Hot off the Action Ukraine Report presses:

The United States and Ukraine have concluded bilateral negotiations on market access issues related to Ukraine's World Trade Organization (WTO) accession.  Trade Minister Arseniy Yatsenyuk will join U.S. Trade Representative Rob Portman in Washington on March 6, 2006 to formally sign the agreement.

US down, eight more bilateral deals to go and Ukraine will be on its way to WTO membership.

Less than a month until elections, how about some debates?

Here I am agreeing with Yanukovych again. The pro-Yanu ForUm people quotes Yanukovych as "dreaming of holding TV debates with Yushchenko," and also hoping to debate with Yekhanurov.

Of course we part ways when he says that he would only like to debate with those two and none else. Watching him spar with Tymoshenko in a debate would be an opportunity I'd truly cherish. But hey, I'd love to see him debate with Yekhanurov, too. Give the man what he wants!(but let Ty come)

If a debate does happen, expect more pointless discussion of making Russian a second national language. I'm with Tymoshenko, if this issue was important to Yanukovych, you might have expected him to do something, anything, about it during his two years as Prime Minister. He didn't because it's both divisive and relatively unimportant - a bad thing to talk about while in power, but a great subject for pre-election rhetoric. Meanwhile the rest of the world, including Russia, is learning ESL.

NATO is also likely to come up, because so many Ukrainians are opposed and the anti-Oranges have been on a signature drive against it. Would have been nice if the Yushchenko government had ever done that public awareness/public support drive they have been meaning to do for so long. Now all they can do is whine about provocations.

Strong Division

Tymoshenko has repeatedly stated that there is no way she would join in coalition with Regions of Ukraine after the election. This, of course, earns her the freedom to try to guilt NSNU into staying away as well. She adds to it accusations that NSNU is conducting secret negotiations to form exactly that coalition with Regions.

While Tymoshenko is certainly agitating for rapproachment after the election, she doesn't want to join her bloc with theirs before the election. The Pora people are wasting their time protesting in front of Tymoshenko HQ, because of this reluctance to join in a united "Orange" bloc. Well of course she's reluctant.

This is a no-brainer on her side: NSNU raises voter suspicion for, among other things, ties to big businessmen like Petro Poroshenko (nothing on Regions of Ukraine, of course, but then, who's counting?). Her bloc is mistrusted primarily for a different reason: not really having a sober economic agenda, as well as some of the accusations back in September that she was trying to reprivatize assets to Privat Bank because she had ties to it. If BYT and NSNU combined they would be more likely to pool voter suspicion than admiration - leading to fewer votes overall. On top of that Tymoshenko would have less control over her own chunk of the total, and less personal visibility (oddly enough, Interfax places her as having the highest voter confidence of any Ukrainian politician. Perhaps she's getting a good response to her public relations campaign?). Since she's obviously going to make the 3% barrier, there's no compelling reason to join with Yushchenko at all.

The only folks who would really have benefitted would have been, not surprisingly, Pora, because right now they are getting only around 1% support on polls, which would not be enough to get them into the Rada. Which begs this question: why are they whining about attaching themselves to blocs when they could be spending their time trying to raise their support base to the 3% minimum for getting seats?

A Word To Pora: Take those activists off Tymoshenko's doorstep and do something useful with them, for goodness sake. They'd be more effective campaigners for you if they were doing practically anything else, including cleaning litter of the street.

As a side note, Pora is technically now in the Klitchko bloc. Again a group defined by ideology drifts into a group defined only by a single charismatic personality. Much as I like Klitchko, this is sad.

Media

Yushchenko has called for denationalization of the media, which is good. Last year at the height of OR optimism, some important figures were calling for the opposite: more state media in the form of a new public broadcasting TV station. In this country, state-controlled media is an easy tool for producing biased news (as the run up to November 2004 proved); much better to use funds elsewhere.

Gas Gab

Zerkalo Nedeli is still hammering away at the gas deal, Ukrainska Pravda is balancing it with a horrifically translated but interesting article on gas and oil theft.

Yekhanurov, by contrast, said last week that Ukraine and Turkmenistan had solved their gas dispute, a claim echoed by RFE-RL using info from ITAR-TASS. What was discussed and decided doesn't seem solid enough to ensure anything like long-term price stability, but it will last through the election, after which it will be the new Parliament's problem.

Well, Crap 

It seems I forgot to spit over my shoulder three times against bad luck after I wrote this:

There's a major bright spot in this lack of non-gassified news, though. What we aren't hearing about are accusations of media crackdowns and use of administrative resources that came up so often in the last election... All the folks who took part in the ORev protests can take heart: whatever problems there have been in Ukraine since January 2006, their efforts won them not only one fair election, but if things continue on like this, a second one as well.

And now I have noticed irksome examples of both. Foreign Notes brought my attention to a newspaper office burning in L'viv and a journalist beating in Donetsk (there was another firebombing claim last fall from a Ukrainian tabloid, not terribly well sorted out). Also Regions of Ukriane broke into a school to get one of their deputies un-fired.

And for the administrative resource, I have political commentary from one of my favorite sources, my mother-in-law: 

…Today the president of our academy came to visit us at the institute and campaign for BYT (Block of Yulia Tymoshenko). Our academy president wants to keep his seat for more than one term, that's why he decided to go into politics and chose support to support this bloc. He seems pretty sure that Tymoshenko will be the new Prime Minister.

So they go around all the institutions belonging to our system and "persuade" people to become BYT party members. Well, people here got used to this kind of requests from higher echelons, that's why they spend all their efforts to ensure the president's support by making their subordinates enter BYT. (e.g. one girl is working on her thesis and she was afraid that if she didn't become a BYT it would reflect badly on her chances. "It's a lucky thing the ballot is still secret" she told mom.)

The election campaign is getting heated up. Tymoshenko has chosen a tactic – sidle up to the electorate: a minimum of the external advertising, very few billboards (it's true), no TV advertising, not a word of advertising on Radio Era either. Instead, you get roundtables to help ordinary people to solve some problems, like "have your been granted the right pension?", etc. They also help orphanages, schools, kindergartens and individual pensioners. So they're at least somewhat useful.

The Regions guys, on the other hand, have been trying to give everybody the shakes: they blather on in sepulchral voices that "Alles Kaput": the economy, social status and international status. And when the proffessor comes, everything will be go back to the good old days...

Man I hope they put together a functioning judiciary sometime soon, so some of these problems can actually get dealt with. A little more refugee friendliness would be nice, too.

Other Bits 

In good news: Ukraine's finally gotten market economy status from the US. 

In entertainment news: Vera Serduchka (as always). Serduchka is officially backing the Green Party. I'm sure the similarity of their political views is obvious.

OK I Admit It

Not a terribly insightful entry today. As penance, here are a few Donetsk pictures. 

Waiting on March 26

There aren't many new proposals out there, what with the March election coming up and no politician wanting to get involved in anything. So it looks like the continuing rumble of the gas crisis is again the focus of attention. However, to be perfectly honest I've run out of gas-related entry titles that don't explicitly refer to flatulence, so I think going to stick with this more subdued title.

There's a major bright spot in this lack of non-gassified news, though. What we aren't hearing about are accusations of media crackdowns and use of administrative resources that came up so often in the last election. This is true even from Regions of Ukraine. All I could find was a tiny bit of whining about decal removal from Pora which is directed at Kyiv Mayor Oleksandr Omelchenko not the Yushchenko government, and the usual rubbish from Ne Tak.

This is a phenomenal improvement on 2004. All the folks who took part in the ORev protests can take heart: whatever problems there have been in Ukraine since January 2006, their efforts won them not only one fair election, but if things continue on like this, a second one as well. 

Can we try that whole "gas agreement" thing one more time?

So now, according to Yekhanurov, the Ukrainian government is “willing to change the gas intermediary if Russia wants to,” picking up on recent Putin comments about RosUkrEnergo not being totally transparent. Ukrainian Radio went ahead and said they were already in negotiations, despite the fact that Yekhanurov hadn't even sent a letter to Fradkov about the idea yet. Nice optimism.

Along with Yekhanurov's wishful thinking, Yushchenko is backpedaling on his support for the gas agreement with Russia, but trying to spin it as merely a natural continuation of his commitment to transparency. His change of heart is by no means too early. Finance Minister Pynzenyk says that at the current price, 2006 budget targets are only barely reachable. Fuel and Energy Minister Plachkov admits that unknown Ukrainian businesspeople own stakes in RosUkrEnergo.

Worst of all, according to the Eurasia Daily Report, the additional shadowy intermediary, UkrGasEnergo, between gas and Ukrainian consumers is likely meant to help provide Russia with a wedge for prying Ukrainian transportation assets away from the nation. The price of gas is deeply volatile, and dependent on a Turkmenistan which has stated its interest in raising prices, but at the current price pegs Naftogaz is primed to quickly fall deep into debt, at which time Ukrainian ownership of its own transportation infrastructure will be funneled through the two layers of intermediaries to Russia.

Kommersant thinks the price pegs will hurt Russia, because the country won't be able to pass along the price hikes from Turkmenistan, but their reasoning seems doubtful, since it relies on the effectiveness of price controls and seems at variance with everything else I'm reading. (Execrable formatting in the article, at least if you’re using Firefox, so if you want to read it, I suggest cutting and pasting to a word file)

The G8 ministers (aside from Russia) took one look at this mess and said: give us market mechanisms and diversified supply.

Half-Empty and Half-Full Economists  

Economic reports don't get much more diametrically opposed than this: 

Anatoliy Halchynskiy rips in to the Yushchenko government's long-term economic strategy in this article in Zerkalo Nedeli. To him, the basic problems are that the Yushchenko government did not use its phenomenal early popularity to push through necessary reforms, and has now "forgotten what the word means". Furthermore, since reforms haven't provided the cash, the massive social spending increases of last spring are now unsupported.

On the other end, SigmaBleyzer begins its January 2006 report, which assesses much of 2005, with the words, "Despite early concerns about Ukraine's economic situation in 2005, the country ended the year with a relatively good performance overall."

They point out that while budget expenditures went way up in 2005, the elimination of a number of privileges and exemptions allowed the government to collect enough new tax revenues to pay for the spending, subsidized by the massive addition of Kryvorizhstal privatization money. (whether or not more of that money should have been put into capital improvement, like desperately needed reductions in energy consumption by major industry, is not covered). They say that if the $95 figure holds through the next year or so, (a big if, as we know), then Ukraine will be challenged, and lose perhaps 2% GDP growth, but this is acceptable and much better than some of the scare figures that came up at the end of December.

Not as bad as it could have been, is their final estimation.

One last little bit of privatization news thrown in here: Parliament imposed a moratorium on the sale of Nikopol Ferro-alloy Plant, for the same old "strategic importance" reasons that held up the sale of Krivoryzhstal.

Sharpening Teeth for the Campaign

Yushchenko gave his annual address to the Rada. Zerkalo Nedeli responded with little enthusiasm. A primary example:

The major emphasis in the presidential speech was laid on the constitutional reform. In fact the constitutional reform was referred to as a main state concern. Everyone who is aware of the nature of Yushchenko’s claims to the political reform can draw the following conclusion: the fight for restitution of authority will be his priority for this year. Such a fight, as a rule, leaves too little time and strength for the implementation of the other tasks [many of which ZN enumerates in the article].

And while Yushchenko was giving his speech, his party was accusing Tymoshenko of carrying out smear campaign. They were also accusing Regions of Ukraine deputies of having no political platform, and, by the way, of being traitors. (the latter accusation is a commentary on their behavior in the gas, milk, and meat disputes with Russia)

Yanukovych came back blaming Yushchenko and his party for Ukraine’s economic woes.

As for the neighbors, Yushchenko again gave lip service to the importance of relations with Russia. Yanukovych said the same thing, but also talked about continuing to work on the Action Plan signed with the EU. The latter positioning beats his stance in 2004, when Yanukovych was notoriously quiet about EU entry in fall 2004.

In contrast, Security Council Chief Anatoliy Kinakh said that since market relations seems to be the order of the day with Russia now, maybe that means Ukraine should get market rate rents from Russia for the Black Sea fleet. After all, Russia unilaterally scrapped a gas deal good through 2009 based on market principles, why not scrap the Black Sea Fleet agreement, good through 2017, on those same principles?

It's a gas, gas, gas

Zerkalo Nedeli has recently translated their analysis of the gas agreement based on information released January 31. The fact that this info was only released on Jan 31 is indicative of the counterproductive secrecy involved in this whole affair. Roman Kupchinsky, formerly head of RFE/RL Ukraine condemns the agreement in a Kyiv Post opinion article here, and does so specifically because of the associated secrecy. The AP basic summary of the reformulated agreement as of Feb 2 is rather more optimistic; and Abdymok also has a more measured take on the agreement and repeats a good (oft-repeated) quote from Yekhanurov “people can curse me for signing the deal this summer, but some may remember me with a kind word when they go home to their apartments tomorrow.”

But ZN is frothing. Basically it talks about how an additional three documents were part of the January 4 agreement. They were sufficiently poor to offend almost the entire Cabinet of Ministers (the one that's being kicked out, the one that's majority NSNU deputies, Yushchenko's own party):

In fact, Minister Plachkov was the only Cabinet member who felt good about the gas agreements with Russia. Some ministers kept silent, but the majority was most censorious. Amongst the latter were [Minister of Economy] Arseniy Yatseniuk, Viktor Pynzenyk, [Deputy Ministers of Foreign Affairs] Volodymyr Ohryzko and Anton Buteyko, [Minister of Defence] Anatolioy Gritsenko, [Minister for Emergency Situations] Viktor Baloha, [Minister of Construction] Pavlo Kachur, [Minister of Transport] Viktor Bondar, Pavlo Ihnatenko and… [PM] Yuriy Yekhanurov... Presumably, the Prime Minister learned about it a bit earlier than the other Cabinet members, but long after the capitulation had been signed.

And what was ZN's own analysis? (paraphrased)

1) Ukraine has leased its underground storage facilities to RUE at a trifling $2.25 per 1,000 cubic meters for a term of 25 years. [compared to $14 and $17 for European-owned gas]

2) Whereas the minimal European transit tariff is $2.5 per 1,000 cu m, Ukraine will charge RUE and Gazprom a mere $1.6 for pumping natural gas through its pipeline (and this tariff has been set for 25 years!)

3) The national company Naftogaz... loses the right to supply natural gas to industrial consumers, starting next year  - to the communal sector... It loses the right to independently manage the underground storage and distribution of natural gas, or to control the accounts of regional gas distribution companies...

4) ...If one day RUE decides to break the contract on supplies of natural gas to Ukraine, there will be no one left holding the bag.

5) Naftogaz finds itself in a bind. Being cash-strapped, it will be simply unable to properly maintain the national gas transportation system, repay credits, and even pay regular deductions to the central budget. The company’s solvency and financial stability will be reduced considerably. Subsequently, the absence of new credits will stall modernization projects.

6) When supplies of Turkmen natural gas are terminated in 2007, Ukrainian communal consumers will have to pay at least $95 to the joint venture (and not $39 as currently).

7) The joint venture becomes a strong factor of property repartition in Ukraine. In the first place, this concerns the chemical, cement, and metallurgical industries. This instrument may also be used in “regulating” the political situation in this country.

They thought it was rather ironic that Mr Kostusiev, Chair of the Antimonopoly Committee, took a leave of absence for his campaign as a deputy for Regions of Ukraine (with the motto “God and Russia are with us!”) then came back and ruled that the new joint venture was not a monopolist.

Which, if accurate, pretty much overwhelms my old evaluation that it was a compromise in a tight spot later found to have had some additional negative clauses not released to the public. That's a lot more than a simple compromise.

Poll Numbers and Politics

Just some news roundup stuff. 

Razumkov poll numbers from last week:

29.9% Party of Regions
19.6% NSNU
13.7% Bloc Yulia Tymoshenko
6.8% Communists
6.7% Socialists
3.3% Lytvyn's Pop Bloc
2% Vitrenko Bloc
1.5% SDPU(u) and the Ne Tak-ers
1.1% Pora

On the political front, Tymoshenko seems to be at least acknowledging that the 2006 vote will be critical, and that her bloc and NSNU will need to unite with each other, if they don't want to do so with Yanukovych. She's also created a political documentary on herself as a samurai, which may be a less optimistic self assessment than Zinchenko's assertion that NSNU will form a majority in the new government.

And speaking about leaving reality... NSNU and BYUT rapproachement is unlikely if Bessmirtniy can stop it, judging by an Ukrainska Pravda interview (rus) in which he likens Tymoshenko to a Facist:

Question to Roman Bessmirtniy:
Dear Roman Petrovich: How would you describe your relationship with Victor Yuschenko? Why do you dislike Timoshenko so much and why does she strongly dislike you too? And, in general, who dislikes who the most?

Answer:
My relationship with Yuschenko is stable.
As for Tymoshenko: love in politics is out of the question. There exist political interests. Our interests do not coincide. I've never supported advocates of ideologies that verge on radical trends. Solidarism, proclaimed by Yuliya Vladimirovna, was the foundational element of Fascist ideology in its time.

Way to drag the discussion into the toilet, Roman. I'm sure it will help promote constructive dialog and necessary rapproachment in the future. Or would you prefer linking with Yanukovych, the man you think you organized an OR coup d'etat against?

Gongadze Case Dragging Along (Way in the Background)

It's sad that the gas deal is such a huge problem that it's distracting from the case against the killers of Gongadze. (which has been explicitly set up not to implicate any organizers, but just get the thugs who carried out the order). The Kyiv Post is going against the flow in this, but that's not necessarily a great thing. They have a news article on the delays in the trial, but on the other hand, they don't have any news on the gas deal, aside from an outside editorial opinion from Kupchinsky.

Meanwhile, Yushchenko is expressing indignation about the fact that the whole case is going on in secrecy. It rings rather hollow considering the secrecy of the gas deal, and the impotence of those protestations. How about shaking up the PGO instead of just trying to look indignant?

because it's mud-slinging month

Well, February has begun and Foreign Notes has an accusation passed along from Svoboda that RosUkrEnergo transferred $53mn to a company partially owned by Yushchenko's brother just before the gas deal on January 4. Then another accusation, this time against Tymoshenko.

More, but also more moderate accusations from Tymoshenko come through RIA Novosti. Again she faults the Yushchenko government for an disadvantageous gas deal and says it was motivated by politics, not economics. Then different accusations from her that Yushchenko had struck a deal not to prosecute Kuchma.

In order not to make Yanukovych feel left out, Lutsenko reminded the ICTV audience on Sunday that the court ruling overturning one of his criminal convictions from the 70s was forged. 

Unaccountable Speakers

I expect the accusations to get more shrill throughout this month, especially from the smaller parties. To start with, there are plenty of legitimate reasons to find fault with the behavior of the Yushchenko government these past few months. Who knows what went into the January agreement? Very few people, since one of the problems with it was that it was negotiated in secrecy. There will also be Yushchenko's call for a referendum on constitutional reform, which he should not be able to find support for with his low popularity and thankfully so. But while he continues to talk about calling for a referendum, expect more sharp criticism.

What concerns me much more than the grounded criticism about the referendum or the gas deal are the accusations like those highlighted by Foreign Notes - ones which are currently impossible to prove. These gobs of grime are remarkably easy to hurl around Ukraine, primarily because the country's judiciary is non-functioning and untrustworthy. As I said in perhaps my favorite entry of 2005: 

Regardless of whether or not the [Yekhanurov] Cabinet can enact real reform and Yushchenko can win back voters, if the judiciary remains unable to see a case through to completion, progress in Ukraine is going to be extremely slow. In lieu of progress, there will simply be more accusations, because accusations are free, and accusers will not need to worry about being called to account.

Campaigning politicians, when they get down to the last leg of a campaign, seem to always end up resorting to crude negative advertising. The problems with this is that it almost always means dragging down discussion from critical issues to side issues politicians think they will be able to score points on. Furthermore, without a court able to investigate the wilder accusations from politicians and decide on their validity in a manner Ukrainian citizens find trustworthy, there is almost no reason for politicians to temper their criticism. Why bother when the more strongly-worded version will sway more people and no one will hold you account?

All in all, I am so loathe to watch the icky media spectacle I expect that I'd almost rather read about the Satanic Odesan Vampire Woman. 

I've started a list of March 2006 Election links over on the left sidebar, if you haven't already noticed. If you have suggestions for other links to add to the list, please email me.