recalled in a 2008 interview with Izvestia. "I was young then and dated a student who was elder than me. Her name was Svetlana," Mikhalkov said. "But everyone decided that the poem was about Stalin's daughter," also named Svetlana. In 1938, Mikhalkov was ushered into the prestigious Writer's Union, which he headed from 1970 until his death, and the following year he was awarded his first of four Orders of Lenin, for satirical poems and fables. In 1944, Stalin decided to replace "The Internationale," the socialist anthem by French poet Eugene Pottiere, as the Soviet anthem and picked lyrics written by Mikhalkov and poet Gabriel El-Registan and set to music by Alexander Alexandrov. Mikhalkov loved to relate in television interviews how he received drafts of his lyrics back from Stalin, marked with Stalin's suggestions and changes. A line from the anthem — about Stalin inspiring and raising "us" for labor and heroic deeds — is inscribed on a wall in the newly restored Kurskaya metro station, drawing ire from human rights activists. For more than 20 years after Stalin's death, the anthem was performed without lyrics, until Mikhalkov replaced references to Stalin with Lenin in 1977. This anthem remained unchanged until 1993, when then-President Boris Yeltsin introduced a new wordless anthem based on a patriotic song by Mikhail Glinka. In 2000, then-President Vladimir Putin controversially reintroduced the Soviet anthem, and Mikhalkov rewrote the lyrics again. Mikhalkov described the new lyrics as "the anthem of an Orthodox Christian nation." The words describe the vastness and grandeur of Russia and do not mention any national leaders by name. Mikhalkov faced scorn from literature critics and by some of his peers for putting his talent to work for the Soviet authorities and for showing loyalty to whoever was in charge in the Kremlin. He also participated in smear campaigns against "anti-Soviet" authors such as Nobel laureates Boris Pasternak and Alexander Solzhenitsyn. But Mikhalkov denied being subservient to the Communist Party. "I have never been influenced by politics," he told Kommersant in 2003. "I always served the state." Mikhalkov also wrote the well-known phrase inscribed on the Tomb of the Unknown Soldier next to the Kremlin and on many similar monuments across the country: "Your name is unknown, your deed is immortal." In 1962, Mikhalkov created a short satirical movie newsreel, "Fitil," or "Fuse," that preceded most movie performances in Soviet times. More than 600 "Fitil" shorts were produced under his leadership over 45 years. A funeral for Mikhalkov will be held at the Christ the Savior Cathedral on Saturday, said an aide to his son Nikita Mikhalkov, Interfax reported. He will most likely be buried at Novodevichoye Cemetery, where his first wife, Natalya Konchalovskaya, is buried, a source close to the Mikhalkov family told Interfax. Nikita Mikhalkov's "Burnt by the Sun" about a family during the Stalinist purges won the Academy Award for Best Foreign Picture in 1994. Andrei Konchalovsky's films include the Oscar-nominated "Runaway Train" and "Tango & Cash." Mikhalkov is also survived by his physicist wife, Yulia Subbotina, 10 grandchildren and eight great grandchildren.
Fashion Designers Cut Out The Shop
Handbag designer Nutsa Modebadze sells in traditional boutiques but says that quantity of sales from her LiveJournal blog far surpasses what she makes on the high street.
Retailing through blogs also deepens Modebadze’s client base: Subscribers are kept updated about her latest designs, and they will often pass on interesting links to friends. In effect, blogs allow word-of-mouth to travel faster — the Russian for which (sarafannoe radio), incidentally, is related to the word for a summer dress.
“I put my new creations online, and almost immediately people begin making comments and placing orders,” said Modebadze, 27. “Altogether, about 4,000 people follow my work on Vkontakte.ru, LiveJournal and other networks.”
Modebadze is among a group of young designers who are increasingly exploiting novel marketing models, made possible by Internet communities and social networks, to sell their creations directly and avoid the overheads of traditional distribution chains.
“Little-known brands choose the Internet for promotion because they can easily formulate their desired image,” said Alexander Kulikov, editor-in-chief of online portal Fashiontime.ru.
He highlighted the example of designer Dasha Gauser, a headliner at this year’s Russian Fashion Week, who enjoys a strong online following in part thanks to the blessing of online fashion magazines.
Dima Sher, 25, and his wife, Sveta, 22, the team behind Shtripka, a small vintage clothing boutique, are typical of Moscow’s latest generation of marketing-savvy designers who promote their products almost exclusively through social networking web sites like LiveJournal and Vkontakte.ru.
They also invite their online followers to micro-exhibitions, where a handful of designers display their creations in a concept dubbed “showroomchik,” typically a friend’s apartment or a small design studio.
Sher said the trend is a recent import from St. Petersburg, where living room fashion shows are a more common, if still rare, marketing novelty.
“It’s a cross between a boutique and a house party. A small number of designers come together in an apartment to show their collections and send invites out through community web sites,” Sveta said.
At a recent showroomchik, models posing for a catalog shoot mingled off-camera with buyers, a guitarist played in the corner and in the adjoining room a calligraphy artist promoted her bespoke greeting cards. The cozy gathering took place in a city-center basement showroomchik, with the designer’s friends as models and her husband as the photographer.
By effectively cutting professionals out of the picture, an outlay of 500 rubles ($16) — mostly on champagne and snacks — sufficed to put the whole evening together and pack the venue with buyers.
Artisans, meanwhile, have particularly taken to online communities to market their designs. With this trend in mind, Olga Rogovaya used LiveJournal as her only marketing channel when she brought together almost 50 designers to launch a handicraft market in June. The “Stranger than Paradise” fair, whose fourth tri-weekly installment opens in Kitai-Gorod on Friday, is shielded from the economic crisis, Rogovaya said. As with the showroomchik format, overheads are minimal, and supporters of the project tend to give their time — and retail space — for free or at well below market prices.
The new venture is only the third such large-scale artisan market in Moscow, its more established competitors being Winzavod Gallery’s Art-Bazaar and Sunday Up Market, which also advertise heavily through community web sites.
Marketing exclusively on social networking sites has its downsides, Rogovaya cautioned. It is time-consuming, and online communities expect constant interaction and immediate responses. And it sometimes takes a little prodding to get tongues wagging. The participants in her market, almost all of whom operate and sell through their own blogs, are required to promote the project to their own online followers.
Concrete statistics on Internet and community marketing in the fashion industry are scarce because of the novelty of the approach. Retailers’ own use of social networks further distorts the picture. Anna Domracheva, director of Internet boutique Siam Shop, suggested a 20-30-50 model for artisan retailers: 20 percent of sales are completely offline, 30 percent are from markets that advertise through social networks and 50 percent are directly from online orders.
Riding one of the few positive waves of the economic crisis, specialized social networking web sites have appeared to cater specifically to the crafts industry and allow it to be more effectively monetized. Livemaster.ru, a kind of artisan Amazon.com, promotes a catalog of bespoke apparel and accessories, running the gamut from faux couture to winter scarves knitted by enterprising babushkas.
The return on investment from successful, niche social networking sites can be attractive. An Aug. 17 Kommersant Dengi report found that a community site with 10,000 to 15,000 unique users per month can be developed and launched for $20,000. Scaling for future growth depends on the average revenue per user, which for social networks with a retail element is well above that of wide-reach networks. Facebook, for example, has monthly average revenue per user estimated at $1 to $3.
“The economic crisis can’t harm social networks,” Dima Sher said. “It was how new ideas traveled in the Soviet Union, around the kitchen table, and it will continue to work now, online.”
Retailing through blogs also deepens Modebadze’s client base: Subscribers are kept updated about her latest designs, and they will often pass on interesting links to friends. In effect, blogs allow word-of-mouth to travel faster — the Russian for which (sarafannoe radio), incidentally, is related to the word for a summer dress.
“I put my new creations online, and almost immediately people begin making comments and placing orders,” said Modebadze, 27. “Altogether, about 4,000 people follow my work on Vkontakte.ru, LiveJournal and other networks.”
Modebadze is among a group of young designers who are increasingly exploiting novel marketing models, made possible by Internet communities and social networks, to sell their creations directly and avoid the overheads of traditional distribution chains.
“Little-known brands choose the Internet for promotion because they can easily formulate their desired image,” said Alexander Kulikov, editor-in-chief of online portal Fashiontime.ru.
He highlighted the example of designer Dasha Gauser, a headliner at this year’s Russian Fashion Week, who enjoys a strong online following in part thanks to the blessing of online fashion magazines.
Dima Sher, 25, and his wife, Sveta, 22, the team behind Shtripka, a small vintage clothing boutique, are typical of Moscow’s latest generation of marketing-savvy designers who promote their products almost exclusively through social networking web sites like LiveJournal and Vkontakte.ru.
They also invite their online followers to micro-exhibitions, where a handful of designers display their creations in a concept dubbed “showroomchik,” typically a friend’s apartment or a small design studio.
Sher said the trend is a recent import from St. Petersburg, where living room fashion shows are a more common, if still rare, marketing novelty.
“It’s a cross between a boutique and a house party. A small number of designers come together in an apartment to show their collections and send invites out through community web sites,” Sveta said.
At a recent showroomchik, models posing for a catalog shoot mingled off-camera with buyers, a guitarist played in the corner and in the adjoining room a calligraphy artist promoted her bespoke greeting cards. The cozy gathering took place in a city-center basement showroomchik, with the designer’s friends as models and her husband as the photographer.
By effectively cutting professionals out of the picture, an outlay of 500 rubles ($16) — mostly on champagne and snacks — sufficed to put the whole evening together and pack the venue with buyers.
Artisans, meanwhile, have particularly taken to online communities to market their designs. With this trend in mind, Olga Rogovaya used LiveJournal as her only marketing channel when she brought together almost 50 designers to launch a handicraft market in June. The “Stranger than Paradise” fair, whose fourth tri-weekly installment opens in Kitai-Gorod on Friday, is shielded from the economic crisis, Rogovaya said. As with the showroomchik format, overheads are minimal, and supporters of the project tend to give their time — and retail space — for free or at well below market prices.
The new venture is only the third such large-scale artisan market in Moscow, its more established competitors being Winzavod Gallery’s Art-Bazaar and Sunday Up Market, which also advertise heavily through community web sites.
Marketing exclusively on social networking sites has its downsides, Rogovaya cautioned. It is time-consuming, and online communities expect constant interaction and immediate responses. And it sometimes takes a little prodding to get tongues wagging. The participants in her market, almost all of whom operate and sell through their own blogs, are required to promote the project to their own online followers.
Concrete statistics on Internet and community marketing in the fashion industry are scarce because of the novelty of the approach. Retailers’ own use of social networks further distorts the picture. Anna Domracheva, director of Internet boutique Siam Shop, suggested a 20-30-50 model for artisan retailers: 20 percent of sales are completely offline, 30 percent are from markets that advertise through social networks and 50 percent are directly from online orders.
Riding one of the few positive waves of the economic crisis, specialized social networking web sites have appeared to cater specifically to the crafts industry and allow it to be more effectively monetized. Livemaster.ru, a kind of artisan Amazon.com, promotes a catalog of bespoke apparel and accessories, running the gamut from faux couture to winter scarves knitted by enterprising babushkas.
The return on investment from successful, niche social networking sites can be attractive. An Aug. 17 Kommersant Dengi report found that a community site with 10,000 to 15,000 unique users per month can be developed and launched for $20,000. Scaling for future growth depends on the average revenue per user, which for social networks with a retail element is well above that of wide-reach networks. Facebook, for example, has monthly average revenue per user estimated at $1 to $3.
“The economic crisis can’t harm social networks,” Dima Sher said. “It was how new ideas traveled in the Soviet Union, around the kitchen table, and it will continue to work now, online.”
IKEA Upbeat After 10 Years of Problems
But managers say they are still waiting for a store in Samara to open before they consider any new investments in Russia.
IKEA officials put a bright face on what have been an occasionally rocky first 10 years in Russia, saying Thursday that they would continue expansion once a mall in Samara is completed and don’t regret their decision to enter the market.
“We’ve had annual sales increases of 20 percent on average since the launch of the first store in 2000,” Per Kaufmann, head of IKEA Russia and CIS, said at a news conference dedicated to the anniversary. “Our business has never witnessed such sale boost anywhere in the world.”
He said the company expected to maintain the growth figure this year, despite the recession and that sales in the country now accounted for about 4 percent to 5 percent of the company’s overall volume.
But the Swedish retail giant has faced numerous obstacles to its growth from regional authorities and regulators, most recently in Samara. The company’s experience has served as a cautionary tale to others thinking of investing in Russia, although IKEA said it was heartened by improvements in recent years.
“We’re currently building a mall in Ufa, and we’re preparing for the construction of a shopping center in Mytishchi,” Kaufmann said. “We have design projects for outlets in Saratov and Voronezh ready.”
In June, Kaufmann said IKEA would halt all future investments in Russia after it was not allowed to open the Samara mall — almost two years after it was finished — because of bureaucratic barriers posed by local officials.
IKEA founder Ingvar Kamprad, ranked by Fortune magazine as the world’s fifth-richest person, said on Swedish radio that Russian power companies had cheated IKEA out of 135 million euros ($190 million) by overcharging it for electricity and gas, and he linked the problem to IKEA’s policy of not paying bribes.
But the threat to halt investment appeared to hit home, and the Economic Development Ministry said in late July that it had reached an agreement with IKEA that would allow the store to open. Kaufmann said at the time that IKEA agreed to set a schedule for resolving problems found by the government.
“The situation isn’t that bad, as we currently have 12 Mega stores operating in Russia,” said Stefan Gross, director of real estate in Russia and the CIS. “But we really expect the Samara mall to be opened before we make the next decision on further investment.”
Lennart Dahlgren, the company’s first CEO in Russia, recalled the arduous process of opening the first store.
“We first wanted to launch IKEA in Russia in the Soviet era, then we made a second attempt in 1993, but the military coup forced us to put our plans aside,” he said. “I came to make the third attempt on Aug. 17, 1998, the same day the last crash hit the Russian economy.”
Dahlgren said many of his high-ranked Western colleagues tried to talk him out of that “crazy idea” to start a business in a country with high corruption and excessive import taxes.
“Even my friend, IKEA’s legendary founder Ingvar Kamprad, was opposed to starting business there and then,” he said. “But I insisted, and we succeeded.”
In August 1999, Vladimir Putin — shortly after starting his first stint as prime minister — signed an order decreasing import duties, which allowed the company to launch its business, Dahlgren said.
On March 26, 2000, IKEA inaugurated its first mall in Khimki, just outside of Moscow, and 40,000 people visited it.
“I remember that day, Ingvar Kamprad was almost crying of joy,” he said. “On the second day, we decided to build more stores and hire more people, so this is how we came to where we are today.”
The company also faced some of its great challenges opening the Khimki mall, as the local authorities posed serious obstacles. Dahlgren said the Russian media played a decisive role in overcoming the situation.
“That was a surprise to me, that the media stood as the one opposing the authorities,” he said. “Soon, the Moscow region governor, unwilling to see the scandal get any bigger, had to write to the mayor of Khimki and order him to allow the opening.”
But for all the reminiscing of good times and bad, the executives were decidedly upbeat about IKEA’s next 10 years in Russia.
“I have noticed considerable differences during the three years I have been here,” Kaufmann said. “Russia is starting to obey the laws, which brings transparency and benefits foreign business working here.”
IKEA officials put a bright face on what have been an occasionally rocky first 10 years in Russia, saying Thursday that they would continue expansion once a mall in Samara is completed and don’t regret their decision to enter the market.
“We’ve had annual sales increases of 20 percent on average since the launch of the first store in 2000,” Per Kaufmann, head of IKEA Russia and CIS, said at a news conference dedicated to the anniversary. “Our business has never witnessed such sale boost anywhere in the world.”
He said the company expected to maintain the growth figure this year, despite the recession and that sales in the country now accounted for about 4 percent to 5 percent of the company’s overall volume.
But the Swedish retail giant has faced numerous obstacles to its growth from regional authorities and regulators, most recently in Samara. The company’s experience has served as a cautionary tale to others thinking of investing in Russia, although IKEA said it was heartened by improvements in recent years.
“We’re currently building a mall in Ufa, and we’re preparing for the construction of a shopping center in Mytishchi,” Kaufmann said. “We have design projects for outlets in Saratov and Voronezh ready.”
In June, Kaufmann said IKEA would halt all future investments in Russia after it was not allowed to open the Samara mall — almost two years after it was finished — because of bureaucratic barriers posed by local officials.
IKEA founder Ingvar Kamprad, ranked by Fortune magazine as the world’s fifth-richest person, said on Swedish radio that Russian power companies had cheated IKEA out of 135 million euros ($190 million) by overcharging it for electricity and gas, and he linked the problem to IKEA’s policy of not paying bribes.
But the threat to halt investment appeared to hit home, and the Economic Development Ministry said in late July that it had reached an agreement with IKEA that would allow the store to open. Kaufmann said at the time that IKEA agreed to set a schedule for resolving problems found by the government.
“The situation isn’t that bad, as we currently have 12 Mega stores operating in Russia,” said Stefan Gross, director of real estate in Russia and the CIS. “But we really expect the Samara mall to be opened before we make the next decision on further investment.”
Lennart Dahlgren, the company’s first CEO in Russia, recalled the arduous process of opening the first store.
“We first wanted to launch IKEA in Russia in the Soviet era, then we made a second attempt in 1993, but the military coup forced us to put our plans aside,” he said. “I came to make the third attempt on Aug. 17, 1998, the same day the last crash hit the Russian economy.”
Dahlgren said many of his high-ranked Western colleagues tried to talk him out of that “crazy idea” to start a business in a country with high corruption and excessive import taxes.
“Even my friend, IKEA’s legendary founder Ingvar Kamprad, was opposed to starting business there and then,” he said. “But I insisted, and we succeeded.”
In August 1999, Vladimir Putin — shortly after starting his first stint as prime minister — signed an order decreasing import duties, which allowed the company to launch its business, Dahlgren said.
On March 26, 2000, IKEA inaugurated its first mall in Khimki, just outside of Moscow, and 40,000 people visited it.
“I remember that day, Ingvar Kamprad was almost crying of joy,” he said. “On the second day, we decided to build more stores and hire more people, so this is how we came to where we are today.”
The company also faced some of its great challenges opening the Khimki mall, as the local authorities posed serious obstacles. Dahlgren said the Russian media played a decisive role in overcoming the situation.
“That was a surprise to me, that the media stood as the one opposing the authorities,” he said. “Soon, the Moscow region governor, unwilling to see the scandal get any bigger, had to write to the mayor of Khimki and order him to allow the opening.”
But for all the reminiscing of good times and bad, the executives were decidedly upbeat about IKEA’s next 10 years in Russia.
“I have noticed considerable differences during the three years I have been here,” Kaufmann said. “Russia is starting to obey the laws, which brings transparency and benefits foreign business working here.”
Lukashenko Plays Coy With Kremlin
Belarussian President Alexander Lukashenko maintained his noncommittal stance toward Moscow on Thursday when much-anticipated talks with President Dmitry Medvedev ended with few tangible results.
The three-hour meeting in Sochi was the first between the two leaders since talks last spring in Medvedev’s residence outside Moscow, after which relations between Minsk and Moscow plummeted to unprecedented lows.
Despite Belarus’ dire financial situation, the presidents apparently did not make any progress on loans or energy, the two issues that analysts have identified as laying at the core of the difficulties between Moscow and Minsk.
“On a practical level, Lukashenko did not raise the subject of loans,” a source in the Russian delegation told Interfax after the Sochi talks.
The source said deliveries of Russian gas also did not feature in the talks.
Instead, Medvedev’s foreign policy aide Sergei Prikhodko said later that those problems would be discussed through intergovernmental channels.
“Both presidents agreed to order their governments to hold consultations on both financial and economic issues,” Prikhodko said, Interfax reported.
Belarus’ largely state-run economy has been severely hit by the crisis, and worries have been escalating that the country might be on the verge of bankruptcy. Its total foreign currency reserves stood at $2.65 billion on July 1, down from $3.9 billion in May, while gross foreign debt stood at $16.3 billion in April, according to the Belarussian central bank.
Dependent on foreign loans, Minsk has been looking to two sources — Russia and the International Monetary Fund.
In May, Finance Minister Alexei Kudrin angered Lukashenko by saying Russia would not pay the last $500 million tranche of a $2 billion loan because Belarus might be insolvent by the end of the year.
The IMF’s senior representative to Belarus, Marek Belka, actually echoed Kudrin’s words this week when he told Belarussian Prime Minister Sergei Sidorsky that a shortage of foreign reserves posed a threat. “This might be a danger to the country’s stability,” Belka said.
Minsk has received $1.48 billion of
a planned $2.5 billion loan from the IMF.
Thanks to the cash injection, Belarus’ reserves are growing again and have reached $3.16 billion, according to preliminary central bank figures.
The IMF estimates that Belarus will need $11 billion in loans to survive this year and next, Interfax reported.
Minsk also asked Moscow for a much bigger loan of $9 billion earlier this year for a new Russian-built nuclear power plant in its western Grodno region.
Belarus is now asking for $1.5 million of this to be paid immediately, Kommersant reported Thursday. If Medvedev does not respond positively, Minsk is threatening to give the tender to another country, possibly China, the report said, citing an unidentified Russian government source.
Prikhodko did not mention the threat but said progress had been achieved on the nuclear project. “Here, we are moving forward and [our] positions are drawing closer,” he told reporters.
Traditionally Russia’s closest ally, Belarus abruptly sought friendlier relations with the European Union last year, despite the fact that Lukashenko has long been ostracized as Europe’s last dictator.
Minsk joined the EU’s Eastern Partnership program last spring, which promises to slash hurdles to trade and investment but has been branded by Moscow as an attempt to diminish its influence in post-Soviet countries.
The Kremlin seemingly responded by blocking Belarussian dairy imports for purported quality problems. Although reports said the “milk war” was over by the end of July, Russian inspectors last week sent a 60-ton shipment of condensed milk back to Belarus for alleged violations of transportation safety rules.
Belarus suffered from a massive current account deficit of $1.8 billion in the first quarter of 2009, and trade with Russia fell by 40 percent to $10.5 million in the first half of this year compared with the same period last year, the Belarussian Belta news agency reported.
But Lukashenko intensified his pro-Western policies over the past three months, making a historic trip to Rome while snubbing two summits of post-Soviet states in Moscow. That included a key meeting of leaders of the Collective Security Treaty Organization in June, which saw the inception of a rapid-reaction task force, seen as a key move to transform the loose military group into a defense alliance.
Lukashenko not only missed the signing of the agreement for the task force, but also forced Moscow to take the organization’s rotating chairmanship, which would have been Minsk’s if the president had showed up.
No word emerged Thursday on any movement on the task force issue, and Prikhodko said only that Russia and Belarus would hold joint military exercises in Belarus late September and Minsk would return to the chairmanship issue after consultations with other members.
In an interview published in Thursday’s Izvestia, Lukashenko seemed to suggest that he opposed deeper integration into a military alliance whose seven members include four Central Asian states. “Why should my men fight in Kazakhstan? Mothers would ask me why I sent their sons to fight so far from Belarus. For what? For a unified energy market? That is not what lives depend on. No!” he was quoted as saying.
Belarus also has not followed Russia’s lead in recognizing the independence of the Georgian breakaway regions of Abkhazia and South Ossetia.
South Ossetian leader Eduard Kokoity said last week that he would like to join a union state formed in the 1990s between Russia and Belarus.
Analysts said Thursday that Lukashenko would keep any bargaining chips to himself and that talk of the separatist regions joining the Russia-Belarus Union was premature.
“He is in a very difficult situation because his future depends on money from two sources that ultimately challenge his political survival,” said Vladimir Zharikhin, an analyst with the Moscow-based CIS Institute.
Zharikhin explained that financial aid from the EU and the Western-dominated IMF would be linked to political reforms that ultimately would threaten the government’s grip on power.
While Russia’s aid is conditioned purely on economic reforms, they also might bring Lukashenko down because they focus on reducing the state’s Soviet-size share in the economy, Zharikhin said.
“Much of Lukashenko’s popularity depends on his social policies,” Zharikhin said.
The three-hour meeting in Sochi was the first between the two leaders since talks last spring in Medvedev’s residence outside Moscow, after which relations between Minsk and Moscow plummeted to unprecedented lows.
Despite Belarus’ dire financial situation, the presidents apparently did not make any progress on loans or energy, the two issues that analysts have identified as laying at the core of the difficulties between Moscow and Minsk.
“On a practical level, Lukashenko did not raise the subject of loans,” a source in the Russian delegation told Interfax after the Sochi talks.
The source said deliveries of Russian gas also did not feature in the talks.
Instead, Medvedev’s foreign policy aide Sergei Prikhodko said later that those problems would be discussed through intergovernmental channels.
“Both presidents agreed to order their governments to hold consultations on both financial and economic issues,” Prikhodko said, Interfax reported.
Belarus’ largely state-run economy has been severely hit by the crisis, and worries have been escalating that the country might be on the verge of bankruptcy. Its total foreign currency reserves stood at $2.65 billion on July 1, down from $3.9 billion in May, while gross foreign debt stood at $16.3 billion in April, according to the Belarussian central bank.
Dependent on foreign loans, Minsk has been looking to two sources — Russia and the International Monetary Fund.
In May, Finance Minister Alexei Kudrin angered Lukashenko by saying Russia would not pay the last $500 million tranche of a $2 billion loan because Belarus might be insolvent by the end of the year.
The IMF’s senior representative to Belarus, Marek Belka, actually echoed Kudrin’s words this week when he told Belarussian Prime Minister Sergei Sidorsky that a shortage of foreign reserves posed a threat. “This might be a danger to the country’s stability,” Belka said.
Minsk has received $1.48 billion of
a planned $2.5 billion loan from the IMF.
Thanks to the cash injection, Belarus’ reserves are growing again and have reached $3.16 billion, according to preliminary central bank figures.
The IMF estimates that Belarus will need $11 billion in loans to survive this year and next, Interfax reported.
Minsk also asked Moscow for a much bigger loan of $9 billion earlier this year for a new Russian-built nuclear power plant in its western Grodno region.
Belarus is now asking for $1.5 million of this to be paid immediately, Kommersant reported Thursday. If Medvedev does not respond positively, Minsk is threatening to give the tender to another country, possibly China, the report said, citing an unidentified Russian government source.
Prikhodko did not mention the threat but said progress had been achieved on the nuclear project. “Here, we are moving forward and [our] positions are drawing closer,” he told reporters.
Traditionally Russia’s closest ally, Belarus abruptly sought friendlier relations with the European Union last year, despite the fact that Lukashenko has long been ostracized as Europe’s last dictator.
Minsk joined the EU’s Eastern Partnership program last spring, which promises to slash hurdles to trade and investment but has been branded by Moscow as an attempt to diminish its influence in post-Soviet countries.
The Kremlin seemingly responded by blocking Belarussian dairy imports for purported quality problems. Although reports said the “milk war” was over by the end of July, Russian inspectors last week sent a 60-ton shipment of condensed milk back to Belarus for alleged violations of transportation safety rules.
Belarus suffered from a massive current account deficit of $1.8 billion in the first quarter of 2009, and trade with Russia fell by 40 percent to $10.5 million in the first half of this year compared with the same period last year, the Belarussian Belta news agency reported.
But Lukashenko intensified his pro-Western policies over the past three months, making a historic trip to Rome while snubbing two summits of post-Soviet states in Moscow. That included a key meeting of leaders of the Collective Security Treaty Organization in June, which saw the inception of a rapid-reaction task force, seen as a key move to transform the loose military group into a defense alliance.
Lukashenko not only missed the signing of the agreement for the task force, but also forced Moscow to take the organization’s rotating chairmanship, which would have been Minsk’s if the president had showed up.
No word emerged Thursday on any movement on the task force issue, and Prikhodko said only that Russia and Belarus would hold joint military exercises in Belarus late September and Minsk would return to the chairmanship issue after consultations with other members.
In an interview published in Thursday’s Izvestia, Lukashenko seemed to suggest that he opposed deeper integration into a military alliance whose seven members include four Central Asian states. “Why should my men fight in Kazakhstan? Mothers would ask me why I sent their sons to fight so far from Belarus. For what? For a unified energy market? That is not what lives depend on. No!” he was quoted as saying.
Belarus also has not followed Russia’s lead in recognizing the independence of the Georgian breakaway regions of Abkhazia and South Ossetia.
South Ossetian leader Eduard Kokoity said last week that he would like to join a union state formed in the 1990s between Russia and Belarus.
Analysts said Thursday that Lukashenko would keep any bargaining chips to himself and that talk of the separatist regions joining the Russia-Belarus Union was premature.
“He is in a very difficult situation because his future depends on money from two sources that ultimately challenge his political survival,” said Vladimir Zharikhin, an analyst with the Moscow-based CIS Institute.
Zharikhin explained that financial aid from the EU and the Western-dominated IMF would be linked to political reforms that ultimately would threaten the government’s grip on power.
While Russia’s aid is conditioned purely on economic reforms, they also might bring Lukashenko down because they focus on reducing the state’s Soviet-size share in the economy, Zharikhin said.
“Much of Lukashenko’s popularity depends on his social policies,” Zharikhin said.
Another Diplomatic Spat Between Russia, Ukraine Looms
SEVASTOPOL, Ukraine -- Another diplomatic spat looms between Russia and Ukraine after a failed Ukrainian attempt to seize navigation equipment at a Russian Black Sea Fleet lighthouse.
It remains to be seen how Russian and Ukrainian authorities will react to the latest dispute, though it is widely believed that a new round of diplomatic sparring is looming amidst already heightened tensions between the two former Soviet neighbors.Two Ukrainian court bailiffs on Wednesday entered the Black SeaFleet's base in the Ukrainian port city of Sevastopol, Russian media reported.The bailiffs demanded that Russian servicemen there hand over navigation equipment at the Khersones lighthouse, citing a ruling of the Sevastopol Economic Court.The Black Sea Fleet, which has long been deployed on Ukraine's Crimea Peninsula, prevented the two bailiffs from seizing the property and handed them over to Ukrainian police instead.The Black Sea Fleet command denounced the move as "an unprecedented fact of gross violation of the basic agreements on the Black Sea Fleet" between Russia and Ukraine."The bailiffs deliberately violated the international agreements and Ukrainian legislation by illegally penetrating into the guarded object," the command said in a statement reported by the Itar-Tass news agency.Meanwhile, the Ukrainian foreign ministry said Thursday that "the Black Sea fleet command continues unlawful actions by rudely violating Ukrainian legislation and basic international agreements."According to a judgment of the local civil court, bailiffs are allowed to enter the Russian-controlled military area, the Russian newspaper Nezavisimaya Gazeta quoted the Black Sea Fleet as saying Friday.The court's decision made it clear that the lighthouse and its equipment belongs to Ukraine and the country can have access to them.Ukraine's Breeze broadcasting company reported that Russian troops put obstacles around the lighthouse and blocked a key road for sick Ukrainian children to get to nearby rehabilitation centers.The two sides are still waiting for a statement from the Russian Foreign Ministry on the event, Nezavisimaya Gazeta said. Ukrainian analysts believe that Russia's response will trigger more bickering.Nezavisimaya Gazeta said there was a good chance that the lighthouse episode was connected with Kiev's expulsion of some Russian diplomats last month.Kiev asked the Russian consul general in Odessa and a senior counselor of the Russian embassy to end their duty in Ukraine at the end of July. In response, Moscow demanded that Ukraine recall two senior diplomats.Russian President Dmitry Medvedev labeled Ukraine's expulsions "without any reason" as "an unprecedented provocation in the whole of the post-Soviet space."Moscow and Kiev later reached a consensus to stop the expulsion of the Russian consul general in Odessa and the Ukrainian consul general in St. Petersburg.However, the Russian consul general was suspected of being a middleman in an attempt to provide financial aid for pro-Kremlin Crimean authorities, Ukrainian media reported.Russian-Ukrainian relations have been gradually deteriorating under pro-western President Viktor Yushchenko. They sank to a new low earlier this month after Medvedev accused Yushchenko of taking anti-Russian positions and delayed sending a new ambassador to Ukraine.In his letter to Yushchenko, Medvedev also criticized Ukraine for deliberately barring the activities of the Black Sea fleet despite an existing bilateral agreement on its deployment.Kiev and Moscow signed an agreement in 1997 stipulating that the Black Sea Fleet's main base in Sevastopol would be leased to Russia for 20 years, with the possibility of extending the term.Ukrainian officials, however, have repeatedly called on the fleet to leave Sevastopol when the lease expires in 2017.As contentious as the fleet issue could be, Kiev's bid for NATO membership and its backing of Georgia in a brief Russia-Georgia war in August 2008 are also inflammatory issues.
It remains to be seen how Russian and Ukrainian authorities will react to the latest dispute, though it is widely believed that a new round of diplomatic sparring is looming amidst already heightened tensions between the two former Soviet neighbors.Two Ukrainian court bailiffs on Wednesday entered the Black SeaFleet's base in the Ukrainian port city of Sevastopol, Russian media reported.The bailiffs demanded that Russian servicemen there hand over navigation equipment at the Khersones lighthouse, citing a ruling of the Sevastopol Economic Court.The Black Sea Fleet, which has long been deployed on Ukraine's Crimea Peninsula, prevented the two bailiffs from seizing the property and handed them over to Ukrainian police instead.The Black Sea Fleet command denounced the move as "an unprecedented fact of gross violation of the basic agreements on the Black Sea Fleet" between Russia and Ukraine."The bailiffs deliberately violated the international agreements and Ukrainian legislation by illegally penetrating into the guarded object," the command said in a statement reported by the Itar-Tass news agency.Meanwhile, the Ukrainian foreign ministry said Thursday that "the Black Sea fleet command continues unlawful actions by rudely violating Ukrainian legislation and basic international agreements."According to a judgment of the local civil court, bailiffs are allowed to enter the Russian-controlled military area, the Russian newspaper Nezavisimaya Gazeta quoted the Black Sea Fleet as saying Friday.The court's decision made it clear that the lighthouse and its equipment belongs to Ukraine and the country can have access to them.Ukraine's Breeze broadcasting company reported that Russian troops put obstacles around the lighthouse and blocked a key road for sick Ukrainian children to get to nearby rehabilitation centers.The two sides are still waiting for a statement from the Russian Foreign Ministry on the event, Nezavisimaya Gazeta said. Ukrainian analysts believe that Russia's response will trigger more bickering.Nezavisimaya Gazeta said there was a good chance that the lighthouse episode was connected with Kiev's expulsion of some Russian diplomats last month.Kiev asked the Russian consul general in Odessa and a senior counselor of the Russian embassy to end their duty in Ukraine at the end of July. In response, Moscow demanded that Ukraine recall two senior diplomats.Russian President Dmitry Medvedev labeled Ukraine's expulsions "without any reason" as "an unprecedented provocation in the whole of the post-Soviet space."Moscow and Kiev later reached a consensus to stop the expulsion of the Russian consul general in Odessa and the Ukrainian consul general in St. Petersburg.However, the Russian consul general was suspected of being a middleman in an attempt to provide financial aid for pro-Kremlin Crimean authorities, Ukrainian media reported.Russian-Ukrainian relations have been gradually deteriorating under pro-western President Viktor Yushchenko. They sank to a new low earlier this month after Medvedev accused Yushchenko of taking anti-Russian positions and delayed sending a new ambassador to Ukraine.In his letter to Yushchenko, Medvedev also criticized Ukraine for deliberately barring the activities of the Black Sea fleet despite an existing bilateral agreement on its deployment.Kiev and Moscow signed an agreement in 1997 stipulating that the Black Sea Fleet's main base in Sevastopol would be leased to Russia for 20 years, with the possibility of extending the term.Ukrainian officials, however, have repeatedly called on the fleet to leave Sevastopol when the lease expires in 2017.As contentious as the fleet issue could be, Kiev's bid for NATO membership and its backing of Georgia in a brief Russia-Georgia war in August 2008 are also inflammatory issues.
Russia And Ukraine In Intensifying Standoff
SEVASTOPOL, Ukraine — A year after its war with Georgia, Russia is engaging in an increasingly hostile standoff with another pro-Western neighbor, Ukraine.
Relations between the two countries are more troubled than at any time since the Soviet collapse, as both sides resort to provocations and recriminations. And it is here on the Crimean Peninsula, home to a Russian naval base, where the tensions are perhaps most in danger of bursting into open conflict.Late last month, the Ukrainian police briefly detained Russian military personnel who were driving truckloads of missiles through this port city, as if they were smugglers who had come ashore with a haul of contraband. Local officials, it seemed, were seeking to make clear that this was no longer friendly terrain.Ukraine has in recent years been at the forefront of the effort by some former Soviet republics to switch their alliances to the West, and it appears that the Kremlin has, in some sense, had enough.President Dmitri A. Medvedev of Russia denounced Ukraine this month for “anti-Russian” policies, citing in particular its “incessant attempts” to harass Russia’s naval base in Sevastopol. Mr. Medvedev condemned Ukraine’s bid for NATO membership and its support for Georgia, and said he would not send an ambassador to Ukraine.And the criticism has not let up since then.Monday was Ukrainian independence day, and Russian prosecutors used the occasion to accuse Ukrainian soldiers and members of Ukrainian nationalist groups of fighting alongside Georgia’s military in the war last August. The Ukrainians denied the charges, but they underscored the bitterness in Moscow.For its part, the Ukrainian government, which took power after the Orange Revolution of 2004, has repeatedly accused Russia of acting as a bully and trying to dominate the former Soviet space both militarily and economically.Looming is a presidential election in Ukraine in January, which might cause Ukrainian candidates to respond more aggressively to Russia to show their independence. The Kremlin might seek to exploit the situation to help pro-Russian politicians in Kiev.Both countries publicly avow that they do not want the bad feelings to spiral out of control.Still, they persist, especially in Sevastopol, where Russia has maintained a naval base since czarist times.The Kremlin has bristled at what it sees as Ukraine’s disrespectful governing of a city that it formerly controlled — one that was the site of momentous military battles, including in the Crimean War and World War II.Ukraine appears to regard the base as a sign that Russia still wants to project its military might over the region.The Ukrainians have not only briefly detained Russian military personnel transporting missiles on several occasions this summer. They also expelled a Russian diplomat who oversees naval issues and barred officers from the F.S.B., the Russian successor to the K.G.B., from working in Sevastopol.The Ukrainians are trying to close a nearby Russian navigation station and are threatening penalties over supposed pollution from Russian vessels off Sevastopol, which is on the south of the Crimean Peninsula.“Ukraine has become more demanding, and has a right to do that,” said the Sevastopol mayor, Sergei V. Kunitsyn, an appointee of the Ukrainian government.Mr. Kunitsyn said Russian military trucks transporting missiles in Sevastopol had been stopped and searched by the police because their route had not been approved in advance, as is required under accords signed by Russia.He insisted that day-to-day interactions involving the Russian fleet were being carried out in a businesslike manner in Sevastopol, a city of 350,000.He said Ukraine was not trying to oust the Russian fleet, though he did raise the prospect of additional pressure.“If we wanted to, they would have such problems that they would never be able to leave the port,” he said. “According to the law, we could find 1,000 reasons why the fleet could simply not live.”The Crimean Peninsula, which has two million people, is part of Ukraine through something of a historic fluke. In 1954, Nikita S. Khrushchev, then the Soviet leader, transferred it to Ukraine from Russia, though at the time the decision had little significance because both were part of the Soviet Union.Besides serving as host for the Black Sea Fleet, the peninsula had a cherished role in the Soviet era as a vacation spot, with beaches and abundant fruits and vegetables.After the Soviet fall, Russia reached a deal with Ukraine to maintain the base in Sevastopol, under a lease that ends in 2017. The Ukrainian president, Viktor A. Yushchenko, has declared that it will not be renewed, though his successors may not concur.The current concern is that a spark in Crimea — however unlikely — could touch off a violent confrontation or even the kind of fighting that broke out between Russia and Georgia over the breakaway enclave of South Ossetia.The situation is particularly uneasy because the population in Crimea is roughly 60 percent ethnic Russian and would prefer that the peninsula separate from Ukraine and be part of Russia. (Sevastopol has an even higher proportion of ethnic Russians.)People have been upset by new Ukrainian government policies that require the use of the Ukrainian language, rather than Russian, in government activities, including some courses in public schools. Throughout downtown Sevastopol last week, residents set up booths to gather signatures on petitions in an effort to overturn the regulations.And on Monday, Ukrainian independence day, ethnic Russians in Crimea held anti-Ukrainian demonstrations.Sergei P. Tsekov, a senior politician in Crimea who heads the main ethnic Russian communal organization, said he hoped that Russia would wholeheartedly endorse Crimean separatism just as it did the aspirations of South Ossetia and another Georgian enclave, Abkhazia.“The central authorities in Ukraine are provoking the people of Crimea,” Mr. Tsekov said. “They relate to us like Georgia related to the Abkhazians and South Ossetians. They think that we’re going to forget our roots, our language, our history, our heroes. Only stupid people would think that we’re going to do that. Unfortunately, stupid people currently lead Ukraine.”Crimean separatists have been encouraged by prominent politicians in Russia, including Moscow’s mayor, Yuri M. Luzhkov, and a senior member of Parliament, Konstantin F. Zatulin, both of whom have been barred from Ukraine by the government because of their assertions that Sevastopol belongs to Russia.The Kremlin has not publicly backed the separatists, though it has declared that the rights of ethnic Russians in Crimea must not be violated.While not denying frictions between Russia and Ukraine, Mr. Kunitsyn, Sevastopol’s mayor, said ethnic Russians in the city were more worried about the local economy than who was in charge of the local government. He said employment in military and merchant fleets had dropped sharply.“People are slowly getting used to the idea that Sevastopol is Ukraine’s, and that Ukraine is helping Sevastopol,” he said.Near the harbor, though, residents did not necessarily agree.Larisa G. Bakanova, 74, a retired teacher, was at a petition booth not far from a monument to Adm. Pavel S. Nakhimov, who led Russia’s defense of Sevastopol in the Crimean War in the 1850s. She said people had eagerly signed up to oppose Ukrainian language mandates.“The pressure from Kiev is more and more intense,” she said. “They are stirring us up. They need to understand that this is the city of Sevastopol — a city of military glory, a city of Russian glory.”
Relations between the two countries are more troubled than at any time since the Soviet collapse, as both sides resort to provocations and recriminations. And it is here on the Crimean Peninsula, home to a Russian naval base, where the tensions are perhaps most in danger of bursting into open conflict.Late last month, the Ukrainian police briefly detained Russian military personnel who were driving truckloads of missiles through this port city, as if they were smugglers who had come ashore with a haul of contraband. Local officials, it seemed, were seeking to make clear that this was no longer friendly terrain.Ukraine has in recent years been at the forefront of the effort by some former Soviet republics to switch their alliances to the West, and it appears that the Kremlin has, in some sense, had enough.President Dmitri A. Medvedev of Russia denounced Ukraine this month for “anti-Russian” policies, citing in particular its “incessant attempts” to harass Russia’s naval base in Sevastopol. Mr. Medvedev condemned Ukraine’s bid for NATO membership and its support for Georgia, and said he would not send an ambassador to Ukraine.And the criticism has not let up since then.Monday was Ukrainian independence day, and Russian prosecutors used the occasion to accuse Ukrainian soldiers and members of Ukrainian nationalist groups of fighting alongside Georgia’s military in the war last August. The Ukrainians denied the charges, but they underscored the bitterness in Moscow.For its part, the Ukrainian government, which took power after the Orange Revolution of 2004, has repeatedly accused Russia of acting as a bully and trying to dominate the former Soviet space both militarily and economically.Looming is a presidential election in Ukraine in January, which might cause Ukrainian candidates to respond more aggressively to Russia to show their independence. The Kremlin might seek to exploit the situation to help pro-Russian politicians in Kiev.Both countries publicly avow that they do not want the bad feelings to spiral out of control.Still, they persist, especially in Sevastopol, where Russia has maintained a naval base since czarist times.The Kremlin has bristled at what it sees as Ukraine’s disrespectful governing of a city that it formerly controlled — one that was the site of momentous military battles, including in the Crimean War and World War II.Ukraine appears to regard the base as a sign that Russia still wants to project its military might over the region.The Ukrainians have not only briefly detained Russian military personnel transporting missiles on several occasions this summer. They also expelled a Russian diplomat who oversees naval issues and barred officers from the F.S.B., the Russian successor to the K.G.B., from working in Sevastopol.The Ukrainians are trying to close a nearby Russian navigation station and are threatening penalties over supposed pollution from Russian vessels off Sevastopol, which is on the south of the Crimean Peninsula.“Ukraine has become more demanding, and has a right to do that,” said the Sevastopol mayor, Sergei V. Kunitsyn, an appointee of the Ukrainian government.Mr. Kunitsyn said Russian military trucks transporting missiles in Sevastopol had been stopped and searched by the police because their route had not been approved in advance, as is required under accords signed by Russia.He insisted that day-to-day interactions involving the Russian fleet were being carried out in a businesslike manner in Sevastopol, a city of 350,000.He said Ukraine was not trying to oust the Russian fleet, though he did raise the prospect of additional pressure.“If we wanted to, they would have such problems that they would never be able to leave the port,” he said. “According to the law, we could find 1,000 reasons why the fleet could simply not live.”The Crimean Peninsula, which has two million people, is part of Ukraine through something of a historic fluke. In 1954, Nikita S. Khrushchev, then the Soviet leader, transferred it to Ukraine from Russia, though at the time the decision had little significance because both were part of the Soviet Union.Besides serving as host for the Black Sea Fleet, the peninsula had a cherished role in the Soviet era as a vacation spot, with beaches and abundant fruits and vegetables.After the Soviet fall, Russia reached a deal with Ukraine to maintain the base in Sevastopol, under a lease that ends in 2017. The Ukrainian president, Viktor A. Yushchenko, has declared that it will not be renewed, though his successors may not concur.The current concern is that a spark in Crimea — however unlikely — could touch off a violent confrontation or even the kind of fighting that broke out between Russia and Georgia over the breakaway enclave of South Ossetia.The situation is particularly uneasy because the population in Crimea is roughly 60 percent ethnic Russian and would prefer that the peninsula separate from Ukraine and be part of Russia. (Sevastopol has an even higher proportion of ethnic Russians.)People have been upset by new Ukrainian government policies that require the use of the Ukrainian language, rather than Russian, in government activities, including some courses in public schools. Throughout downtown Sevastopol last week, residents set up booths to gather signatures on petitions in an effort to overturn the regulations.And on Monday, Ukrainian independence day, ethnic Russians in Crimea held anti-Ukrainian demonstrations.Sergei P. Tsekov, a senior politician in Crimea who heads the main ethnic Russian communal organization, said he hoped that Russia would wholeheartedly endorse Crimean separatism just as it did the aspirations of South Ossetia and another Georgian enclave, Abkhazia.“The central authorities in Ukraine are provoking the people of Crimea,” Mr. Tsekov said. “They relate to us like Georgia related to the Abkhazians and South Ossetians. They think that we’re going to forget our roots, our language, our history, our heroes. Only stupid people would think that we’re going to do that. Unfortunately, stupid people currently lead Ukraine.”Crimean separatists have been encouraged by prominent politicians in Russia, including Moscow’s mayor, Yuri M. Luzhkov, and a senior member of Parliament, Konstantin F. Zatulin, both of whom have been barred from Ukraine by the government because of their assertions that Sevastopol belongs to Russia.The Kremlin has not publicly backed the separatists, though it has declared that the rights of ethnic Russians in Crimea must not be violated.While not denying frictions between Russia and Ukraine, Mr. Kunitsyn, Sevastopol’s mayor, said ethnic Russians in the city were more worried about the local economy than who was in charge of the local government. He said employment in military and merchant fleets had dropped sharply.“People are slowly getting used to the idea that Sevastopol is Ukraine’s, and that Ukraine is helping Sevastopol,” he said.Near the harbor, though, residents did not necessarily agree.Larisa G. Bakanova, 74, a retired teacher, was at a petition booth not far from a monument to Adm. Pavel S. Nakhimov, who led Russia’s defense of Sevastopol in the Crimean War in the 1850s. She said people had eagerly signed up to oppose Ukrainian language mandates.“The pressure from Kiev is more and more intense,” she said. “They are stirring us up. They need to understand that this is the city of Sevastopol — a city of military glory, a city of Russian glory.”
Subscribe to:
Posts (Atom)