Orange Ukraine gone (mostly) static

Hello to everyone who's still with us out there reading Orange Ukraine, at those, increasingly rare, times that I have been updating the site. It is with quite a bit of sadness that I announce to you that Orange Ukraine will be going static for the foreseeable future.

The gist of the matter is that since Lesya and I have returned to the US to work on the immigration process and will be here through 2009, I won't be able to give you the on-the-spot items I'd been able to up until May. In addition, I have needed to emphasize my editing work, to the detriment of my ability to pass along pertinent information about Ukraine (If you are curious, my site for editing and fiction writing is here).

What you are likely to see in the next few months, though, is more maintenance and expansion of the brand new Philanthropic Ideas page, and also the Book Recommendations page. What I will not be doing much of is the core blogging.

My apologies to all you loyal readers that I won't be able to provide you with the same updates and roundups, editorials and pointers to other news, as I have in the past. I warmly encourage you to look to some of the other great Ukraine bloggers I've linked to: Foreign Notes, Ukrainiana, Neeka's Backlog...

All the best,

Dan

Hello, everyone! At long last I've finally gotten up an initial list of philanthropic causes in Ukraine. I hope to greatly expand the list over time, but to do that I'm going to need your help.

At present the page is divided into organizations for which I have personal recommendations (either mine, or one's that have been made to me), and ones for which I do not yet have such recommendations. So, if you know of a name, but don't know if it's a good cause, or you know of an organization you would personally vouch for, or if you would like to recommend one of the organizations I don't have a recommendation for currently, please make your recommendation in the comments section of this entry.

Thank you for any ideas you have to share, and I hope you find the new page useful. 

Oil and Gas: Not a lot to watch on any channel

Some progress on oil and gas agreements was expected from the talks in Kyiv with Azerbaijani officials last week. The most promising progress would have been on an end-around oil deal to circumvent Russia's near monopoly on fuel transport out of Central Asia. The plan calls for oil to be transported by boat across the Black Sea to Odesa, and then up the Odesa Brody pipeline (using an as-yet-nonexistent extension into Poland) and on to Europe. Actual gains appear to be modest, with Yushchenko saying the usual nice things about how relations are so nice now and signing the usual meaningless cooperation agreements. The not very big news on energy concerns was talk about jointly creating a new refining plant (without commitment).

It may mean progress was made behind the scenes that the next day (Friday, May 23), Yushchenko called Russian fuel transport tactics "blackmail" while meeting with President Mikheil Saakashvili of Georgia. Admittedly the Georgian president is a very sympathetic audience for this kind of statement, but Yushchenko has always been much more circumspect in his criticism of Russia than Tymoshenko, especially about energy issues. If he feels confident enough to make such statements now, it may mean that the Azerbaijanis have given him good reason for it.

This all makes it difficult to determine if Yushchenko's recent decree to pump oil from Odesa to Brody (currently it's being used by Russia in the opposite direction, because Ukraine has had no oil to fill it with in the forward direction).  It could be an indication that he expects oil soon, or could be one of his many "say nice things" decrees, which lacks a proper basis and is meant more like a marketing statement than an expression of political will.

Tymoshenko vs. Vanco

One battle that may have repercussions is Tymoshenko's fight with Vanco over Black Sea shelf drilling rights the company bought in 2005. This has been the topic she's criticized Yushchenko the most directly and strongly about, that I've seen. And, as EDM describes, she has recently engineered to have the company's license revoked.

Tymoshenko seems to have a lot less justification for this overturn than she and Yushchenko had regarding the Kryvoryzhstal privatization of 2004. The Kryvoryzhstal privatization had been for far less than the amount offered by the highest bidder, and hinged on a requirement in the terms of the tender that eliminated all potential buyers except the winning bidder (Akhmetov and Pinchuk). It only went through because it was carried through by Kuchma with help from SPDU(o), his main supporting party.

In contrast, the Vanco deal was not won by such large margins. It took place in October 2005, after Tymoshenko's government was fired by Yushchenko, and NU had gotten its own Prime Minister in place (Yekhanurov) at the cost of allying themselves with Party of Regions to do so. The part of the deal that is Tymshenko's focus is the product sharing agreement that was later signed in 2007, when Yanukovych was Prime Minister. This was signed with a Vanco subsidiary that has partners (only revealed after Tymshenko revoked its license) linked both to Akhmetov (again) and to Russia. She claims this is "selling out" Ukraine's interests.

It is true that Yanukovych's action, selling to partnership of which his own party is a major stakeholder, is highly suspicious and shady, Tymoshenko may not win this one. The business community opinion likely matches that of Forbes: US Driller Falls Victim To Ukraine Political Rivalry. Unlike Akhmetov's threats to go to European courts over Kryvoryzhstal, Vanco's statements that it will seek arbitration or go to court are not idle. She can try to blithely dismiss them, but they remain a real possibility---perhaps an educational one for a woman as gung-ho as Tymoshenko.

The legality of Tymoshenko's move may even be moot: The Prosecutor General's Office has just overturned  the revocation of Vanco's license.  

Inflation and a Strengthening Currency?

A word about inflation before closing: it continue, largely unabated. A group of officials from the World Bank and IMF issued a warning two weeks ago. Last week Yushchenko recently met with the National Bank governor, Volodymyr Stelmakh, to discuss the issue. And, counterintuitively, the inflation is accompanied by a strengthening of the hryvnia against the dollar. The hryvnia has been within a (National Bank-defined) band of about 5 to 5.1 to the dollar since 2005, but this spring broke through and has dropped to about 4.5 to the dollar, so far. Experts also expect the trend to continue.

How exactly Ukraine can be experiencing such strong inflation (30% yoy to April) and still be appreciating against the dollar is a mystery to me. Sources and acquaintances have blamed any number of factors:

Collapse of the Housing Bubble in the US: It may have collapsed, but certainly not enough to explain away this discrepancy.

Government Machinations: According to this argument, in an effort to clamp down on the semi-legal gray economy (which avoid taxes by paying unreported amounts under the table, usually in dollars), and make inflation seem less onerous by comparison (something Tymoshenko is obviously keen to do), the government is somehow engineering the strengthening of the hryvnia. This argument seems to founder when one considers how many analysts and organizations believe the strengthening of the hrynia is inevitable: a market-driven, not government-driven change.

Opportunist Exchange Dealers: This theory has it that when the hryvnia first broke $5, people on the streets panicked, and exchange dealers have simply been taking advantage of their fear. This also seems suspect, in that many of the exchanges have had 4.6-4.7 rates off and on since mid-April. In any case, the foreign exchange dealers almost always get the flack for "opportunism" since they're the last ones holding the hot potatoes. The situation is analogous to the way grain producers get tied up in export restrictions amidst accusations of "speculation" when grain prices are high.

At the end of the day, I haven't been able to understand how a currency could be inflating wildly and still be increasing in strength against foreign exchange. If any of you have an explanation, I'd love to hear it. 

Yushchenko and Tymoshenko take turns holding each other back

While there aren't many things that could have made relations between Yushchenko and Tymoshenko worse that I mentioned in my last entry on the subject, the two of them seem to have found ways to do so. Ostensibly for stymieing Tymoshenko's anti-inflation proposals, Bloc Yulia Tymoshenko blocked Yushchenko from giving his annual address on May 13. The effort was also probably in retaliation for Yushchenko's own blocking of Tymoshenko's privatization plan (by ignoring a court ruling in order to keep his anti-privatization State Property Fund Chairwoman Valentyna Semenyuk in place). Rather unconvincingly, even as she was stopping Yushchenko from making he speech, she was wording her description of the action as if it were targeted as some greater, poorly defined "force" opposing her, rather than at the President personally.

This seems like a strange reticence from her, since she has now made other accusations directly against the President, in regards to the sale of Black Sea shelf rights (she accuses him selling out Ukrainian interests, after having been tricked by corrupt businesspeople).

Blocking the podium may have been too extreme an action. In the first place, Tymoshenko should remember that the Party of Regions may have lost as much as a 10% support in the polls for blocking the actions of the Parliament in March. In the second, she may have noticed that the People's Self-Defense party, the NS in NUNS, have begun calling for the resignation of the head of Yushchenko's secretariat, Viktor Baloha, the presumed instigator of Yushchenko's hard anti-Tymoshenko stance. If Yushchenko's closest allies are calling for an end to his attacks on Tymoshenko, she might have been able to wait, instead of forcing things now.

I would say that this action has brought the government to a standstill, but it was essentially immobile before May 13 as well. It makes for very little political news. The Ukrainian Journal seems to blame Tymoshenko. Taras Kuzio blames Yushchenko, and I've been inclined to agree since he ditched Tymoshenko's government for Yanukovych in 2006 2005 [thanks to the commenter who caught this error of mine!]. But at the end of the day, apportioning blame correctly may be as futile as apportioning blame between a couple after a divorce. 

Now might be a good time to move on from the frustrating to the merely ridiculous. 

Candidates for "Most Senseless Statment of the Week"

1. Yushchenko's assurance that Ukraine will be allowed into NATO at the December 2008 meeting. There are a lot of issues of importance he could be talking about or, even better, acting on, before giving his assurance. One big one would be to finally launch the public information campaign on the subject the government has been promising for years.
   
2. BYuT this week offered Klitchko (currently far ahead of their candidate, Turchynov, in the polls) the position of Kyiv Council Secretary if he withdraws his candidacy and Turchynov is elected. They're asking him to give up a strong candidacy in order to take inferior position beneath a weak opponent in the unlikely event that that opponent can overcome a 20% popularity gap in the next week... they must really think as little of Klitchko's intelligence as Turchynov's banners imply they do.
3. In Sevastopol recenlty, Moscow Mayor Yuriy Luzhkov again made a speech that the city, as well as the whole of Crimea, has never been legally part of Ukraine. National Security and Defense Council Secretary Raisa Bohatyrova (herself a former member of the generally pro-Russian Party of Regions) responded with measured irritation, and the SBU has barred Luzhkov from entering the country again. This level of restraint is probably for the best. Getting irate at Russian impudence would likely just give more of an appearance of legitimacy to this balderdash.
   

Take your pick: which of these do you think is most senseless, which second, which third?

Not a very good week for political news. As a consolation, look for some (long overdue) additions to the Ukrainian book library within the next week. If you've got book recommendations, please include them in the comments.

Spotlight on the Biggest Privatization in Ukraine 

Since privatization is a big topic again with the fight between Yushchenko and Tymoshenko, I thought it would be worth looking back to see what's going on with Kryvoryzhstal, now Mittal Steel Kryvy Rih.

For background, this state asset was first privatized in an untransparent bid by Akhmetov and Pinchuk in Fall 2004 for $800mn, then reprivatized in November of 2005 in a fair and open bid that provided a massive amount more money for government coffers ($4.8bn: more than the previous 10 years of investment). It's been quite a while since I've seen big news about the plant, but if we're to decide what we think of Tymoshenko's new privatization proposals, knowing the current status of this key privatization will be important.

2006-2007 

In the spring of 2006 ran into troubles (some big troubles) with State Property Fund Chairwoman Valentyna Semenyuk. Taking into account that she fought against the privatization to Mittal Steel from the beginning (preferring, implicitly, the much less economically beneficial, nontransparent, and suspicious privatization to Akhmetov and Pinchuk), this was not an unexpected attack. However, her accusation that Mittal wasn't keeping the promises regarding wages that were part of the privatization deal did not seem to have been refuted by the company in the Ukrainiska Pravda article above, thought the company resolved to do better. Two days later, according to this article, the company raised the wages it pays its employees to the highest in the entire metallurgic sector.

Things also seem to have improved in fall of 2006, when Mittal Steel got a loan from the European Bank for Reconstruction and Development for $500mn to modernize the facilities. The company claimed to have already invested a further $85mn of its own money in the same effort. This article in New Europe states that the company managed to increase sales by 16% as the result of its efforst in 2006.

In 2007, the company bought a new coke battery, increased production in the first quarter, and submitted plans for further investment and growth, especially growth in sales in the Ukrainian market. A January 2008 report states that the company lifted output for 2007 year by 7%. 

Finally, the company is cited in this report on the Ukrainian steel market as the major factor in increasing competition in the Ukrainian steel production, and thus improving the market overall.

2008 

For it in 2008 is this conflict, in which it seems the company has defaulted on one promise to improve the situation for workers, as well as a number of lesser articles in the privatization agreement of 2005 (again coming into conflict with Semenyuk).

I originally looked back into this issue, because a friend of mine who knows people working in or around Mittal Steel Kryvy Rih told me that his acquantences were complaining that the new company was worse than the old one.

Does anyone else have more information on this? The track record in the articles of continued investment and growth looks good from a business standpoint. However, is this be happening without greatly improving the situation for workers? What's happened to the high wages they were reported to have been earning in 2006?

Thanks in advance for any article links you might have! 

Tymoshenko and Yushchenko's Loudest Confrontation Yet: Privatization

It used to be that Yushchenko would send uncountable directives over to Tymoshenko and she would blithely ignore most of them and work towards her own purposes while saying she "admires" the president. He would veto what she did, issue a new directive, and the process would start again.

Recently, things have degenerated.

The major sticking point is Tymoshenko's extensive privatization plan, the proceeds from which she intends to use mostly for government remunerations (or handouts) to holders of Soviet bank accounts made worthless in the aftermath of the fall of the Soviet Union. Yushchenko considers this an irresponsible use of the money, and accuses her of privatizing into the hands of her allies--the claim made by pretty much every party against a privatization by one of its opponents.

So, for example, since State Property Fund Chairwoman Valentyna Semenyuk has been one of the main agents blocking Tymoshenko's privatizations, Tymoshenko kicked her out and installed her own chairman, Andriy Portnov. Yushchenko reinstated Semenyuk, cancelled the privatizations, and issued a "yellow card" warning to Tymoshenko's government. The Constitutional Court overturned his decision, and Tymoshenko told Portnov to ignore it. Along a parallel track, the privatization of, for example the Odesa Pre-Port Plant has been ordered, suspended, ordered again, and again suspended. The Eurasia Daily Monitor has a summary of all the tit-for-tat.

In retaliation, it seems, BYT lined up with the Party of Regions and Tymoshenko said she supports a vote to decrease the President's power in favor of the Parliament (and she's been taking on a number of advisors from the defunct and unmourned SDPU(o) of Viktor Medvedchuk, though this may not be a retaliatory gesture as much as a tactical one). However, when Yushchenko saw that he lacked the support of the Constitutional Court and the Parliament, he backed down. His statement is a classic one of a politician accidentally saying the truth:

Let us not put to question which organization [of power] we need, but focus on the task of achieving, through dialogue, through the work of public commission, through public referendum, a system of counterweights which would ensure serene future for us and our children.

Exactly. Now why have you been wasting your time on this issue practically since you got into office?

Not that Tymoshenko or Yanukovych are any less to blame. The last link goes to an article in Dzerkalo Tizhnya: it's wordy, but overall a great article. The line that pretty much sums everything up:

Each of the three top Ukrainian political players more or less realize the need of the reforms, but all explain their slackness by the following logic: “Now preparations for the decisive battle are going on. What is of critical importance now is to garner as much resources and voter support as possible. It is imperative that sufficient financial, media and electoral reserves be built up. I will begin attending to the country’s salvation and development once I take the country’s top office for a long enough period”. The result is that Tymoshenko and Yushchenko are competing in populism, while Yanukovych, in the absence of State resource, is busy with NATO and language-related issues. This provides an explanation as to why we keep making the same mistake, which is because we make no headway. A country cannot move ahead unless and until the main state and public challenges are correctly identified and begun to be dealt with. Purely personal and corporate interests of policy makers cannot provide enough progress to drive us away from the same old mistake.

Speaking of wasting their time on political games while gas and inflation crises loom...

The Kyiv Mayoral Election vs. Macroeconomics

Taras Kuzio, writing in the Eurasia Daily Monitor, thinks BYT's candidate in the Kyiv mayoral election, Turchynov, will be able to get past Klitchko and Chernovetsky, citing corruption charges against both of the latter. I still fail to see how Turchynov is going avoid similar charges sufficiently to overcome the huge gap in public support between himself and the main contenders--particularly since there will be no runoff. Not that we should want Chernovetsky to win (which recent polls think he might, using the same tactics as last year).

This mayoral election is the biggest distraction from the two main problems for Ukraine, both of which are economic: inflation and fuel price hikes. 

While Tymoshenko was certainly overstating things when she said her government was getting the highest appreciation in the world and holding inflation policy unchanged will be enough, it is true that she was praised by the WTO.
The IMF was more moderate in its praise. In this report it did not actively argue against her privatization plan, but it definitely suggested holding back at least some of the money thus earned to promote a more balanced budget (meaning less going to Tymoshenko's handouts). Another one of its main points is that the hryvnia should be allowed to float against the dollar (meaning appreciate, in the current economic climate). According to the Ukrainian Journal, the NBU seems interested and Tymoshenko has reigned in her criticism of the bank on at least this issue. The WTO and IMF both make the situation with inflation seem less dire than Dzerkalo Tizhnya seems to think it is, but DzT bases more of its assessment on an expected massive fuel price hike from Russia (something I also think is imminent, and the IMF notes as a potentially major problem).

Two More Good Items 

One alternative to politics-watching is this entry on Ukrainiana about Chernobyl. It includes Taras's own story from living (six years old) in Kyiv at the time. It also is heavily laden with YouTube videos related to the event.

Another wonderful and unrelated article by John Marone at Eurasia Home praises the introduction of national standardized university examinations. One step forward for transparency, one step backward for corruption.

BYuT and NUNS fight over city politics, the nation gets closer to crisis

February and part of March were the Party of Region's chance to waste everyone's time blocking parliament with their NATO Circus of Obstructionism. The end of March seems to have been burnt up looking for the next issue for politicians to focus on. Now it's April and they've finally found something to keep themselves from addressing any of the multiple looming disasters—the Kyiv Mayoral Election.

NUNS is the less popular party, but is pushing for the vastly more popular candidate in this election: Klitchko. BYuT's candidate is Turchynov, who has about 6% popularity to Klitchko's 31%. That means that if Tymoshenko wants him to win she'll have to spend massive amounts of time and political capital to do so. So far she doesn't seem to have been deterred at seeing what PoR earned for its anti-NATO efforts on a national level—a ten percent drop in popularity and repeated local election losses to Bloc Yulia Tymoshenko.

Certainly Baloha and his new gang (a breakaway from NUNS) haven't acted constructively and won't do so in the future. But NUNS bleeds votes every election because of their pettiness and unprofessionalism. It's BYuT, which is stronger and more politically savvy that will need to compromise here, because there are much bigger national problems her Cabinet needs to be addressing.

Inflation

Thank's to IIU's blogging, readers here already know that inflation is a big problem that's getting worse. Years without reform, worldwide price increases for foodstuffs, government-on-government increases in unsupported payouts to voters (the most recent being Tymoshenko's payments on Soviet accounts) have all resulted in 26% inflation this March.

As with other issues, NUNS and BYuT are working at cross-purposes. Tymoshenko's payouts went through, but the privatizations she proposed to use to generate the money to pay for them were vetoed by Yushchenko. She's tried to get rid of a longstanding land auction ban which she also thinks could improve economic growth (I do, too) and has again been vetoed by Yushchenko. I would be less apt to think Yushchenko was simply playing spoiler if I saw any indication that he has a better plan instead of his usual vague generalities.

Tymoshenko has said the government going to stop inflation in five to six months. To do this will take actual reforms, though, and that means working with NUNS. That may not be possible under any circumstances, but fighting over the Kyiv mayor is the one way to ensure defeat.

Gas Price Hikes

RosUkrEnergo is still hanging on in Ukraine-Russia gas deals despite Tymoshenko's opposition. She is claiming a victory anyway by saying that the deals will happen on Russian soil so it is technically "out of the Ukrainian market", but it looks from this angle like she's trying to save face after failing to eliminate it.

Though Russia has been able to keep its intermediary (and its active push to keep RosUkrEnergo throughout the negotiations last month confirms that it is, indeed, Russia's preferred intermediary), this won't stop Ukraine's gas prices from increasing significantly in the next few months. The ultimate driving force will be simple, rational self-interest: why sell at under $200 per m³ to Ukraine when Europe will soon be paying over $300 per m³ to Europe?

The price rise has already been foreshadowed: a month ago Russia increased the price it pays Central Asia for gas. This was not out of generosity: it was a revision to preempt hard bargaining by Central Asia, or (much worse for Russia) actual progress on alternative gas routes to Europe that don't include it (one of them is Tymoshenko's White Stream project, lauded by The Economist, which would be a great use of her considerable political skills if she weren't too busy in Kyiv). Russia's price increase is likely to be passed on to Europe in the near future, and Ukraine should not expect to be far behind.

We should not be distracted from this issue. Yes, another Russian general has threatened to attack Ukraine militarily (and with "other methods" as well), and responding in a professional manner was important. Yes, Kommersant claims Putin said Ukraine "isn't a real nation" and it will "cease to exist" if it joins NATO (a claim his government has not refuted). Ukrainian politicians should remember this when dealing with Russia (Hey, Yanukovych, you've been shouting a lot about Ukrainian national sovereignty at anti-NATO rallies—refresh my memory, when did any NATO ally threaten that as much as Putin just did?). Nevertheless, the real motive force in the gas sphere will be the $100 per m³ price differential. Either Russia will take payment in cash, or in ownership of Ukrainian energy assets, but it won't sit for long without payment.

I don't know when the hike will come. Gazprom may not know, and maybe not even the Russian government. But since the Russian government doesn't like NATO and doesn't think Tymoshenko is going to give it anything in exchange for the discount pricing, the hike will certainly come this year. If Russia is looking to improve its chances of getting paid, it may hike them this summer or wait until inflation is more under control, so it doesn't catch Ukraine when it is more desperate. If it wants to shake Ukraine up more it may load on the hike about the same time that inflation problems come to a head.

Not Even Together Enough To Host A Soccer Match

Inadequate preparation for Euro 2012 should be a big issue. There is $25 billion more investment that needs to be made, Ukraine's reputation is on the line—this should be a cause for major concern. But, because the government has gotten into an inflationary and budgetary mess that dwarfs even this event, all that I'll do is note that it's still a problem. I will add, though, that it particularly unhelpful to see Yushchenko blithely state that everything is going smoothly despite warnings from Ukraine's host partner Poland and the Euro 2012 committee.

Tymoshenko Should Support Klitchko 

Below inflation, gas prices, Euro 2012, somewhere under corruption in public transportation, is the Kyiv mayoral election. And yet, the politicians of an entire nation are occupying themselves with this single city election.

Tymoshenko doesn't need to look very far to know what she should do in this situation: all she needs to do is remember her own decision ahead of the 2004 presidential election.

In 2004 she gave up her own candidacy in order to support Yushchenko, despite her ego and despite the animosity between them that is unlikely to have emerged fully-formed in January of 2005. The reason she did so was that she did not have a real chance at the presidency (her public popularity was in the low teens, I believe), but Yushchenko needed help to overcome his opponent Yanukovych. Divided, their two parties could have both lost a legitimate election to Yanukovych. In doing the right thing, Tymoshenko also earned enough voter support to improve her political rating far beyond anything she had had thusfar.

Tymoshenko should support Klitchko. Like Tymoshenko in 2004, Turchynov in 2008 is little more than a spoiler. This is especially true since the mayoral election, unlike the presidential, is decided without a runoff (though BYuT is trying to change this). If Turchynov and Klitchko fight one another, it is likely that both will lose to to Chornovetsky, whi is still polling above 30% popularity.

In a real, monetary way, Ukrainians cannot afford to watch BYuT and NUNS continue to squabble. If Tymoshenko makes the magnanimous step here, not only will it improve the nation's chances in the upcoming crises, but likely result in voters rewarding her as they did after 2004.

April Fools' Day and Anti-NATO Rally Day in Odesa 

It is with significant disappointment that I report to you the death of the "Odessan Sense of Humor".

Natives of the FSU will certainly remember the great number of comedians to come out of this city. Those who've visited the city or lived here often have stories of funny or witty bits of conversation. What was it like? It's hard enough to convey personal anecdotes, let alone second-hand ones, so I'm limited to my own experience. Unfortunately, I've only got one from our three months here.

A couple of older women are walking along, engaged in a deep conversation about a colleague. There was a lot of nodding and stern looks.

"...and you know," one said, "she's not spiteful. She doesn't do it out of spite."

"No, no, she's not spiteful, no..." said the other, and there was a moment of silence.

"But what about me?" 

If this does not convey the sense of humor, my apologies, I arrived too late to do it justice, it seems. It may be that occasional jokes still get floated around, but is simply drowned in the stream of profanity that begins a minute and a half from our door and flows along until a minute or so before we get wherever we're going.

April 1

It was with a sense of relief, if not a huge amount of hope, that we went to watch the April 1 celebration. Given Odesa's historic reputation for humor, April 1 is a big day here: an official city holiday this year. We could expect some of the prize humor to be at the show, wherever it is the rest of the year. Zhvanetsky, one of those famous Odesan comics, was slated to come.

When Zhvanetsky changed his mind and withdrew from the lineup, it was a warning sign.

Aside from Maski Show, a local clown act, and the cast of Derevnya Durokov, a television clown act, there wasn't anyone there who was ever funny, let alone who said something funny that day. By the time we finished dinner and headed down to the stage for the last three hours of the celebration, both groups were long gone. Without them, in fact, the only funny parts were the one's that weren't supposed to be funny.

Click pic to enlarge. Next to Precious is a girl from the Moscow circus in a leotard hanging in a hula hoop. The organizers apparently didn't think Eruption  was explosive enough on its own.Take Eruption, one of the two headline bands. Never heard of them? That's because it's a British R&B group that had a few hits in Germany and Europe in the 70s and 80s, then disappeared. Their second female lead singer, named Precious Wilson took the name when the rest of the group broke up, gathered together a couple girlfriends and created an all-female caberet act that's still singing Eruption's "hits" thirty years later. It's an uncomfortable mixture of funny and sad to watch Precious, now 51 years old, trying and failing to get a bunch of Ukrainian kids to sing the lyrics to Eruption's 1978 hit "One Way Ticket". When the MC called for an encore, she tried, and failed, again.

Wait, wouldn't that make it a two-way ticket?

After her was a strong man act with a guy in studded leather and his similarly-clad girlfriend. He lifted weights, and then lifted his girlfriend---almost as amazing as a trip to the gym or a football cheerleading squad practice. Then he blew up a hot-water bottle. For his big climax scene he (at this point you're going to think I'm kidding but I'm not) hammered a nail up his nose.

After him came a "zany" singing troupe that looked like it was made up of volunteers from my high school PTA. Did the PTA chaperones dance at your high school dances, too? Now you've got a mental picture of what I'm talking about.

Man in leather blowing up a hot water bottle All of which brings up a very important question: Why, God, why? Why couldn't they have gotten any decent Ukrainian music? There's plenty of Ukrainian bands with senses of humor. Why did they have a couple unfunny over-the-hill and pudgy Russian MCs and no actual comedians? Why did Zhvanetsky think the show was going to be a farce, not a good kind of farce, and cancel?

Two days later, I think I got my answer.

April 3 

Notwithstanding the fact that the Russian government, using Germany and France as proxies, has already vetoed giving Ukraine and Georgia NATO action plans for at least a year (actually, maybe I'm wrong about this, December may be the new goalpost, and Europe may not have barred Ukraine as strongly as I'd thought, see the comments here), there was an anti-NATO rally on April 3.

Some schoolkids march in for the rally, others ride the американские горки (roller coaster)It was held in the same plaza as the April 1 celebration, almost immediately after they'd taken down the props from that event. In fact, they didn't even take down the stage scaffolding, they just replaced the "Humarine 2008" banners with "Nato - Nyet" banners. Where the beer and cupie doll carnival games had been were new little kiosks giving away Party of Regions and Moscow Patriarchy Orthodox newspapers, or gathering signatures to make Russian another official national language.

The composition of the rally was the usual for PoR: older pensioners waving Soviet flags next to PoR flags (or new half-Soviet-red half-PoR-light-blue flags). The rest were kids that were given a day off from school along with plastic PoR ponchos and flags. They looked like they were at a boring assembly.

Keeping the purpose of their rally in mind, what would you expect the music lineup to be?

The April Fools'/anti-NATO stage, in the foreground a man with the Russian flag and a sign reading "Beating a Turk is not Playing a Schoolboy for a Fool". Anyone know what in the world that means?Let's see how well you guessed:

Queen - I Want to Break Free
Jamiroquai - Something, Not Canned Heat
Metallica - Enter Sandman
...a couple more of the same, couldn't remember their names as I'm not very up on my American culture

Then they brought in their live acts, which I thought would mean no more watching pensioners attempt to hold up under a barrage of American pop. Instead, their first singer sang only one Russian song before launching into Simply the Best by Tina Turner. Wait, don't click on that last link, this YouTube video of Dutch pop idols trying to cover the song will give you a much better idea of what it was like.

We waited through the end of that song act, and the arrival of some more of the attendees. I read the PoR news-pamphlet we picked up, but there was no actual fact-based argument against NATO in it. Never did find one. If anyone has seen a coherent argument against NATO, please let me know. I'd love to know what the objection is.

I'm afraid we didn't make it to the actual speeches, if there were any. We had to leave when the next twenty-year old boy on stage sang (in English):

Nasty, nasty, nasty girl

Every night I see,
you and me

Nasty, nasty nasty girl

Every night I see,
you and me

I wonder,
where are you now.

All of this is the best answer I have to what happened to the Odesan sense of humor: the reflexive anti-Ukrainianism in Odesa has overshadowed the city's famous indifference to politicians and their posturing. Since Odesa has been dragged down into the leaden stupidity of politics, the citizens can't muster the light wittiness that made the city so unique.

It's like a cruel joke.

despite the efforts of the US, Canada, and the newest EU members

As of today, efforts to stop Ukraine and Georgia from getting MAPs of how to eventually get into NATO should succeed: thanks to the craven capitulation of the German and French governments to Russia (IIU has already linked a great article by Taras Kuzio running down the list of how similar the situations of Ukraine and Georgia are to those of other nations that joined NATO, even Germany itself: showing clearly that the motivation for refusal is as a sop to Moscow).

In this environment, I'd like to praise Bush for launching the lead balloon IIU just blogged about. He could have downplayed Ukraine and Georgia's requests. He wouldn't even have needed to come out against, merely gone along with the usual practice at NATO meetings of not airing clashing views. In doing so he would have been more friendly with Russia, and thereby also with France: something that could produce real political dividends at a time when Russia has been suggesting it might open nearby bases to, and France may increase its participation in NATO in Afganistan. On the basis of a cost-benefit analysis, Bush could easily have waffled.

Instead he first visited Ukraine to express his support, and then at the summit he went off script to say:

Welcoming [Ukraine and Georgia] into the Membership Action Plan would send a signal to their citizens that if they continue on the path to democracy and reform they will be welcomed into the institutions of Europe.

It would send a signal throughout the region that these two nations are, and will remain, sovereign and independent states.

A lame-duck President doesn't have a lot of political muscle (or as much temptation to make compromises out of political expediency, to be fair). But Bush pushed as hard as he could to support Ukraine and Georgia, because doing so was right. Whatever else he's done, that deserves commendation.

The newest EU members and Canada are also to be praised. I particularly like the quotes by the Estonian and Latvian presidents (in one of the articles linked by IIU) that  the MAP would be of great benefit because "it forces nations to reform even when they don't want to do it," and "no action plan, no action.

Both statements are sadly approriate in Ukraine's currently political climate. Additional external pressure for reform would have been welcome.

the way corruption moves

We've probably all heard of the trickle down theory of economics. The basic premise is that if the powerful and rich get economic breaks and are allowed to improve their own positions, benefits will tumble down to the rest of us, like crumbs falling off an over-laden table. A similar-sounding precursor to the idea is that of the horse and sparrow: as the horse's oat feed increases, more falls out of the trough for the sparrows to eat. The theory is too paternalistic and snobbish to get much positive attention, but there is an interesting corrolary to explore: whether or not benefits trickle down---does corruption?

The answer is no. It is an outgrowth of corruption in society. Dzerkalo Tizhnya worded the problem well in its extremely negative review of Tymoshenko's first 100 days in office. (Though the article is so negative it makes me wish they'd sit down with Taras Kuzio some time and hash things out---maybe pick up a glimmer of optimism, or half; I'd take half a glimmer.) In their words:

Everybody demands to put an end to corruption in the highest echelons but resist any attempts to fight it at the grassroots level: taxi drivers still drive their passengers with the meter off; draftees’ parents still pay conscription officers for exemption from military service; marketplace vendors still give short weight; students still “buy” their test and exam grades.

During the Orange Revolution, Ukrainians demanded “jails for bandits”. Of course, they meant “oligarchs”, not obstetricians who would never even enter the prenatal ward unless palmed with $300… Those who rule Ukraine are not from Mars, Washington, or Moscow. They are the very flesh of the flesh of those “little Ukrainians”, only vested with authority. The symptoms are the same.

In contrast to DT, I think the call "bandits to jail" did reflect a desire for accountability at all levels, very much including the bribe-taking doctors and short-weight kiosk workers, but in proportion to their crimes. And I think it also clear that the "everybody" and "they" used of Ukrainians here refers to the same kind of "everyone but me" group that always seems to oppress the self-righteous. Nevertheless, the source of corruption that DT identifies is, I believe, right on.

Nipping it in the Bud 

Corrupt officials do not crawl out of Hades directly into elected office. They creep up. It begins with a government official at the lowest level that uses undemocratic and immoral means to become richer, or stifle opponents, or curry favor with higher-level officials. As a fictional example bureaucrat, we'll use Viktor Exemplarov. He begins in a low-level position at AVIR extorting small bribes for expediting the intermidable process of updating an international passport. Since there is plenty enough red tape to frustrate average citizens, he succeeds, and since not many people complain, he continues bribe-taking. From there he moves up by covering the tracks of a superior who is an embezzler and also a deputy in one of the parties in power. Now he's part of politics.

After serving on a city council and voting with the party reliably for a couple years, Viktor gets another break. The next election rolls around, and he takes one of the last seats, because the party is on the rise that year and has extra seats to dispense (voters don't have many choices, and didn't like the other party very much, either). He's sent back to his hometown, only now he's in charge.

Breaking this cycle is tricky. First: to rebuff bribe solicitations forcefully at even the lowest levels. Second, to find the political clout and legal power to stop Viktor when he's still a bribe-taking low functionary. Third, to to hold accountable those Viktors who make it past the local level. The third level is where the worse troubles start, because regional officials are appointed, not elected. Since voters can't choose their regional government directly, the power of their votes is dilluted. They vote on a national level, about nation-level issues like foreign relations, taxation, and nation-wide policy. And then, when the dust settles, they get whatever local officials the winning-est party sends them. This is a terrible way to structure things in a country with any history of high-level corruption.

I've never heard of any city locals demanding to know who their mayor would be before casting their national ballots, have any of you? But, aside from agitating for direct local elections, this would be the only way Ukrainians could keep the government accountable for decisions made on the regional level.

The task is gargantuan but if Ukrainians can manage even modest success, I think we'd all be amazed and what can flower in the country if a few of the creeps are weeded out.

Tymoshenko charges ahead, Gazprom and PoR fall back

Probably the most iconic image of the American stock market is the opposition between the optimistic bulls charging ahead with ever more ambitious and, often, foolhardy investment projects and the skeptical bears making their money on failure and slowing markets with their pessimism.

In the FSU, where bears show up in metaphors often enough anyway, the image of large pessimistic men in grey and brown who spend their time retarding their countries’ growth for personal profit seems more apt a description of the political classes than investors (where the two can be separated). In this bears’ world, how refreshing it is to see the great bull of Ukraine, Tymoshenko, trampling politicians underhoof.

Circus of Obstructionism Breaks Up

At long last the Circus of Obstructionism, the Party of Regions’ blockade of Parliament that prevented the body from passing any laws for a month, has broken up. And what did they get for trying to score cheap populist points? Another rise in popularity for Tymoshenko. BYuT is now leading PoR 30% to 23% in the polls, with NUNS trailing behind at around 10%. It is cheering to those of us who are bullish about Ukraine to see citizens punish PoR for wasting their time, even if NATO, the ostensible reason for the protest, is not very popular.


The wackier side of anti-NATO Vitrenko's poster - apparently created around 1932: Let's see, NATO leads to Nazis, prostitution, colonization, drug addiction... wait, they forgot head lice!Granted, the pressure it brought to bear may have accelerated the breaking away of NUNS deputies, prominent among them being Presidential Secretariat Chief Victor Boloha. Those NUNS members are largely in favor of ditching BYuT for a coalition with PoR, and may eventually gather in enough numbers to turn the vote (some estimates put them just 15 deputies shy). But NUNS is so full of waverers the whole parliamentary body has been shaking like a gelatin mould since it was formed. Much more interesting is that same pressure has also increased the divide within PoR itself, between hardliners and the numerous PoR billionaires and businessmen. (Check out pictures of Akhmetov skipping PoR’s big Eastern Donetsk rally to watch a soccer match. He even called in sick, how terribly schoolboyish.)

In contrast BYuT barreled through intact. Tymoshenko can now be expected to get back to her furious change of pace. After the stupefaction of February, it will be enjoyable to watch PoR and NUNS politicians try to slow her down again. The title of this UNIAN article is illustrative: Yanukovych asks President to stop Tymoshenko. Perhaps Yanukovych is hoping Yushchenko will come in his tank?

Gazprom’s Fast-Handed Tap-Turning

More to Tymoshenko’s personal credit than the victory she was handed by voters is the progress she made for Ukrainian interests by knocking Gazprom back a step.

Since my last entry on the subject, a whole new crisis has come and gone (discussed by IIU here, here, and here). Essentially Yushchenko’s stopgap measures in February lasted even less time than we might have expected. First Gazprom demanded Ukraine pay down the gas debt for 2007—reasonable enough. But when, in February, Ukraine did pay that down, Gazprom came back the next day and demanded $600mn for January and February.

This number would come out to around $314 per m³, much higher than the $179 per m³ Ukrainian politicians quote from the 2006 deal. Where’s the discrepancy? Essentially, in addition to keeping the non-transparent intermediary RosUkrEnergo , the 2006 deal included a bit of purposeful obscurantism: Ukraine agreed to pay near-European prices for Russian gas, but that that gas would be mixed in with Central Asian gas priced at absurdly below-market rates, even though all of it comes down the same pipe. At the mix they agreed upon, the final cost-to-consumer was about $179. However, since it’s built upon this virtual dichotomy, all Gazprom had to do was quietly mix in more Russian gas over the last two months and voila: instant debtor crisis.

In response, Ukraine tried to stall and see if they could drag out negotiatons, so Gazprom upped the stakes.

First it reduced gas flows to Ukraine by 25%, demanding that Ukraine agree to increased prices and continue using RosUkrEnergo—the intermediary that has compromised Ukraine’s national interests in natural gas dealings for years—in the same capacity as before. Since RosUkrEnergo is a blatantly non-transparent entity, the Russian government usually tries to distance itself, but in situations like this it’s position is made obvious.

This pressure seemed to work on the President. He signed on a deal to bring back RosUkrEnergo and return to normal (though not necessarily at a hiked rate as Tymoshenko has alleged); however, Tymoshenko still vetoed the decision. In part this was just her usual spirit of populism---fight price hikes by whatever means necessary (the reason some commentators like the FT think of her as the deal-breaker), but also because she has opposed the use of RosUkrEnergo since at least 2006 and refused to sign a new agreement that kept it on (her given reason for the veto is that the intermediary hadn’t provided the necessary documents to her government; she also maintains that the debt to Russia for January and February will be paid).

Since she would not relent Gazprom reduced gas levels to 50%. In this waiting time, Yushchenko applied as much pressure on Tymoshenko as he could to get her to sign a new deal. Instead she held stead and while Naftogaz (Ukrainian gas provider) played bad cop and hinted it might start siphoning off gas meant for Western Europe, she gave assurances that not “one iota” would be taken.

The standoff lasted three days, and then Gazprom backed down. The gas was turned back on, and RosUkrEnergo is out of the deal.

How did Tymoshenko win? Some major Russian news sources attributed Gazprom’s retreat to fears by the company that if it plays Big Bad Monopolist, Europe may revive interest in trying to diversify its sources of gas away from Russia. Now when Russia it trying to make sure the Nabucco pipeline fails (a European idea that would cut Russia out of the deal, but has never had enough will behind it for money to show up in front) and promote its own South Stream pipeline is not the time to draw attention to itself trying to push customers around.

When Russia is feeling more confident about the success of South Stream and failure of Nabucco, it is certain that revising the price charged to Ukraine will come up again. But the really important thing for the Ukraine is that RosUkrEnergo looks to be gone from the deal. Tymoshenko probably earned herself a few more points in her lead over Yushchenko for playing the tough guy to his capitulator, but that can be considered just payment for cutting out this troublesome intermediary.

Overdue Process

Bullish optimism is on the upsurge then, and that’s a good thing. But there is one very big caveat: while it’s a nice trend, it is more a change of attitude than of process. Therefore, it has little bearing on the structural reforms Ukraine also needs. Though Tymoshenko has her strengths, the creation of and implementation of the more boring reforms like those the judiciary needs are not among them.

Dzerkalo Tizhnya has long been a paper that has distinguished itself by its fiendish devotion to analyzing process issues, international agreements, judicial practices, and the like. It is thus instructive to see how pessimistic it has been for quite some time about the possibility of procedural reforms, particularly badly needed judicial reforms. The Kharkiv Human Rights Organization is another great  source of this information on all of the many ways Ukraine could improve its governmental processes, but we already know that from IIU and her frequent references.

Keeping all this in mind should still leave us to optimistic about changes in this government, but temper that optimism enough that we don't experience that terror of the bull market: a bursting bubble.

Apparently he admires North Korean-style negotiation tactics

When a Russian general recently waved the country's nukes at Europe in an effort to intimidate people, I thought to myself, "How smart, if reprehensible, of Putin to let his military advisors threaten nuclear attack (excuse me, nuclear preemptive defense) on whomever the government and army think is encroaching on the country's interests. Now he can tut-tut about over-enthusiastic generals and Europe gets reminded what real loonies are within grasping distance of power if his government relaxes its chokehold on the country."

Now Putin has gone and said something very similar (a fact IIU mentioned earlier) His exact words:

It is horrible to say and terrifying to think that Russia could target its missile systems at Ukraine, in response to deployment of such installations on Ukrainian territory. Imagine this for a moment. This is what worries us.

Why is Putin telling us these horrible thoughts of his now? He implies that it is a reaction to Ukraine thinking of targeting missiles at Russia. But what on earth could he be talking about? He can't be accusing Ukraine of targeting nuclear weapons the way Russian generals are targeting them: Ukraine shipped its nukes to Russia years ago. The only possible missiles he might be referring to are NATO missiles: not targeted as such, but rather allowed into Ukraine as part of a NATO missile defense grid, as in the Baltic countries. While this is what Putin is referring to, his threat is so pre-emptive, and the Ukrainian government so obviously unthreatening, that it is not a credible reason why he is saying this now.

Pulling a Knife On a Guy Who's "Looking At Me Funny" 

To be absolutely clear, Putin is threatening Ukraine not for entering NATO, not for thinking of entering NATO, but for thinking about asking NATO for a plan to see what NATO has to offer before holding a national referendum to ask Ukrainian voters whether or not they'd like to join (the same reason, by the way, for the Pary of Region's Circus of Obstructionism). Even should Ukraine be granted a plan, it would take years before the country would be able to meet the necessary criteria for NATO entry, on top of however much time it would take to convince Ukrainians to vote for starting the undertaking.

For this reason, the idea that Putin is reacting against a real and present threat against Russia is laughable. Instead he is threatening an attack on a peaceful Ukraine for what is essentially thoughtcrime: for wanting to consider what NATO has to offer and what it would require of Ukraine as a member.

On Gas, Too, Cold Threats from Moscow

Russian government-controlled Gazprom also recently gave Ukraine a whopping four days' notice to pay off gas debts to Russia before it turned off the tap. To get things in order: the threat to freeze Ukrainians was just before Yushchenko's visit to Moscow, the threat to blow them up was during the visit.

The linked article from Eurasia Home Analytical Resource (EHAR) gives a nice summary of why Ukraine is in the situation it is. Essentially the trick has been to offer gas at cut-market prices and then organize the deal in such a way that the money from the deals goes to nontransparent intermediaries (also controlled by Russia) and from there into the hands of wealthy businesspeople, thus leaving Ukrainian state gas company Naftohaz bankrupt and giving Gazprom an opening to try to expropriate gas assets to cover the debts.

This is the reason the Economist's advice is essentially to pay European prices ($300 instead of $179), reciprocate with higher transit fees charged to Russia, and take all the reform pain now. As the Economist sees it, this will be excruciatingly hard, but better than giving Russia the ability to extract potentially larger concessions later by use of threat. And, unfortunately, the half-measure worked out during Yushchenko's visit (the price is still $179, but Ukraine will have to accept a new intermediary, allowing a continuation of the same scam and the same inevitable bankruptcy, or allow the price to rise to $300) just buys time. I wholeheartedly agree. To the the response that Ukraine can't pay that much the answer is simple: it already is, and Gazprom just makes everything clearer by waving its hand over the cutoff valve.

Small Carrots 

There are those in Ukraine who benefit from the current gas deals and from missile-waving. By threatening all of Ukraine with death and destruction, the Russian government may be helping PoR, which has lately picked up NATO protest as an excuse for making it impossible to pass any legislation. If Ukrainians are more worried about the missiles than about the results of letting Ukraine be bullied, the PoR deputies may win the NATO battle. And while Naftohaz goes bankrupt, the handful of nontransparent owners of the RosUkrEnego intermediary have made millions, perhaps billions.

The most disappointing aspect of the Russian government's interactions with the West in general and Ukraine in specific is that its threats are broadcast so widely and its enticements channeled so narrowly.

Miners have paid for coal in lives; one manager pays with his job (sort of)

 It's a sad comment that Ukrainian miners die so regularly that new incidents cropping up could be better classified as updates than news.

Now, at the very least, a small step has been taken (Feb 6): Zasyadko General Director Yefim Zvyagilsky (in charge since 1979!) has been forced from his post (though no official blame has been placed on him for running the most deadly mine in Ukraine (by a wide margin) throughout the country's post-Soviet existence).

Though it may be overly optimistic to believe that any legislation could make it through the Party of Region's Circus of Obstructionism, and it's probably overly optimistic to believe any of that legislation will improve health and safety conditions for miners, the miners deserve better. So far the government has done nothing to improve the situation, but Tymoshenko has proven herself eager to push through privatizations, and I believe coal mines are still state industries (anyone got word otherwise?). If so, the greatest hope is that she'll turn her attention to these assets and start putting them in the hands of managers and owners who at least might expect to be fired if miners die on their watches.

speculation on the future of the Ukrainian oil and gas industry

Yuliya Tymoshenko is back and (I find the pun leaping to my typing fingers with the speed of inevitability) she's been cooking with gas. In addition to a whole raft of proposed economic reforms (including the TTI--Tymoshenko Transparency Index--which contains some admirable goals, but is ever-so amusingly self-absorbed) she's been promoting big-time gas and industry changes.

RosUkrEnergo and UkrHazEnergo

The new news is her statement that Yushchenko and the National Security and Defence Council have agreed to eliminate the RosUkrEnergo intermediary from Ukrainian-Russian natural gas trade. If true, this will be a victory for her, as she has long opposed the intermediary (for solid economic reasons, as described in detail in this article, though  the article does get embarrassingly laudatory at times). At another conference on the plans for her visit to Russia (Feb 21-22), Tymoshenko repeated that should be no intermediary. This despite the overall " harmony and understand" theme she was working on to try to put a diplomatic face on things (the Russian government has on occasion attempted to distance itself from RosUkrEnergo, likely because its lack of transparency makes it highly suspicious to the kind of energy investors Russia would like to woo, but has also never showed itself eager to eliminate the company from trade relations; Yushchenko has certainly couched his support for continuing the intermediary in "keep Russia happy" terms).

Moreover, Russia itself seems to be helping her. I thought I was going to be the first to make this connection and bring you some real news instead of bloggy conglomerations, but then I found this article at the Eurasia Heritage Foundation (anyone know something about this source?). The writer, John Marone, also noticed with interest the arrest of Seyon Mogilevich by the Russian government. The Eurasia Daily Monitor article details two prevailing theories on the arrest (that it was done by opponents of Medvedev to show they're still relevant or by Putin to put Mogilevich where he won't be talking to reporters), but Marone was more interested in how Tymoshenko might be able to use the arrest, since Mogilevich happened to be the major Russian participant in that very same RosUkrEnergo scheme.

He reports her statement on the arrest:

“The presence of additional middlemen is a sign of specific corrupt activities. The recent arrests demonstrate that the international community is following events and will not allow the development of any shadow models, including among states bordering the EU. Therefore, my position remains unchanged: all shadowy middlemen will be shut down.”

Nothing surprising there, but her discussions with them at the end of February should be fun to watch.

The White Line 

Simultaneously, she's kick-started discussion of another gas pipeline route, one that would bypass Russia but travel through Ukraine on its way to Europe. This comes at a time when another Russian-bypass pipe project proposed by EU countries themselves (Nabucco) has been foundering. (In an article called Pipedreams published the week before her announcement, Economist described the situation.)

How seriously should we take this? To put things bluntly: this sounds a lot like another Odesa-Brody pipeline and we don't hear much about that these days. Before Tymoshenko's White Line, it was the big pipeline project that was going to get Central Asian oil to Europe without Russia. As the linked RFE-RL article points out, though, Ukraine failed to find the oil to pump under Kuchma, and it's been pumping Russian oil the opposite way since 2004. While there is a prospective extension of that pipeline to Plock, there are still a lot of questions. To create another line to meet whatever unknown demand is left over with as-yet unknown supply does not seem particularly promising.

Nevertheless, even having the option on the table is a bargaining chip. And a reasonable argument can be made that a major reason for the failure of Odesa-Brody was a lack of government will to push it through and risk Russian retaliation (in forms such as raising the then-bargain natural gas rates), a lack Tymoshenko has never felt.

So throwing this idea sounds like fun to me, though I can't see why she called it the White Line and not something more like, say, TymoTunnel.

WTO and, Why Not?, the EU

Ukraine finished WTO bilateral negotiations this January (this was not a Tymoshenko thing; rather it was a steady if obscenely slow process pushed along by the last four government formations). Should the WTO officially welcome in Ukraine at its Feb 5 meeting, as Yushchenko has predicted, there will definitely need to be further reform and efforts to harmonize standards (referred to by the Ukrainian agriculture minister and indirectly by Yushchenko in his call for Tymoshenko to oversee the transition process for the grain sector). Nevertheless, Russian Finance Minister Alexei Kudrin makes his government look rather spiteful and self-absorbed for saying Ukraine (after fourteen years of negotiation; the first ten of which were a wash) has recklessly rushed in "on unfavorable terms just to get in ahead of Russia."

However long we've been waiting for this move, that Ukraine will be getting into the WTO soon is a reason for a little bit of celebrating. Tymoshenko did so by proposing that the EU join Ukraine in a free trade zone and share joint visas with it.

The strategy reminds me of an old Calvin and Hobbes comic I once read:

"Mom, can I set fire to my bed mattress?"
"No, Calvin."
"Can I ride my tricycle on the roof?"
"No, Calvin."
"Then can I have a cookie?"
"No, Calvin."
"She's on to me." 

Who knows, maybe the EU reps will be squishier than Mrs., uh... Mrs. Calvin's Mom. (Then can we have an EU *action plan*?...)

how does this strike you?

Parliamentary Speaker Vyacheslav Kyrylenko of NUNS recently said he's going to demand an explanation from Tymoshenko for allegedly suggesting that the Party of Regions might be able to join in on the coalition (she later claimed it was just a meaningless be-fair-to-the-opposition statement).

Granted that it's worth asking her to explain herself, but based on what history of principled opposition does Kyrylenko get to say, "Our bloc will never initiate the collapse of the coalition or the creation of a coalition with [PoR] and  we will demand the same position from [BYT]." It took him and NUNS three months of fighting their own prominent deputies to finally commit to BYT instead of PoR, but now he feels he has the opposition credentials to shame Tymoshenko the compromiser?

Tymoshenko and Bohatyrova in the Ukrainian Government

I guess it would not be a surprise to most folks that after traveling from California to Ukraine, Lesya and I found we didn't have enough winter clothing (you may leave your jokes about wussy Californians in the comment line if you must). Hats and gloves and boots for me--no problem. Women's boots... well...

"How is it," we said to ourselves, "that in a country where the sidewalks are often cracked, in winter lines of ice criss-cross through those cracks, night lighting is inadequate, and most people aren't traveling around door-to-door by car, how is it that all the women's boots have stiletto heels?"

Every store, every bazaar kiosk, every megamarket, it was the same story. Just about when we started to despair though, we found at least one woman trying to do the same thing.

"I'd like a pair boots: comfortable ones without heels," she said.

"Oh?" said the shopkeeper, "going to the Carpathians are you?"

Ah, Ukraine, we thought. A country of very strong women, but one where traditional gender roles are still a little too prominent.  It provides perspective on the two women in politics that this entry is about.

Tymoshenko: Beats Another Gray Bureaucrat

We've seen it before: when talk turns to Tymoshenko, the temperature tends to turn up. And since she's proved herself quite capable of rolling over less charismatic Ukrainian politicians than herself (all of them), the inevitable charge is populism.

Sure she's populist. But democracy isn't about chosing the best: that's meritocracy. Democracy is about chosing the best of what options you've got. So, for example, let's look at Tymoshenko's current campaign to sell state assets and use the money to reimburse holders of long-defunct Soviet account.

For press material, she made up a cheesy notebook! The caption reads "No Going Back!"PoR's argument isn't just Yushchenko's reasonable one that it's irresponsible to sell off major assets for a one-off handout. Or the one implied in Yu's talk about restraint in privatizations: that it's going to scare the hell out of foreign investors. Both of these are old arguments, Ty and Yu had them in 2005. The one PoR and its allies add is the complaint that people will only be recovering 1000 hr, a fraction of what they'd lost. Think about it: why would that be a big accusation unless they are also promising the same thing to their constituents, just at a future date? Nor is this behavior any less inhibited than how PoR politicians acted in power. Remember the massive pension increase the Yanukovych government made a month before the 2004 election? By comparison, Tymoshenko is taking a relentlessly principled position. After all, the next election isn't for another year and a half: she's giving people plenty of time to forget this money.

The frightening fiscal situation is similar. Inflation in Ukraine is well into double-digits for 2007, but as Dzerkalo Tizhnya points, all political parties contributed as the problem.

We move on to less certain territory with Tymoshenko's