Ukraine’s ‘Most Important Task‘

President Viktor Yanukovych on June 23 heard the same drumbeat of criticism that’s been playing in national leaders’ ears for more than a decade.

If the message is getting through, it somehow isn’t getting carried out.

“Address the systemic and pervasive corruption that…touches the lives of every citizen at every level,” Thomas Mirow, president of the European Bank for Reconstruction and Development, said at an investors’ council meeting chaired by Yanukovych.

Some of the largest foreign and domestic investors in Ukraine came to tell Yanukovych what they thought of his plans to improve the economy and investment climate, two key components of the president’s plan to transform the country.

Foreign direct investment is expected to reach $5.81 billion this year, due to “reforms carried out by the Ukraine state and an improving climate for investment,” Ernst & Young’s 2011 Ukraine foreign direct investment report stated. In 2010, FDI inflows stood at only $4.15 billion

Ukraine ranked 10th in Central and Eastern Europe for the number of FDI projects – 178 – and number of jobs created – 7,487 for the years 2006-2010.

Ukraine is a high-risk destination for investment. According to the June Euromoney Country Risk Survey, Ukraine remains among the 10 riskiest countries in Central and Eastern Europe.

Kononchuk said government government institutions need to be strengthened, laws adopted that treat everyone equally.

Speaking at the investment council meeting, Ukraine’s richest man, a longtime backer of Yanukovych, was upbeat. “We’re going in the right direction,” said billionaire Rinat Akhmetov. “There’s a favorable investment climate in Ukraine today.”

Speaking with the Kyiv Post, Cargill’s CEO Greg Page stressed that a vast amount of investments could pour into Ukraine to help develop the nation’s promising agriculture sector, double harvests within a decade and, in turn, feed an increasingly hungry world.

But he warned that if protectionist policies such as last season’s grain export restrictions persist along with preferences for insiders, Cargill, which has invested $150 million in Ukraine thus far, could roll back on investments.

“This is a great place for the world to grow more food. But all the gifts that nature provides can be undone with bad policies,” Mr Page said.

US Groups To Censure Ukraine’s Yanukovich

KIEV, Ukraine -- Viktor Yanukovich, the Ukraine’s president, will be criticised by two pro-democracy institutes for backtracking on democratic gains made since the Orange Revolution in 2004.
A joint statement will be made public in coming days by the institutes representing the top political parties from the US.

Written by the International Republican Institute and National Democratic Institute, the statement – obtained by the Financial Times – focuses on recently adopted election legislation that unfairly undermines the chances of opposition parties in a forthcoming October 31 election to regional legislatures.

Marking the sharpest international criticism of Mr Yanukovich’s democratic credentials yet, the statement follows rising complaints by domestic opposition parties and media.

Both have accused Kiev’s Moscow-friendly leader and loyal coalition of waging a Kremlin-styled crackdown on democracy and press freedoms since taking over as president.

Referring to the election law that was adopted by pro-presidential allies in parliament on June 29 and signed by Mr Yanukovich on July 27, the statement attacks the law for “limiting electoral potential” of opposition parties by banning participation of election blocs and parties registered less than one year ago.

“Restrictions on new parties and independent candidates appear to be unreasonable in light of principles established by the Ukrainian constitution, as well as international obligations and commitments that Ukraine has undertaken,” the statement reads.

Pro-democracy activists have praised the progress Ukraine has made since the Orange Revolution. Back then, a rigged presidential vote favoring Mr Yanukovich was overturned leading to a five-year presidential term by his pro-western rival, Viktor Yushchenko.

Ukraine was seen as a rare beacon of democracy in Russia’s backyard and activists hoped the trend would continue despite Mr Yanukovich’s remarkable political comeback in winning the presidency this February.

But IRI and NDI point to the recent developments as big risks for democracy in Ukraine, saying: “These developments could be characterised as changing the legal framework to create restrictions on political competition and … unreasonable denial of citizens’ rights to legitimate choices.”

Mr Yanukovich’s majority coalition in parliament was also criticised for adopting the new rules too close to the election “in a non-transparent manner with virtually no public debate”.

Opposition parties claim that their leaders and associates have faced increasing political persecution. Three high-level officials that served last year in the government of Yulia Tymoshenko, now an opposition leader, have been jailed on corruption charges.

On Wednesday, Ms Tymoshenko’s party headquarters on the Crimean peninsula was raided by secret service agents.

Mr Yanukovich has repeatedly denied wrongdoing.

But in an open letter this week, the International Press Institute urged Mr Yanukovich to put an end to a “disturbing deterioration in press freedom over the last six months”.

“There are fears that since then the clock has been rolled back on recent press freedom gains in Ukraine,” the Vienna-based institute added.

Ukraine Backs Kazakhstan's Initiative To Convene OSCE Summit On European Security

KIEV, Ukraine -- Ukraine supports an initiative by Kazakhstan, current chairman of the Organization for Security and Cooperation in Europe (OSCE), to convene an OSCE summit, and is ready to actively participate in the discussion of a new treaty on European security, President Viktor Yanukovych said on Wednesday.
"We support Kazakhstan's idea to convene a summit of the Organization for Security and Cooperation in Europe, and we're ready to work on the summit's agenda. We are ready to actively participate in the discussion of Kazakhstan's initiative on a new treaty over European security," he said at a meeting with Kanat Saudabayev, the foreign minister of Kazakhstan and Chairman-in-Office for the OSCE.

Yanukovych stressed the importance of reflecting in the new treaty security guarantees for states that voluntarily give up their nuclear arsenals, as well as for states, such as Ukraine, that are not members of any military bloc.

He said the OSCE is the "most suitable forum" for discussions on European security issues.

Saudabayev, in his turn, said that the OSCE and Kazakhstan attach great importance to developing relations with Ukraine. "We are willing to further strengthen cooperations with Ukraine in various fields," he added.

Saudabayev arrived in Kiev on Tuesday for a two-day visit to Ukraine.

Former Ukraine Prime Minister's Conviction Upheld

SAN FRANCISCO, CA -- Former Ukrainian Prime Minister Pavlo Lazarenko's conviction on money-laundering and conspiracy charges was upheld by a federal appeals court Friday, a judgment that will keep the long-incarcerated politician in U.S. prisons for at least several more years.
Lazarenko, 56, was head of the Ukrainian government from May 1996 to June 1997, during which, prosecutors said, he siphoned at least $200 million from the nation's coffers through elaborate schemes of extortion, cronyism and kickbacks. Ukrainian authorities have also sought his extradition to face charges of complicity in the killings of several political opponents in the 1990s.In U.S. custody since February 1999, when he fled a pending indictment in his homeland and arrived in New York with an outdated visa and an invalid diplomatic passport, Lazarenko was prosecuted in America because much of his ill-gotten money was funneled through U.S. banks. He was initially charged with 53 counts stemming from schemes involving monopoly natural gas sales, inflated government purchases of foreign property and unauthorized transfers to his personal bank accounts in Switzerland, Hungary, Panama and the Caribbean island of Antigua.In May 2004, a federal jury found Lazarenko guilty on 14 of the counts, and the rest were dismissed by the trial judge, mostly because of lack of documentation that money shuffled among his bank accounts was directly traceable to criminal activity. He was later sentenced to nine years in prison.On Friday, a three-judge panel of the U.S. 9th Circuit Court of Appeals in San Francisco overturned the conviction on six counts but upheld the remaining eight. The opinion also noted that the defendant's request for rehearing of his case by an 11-judge panel had been denied, and Friday's ruling was therefore the final judgment of the appeals court.Lazarenko was also tried in absentia in Switzerland in 2000 and convicted of money laundering. The Swiss government seized $6.6 million from his account there in addition to imposing an 18-month sentence, which was suspended because the defendant was already incarcerated at the federal prison in Dublin, Calif. Lazarenko is also sought by Antigua for suspicious activity in Euro Fed Bank there, in which he had $104 million deposited.The appeals court sent Lazarenko's case back to the trial court in San Francisco to recalculate his sentence in view of the overturned counts of fraud and interstate transport of stolen property.Lazarenko has been at the minimum-security facility in Dublin for a decade. It is primarily a women's prison but has an administrative detention area for pretrial prisoners. He probably will be moved to another federal prison after sentencing.

Valeriy Khoroshkovsky Appointed Deputy Head Of Ukraine’s Spy Agency

KIEV, Ukraine -- President Victor Yushchenko raised eyebrows on Jan. 28 appointing billionaire media magnate Valeriy Khoroshkovsky as deputy head of Ukraine’s spy agency, the State Security Service, or SBU, as it is commonly called.
The controversial appointment comes amidst a deepening rivalry between Yushchenko and Prime Minister Yulia Tymoshenko.Both are expected to square off for the presidency later this year or in early 2010.Khoroshkovsky, who has served as head of Ukraine’s Customs Service, claims to own one of Ukraine’s leading television channels, Inter, via a holding called U.A. Inter Media Group.Tymoshenko identified Dmytro Firtash, the billionaire who controlled natural gas supplies to Ukraine via Swiss-registered Rosukrenergo, as a media partner of Khoroshkovsky.Tymoshenko’s gas agreement this month removed this intermediary, which her political camp claims has been “corrupt” and funneled money to her opponents, Yushchenko and ex-premier Victor Yanukovych.Khoroshkovsky this week admitted that Firtash has an option to buy into the Inter media group, but insisted Tymoshenko tried to buy Inter channel herself, or have it sold to other investors.