JANUSZ BUGAJSKI: THE YEAR AHEAD PAGE FORECASTS FOR 2013: BUDGET PAGE WAKE UP CALL: 10,000 PROTESTERS PAGE WILL BE A TEST DEFICIT, PRESSURE ON BUSINESS RALLY AGAINST POLLUTION BY FOR UKRAINE'S INDEPENDENCE 6 AND DECLINING INVESTMENT 24 OBSOLETE OLIGARCH-RUN PLANTS 34
№ 20 (43) DECEMBER 2012
Why Ukraine should avoid the trap by all means
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Wishing you a Merry Chri mas and a New Year filled with joy. May the new year bring you peace, happiness and prosperity! |contents briefing focus The US Revokes Janusz Bugajski In Whole or in Part? Visa for First on 2013 as a testing year The Kremlin will try to Deputy Prosecutor for Ukraine and threats to drag Ukraine into the General Renat its independence Customs Union using Kuzmin economic tools 4 6 8 Politics Ariel Cohen on the Divide and Conquer: The Batkivshchyna’s prospect of the Kremlin is preparing to Andriy Pyshnyi: The Magnitsky Act being keep Ukraine under its further Ukraine is applied to Ukraine control after the 2015 from the Customs presidential election Union, the better 20 10 13 12 15 Neighbours ECONOMICS Alone at the Top: Despite Russian philosopher Deficit Looming Large: The his initiatives to fight Igor Chubais: Hoping government is likely to take corruption, to many, Putin for change through some radical moves to fill in the seems increasingly isolated elections in Russia is depleted budget and out of touch naïve 2013 18 20 22
• 73rd place (of 144 countries) in the Global Competitiveness AFRICAN LEVEL Report (World Economic Conditions for condu ing Forum, 2012) business in Ukraine High Risk Zone: The are among the Between a Rock and Ukraine’s Robber wor in the world – the evaluation investment climate in of international a Hard Place: Barons: Where in itutions:
• 137th place (of 185 countries) in the Doing Business rating (index on the Ukraine in 2013 will orld A tough year they come from ease of doing business) compiled by the W th Bank and the IFC (Russia – 112 , E onia – 21 and Georgia – 9th) • 144th place (of 176 countries) not intimidate Russia 012 from for non-oligarch in the Corruption Perceptions Index – 2 Transparency International (together with epublic, Bangladesh, Cameroon, Central African R Congo and Syria) alone nd business • 152 of 183 countries with regard to the total tax rate. In Ukraine, it con itutes 57.1% (World Bank and PricewaterhouseCoopers research) • 163rd place (of 179 countries) in the Economic Freedom Index – 2012 • Down to 2.14 oundation) (Wall Street Journal and the Heritage F on a 5-point scale – the level to which the Inve ment 24 • 181 place (of 183 countries) 25 26 orld Bank Attra iveness Index for in the ease of paying taxes ranking (W ) Ukraine in Q3’2012 has fallen. and PricewaterhouseCoopers research The level of Ukraine’s attra iveness • 4.43 on the 10-point scale aluated aine for inve ors, which has been ev of the Inve ment A ivity Index in Ukr ey by the European Business Association in O ober 2012, based on the results of a surv opean with the support of InMind marketing INVESTIGATION of the managers of 253 American, Eur research company since 2008, has fallen SOCIETY , condu ed . and Ukrainian enterprises to the lowe level in the la three years by Research & Branding Group The Ghosts of Industrial Past: Stolen Air: The half- Easy Come, Easy Go: Industrial depression in the million population of Why Ukrainians Donbas depopulates towns Mariupol in Eastern are becoming more once built around plants and Ukraine is standing for its reluctant to get coal mines right to breathe safely married 30 34 37 history culture & arts To Marry or not to Marry: Carol of the Bells: The Learn to Listen to Yourself: The evolution of marriage birth of the popular Polish DJ with Ukrainian roots from forced to voluntary, Christmas tune in pre- Cai Caslavinieri talks about from church to civil, and from Christian Ukraine Ukrainians in Poland, commercial convenience to love art and freedom of music choice 40 43 44 Wishing you a Merry Chri mas and a New Year filled with joy. navigator May the new year bring you peace, happiness Authentic Christmas: The Ukrainian Back to the Village: Open-air museums and prosperity! Week offers a selection of films and invite everyone on a journey back CDs that reveal Ukrainian winter in time festivity rituals in a creative modern interpretation 46 48
Natalia Romanec, Shaun Williams, Editors; Anna Korbut, Translator Mailing address: PO Box 2, Kyiv, 03067 The Ukrainian Week № 20 (43) December 2012 Publisher address: vul. Mashynobudivna 37, Kyiv 03067 Ukraine Founder: ECEM Media Ukraine LLC Publisher: The Ukrainian Week LLC E-mail: [email protected], Tel.: (044) 351-1300 First published in January 2010 www.ukrainianweek.com State registration certificate Print: The Novy Druk, LLC, 1 Mahnitohorska Str. Series KB No18352-7152ПР of October 24, 2011 Ordering number: 12-7239. Print run: 15,000 Bohdan Andriytsev, Director, ECEM Media Ukraine LLC Sent to print on 14 December 2012 Serhiy Lytvynenko, Editor-in-Chief, The Ukrainian Week Free distribution № 20 (43) december 2012|the ukrainian week|3 briefing| 27 November 6 December 10 December Viktor Yanukovych signs the The Senate passes the The EU commits to signing the Law on the Referendum. Go Magnitsky Bill envisaging Association Agreement and FTA to p. 12 for more details on sanctions against blacklisted with Ukraine in November 2013 the threats of the new law Russian officials and the provided that Ukraine shows freezing of their assets. progress in several areas The US Bans Visa for Prosecutor Key people in the Yanukovych regime have been banned from traveling to the West, but the first “victim” of this ban appears to be a provocateur
Author: krainian officials are beginning to be persona Oleksandr non grata in the West. At least, this is the Mykhelson conclusion made by a good few observers of Uthe scandal surrounding the First Deputy Prosecutor General of Ukraine, Renat Kuzmin, whose visa for entry into the USA was revoked. As is well-known, in early October, following the approval of the US Senate resolution regarding official Kyiv, which proposed banning representatives of the Ukrainian Government, involved in the Tymoshenko case from entering US territory, including the Dep- uty Prosecutor General, Kuzmin wrote a letter to the US Congress and Vice President Biden with a pro- posal to address the US Congress in order to tell them the “truth" about Tymoshenko and her com- plicity in the murder of four people. However, on 19 October, the US Ambassador to Ukraine, John Tefft, the American side is not responding to the applica- personally informed him of the cancellation of his tion for the transfer of this evidence, made by the multi-entry five-year visa. General Prosecutor’s Office of Ukraine. Moreover, An open letter to the US President Barack Obama the Deputy Prosecutor General asserts that “On the dated 3 December, states that American officials are initiative of some American and Ukrainian politi- supposedly hampering investigations in the case of cians, the US Justice Department has developed a the 1996 assassination of Yevhen Shcherban. Kuz- detailed plan to counteract and destroy the case on min claims that the US Justice Department has doc- the assassination of Yevhen Shcherban.” Kuzmin uments and evidence provided by Petro Kyrychenko, then discloses highly controversial details. Accord- a former aid of Lazarenko, Lazarenko himself and ing to the letter, he was supposed to be arrested on ex-Major Mykola Melnychenko, which confirm Ty- the territory of the USA, for exerting pressure on moshemlo’s guilt. However, Kuzmin complains that Melnychenko. So Kuzmin would have languished in
The month 1 December 1991 3 December 1722 6 December 1903 in history Over 90% of the 32 million Hryhoriy Skovo- Mykola Kolessa, composer Ukrainians who voted in the roda, Ukrainian and the patriarch of Ukrai- national referendum supported enlightener phi- nian conductor school,is independence for Ukraine losopher, poet born and teacher, is born 4|the ukrainian week|№ 20 (43) DECEMBER 2012 |briefing 11 December 12 December 13 December Oleksandr and Andriy Tabalov 127 WTO countries con- Viktor Yanukovych signs elected to theVR under United Op- demn Ukraine’s plans to a decree to re-appoint position list are the first crossovers revise imports duties Mykola Azarov as Premier in the new parliament. UO will de- after the VR votes in his mand withdrawal of their mandates favour with 252 votes
“green” diplomatic passport, which he has, but which does not provide for such immunity). At the same time, well-informed sources of The Ukrai- nian Week stress that the Ukrainian official could only be arrested in the USA for espionage or a fel- ony offence. In a 2010 interview, Kuzmin remarked briefly that he was conducting “investigative proce- dures” with Petro Kyrychenko in the United States. If there was no official permission for this from Read more on the Magnitsky Act and its competent US bodies, Kuzmin clearly violated consequences for American law. However, as those interviewed by Kyiv officials on page 10 The Ukrainian Week stated, he would only have been expelled from the country for doing this, not arrested. The lack of reaction from the Ministry of For- eign Affairs of Ukraine, the Prosecutor General and the Presidential Administration to the “diplo- matic incident” can only be evidence of the at- tempt by the Ukrainian government to distance it- self as much as possible from the incident with Kuzmin, saying in effect, that this is a personal is- sue, in order to avoid suddenly coming under the heavy hand of the US. expert opinion Steven Pifer, US Ambassador to Ukraine in 1998- 2000 and Senior Fellow at the Brookings Institution Ukrainian-American relations have deteriorated due to the democratic regression that has taken place in Ukraine over the past two years. This includes - but by no means is limited to - the selective prosecution of former government officials such as Yulia Tymosh- enko. Mr. Kuzmin's letter will not change that. I found the letter odd for a couple of reasons. First, it is odd for a foreign government official of Mr. Kuzmin's rank to send an open letter to the president of the United States. I assume that he does not expect a reply. Second, it is odd that Mr. Kuzmin believes the U.S. Department of Justice would elaborate a plan aimed at discrediting him and is an American jail, had the ex-Major not warned him worried that he might be arrested. That is not the way the Department of Justice of the insidious plans of adversaries on the other works. Moreover, if Mr. Kuzmin wants to travel to the United States on official side of the ocean. business connected with his duties as deputy prosecutor general, he would as a Specialists in the field of diplomacy, questioned Ukrainian official normally apply for a diplomatic visa that would confer immunity by The Ukrainian Week, see this story as a bad protecting him from arrest. Finally, it is hard to understand why the Ukrainian -gov joke. According to all diplomatic standards, deputy ernment continues to have Mr. Kuzmin out in public addressing Western audiences prosecutor generals and even prosecutor generals so often. I do not think that helps to make the government's argument. In Sep- tember he appeared at a conference on a panel regarding the Tymoshenko case. do not write letters to the presidents of other coun- He sought to persuade the audience that the Ukrainian legal system was impar- tries. The situation regarding the revocation of tial, that the government did not selectively prosecute former officials, and that it Kuzmin’s visa also seems strange. It is known that had correctly handled Tymoshenko. Judging by the reactions I heard from many it was not a diplomatic visa, which ensures immu- Americans and other Europeans there, his presentation and comments had ex- nity against criminal prosecution (in contrast to a actly the opposite impact.
9 December 1863 17 December 1897 24 December 1982 Borys Hrinchenko, writer, The Kharkiv Locomo- An-124, the third larg- linguist and author of the tive Plant builds the est operating cargo first fundamental diction- firstU krainian steam aircraft designed by ary of the Ukrainian locomotive the Antonov bureau language, is born in Kyiv, makes its first flight № 20 (43) DECEMBER 2012|the ukrainian week|5 Focus|Ukraine in 2013: National Security DANGERS TO UKRAINE’S INDEPENDENCE The country’s sovereignty will be challenged through a combination of domestic turmoil, Western estrangement, and Russian assertiveness
Author: kraine is facing a testing Janusz year in its development Bugajski, as an independent state. Senior UIncreasing alienation from Associate at the West will make Ukraine more the Center for vulnerable to Russia’s political Strategic and pressures; such a scenario can International radicalize society and raise the Studies, specter of national instability. Washington DC Geostrategic Setting A key priority that Vladimir Putin set for his third presidential term was the creation of a Eurasian bloc to balance the European Union in zakhstan, and the creation of a the country’s territorial integrity and the West and China in the East. broader Eurasian Economic statehood. This would enable Russia to Union by January 2013. The EU underscores that strengthen its position as a “pole Putin has also declared that Ukraine’s democratic reversals dis- of power” in a “multipolar” world. Moscow will strengthen the Col- able the signing of an Association Such a grand plan envisages the lective Security Treaty Organiza- Agreement and a comprehensive integration of former Soviet re- tion (CSTO) by enhancing foreign free trade accord. There is little indi- publics, with tighter economic policy coordination within the cation that this position will change links culminating in a political and bloc. Although Ukraine currently given Brussels criticism of the parlia- security pact. By solidifying eco- stands outside these Russo-centric mentary elections and its demands nomic, security, and political structures, the Kremlin has for releasing Yulia Tymoshenko, bonds it becomes less likely that stressed that all formats would be Yuriy Lutsenko, and other political Russia's neighbors will be in a po- open to other states, primarily to prisoners. In the longer term, sition to join alternative alliances members of the CIS and to associ- Ukraine’s political estrangement such as NATO or the EU. ates such as Ukraine. would mean a permanent blockage In May 2012, Putin signed an from the EU project. Executive Order On Measures to Sovereignty Challenged Although Ukraine may be drawn Implement the Russian Federa- Ukraine’s political regression plays into the Eurasian economic struc- tion’s Foreign Policy. It instructed into Moscow’s hands and presents a tures as compensation for its exclu- state organs to focus on the inte- direct challenge to its independence sion from the EU, such moves will gration processes within the for three core reasons. First, it will further disqualify the country from Commonwealth of Independent distance the country from the eco- mainstream Europe. Membership of States (CIS) as a national priority. nomic and security benefits of inte- the post-Soviet Customs Union These are to include numerous gration with Western structures. would undermine qualifications for sectors, including economic, se- Second, the lack of credible alterna- free trade and other EU benefits. curity, and law enforcement. The tives in Europe can pull the country President Viktor Yanukovych and Order envisages deeper Eurasian into a “Eurasian” framework based the Party of Regions elite may fear assimilation within the frame- on authoritarianism and statism. that their business ventures will suf- work of the Customs Union and And third, most ominously, it can di- fer from harsh competition with the Common Economic Space be- vide Ukrainian society and generate Russian oligarchs. But the carrots of tween Russia, Belarus, and Ka- social instability that could threaten cheaper energy and substantial loans 6|the ukrainian week|№ 20 (43) DECEMBER 2012 Ukraine in 2013: National Security|Focus wants to buy into Ukraine’s gas pipe- politics the national crisis will be- line or ensure Kyiv’s membership of come critical. the Customs Union. If economic con- ditions continue to deteriorate and Defending Ukrainian the government becomes insolvent, Independence Kyiv will find itself precariously ex- To uphold Ukraine’s independence posed to Russia’s enticements. and prevent a dangerous spiral of de- stabilization, the government needs Security Dimensions to focus on three key national inter- In the security arena, Ukraine’s “non- ests. First, above all, it must more ef- bloc status” underscores that the cur- fectively balance Kyiv’s international rent government no longer aspires to connections between East and West. join NATO. The rationale for interna- It can temper the Kremlin’s designs tional neutrality was to stabilize rela- by relaunching the EU association tions with Russia and lessen Mos- track through a commitment to re- cow’s pressure on Kyiv to distance it- leasing prisoners that Brussels con- self from the West. Nonetheless, siders to be political hostages. It can permanent neutrality may encourage also revive relations with NATO by the Kremlin to become even more as- participating in Alliance operations sertive, and without the realistic and enhancing its military and politi- prospect of NATO accession as a bal- cal inter-operability. ancer Ukraine could be drawn into Second, Ukraine needs to wean Russia’s organizational constella- itself off its dependence on Russia’s tions. energy supplies and develop a more In the worst-case scenario, the effective energy strategy. Russia is Ukrainian government’s inability to defend the country from gradual ab- An escalating national sorption into Eurasian organizations and its widening estrangement from crisis could challenge Western structures could precipitate the integrity of the state an internal implosion. Dissatisfac- tion with receding European pros- by raising calls for pects and a consignment to neutral- substantial regional ity or a Russian-centered bloc, espe- cially if accompanied by declining autonomy economic conditions, can alienate from Moscow may convince Kyiv large sectors of Ukrainian society. refusing to cut gas prices for Kyiv that the Customs Union is more The reaction of the Ukrainian while proceeding with the South likely to maintain their power than government to growing social unrest Stream gas pipeline designed to by- the political liberalization demanded would determine whether the coun- pass the country. However, Mos- by the EU. try descends toward conflict. A cow’s policies are a blessing in dis- Economic conditions are work- crackdown is less likely to cower so- guise, as they can reduce Ukraine’s ing against Ukraine. For instance, ciety than in Russia or Belarus and it dependence on gas imports from Kyiv is running out of options to fi- could ignite several destabilizing Russia, diversify energy sources, nance USD 4.3bn of outstanding trends. It would further polarize and boost gas extraction in the Black foreign-currency debt in the first half radicalize Ukrainian politics, draw Sea, encourage the construction of of 2013. To regain access to IMF clearer battle lines between support- an LNG terminal near Odessa, and funds and avert a financial crisis, the ers and opponents of a union with promote energy conservation. government needs to agree to raising Russia, and become increasingly Third, Ukraine must avoid sink- gas prices and adopting a more flexi- linked with regional differentiation. ing into the category of a dictatorship ble exchange rate. In sum, the Ukrai- Such a scenario could heighten in international perceptions and be- nian economy is rapidly declining the resentment of Western and Cen- coming indistinguishable from Rus- and revenues are falling as the euro tral Ukraine not only against the sia, Belarus, or the Central Asian re- zone crisis lowers demand for steel country’s democratic reversals but publics. To exhibit their governing and other Ukrainian exports. With- also in opposition to another close credentials, maintain internal stabil- out an IMF agreement, Ukraine’s alliance with Moscow. Such develop- ity, and reinvigorate Kyiv’s Western limited options include turning to ments could severely undermine the connections, the authorities need to Russia for loans and thereby increas- current government, precisely the demonstrate a commitment to hu- ing its dependence on Moscow. scenario that Ukraine’s “non-bloc man rights and the democratic prin- Energy also remains a favored status” was supposed to prevent. If ciples undergirding the OSCE, the weapon for the Kremlin in exerting mishandled, an escalating national organization Kyiv will be chairing in political pressure on its neighbors. At crisis could challenge the integrity of 2013. Ultimately, Ukraine’s key na- present, Ukraine is cutting Russian the state by raising calls for substan- tional interest, to uphold its indepen- gas imports because of the high tial regional autonomy, confedera- dence, remains contingent on two prices that Moscow refuses to reduce tion, or even secession. If this culmi- factors: democratic development without gaining political benefits. In nates in more direct and intensive and the freedom to decide on its in- exchange for cutting prices, Gazprom Russian involvement in Ukrainian ternational alliances. № 20 (43) DECEMBER 2012|the ukrainian week|7 focus| Ukraine in 2013: Customs Union Membership In Whole or in Part? The Kremlin will try to drag Ukraine into the Customs Union – or at least get control of some sectors of its economy
Author: t first glance, the Ukrai- Union. The first reason for this cial expansion and Russian-con- Maksym nian and Russian gov- is that joining it runs counter to trolled transnational holdings, Bugriy ernments are now in a the Family’s key goal: to grab set up on the basis of acquired A sort of a Nash equilib- unlimited power in the state. Ukrainian assets. Russian finan- rium state, where each party In fact, Ukraine’s exports to cial institutions are currently continues to stick to its own Customs Union markets are among the key lending instru- strategy: Putin demands that growing, even without member- ments Ukraine uses to buy Rus- Ukraine joins the Customs ship, while Kazakhstan’s and Be- sian gas or cover its budget defi- Union with Russia, Kazakhstan larus’ membership experience cit as they arrange the placement and Belarus, while Yanukovych suggests that this does not save of Ukraine’s Eurobonds. They demands cheaper gas. This them from all kinds of trade re- will continue to lend funds to equilibrium does not look likely strictions by Russia. For Ukrainian oligarchs. The key to last. The players’ weight cate- Ukraine, joining the Customs Russian-Ukrainian project in gories are too different, espe- Union does not guarantee that it 2013 may be the merger of the cially as the conflict of the Yanu- will be possible to avoid discrim- nuclear power and mechanical kovych regime with the West ination against Ukrainian pro- engineering industries of the two deepens. A crisis scenario ducers for economic or political countries – at least it may for- whereby Yanukovych will have motives. However, economic de- mally begin next year. Essen- to take this “last chance” to pendence on Russia may grow tially, it has already started with maintain power is possible, yet significantly in 2013 even if the construction of a joint ven- the most likely scenario for 2013 Ukraine does not join the Cus- ture – a plant for the production is for Ukraine to continue to toms Union. The key tools used of nuclear fuel in Kirovohrad stay away from the Customs for this will be Moscow’s finan- Oblast. Apparently, Russia also wants to use this scheme to gain Ukraine’s trade with Russia is intense even without access to Ukraine’s strategic ura- nium resources. Already in 2012, membership in the Cu oms Union 90% of fuel for Ukrainian nu- Exports over Jan-Sep 2012 Imports over Jan-Sep 2012 clear power plants was supplied from Russia compared to 70% in (produ share in total exports) (produ share in total imports) 2011. Russia and other Customs Union member-states are major foreign consumers of Ukrainian mechanical engineering prod- 67.1% 57% ucts, since Ukraine cannot com- pete on international markets. This will facilitate the acquisi- tion of Ukrainian mechanical en- gineering assets, especially rail- 26% 32.9% way, ship and aircraft building plants, by Russian companies in 2013. More specifically, Russian expansion in railway carriage 32.9% 32.9% building – the major part of Ukraine’s exports to Russia – will continue, bringing forth the Others threat of being replaced with im- ported products. In 2012, an en- Including tity owned by Russian business- Russia man Stanislav Gamzalov bought 25%+1 share of the Kriukiv Car Building Plant – possibly from Cu oms Union member- ates Serhiy Tihipko’s TAS Group. This may signal that Russians 8|the ukrainian week|№ 20 (43) DECEMBER 2012 Key target sectors for Russia’s possible economic expansion in 2013 The monopolization of the nuclear power sector.90% of fuel for Ukrainian nuclear power stations is supplied from Russia compared to 70% in 2011. If Russians fund the construction of a nuclear fuel production plant in Kirovohrad Oblast and two nuclear reactors at Khmelnytsk Nuclear Power Station, they could claim access to nuclear power in Ukraine in the future. The banking sector.Russian entities already control nearly 20% of the Ukrai- nian banking system. They are also major lenders to private business, govern- ment and some oligarchs in Ukraine. In 2013, the Ukrainian banking sector may grow more dependent on Russian capital as Western investors flee the country. Mechanical engineering. Uncompetitive in international markets, the Ukrai- nian mechanical engineering sector mostly sells its products to Russia and other Customs Union member-states. This will escalate the acquisition of Ukrainian mechanical engineering companies, especially railway carriage, ship and airplane builders, by Russian companies. The oil and gas sector.It depends on raw materials and loans, as well as the priority role that the Kremlin grants to the oil and gas sector. Therefore, this sector of the Ukrainian economy will be one of the most vulnerable ones to Russian expansion. Government-owned monopolist, Rosneft, can increase its presence on the oil market after it acquired TNK-BP. In the future, it may begin to dictate its rules on the Ukrainian market following Gazprom’s suit. If the Firtash-Liovochkin Group happens to lose its current political influence, Dmytro Firtash’s entities could sell their assets, including oblast gas suppliers and chemical plants, which are often acquired with Russian loans and using Rus- sian gas. In this case, the Kremlin will end up with additional instruments of political and economic pressure against Yanukovych. will later target other industry Efforts are being made to per- assets. suade Ukrainians that integra- Deals with entities that are tion with Russia is the only part of Dmytro Firtash’s em- right way. The media is mas- pire can also be interpreted as sively focusing attention on an element of Russian expan- joint Russian-Ukrainian eco- sion. Firtash’s companies get nomic research with conclu- Russian loans, including those sions on the benefits of from Gazprombank, and cheap Ukraine’s membership in the gas to increase their assets in Customs Union and useless co- Ukraine. Under certain circum- operation with the EU. The stances, these can be sold to Kremlin will probably continue their lenders. to use “stick” tactics, although Russians will also gain a more aggressively, fueling the foothold in the retail oil prod- tension around the construc- uct market. First and foremost, tion of South Stream that by- this will be done by means of passes Ukraine and discredit- Rosneft’s entrance onto the ing Kyiv’s plans to diversify its Ukrainian market. It appears gas suppliers. In the meantime, that Rosneft will soon own the it could threaten to take Lysychansk Oil Refinery. Ukraine to the Stockholm court Finally, Russia may invest for violation of the “take or significantly in Ukrainian agri- pay” principle, and cut off gas culture. Presented as a “strate- in the coldest seasons. Notably, gic partnership” in grain ex- think tanks loyal to the Party of ports, this may involve deals to Regions spread more and more buy terminals at Ukrainian comments about the crisis in Black Sea ports. the EU and the “myths of Euro- Forcing the Eurasian inte- pean integration”, while Ukrai- gration of Ukraine under Mos- nian officials talk well of the cow’s control, justified by the Customs Union or choose not motivation to survive the cri- to criticize it. Another pillar sis, is another likely scenario. supporting Ukraine’s member- Supported by many Party of ship in the Customs Union will Regions members – some of be producers oriented at the them in the government – the Russian market and non-diversi- Kremlin is already making fied producers of cars, refrigera- technological arrangements for tors, airplane engines and aero- this “alternative” path and pro- space equipment, still mostly Russian projects in Ukraine. headed by red directors. Politics|Sanctions Will the Magnitsky Act Apply to Ukraine? If passed in its universal version and applied world-wide, it could have serious implications for Kyiv
Author: claims that his conviction Ariel Cohen, came on trumped charges USA brought by the allies of Presi- dent Viktor Yanukovych. ovember 16 marked the The European Court of Hu- third anniversary of Ser- man Rights rejected the convic- gey Magnitsky’s death in tion of Lutsenko and ordered a Na Russian jail. The U.S. payment of EUR 15,000 in dam- House of Representatives For- ages. However, Ukraine has not eign Affairs Committee marked been ordered to release the the occasion by passing the Mag- 47-year-old prisoner while the nitsky Bill. It now has moved on government appeals the ruling. to the Senate for approval—the According to Serhiy Vlasenko, next step on its way to becoming Tymoshenko’s lawyer, “The law. court found that Article 18 of the Provided the language Sena- European Convention on Hu- tors John McCain (R-Ariz.) and man Rights had been violated. Ben Cardin (D-Md.) have writ- They’ve recognized that this was ten survives the legislation pro- a politically motivated persecu- cess, it is possible that the Mag- tion,” said Vlasenko. nitsky Act would apply to If the Magnitsky Act passes Ukraine. It will be up to the in its universal version and is ap- President and the State Depart- plied world-wide, it could have ment to decide, who, if anyone, serious implications for Kyiv. If, may end up on a “Magnitsky on the other hand, the law is lim- List”. ited to Russia alone, it would The Magnitsky Act seeks “to take an inordinate amount of impose sanctions on persons re- lobbying to pass a similar law Senators John McCain (R-Ariz.) sponsible for the detention, applying to Ukraine specifically. and Ben Cardin (D-Md.) abuse, or death of Sergei Mag- The Magnitsky Act is unique, initiated the law to apply nitsky, and for other gross viola- because it took the commitment, sanctions against Russian tions of human rights in the energy and political savvy of officials Russian Federation, and for William Browder, then-Mag- other purposes.” Individuals nitsky’s client and the founder of guilty of massive human rights the UK-based Hermitage Capital very unfortunate if Ukraine is violations would be refused vi- private equity fund, to convince put in the same category as Rus- sas, and their assets within the lawmakers to pass the bill. sia. preview of the U.S. government Today, there is no discern- The fallout from application would be frozen. able champion of Tymoshenko of a Magnitsky Act equivalent to Ukraine’s treatment of for- and Lutsenko in Washington Ukraine would be disastrous. mer Premier Yulia Tymoshenko who could match Browder’s te- and ex-Interior Minister Yuriy nacity and reach on the Hill. The Magnitsky Act would Lutsenko, as well as of other po- Moreover, the Yanukovych Ad- litical prisoners, may come un- ministration has hired Washing- provide a modern system der “other purposes” language, ton lobbyists in the past, and to pinpoint and punish applicable to countries beyond would “go to the mat” to defeat a Russia. legislative equivalent of the gross violators Lutsenko, a key political Magnitsky Act in case one is of human rights ally of former Premier Yulia aimed at them. Tymoshenko, was sentenced The death of Sergei Mag- Ukraine is not Russia. Until re- to four years in prison in Feb- nitsky in a Russian prison was a cently, it had a better human ruary 2012, for “embezzle- tragic demonstration of rampant rights record than Russia. With ment and abuse of office.” Lut- corruption in the Russian state’s Ukraine’s legacy of forced star- senko, like Tymoshenko, highest echelons. It would be vation under Stalin, it would be 10|the ukrainian week|№ 20 (43) DECEMBER 2012 Sanctions|Politics Will the Magnitsky Act Apply to Ukraine? Even with Magnitsky Act in human rights abusers not only place, Russia, the largest country in the tragic case of Magnitsky, on Earth, is attractive to West- and not only in Russia, but ern investors as a source of hy- around the globe. As we wrote in drocarbons and other natural a Heritage Foundation Back- resources. Ukraine is not as grounder, the United States blessed with oil, gas and other needs to take new measures to raw materials, as its northern protect human rights in Russia neighbour. Western business -- and elsewhere. may think twice whether to in- Countries like Iran, North vest in Ukraine if a Magnitsky- Korea, Belarus, and Uzbekistan, style law applies. where political opposition is ei- Nor is the Magnitsky affair ther exterminated in the GU- exactly like the Tymoshenko and LAG-like death camps, or jailed Lutsenko cases. Tymoshenko and tortured, would be primary and Lutsenko are alive, while targets. Ukraine is not in the Sergei Magnitsky is dead. same category, but may endan- He was a 37-year-old attor- ger itself if the Lutsenko and Ty- ney and accountant who worked moshenko cases are not resolved for Hermitage, then the largest quickly. Western private equity fund in Targeted legislation like the Russia. In the course of his work, Magnitsky Act would be an ef- he uncovered what he believed fective way to encourage not to be a giant corruption scheme just Russia and other offenders that involved the embezzlement to respect the rights of its citi- of USD 230mn from the Russian zens. However, Senate sources Treasury by law enforcement point out that broad applica- and tax officials. After making tion of the Magnitsky law may accusations, he was arrested on open a diplomatic can of fabricated tax evasion and tax worms, and spoil relations with fraud charges. “important” abusers of human Magnitsky died in isolation rights, like China and Saudi at the Butyrka prison in Mos- Arabia. cow, where he was beaten merci- The Magnitsky Act would lessly by guards and denied provide a modern system to pin- medical care. An investigation point and punish gross violators by the Russian Presidential of human rights, while allowing Council on Human Rights and U.S. firms to compete for busi- statements by leading Russian ness on a level playing field – in photo: ap photo: human rights activists have con- Russia and elsewhere. tragic if it were recognized as a firmed as much. This has not re- America should prioritize the major violator of human rights. sulted in the punishment of rule of law—including individual Unfortunately, according to those involved. Indeed, some rights, human rights, corrup- Amnesty International and Hu- who deserve punishment have tion, and organized crime—in its man Rights Watch, Ukraine’s since been decorated or pro- relationship with Russia and track record is steadily deterio- moted. other human rights violators. rating. Torture is rampant in Yet, the Senate language of Congress may take action prisons and police precincts. the Magnitsky bill is aimed at against those corrupt officials Human rights activists, such as that systematically violate the Andriy Fedosov of Uzer, a men- On December 14, the Russian Parliament passed the Draft natural rights of people -- not tal disability rights organization, Law On Measures of Influence Against Individuals Involved in just in Russia but across the and Dmytro Hroisman of Vin- Violation of the Rights of Russian Citizens in the first reading globe. The Magnitsky Act not nytsia Human Rights Group, are as a response to the Magnitsky Act. If passed, the draft law only empowers Congress to take beaten or harassed. There are will ban entrance to Russia for some groups of US citizens, action against such individuals including those who committed or were involved in crimes widespread reports of ill-treat- against Russian citizens abroad, kidnapping or illegal depri- but sends a message that the ment of refugees, asylum-seek- vation of freedom of Russian citizens, and passing of unjusti- U.S. will support those who ers and migrants involving arbi- fied or unfair verdicts regarding Russian citizens and prosecu- value the rule of law and free- trary detention, racist abuse, tion thereof without proper reasoning. The draft law envis- dom worldwide. Let’s hope that and extortion. Still, Ukraine is ages arrest of financial and other assets and bans on any Ukraine will not need Congress’s no Russia. property or investment contracts for such groups. attention any time soon. № 20 (43) DECEMBER 2012|the ukrainian week|11 politics|referendum and more threats to national integrity Divide and Conquer Moscow knows that Ukraine may slip out from under its control after the 2015 presidential election. It looks like the Kremlin is setting the scene for a preventive attack
he defeat of the Yanukovych Author: regions while the media back them toms Union and Russian becom- regime in the parliamentary Oleksandr with extensive coverage. ing the second official state lan- election has made the Krem- Kramar This looks like the implemen- guage. They are ever more criti- Tlin nervous. Putin seems to tation of an ultimatum: either cal of the government and the be frustrated with Yanukovych – you are our friends, or the voters opposition because they do not rightly so, as the Ukrainian presi- are not your friends. Putin and meet the voters’ expectations dent continues to resist Ukraine’s Medvedev reportedly articulated which, in their opinion, are integration into Russo-centric this at a meeting on gas issues largely about closer ties to Rus- unions out of fear of losing his un- with Yanukovych in the fall of sia. At the same time, the media limited power and the intent to 2011. Apparently, they will be is unfolding a campaign, the build “another Russia” for his own counting on the Party of Regions’ main message of which is that “Family” in Ukraine. Despite this, core electorate in southeastern delaying membership in the Cus- the Kremlin sees no alternative to Ukraine, which manifested its toms Union aggravates the socio- Mr. Yanukovych among top Ukrai- dissatisfaction in the ruling economic situation and the qual- nian politicians. Meanwhile, a power by giving it much less sup- ity of life for most Ukrainians. shift of power to the opposition port in the latest parliamentary Immediately after the Law On risks ruining every chance of election compared to previous the National and Local Referen- drawing Ukraine into Putin’s neo- ones. Meanwhile, Medvedchuk dums came into effect on 27 No- imperialistic project and destroy- and other pro-Russian politicians vember, which was promoted by ing Moscow’s accomplishments call on the voters to approve the the Ukrainian Choice, the latter over the past few years, including idea of Ukraine joining the Cus- intensified its efforts to unite the extended stay of the Russian Black Sea Fleet in Crimea until 2042, higher status for the Rus- sian language in Ukraine, and a monopoly in supplying nuclear fuel to Ukrainian nuclear power stations. The latest developments suggest that the Kremlin may have counted on direct interference in Ukrainian politics and using pro- test sentiments as a handy tool. This can lead to controlled desta- bilization in Ukraine. The Ukrainian choice. Really? The launch of the Russian govern- ment’s official publication The Russian Newspaper with an… in Ukraine insert, is a symbolic step in reinforcing Russia’s direct ideo- logical presence. The print run is 3,000 copies, to be initially dis- tributed in Kyiv, Kharkiv and sev- eral other big cities. A more practi- cal step in this direction is the growing presence of Viktor Med- vedchuk’s project, the Ukrainian Choice. Vladimir Putin and Dmitri Medvedev’s wife are his daugh- ter’s godparents. The Ukrainian Choice is holding roundtables and seminars on federalization in the 12|the ukrainian week|№ 20 (43) DECEMBER 2012 mostly pro-Russian NGOs around circle and provide orchestrated it. On 30 November, 53 national public opinion. The plan is to and regional NGOs, including the reach a stage whereby people will Civil Duma of Crimea, the Union see imposed priorities as their of the Citizens of Ukraine and a own, and then use the Ukrainian number of associations that call Choice to launch “real public themselves “Cossack” and “patri- power” (this looks very similar to otic”, signed an agreement with Bolshevik propaganda – and we the Ukrainian Choice. According all know how that ended). “You to one announcement, its main run the country, not the people goal is to return to the people of you elect!” says the manifest and Ukraine their constitutional right the massive advertising campaign to have and exercise power. In his that covers the entire country. comment on it, the Ukrainian This will most likely be fol- Choice founder, Viktor Medved- lowed by the conversion of the in- chuk, noted that the agreement fluence, gained in the battle for was signed on the basis of ideas public opinion, into political articulated in the manifest of his power through referendums, pro- organization. An analysis of this moted as public initiative. Of manifest sheds some light on both course, this needs to be backed by its real goal, and specific mecha- a suitable law on referendums. nisms for its implemention. The Ukrainian Choice has one to The task of promoting and offer. If passed, it would allow the spreading ideas is for the media passing of strategic laws and the that will highlight specific ques- cancellation of those that are in ef- tions, opinion polls and priorities fect, decisions on the most impor- of the voters “the way they are in- tant issues of social life, integra- structed to”. A consistent combi- tion into international unions and nation of domination in the media associations (the Ukrainian space – especially hidden domina- Choice’s platform clearly defines tion – and the regular reporting of the ones Ukraine should join) and opinion poll results presented as the manifestation of popular will, the only accurate ones by contrast which could result in the dissolu- to all others, may create a vicious tion of parliament and the resig- nation of government. A weak immune system The sad conclusion now is that Ukraine has insufficient immunity against internal attempts to take power. Under current circum- stances, all it takes is the right or- ganizational skills for consistent nationwide campaigns, significant funding, the lack of strong demo- cratic institutions or resistance from an authoritarian government and an idea that at first glance is attractive to the general public. Medvedchuk and his project al- ready have the first two factors for success. As to resistance from the government, the Yanukovych re- gime has recently tried to take over the referendum initiative in order to preserve its power, passing the law on the referendum, which essen- tially determines that a referendum can be held at the president’s discre- tion. However, his ability to resist the Kremlin’s well-planned special operation in the long run is doubtful, given its international isolation, con- flicts with the opposition, internal struggle between various groups of influence, and Russians holding the key positions in Ukraine’s defence politics|referendum and more threats to national integrity block. Another discouraging aspect dova. This would result in another does not mention that Russian is the worsening socio-economic sit- version of the 2004 PISUAR, an and Soviet models proved unvi- uation and increasingly protest-ori- abbreviation for the short-lived able many years ago, supported ented moods that spread rapidly South-Eastern Ukrainian Autono- only by the proactive exploitation throughout the electorate as the mous Republic project, promoted of natural resources, or the fact quality of life deteriorates, and vot- by separatist movements in Sever- that Ukraine is bound to fall much ers do not have the opportunity to odonetsk, Luhansk Oblast, in re- faster as part of that model be- vent their anger by legitimately pun- sponse to the Orange Revolution. cause it does not have the same ishing those responsible for this level of resources as Russia. state of affairs politically, through Nostalgia for the USSR elections and choosing different Socio-economically, the manifest Dangerous stereotypes leaders. focuses on “the priority develop- Spin doctors behind the Ukrainian In this situation, a possible ment of high-tech industries, such Choice probably counted on the scenario is to provoke the aggrava- as engineering, airplane and aero- poorly informed homo sovieticus tion of existing conflicts among in- space engineering, shipbuilding masses, who would fail to analyze dividual oligarchs or between oli- and the defence industry.” This their manifest properly and be- garchs and the Family as their ap- looks like a curtsey for the red di- lieve what they hear, guided by petites swell both in politics and rector-type managers who have their nostalgic sentimentality for the economy, and fuel overall de- found themselves sidelined lately Soviet times and aggravated by stabilization in the country by fa- as a result of the internal conflict their current frustration with both cilitating orchestrated “ochlocratic within the Party of Regions. Sec- pro-government and opposition initiatives”. As a result, Ukraine’s ondly, this does not entail the political forces. top decision makers are expected modernization of these industries Moreover, the erroneous ste- to find themselves in a situation by upgrading promising facilities, reotype of better living standards where they will have no choice, but eliminating unpromising ones, in Russia has been fueled intensely to seek a force capable of stopping and building new plants in the in- throughout Ukraine’s two decades the chaos and ensuring that they dicated sectors. of independence by the total domi- will preserve their ill-gotten assets The manifest suggests focus- nation of Russian and pro-Russian in Ukraine, since taking them, as ing on the preservation of indus- media in Ukrainian media space, well as those currently being pre- and superficial assessments of pared for privatization, out of Russia’s and Ukraine’s macroeco- Ukraine is next to impossible. The latest developments nomic indicators by Ukrainian ex- Finally, the concept of the perts and politicians who used this campaign is a potentially explo- suggest that the Kremlin as an argument in their criticism of sive mix of struggle with corrup- may have counted on direct the Ukrainian government. Ac- tion and government accountabil- cording to them, the latter “was ity on the one hand – both ideas interference in Ukrainian unable to ensure the standard of are currently highly popular with politics living of not only new EU member- protest-oriented voters - and nos- states, but even that of Russia.” talgic sentiments about the revival tries referred to as “A” group in Ukraine went through a simi- of the Soviet Union and a yearning Soviet times. Its progress de- lar experience in 2009-2010 when for integration into Russia’s neo- pended on the needs of the USSR- the electorate voted for promises imperialistic project, on the other. wide defence complex and closely of “improvement” and “stability” linked Ukraine to other parts of without thinking about how real- The ruins of the Russian the Soviet Empire. istic they were. Today, the risk of World The next passage of the mani- the Kremlin’s successful manipu- Important provisions on the fest confirms this: “the choice of lation of socio-political processes Ukrainian Choice’s agenda are to Ukraine’s foreign economic inte- in Ukraine's reinforced by the na- give the Russian language a privi- gration plays a decisive role in this tion’s fragmented identity, the leged status in all areas of social context. An assessment of the effi- lack of firmly-established state in- life; the right to dual citizenship, ciency of integration in the Cus- stitutions and a developed civic which is essentially a step towards toms Union with Russia, Belarus society, the poor awareness and Ukraine being gradually swal- and Kazakhstan; Common Eco- political culture of the vast major- lowed up by Russia; and the ped- nomic Space or EurAsEC, and ity of voters, and the excessive in- dling of the idea of Ukraine’s fed- possible integration into the EU… fluence of misleading media on eralization, which is supposed to shows the undeniable efficiency of public opinion. In this situation, weaken ties between different eastward integration. This will re- any conflicts in the opposition parts of the country and reinforce new demand for our production.” and the passive position of the those of regions where most citi- The manifest leaves out the West contribute to the threat of zens speak Russian or hold Rus- fact that the “undeniable effi- destabilization, orchestrated by sian passports. ciency” of Eastern integration was foreign players in the 2015 presi- If implemented, this scenario determined by experts whose con- dential campaign. This would be could lead Ukraine to a dilemma clusions were based on the con- followed by the failure of the ex- between integration into the Rus- cept of preserving the current pected return of Ukraine to the sian project as a whole country or structure of the Ukrainian oli- democratic European course, losing its territorial integrity, as garch-controlled economy dis- which many Ukrainian and West- was the case in Georgia and Mol- torted by total corruption. Also, it ern politicians are hoping for. 14|the ukrainian week|№ 20 (43) DECEMBER 2012 Opinion|Politics Andriy Pyshnyi: The further Ukraine is from the Customs Union, the better
Interviewer: actual budget deficit, it is neces- reason why Yanukovych had to Oleksandr Mykhelson sary to add to this the official Pen- have the budget passed, no matter sion Fund deficit, state guarantees what, by the current Verkhovna ndriy Pyshnyi began his (including for NJSC Naftogaz of Rada, which is under his control. career in 2000 as the Ukraine), UAH 40bn of VAT that Political idiocy: the lame-duck Head of the Legal De- has to be repaid, UAH 16bn of government – forwarded the bud- A partment at Oschadbank overpaid profit tax. If you add all get to the equally lame Verkhovna (State Savings Bank of Ukraine), of these together, the actual defi- Rada. As a result, Ukraine does rising to the position of First cit exceeds the planned deficit by not have a budget, but the cost es- Deputy Chairman, and in 2004 100%. timate of a war against its own – 2005 he was acting Chairman It’s the same situation with people. of the Management Board. From the draft 2013 budget. The official Yanukovych feels that the next May 2007 until June 2009 he deficit is UAH 50bn, 3,2% of GDP. parliament will be considerably was the Deputy Secretary of the However, they forgot to count the more difficult for him. I was on air National Defence and Security Pension Fund deficit – UAH at one of the TV channels yesterday Council of Ukraine. He entered 40bn, financial support via gov- and one of the participants, an MP the parliament in 2012 as No. 19 ernment bond borrowing to Naf- from the Party of Regions frankly on the Batkivshchyna party list. togaz and Oschadbank – UAH The newly-appointed politician 8bn and UAH 1.4 accordingly, the enjoys the trust of Arseniy Yat- loan to the Agrarian Fund – UAH seniuk: In the Front for Change, 5bn and state guarantees – UAH he headed the Party Control 50bn. It turns out that the actual Committee and during the elec- deficit is at least 9% of GDP! All of tion campaign, was one of the this means that the basic micro- Deputy Heads at the Election economic indices at the present Headquarters. time do not only have blurred contours – they don’t even exist UW: What are your views on the as such. Budget planning is dead. 2013 State Budget? If I’m not mistaken, Members of UW: But if everything is really so Parliament only received the draft bad, how can the country exist at budget around lunchtime on 4 all in the coming year? December. One thing that catches Ukraine is facing an ex- the eye is the fact that there is a tremely difficult year. Internal change in emphasis: from the incompetence and insatiability “carrot” budget, to a “stick” bud- are aggravated by external chal- get. Taxpayers will once again pay lenges. This budget was written for everything: UAH 1.6bn less in- “on the run”, in haste and does come tax will be collected from not reflect anything, other than Ukrainian enterprises, while it is Yanukovych’s attempts to stay in planned that UAH 1bn more tax power at all cost. As a result, will be collected from private indi- funding for the General Prosecu- viduals, in other words, from the tor’s Office increased the most – citizens. by UAH 550mn, the SBU (Secu- hoto: UNI A N P hoto: At the same time, there rity Service of Ukraine) – by doesn’t appear to be a light at the UAH 160mn and twice as much end of the debt tunnel, which has been allocated to maintain Ukraine is hurtling through for public order than for na- the third consecutive year – the tional defence . The direct and guaranteed national main enemy of the debt is reaching an enormous Ukrainian gov- UAH 600bn. ernment is In early 2012, the budget defi- within the cit constituted UAH 8bn, but in- country. creased to UAH 38bn in the third This quarter alone. To understand the is the № 20 (43) DECEMBER 2012|the ukrainian week|15 Politics|Opinion admitted that his party does not know how to work with the new parliament and the opposition in it. There is no pro-presidential major- ity. To be more accurate, it will be situational and Yanukovych will have to put it together anew each time. And, of course, the main achievement of society lies in the fact that the government will never have the 300 votes required to change the Constitution. By the way, this explains why the current majority was so quick to approve the law on an all-Ukrainian referen- dum, in violation of regulations and the Constitution. After its initial re- jection, it spent two and a half years on the shelf. UW: Is there a threat that the referendum can be transformed into an instrument of power for Yanukovych, bypassing parliament? Absolutely. This instrument allows the implementation of the plan to usurp power. This law al- lows changes to be introduced to the Constitution and laws to be approved without parliamentary participation. It also allows Yanu- kovych to “give his blessing” to decisions, related to such funda- mental issues as the sovereignty and territorial integrity of Ukraine. I presume, that having recovered after the defeat in the election, the Presidential Admin- istration has realized that it has lost – that Ukraine now has a par- UNI A N P hoto: liament that that stands in the Newly-elected way of the usurpation of power MP Andriy how the CEC works, when it was Yanukovych regime, the provi- and will be a hotbed of opposi- Pyshnyi is the completely unable to establish sional division of the country into tion. right-hand man election results in so-called “prob- East and West has lost the mobi- The main value of the new of Arseniy lem” districts, even with the proto- lizing significance, which is so im- parliament does not lie in what it Yatseniuk cols stamped with original ink portant for the Party of Regions. can do, but in what it can prevent. seals in their hands. Society has begun to group along This is why the government has The government will try to the government – people line. So, started looking for alternative throw questions that will polarize having thrown in a provocative routes, one of which is the resus- society into the referendum. They subject, the Presidential Admin- citated anti-constitutional law on are constantly busy with this to istration is trying to distract soci- the referendum. distract public attention. For ex- ety from the socio-political situa- This law is made out in such a ample, this is what happened in tion and work on the division of way, that in many cases, the per- July, when it was “selling” the law Ukraine. son formulating the questions can on the destruction of the Ukrai- I do not rule out that the law programme responses. The execu- nian language. This is how it was on the referendum will be used tive hierarchy completely controls able to mobilize its own elector- for the polarization of Ukrainians the vote-counting process. The ate. at critical moments for the Party Central Election Commission of Regions, for the purpose of (CEC) does not even publish the UW: But the opposing camp was thrusting its destructive scenario results – merely announces them! also mobilized – look at the on society, which has nothing in And under this law, it is the CEC numbers gained by the Svoboda common with the real needs and that determines the constitution- party. interests of the people. ality or non-constitutionality of Indeed, this initiative worked the questions included in the ref- on both sides. But the essence lies UW: So what can the opposition erendum. We all saw last month elsewhere: in three years of the do with this law? 16|the ukrainian week|№ 20 (43) DECEMBER 2012 Opinion|Politics First of all, refuse to recog- sonifying responsibility. To- ket is actually in ruins. Each im- nize it. Secondly, we are working gether with the effective work of ported item means fewer jobs for on an appeal against this law in the opposition and a combina- Ukrainians. When Yanukovych the Constitutional Court. tion of external and internal fac- came to power, the raw material Thirdly, it is necessary to set up tors, the government will be component in the export struc- effective communication with so- forced to make extensive com- ture comprised 68%, today – ciety, which would express its promises with society. 70%. In the meantime, raw ma- aversion to this law just as deci- Opposition to the prospects terial markets are falling at the sively. of the signing of the Association fastest and deepest rate, which is By the way, this is the top-pri- Agreement under the Yanu- why Ukraine lost almost 15% of ority task – the organization of kovych presidency is demon- its GDP in 2008. So what does not only an effective opposition in strated by the fact that interna- the Party of Regions do? Having parliament, but also consistent tional isolation has been im- acquired total power, it not only communication with society for posed against Ukraine by the failed to improve the situation, it the purpose of its active engage- West. What is less obvious is the made it even worse. Why? Be- ment in political life. fact that political isolation has cause a raw material-based econ- tangible consequences in the omy is the source for ensuring UW: Is the opposition intending economic sphere. More specifi- the prosperity of a dictatorship. to cancel or change such cally, this is why Ukraine cannot ambiguous laws as the law on continue its cooperation with the UW: In other words, this is being the principles of foreign and International Monetary Fund. done deliberately? domestic policy or the language If the economy is not based on law, and if so, how? UW: In your view, will Ukraine raw materials, the government As far as the law on the prin- still be able to borrow money must build a completely different ciples of foreign and domestic abroad on the scale necessary to system of communication with policy is concerned, even today it support the economy in the small and medium-sized business. provides for European integra- coming year? And this is a completely different tion as a foreign policy priority, Ukraine is already borrowing organization of state power. which is why Yanukovych has no at greater expense than pre-de- I often met young people choice by to execute it. The only fault Greece. If the increase in during the election campaign. I thing that has been removed is foreign borrowing during Yanu- asked these young people: why the clause on NATO membership, kovych’s government is calcu- doesn’t Yanukovych, with all his which has been replaced with Ya- power to reform higher educa- nukovych’s Kharkiv deals, under tion, ensure first jobs and con- which Ukraine pays the highest The government is not struction of housing for young price in Europe for Russian gas, interested in progressive people? Huge funds are available gave Russia part of Ukrainian ter- for the repair of presidential da- ritory and also limited its own citizens as they chas – country residences – so foreign policy field. demand a different quality could it also have been possible of life and politics to find some resources for a hoto: UNI A N P hoto: UW: Do you consider NATO youth policy? The answer is that membership to be irrelevant? Yanukovych is not interested in First and foremost, I see lated, it will emerge that on aver- young people. After all, they NATO as an organization, capable age, it has grown by almost UAH don’t vote for him! of forming a reform agenda for 7bn per month. They demand a completely Ukraine. This includes the estab- This is what the regime is ca- different quality of life and a lishment of sound civil society in- pable of: take money while it is completely different quality of stitutions. In general, democracy being given, and spend it at will. political power. Therefore is a privilege of healthy societies. It’s catchword from “stability to Ukraine’s current government is In this context, the standards of prosperity” has a new resonance: interested in reducing the num- NATO member - states are im- in June - a 1% fall in industrial bers of these progressive citi- portant – just as important as EU output (in comparison to the zens, and having more that are Association, since it is pointless same period of the previous year), completely degraded. And this is searching for a better plan. July – 1.5%, August – 4.5%, Sep- why it is recreating a raw mate- tember – 7%. Recession is ram- rial-based economy. Actually, UW: In your opinion, should pant in Ukraine. The foreign the same applies in Russia. I re- Europe agree to this Agreement trade balance: 2010 – minus al- cently looked at some statistics – under Yanukovych’s presidency, most USD 10bn, 2011 – up to in Russia, raw material accounts or should it block it until there is USD 14.5bn and in the first nine for 85% in the structure of ex- a change of power in Ukraine? months of 2012 – USD 11.5bn. By ports, while advanced technol- I am one hundred percent the end of the year, Ukraine could ogy products – only 4.5%. And behind the Agreement being possibly reach a negative balance even this, I think, is military-in- concluded as soon as possible, of USD 17bn! How’s that for “sta- dustrial complex production. this is why Europe should not bility” with a trend towards “im- This is why I oppose the Customs abandon Ukraine, but on the provement”. Union. The further Ukraine is contrary, must strengthen pres- 41% of goods on the market from the Customs Union, the sure on the ruling regime, per- are imported. The domestic mar- better. № 20 (43) DECEMBER 2012|the ukrainian week|17 neighbours|russia
Alone at the Top Vladimir Putin has initiated some high-profile battles against corruption. But to many he seems increasingly isolated and out of touch
tate-run television is not kov as defence minister. He was tenth to third in the concerns of usually the place to find fired after investigators linked a ordinary Russians. It is also an is- Snews of corruption scan- company spun off from the minis- sue that unites his opponents. Mr dals involving officials try to a $100m fraud. That a high- Putin may dismiss democratic close to Russia’s president, Vlad- level official with ties to Mr Putin worries, but he sees himself as a imir Putin. Murky business deal- could be so publicly dumped was popular leader, responsive to the ings have never been a bar to unprecedented. But since then, a national will. Legitimacy of a kind government service. When high- $200m embezzlement case over a matters deeply. level bureaucrats fall, they usu- satellite-guidance system has Eight months after his election ally go quietly. But viewers have threatened Mr Putin’s chief of to a third term, Mr Putin’s support recently been treated to quite a staff, Sergei Ivanov. And on No- looks shaky. The polls give him spectacle on Channel One: eve- vember 27th Rossiya-1 channel some of his lowest approval rat- ning broadcasts full of current aired a documentary linking a for- ings ever. So he feels “compelled and former ministers, their lov- mer agriculture minister, Yelena to carry on a populist course, as if ers, their expensive homes and Skrynnik, to a reported $1.2 bil- the elections were still ahead of © 2012 The millions in misappropriated lion fraud. him,” says Nikolay Petrov of the Economist funds. For Mr Putin, taking on graft Carnegie Moscow Centre. Fighting Newspaper This nascent anti-corruption in his own circle has several bene- corruption also defangs the most Limited. All campaign began in October with fits. It is popular: between 2005 resonant complaint of the opposi- rights reserved the dismissal of Anatoly Serdyu- and 2012, corruption rose from tion. 18|the ukrainian week|№ 20 (43) DECEMBER 2012 Launching corruption cases television.” The real point of the against his inner circle can also rein story about Mr Putin’s back was not in excesses that make Mr Putin po- the supposed ailment but the break- litically vulnerable and the state in- ing of a taboo over discussing his effectual. In his 12 years in power, health—and his future. bureaucratic corruption has gone The biggest concern is Mr Pu- “unpunished, unattended, and un- tin’s isolation. His claim to Germa- controlled”, says Elena Panfilova of ny’s Angela Merkel that Pussy Riot Transparency International, a lobby members had hanged the effigy of a group. Worse, state employees now Jew in 2008 was bizarre and inac- feel emboldened to siphon off re- curate (in fact, the band was pro- sources even without sustaining so- testing against anti-Semitism); ei- cial stability. Targeting a few high- ther he was misleading her or he profile officials can be a way to “in- had himself been misled. Mr Putin troduce a certain level of fear,” Ms has spent over a decade in power Panfilova notes. and Yevgenia Albats, editor of the A disruptive public war on cor- liberal New Times, talks of the “typ- ruption also can create more in- ical syndrome of an ageing general fighting among political and busi- secretary”. ness clans. That seems to be hap- Compared with his early years pening at Rostelecom, where two in charge when he relied on eco- managers are being questioned nomic aides like German Gref and about a $225m fraudulent loan Alexei Kudrin, Mr Putin has less from VTB, a state-run bank. Control faith in the counsel of those around over lucrative telecoms licences him and more certainty in his own may be the real point. Yet an anti- judgment. After a difficult year, he corruption purge can also take on believes that he “owes his position its own uncontrolled momentum, to a hard-fought electoral victory, which could make Mr Putin weaker, unlike his colleagues who have no not stronger. mandate from the voters”, says Ser- All this feeds a sense of uncer- gei Guriev of the New Economic tainty, with the Moscow political School. On many issues, says one elite “disoriented,” according to Mr former adviser, Mr Putin “thinks he Petrov. Investigative files on the two understands the situation, but in defence cases have existed for years, fact it can be quite incomprehensi- only to resurface now. Are the rules ble for him”. changing? What could be unearthed Decision-making in the Kremlin tomorrow, and against whom? At appears to be on hold. Mr Putin has the same time, the mood of rudder- slowed down progress on the bud- less leadership has been worsened get, on pensions and on privatisa-
photo: r eu t e rs photo: by questions over Mr Putin’s health. tion. This may partly be a prudent For much of October and No- move to sit out recent turmoil in vember, Mr Putin worked at his global markets. But the danger of Novo-Ogaryovo residence outside what Chris Weafer of Troika Dialog Moscow, rarely going to the Krem- calls a “deliberate policy of inactiv- lin and cancelling foreign trips to ity” is that Mr Putin waits too long, Bulgaria, India and Turkey (though acting only when the next political he is now going to Turkey next or financial crisis hits him. week). News reports discussed a As for the campaign against cor- possible back problem caused by ruption, it will go only so far. Cor- flying an ultralight plane beside ruption is a pillar of Putin-era sta- some wild cranes in September. The bility as much as a threat to it. Much Kremlin dismissed this, saying only of what could be called corruption that Mr Putin had pulled a muscle has become formalised, if not le- while exercising. In another politi- galised, through official tenders, cal system, the story might have court rulings and bank-approved stopped there, but in Russia the loans. That makes it both more mystery took on symbolic reso- prevalent and amorphous—and nance. harder to eliminate. Over the years, Mr Putin has Alexei Venediktov of the Ekho played on traditional Russian defer- Moskvy radio station likens the sit- ence to the leader while relying on uation to “turbulence” in an aero- manipulation of the media. The plane. The ruling class may know “charismatic aura” for Mr Putin, “in which direction and with which says Lev Gudkov of the Levada Cen- pilot” they are flying, he says; but tre polling group, has produced a the plane is shaking disconcert- system like “Byzantium, only on ingly. Neighbours|Russia
hilosopher Igor Chubais is Interviewer: thrust theY anukovych regime into Several years ago, when work- the brother of Anatoly Chu- Milan the arms of the Russian ing on the radio, I glanced at the bais, the spin doctor be- Lelich government. How likely is such a agenda of the United Russia Party, Phind Russian privatization scenario? which stated that it sees one of its who has held key positions in I can only express my personal tasks as “the creation of a circle of Russia over the last 20 years. In view on this: taking the current friendly countries around the Rus- contrast to him, Igor Chubais governments in Moscow and Kyiv sian Federation.” Over this period, chose scholarly activity, heading into consideration, a significant Russia has not gained a single up the first Russian Studies fac- improvement in relations is im- friend from among its neighbours, ulty in Russia, at the Institute of possible. The entire 20 years since and has even lost those that were its Social Sciences. He feels that the the collapse of the Soviet Union friends. experience of the rise and col- However, the influence of the lapse of the totalitarian Soviet Russian political system on all Union, calling it “a state doomed The Russian government neighbouring countries will con- to destruction from the very will find it more and more tinue. It will be ever more difficult start”, is the current problem, for its government to save itself which has yet to be understood by difficult to save itself without having some kind of an society. In his interview with The without some kind of “echo” from the Baltic States, Cen- Ukrainian Week, he talks tral Asia and Ukraine. But this sys- about the direction in which Rus- an supporting echo from tem is artificial and ineffective. sia is moving, how many years the Baltic States, Central the ruling regime has left and re- UW: Is it possible to compare the lations between official Kyiv and Asia and Ukraine current Russian propaganda Moscow. have proved that the Kremlin has machine to that of the Soviet been unable to create stable inter- Union? UW: Clearly, the falsifications in governmental unions. — In the last years of its exis- the last parliamentary election in Until the internal administrative tence, the Soviet propaganda ma- Ukraine will complicate dialogue structure in Russia changes, it’s fu- chine was counter-productive: when between Kyiv and the European tile to count on any international it said on TV that the West was a Union as well as the USA even support or influential international jungle of capitalism and pure hell, further, which could, in turn, alliances. many were convinced that it was ac- 20|the ukrainian week|№ 20 (43) DECEMBER 2012 Russia|Neighbours tually paradise. Some people have by irreversible processes. The econ- cian from the pack in power who can the same view today, although in omy is currently entirely based on be “sold” to the public and who does truth, there are also many problems the export of fossil fuels, while the not evoke aggression on the part of in the West. extraction of oil and gas will decrease the voters. In this context, the re- Today, the Russian mass media in the coming years and prices will moval from office of Anatoli Serdi- has transformed into a means of fall. In addition, the Americans are ukov, the Minister of Defence, is in- mass propaganda, a “zombie- currently building plants for the liq- teresting. The issue is not that he was maker”, which, unfortunately, has a uefaction of shale gas, the output ca- dismissed, but that one of the presi- very strong impact on public opin- pacity of which will satisfy about dent’s support pillars has fallen. It’s ion. However even here, the effect is 50% of West European demand for doubtful that Putin wanted this. not always the one that is planned: gas. This will be a mighty blow to the many people have already devel- Russian economy. UW: Why is the wave of protest in oped a self-defence reaction to what Russia broken up and not grown they are told from the TV screen. UW: Do you believe in the into a revolution? In a normal country, the govern- possibility of the peaceful removal In the West, when there is a 3% ment is responsible for everything of Putin, via elections? tax increase, the streets are filled going on. However in Russia, nei- — No, it’s impossible to remove with protesters. Meanwhile, so ther Putin, nor Medvedev is guilty: him in this manner. And the issue much is happening here – and no they blame everything on Yush- is not Putin himself. Any authori- reaction. But this is not because chenko, Saakashvili, the State De- tarian regime is set up in such a Russians are a kind of submissive partment, etc. The Russian govern- way, that it does not play games nation. For 70 years, the Soviet gov- ment constantly looks for a fall-guy, that do not guarantee victory. To- ernment had been turning its people which does not sit well with many day, the only point in participating into homo sovieticus. Now, people people though. In fact, the Russian in an election (for the opposition) don’t want to take to the streets; mass media does not present any – is to declare to the people: “Al- they don’t have faith in their ability country as a friend, with the occa- though you support us, we shall to change anything. However, in re- sional exception of China. However not win, because these are not elec- Bio: cent times, this faith is emerging, so this system is far too foreign to really tions, but imitations thereof.” So Igor Chubais their turn will come. affect the Russians. No sooner does it’s naive to expect changes in Rus- (born in something happen that is radically sia through the vote. What hap- 1947) – PhD. UW: Has Russia changed since the contrary to the Russian propaganda pened during the last election in In 1988–1990, Bolotnaya Square (the site of he was one of Russian protests in 2011) and line, or vice-versa, ideally fits in with Russia profoundly discredited this the activists in it, than it’s exaggerated to the maxi- mechanism as such. As a result, the informal Sakharov? mum extent. This is the same during the recent local election, Moscow-based — Of course. People came to the method used by the entire propa- voter turn-out was 10–15%, and in Perestroika and square and saw that they are not ganda machine when issues pertain essence, the winner from the Perestroika-88 alone in their dissatisfaction with to Ukraine or the Baltic States. United Russia had the support of unions and the government, when a hundred 5% of the population. a member of thousand people shouted: “Putin – UW: You have often pointed out the Moscow thief!” This launched reflection and the lack of efficiency in the current UW: In other words, only the People’s Front. analysis – Russia truly became dif- state administration system of people can clean up the Russian In 1990, he ferent in this aspect. Russia. After the last presidential regime? was one of the founders of election, there was a popular None of the people I know the Democratic UW: After the meetings, there cartoon of Putin portrayed as would be prepared to take to the Platform in the was considerable criticism of the Leonid Brezhnev, entitled “2024” streets and shoot their neighbours. Communist so-called creative class, which (meaning that Putin would rule The acuteness of a conflict does not Party of the was considered to be the main until then). In your opinion, is it depend on what the citizens want, Soviet Union. driving force of these protests, possible to prevent this? but on what the government is do- He was the since many of the protesters Right now, all that the thinking ing. It was possible to persuade Yelt- Editor in Chief simply saw it as a fashionable part of our society is talking about, is sin that he was unable to normally of the Noviye trend, and in effect, this class is when will this system, which is de- govern the country, so he resigned. Vekhy (New not capable of leading the Milestones) stroying Russia, be brought down. Why can’t this be done with Putin? journal and population on a massive scale … There is one more question – how. By the way, I was told (although I presenter I totally disagree. I was there It’s very hard to make a forecast, be- cannot vouch for the absolute reli- of a radio and I saw the faces – completely dif- cause these processes are nonlinear ability of the information), that in programme. In ferent people from those simply and depend on several factors. Per- the narrow circle of the government, 2010, he signed wandering around town. And what sonally, I take the forecast made by a they are looking at the option of the the Putin Must is the “creative class”? Who defines foreign member of the Russian departure of the current head of Go open letter. the criteria and who meets them? Academy of Sciences, economist state: he wants to remain until the He is also the This notion is an element of manip- Vladimir Kvint, very seriously. In his Olympics, but he is being recom- author of From ulation. When we went to a rally in the Russian o time, Henry Kissinger won this per- mended not to delay and leave im- Idea – to the January, into the freezing -20 cold, son over to the USA. Kvint asserts mediately. Idea of a New people stood on their balconies and that the current regime will lead Many see Sergey Shoygu, the Russia (1996), greeted us. This was a unity of the Russia to an economic collapse in former Minister of Emergencies, Russia in Search whole city. This is why the govern- 2017. In his view, 2017 will be the who was appointed Minister of De- of Itself (1998) ment began a defamation and infor- last year for the Russian economy in fence in autumn, as a candidate for and Unraveling mation war against such demon- its current form, and will be followed the vacancy – he is the only politi- Russia (2005) strations. № 20 (43) DECEMBER 2012|the ukrainian week|21 Economics|Ukraine in 2013: Public finance Deficit Looming Large The Ukrainian government is likely to take radical steps to close the budget gap
Author: inancial calculations made by above the expected 2012 level, In January through Septem- Vitaliy government officials show which was never reached. Econo- ber 2012, all budgets in Ukraine Melnychuk, that the budget gap will mists call this stagnation. received a mere 67% of their ex- Deputy Fwiden, and the government Therefore, the national fi- pected annual income (78% over Chairman of will try radical methods to close nances in 2013 will depend on the same period in 2011). With the Audit that gap three key factors which emerged 65%, the national budget per- Chamber in According to government data in the second half of 2012: de- formed even worse. Budget re- 1997-2005 on economic growth, the state and creasing budget receipts at vari- ceipts from the income tax were local budgets for 2013 were drawn ous levels, issues with financing at 68% and from the VAT at 62% up based on the nominal GDP of the Pension Fund, higher servic- over this stretch despite unprece- UAH 1.576 trillion and a 4.8% in- ing costs for sovereign debt due dented pressure the tax adminis- flation rate. In 2012, budget of all to the replacement of cheap for- tration has been putting on busi- levels were expected to receive eign loans (primarily from the nesses. Clearly, the remaining UAH 474bn, given the nominal IMF) with more expensive money third is unrealistic to collect in GDP of UAH 1.5 trillion. However, accumulated by selling euro- the last three months of the year it is evident even now that bonds on international financial as has been proved by budget Ukraine’s GDP for 2012 will not markets and internal bonds at performance in October and No- exceed UAH 1.4 trillion. Thus, the home. vember. The reason is the inade- budgets are set to receive at least In 2012, there has been a per- quate economic policy and the UAH 32 billion less than pro- ceptible problem of low state bud- government’s unwillingness to jected. get receipts (see Budget break- revise it amid deepening crisis. According to the government, down) caused by a decline in The national and local budgets various-level budgets will account business activity which, in its turn, were based on the 2012 forecast for 29.4% (UAH 463bn) of the is seen as a consequence of crisis of 3.9% economic growth (higher GDP in 2013. This means that, ad- phenomena in the economy, dete- than the actual 1.5% in January justed for inflation, the real re- riorating investment climate and a through October 2012 and possi- ceipts will drop by UAH 32.2bn. sharp reduction in loans issued to bly close to zero for the entire This sum is comparable to two an- the real economy. year) and 7.9% inflation rate nual budgets of Kyiv and 40 such budgets of cities like Zhytomyr or Budget breakdown Sumy. It appears that in order to The comparison of receipts of the national and local budgets over nine months of avoid tackling some hairy issues, 2011 and 2012 signals that the figures laid in the 2012 budget were inadequate, the government simply “extended” aimed at showing budget deficit lower than it really was to 2013 the 2012 state and local 73% budgets which were previously ap- All budget receipts proved but never fulfilled. This 67% means that budget receipts and 74% budget spending will essentially National budget receipts stay at the 2012 level, even though 65% some disbursements will have to be increased, such as salaries in 84% Income tax the government sector, utilities for 68% government bodies, pensions, ser- vicing and repaying sovereign 75% debt, etc. Therefore, even if the VAT 62% country’s budgets at all levels re- ceive, in 2013, their respective As % of the total receipts approved for the respe ive year projected amounts of income (the same as in 2012), they will not rise Jan-Sep 2011 Jan-Sep 2012 22|the ukrainian week|№ 20 (43) DECEMBER 2012 Ukraine in 2013: Public finance |Economics Ever co lier debts 2012. Thus, the Ukrainian govern- Total Total government ment will have a bigger appetite Changes in the amount and ru ure of Ukraine’s sovereign debt show government-backed debt that servicing it will grow more and more expensive. With government debt for additional resources next year. Sovereign, It is already planning to borrow bonds mo ly denominated in foreign currencies and eurobonds being internal debt External debt UAH 135.5bn, UAH 38.5bn more the key source of loans given the increasing international isolation, and Sovereign, Internal debt the need to pay over USD 6bn to the IMF, this negative trend will external debt than planned for 2012. At the continue to burden public finance in 2013 same time, the bulk of loans are Total debt even now being used to service 190,9 108.8 115.8 101.4 and repay previously incurred 227.0 323.5 357.3 391.6 debts, which are becoming in- 89.4 creasingly expensive (see Ever 94.9 103.6 76.8 12.0 costlier debts). For example, in 12.2 14.1 91.1 13.9 141.7 161.5 191.4 2012, close to UAH 66bn were used to repay sovereign debt and 135.9 181.8 195.8 200.2 another UAH 30bn to service it (nearly UAH 96bn in total). In 317.9 432.3 473.1 493.0 2013, the respective sums will be UAH 81bn and UAH 35bn, a total 2009 2010 2011 As of O ober 31, 2012 of UAH 116bn. This is a significant amount under any circumstances and even more so in crisis time. (much higher than the actual a tional budget, which is UAH State budget receipts, the only 0.3% deflation in the first 10 17.3bn more than in 2009, the source for servicing sovereign months). Such government fore- first “post-pension reform” year. debt, will be a mere UAH 361.5bn, casts may have to do with its re- Thus, the Ukrainian government UAH 12.5bn down from 2012. luctance to officially acknowledge is likely to resort, on multiple oc- Therefore, the state finances the worsening budget gap prob- casions throughout 2013, to such will be in dire straits in 2013 due lem and inability to fulfill its- fi extravagant moves as a 15% “pen- to a number of negative factors nancial commitments. sion tax” on foreign currency ex- which will create tension around Dangerous trends have been change transactions. formulating and fulfilling the chief observed in 2012 relating to the Virtually the only source avail- functions of the state and local Pension Fund gap. In an election able to the government to service self-government bodies. The de- campaign boosting effort, the gov- and repay sovereign debt (and clining real budget income and an ernment significantly raised pen- government-guaranteed loans if objective rise in protected spend- sions, which cost the Pension necessary) is Ukraine’s state bud- ing, such as salary in the govern- Fund an additional UAH 9bn. It get. The government can make di- ment sector, pensions and servic- failed to collect this sum by the rect disbursements from the bud- ing and repaying sovereign debt, end of the year, so transfers to it get or use the so-called financing will greatly constrict the room for from the state budget were in- mechanism under which govern- economic, social and political ma- creased by nearly UAH 7bn, in- ment loans are obtained to pay for neuvers for the government (even cluding UAH 5.6bn in direct fi- outstanding debts. Ukraine’s sov- to benefit its favourites). In the nancing of the Pension Fund bud- ereign debt continues to rise rap- present situation, financing even get deficit (see Failed pension idly, increasing by UAH 34.3bn in these protected articles may turn reform). In 2013, a total of UAH the first 10 months of 2012, which out to be problematic. Since the 83.2bn will have to be allocated to is equal to about 10% of the state key creditor with which the Cabi- the Pension Fund from the na- budget receipts projected for net of Ministers will have to deal in 2013 is the International Mon- etary Fund, much will depend on Failed pension reform Kyiv’s cooperation with the IMF. The government is likely to Growing spending of the Pension Fund in 2011-2012 was covered by transfers from try four different ways to resolve the ate budget. The trend may aggravate as the crisis escalates and the govern- the situation. First, the hryvnia ment ruggles to pay pensions raised before the ele ion may be devalued through a mon- 210.7 etary policy that will stimulate high inflation. The budget will Total spending, UAH bn 228.7 then be essentially filled with de- 257.3* valued hryvnias, thus shifting the economic burden on the popula- tion. Second, fiscal and regulatory 58.3 Including transfers from pressure on business may be 64.5 the ate budget, UAH bn stepped up. Third, non-standard 83.2 ways to close the budget gap, such as a 15% tax on foreign cur- 2011 2012 2013 rency exchange transactions, may be introduced. Fourth, budget programmes and social spending *The Pension Fund’s budget for 2013 is not approved yet, therefore total spending may change may be reduced. № 20 (43) DECEMBER 2012|the ukrainian week|23 Economics|Ukraine in 2013: Investment climate solve anything. More and more investors, both domestic and for- eign, are beginning to seriously High Risk Zone consider whether a real catastro- phe is looming. After all, a coun- try with a ruined judiciary and The investment climate in Ukraine in 2013 will corrupt law enforcement agencies not intimidate Russia alone is far too reminiscent of a human organism, deprived of immunity. At the same time, even within the Author: f the current situation with written for idiots; but never before opposition, there don’t appear to Volodymyr foreign investments is compared has it been less funny than now. be any people, but too many in- Dubrovskiy, with data from 2009, it emerges Property rights are more nominal: structions/teams, capable of Senior Ithat 2012 was the worst of the according to the level of its protec- averting such a catastrophe. Economist at last decade. From October 2011 tion, Ukraine is on the same level 2012 is marked by the mass CASE Ukraine until October 2012, for the first as Angola 128th – 129th place (of withdrawal of foreign banks from time since comparative data has 130 countries) in the IPRI rating. Ukraine, which in their time, were been available, foreign investment Even if government-related raider the first to take a “bite” at the in Ukraine, with the exception of attacks for the most part currently prospects of its European integra- that from Cyprus and the British avoid companies with foreign in- tion. They are either selling their Virgin Isles, was less than USD vestments (although even here assets much cheaper than what 1bn. The Investment Attractiveness there have already been several they paid for them, such as Com- Index for Ukraine, calculated by the exceptions!), their owners are well merzbank, or are folding their op- European Business Association, aware that their turn will come, erations, such as Swedbank. It is reached a historic minimum rating “foreign” enterprises will be tar- currently difficult to forecast of 2.14 points, while at the peak of geted in order not to touch “their whether those that have remained the previous crisis in 2008–2009, own”, in other words, those with will follow their example, or hold it only fell to 2.22. direct links to Yanukovych’s circle. out until the bitter end. Right now, Investors are fleeing Ukraine, Much has been learned from the based on the logical development not so much because of the global Russian and Belarussian experi- of events, it’s the turn of the immi- economic crisis, but because of the ence. gration of industrial investors. But reality of the business environ- Ukraine’s symbolic rise in the first of all, they are far less flexible ment in Ukraine. The main factor Doing Business rating was – more specifically, it’s more diffi- is the arbitrariness of the govern- achieved as a result of a certain cult to sell their assets and sec- ment as its principle of adminis- simplification in the registration of ondly, they can pursue more long- tration. There is no independent a typical LLC and a reduction in the term goals. However, if there judiciary – everything is resolved number of tax payments for such should be new investments, they as it was during Soviet times, “on LLCs. But neither one, nor the will generally support projects the phone” – in private discus- other is a true barrier for business that are already in place and at sions. Laws, following the tradi- in the reality of Ukraine. It is sim- minimal levels. tions of the Russian Empire, were ply a “facade” of deregulation. In- Thus investment growth in stead, the number of managers 2013 will clearly be weak: less in-
• 73rd place (of 144 countries) who admit that personnel changes vestment will depart, but less will AFRICAN LEVEL in the Global Competitiveness in the government’s control bodies come in. Maybe though, Ukraine Conditions for condu ing Report (World Economic business in Ukraine Forum, 2012) can significantly impact their suc- will obtain investments for the are among the cess, has tripled. extraction of gas, or less likely, wor in the While foreigners (and the civ- for agriculture – only on condi- world – the evaluation ilized part of the national busi- tion that the moratorium on the of international ness community) were previously purchase and sale of land is lifted. in itutions: supported by optimism regarding Countries with rich natural re- • 137th place (of 185 countries) in the Doing Business rating (index on the prospects for overcoming a prob- sources are generally ruled by ease of doing business) compiled by the World lem, today, disenchantment pre- dictators who, for the most part, Bank and the IFC (Russia – 112th, E onia – 21 and Georgia – 9th) vails. The more visitors learn are corrupt. So the companies in- • 144th place (of 176 countries) about Ukraine, the more they un- volved in such business are used in the Corruption Perceptions Index – 2012 from Transparency International (together with derstand that the problem does to relevant risks. The situation Bangladesh, Cameroon, Central African Republic, not simply lie in “political will”, with investors from CIS coun- Congo and Syria) • 152nd of 183 countries but also in the system itself, un- tries, first and foremost Russia, is with regard to the total tax rate. In Ukraine, it con itutes 57.1% (World Bank and der which this will simply cannot similar: they are fully adapted to PricewaterhouseCoopers research) emerge, because the government the specific features of doing • 163rd place (of 179 countries) in the Economic Freedom Index – 2012 is held together on personal business in Ukraine. After all, (Wall Street Journal and the Heritage Foundation) • Down to 2.14 (largely informal) privileges for they grew up under similar cir- on a 5-point scale – the level • 181 place (of 183 countries) to which the Inve ment individual enterprises and cumstances. It follows, that even in the ease of paying taxes ranking (World Bank Attra iveness Index for and PricewaterhouseCoopers research) Ukraine in Q3’2012 has fallen. branches of industry. And even if the official index of the volume • 4.43 on the 10-point scale The level of Ukraine’s attra iveness of the Inve ment A ivity Index in Ukraine for inve ors, which has been evaluated the hypothetical emergence of an of attracted investments can be in O ober 2012, based on the results of a survey by the European Business Association individual politician, interested maintained at the same level, of the managers of 253 American, European with the support of InMind marketing and Ukrainian enterprises, condu ed research company since 2008, has fallen in the creation of equal and hon- their quality may be found to be by Research & Branding Group to the lowe level in the la three years. est rules of the game, will not re- significantly worse. 24|the ukrainian week|№ 20 (43) DECEMBER 2012 Ukraine in 2013: non-oligarch business|economics n 2012, business was struggling to survive, let alone develop. The financial performance of unprof- Iitable companies plummeted in Between a Rock Q1’2012, followed by profitable businesses in the next quarter. Despite this trend, tax authori- ties continued to pressure busi- nesses, squeezing out income tax to and a Hard Place fill the budget. Over the first six months of 2012, the performance of indus- Business not owned by oligarchs will find itself tries controlled by oligarchs, ori- in a much more difficult position in 2013, under ented at the domestic market that include companies involved in the the influence of the growing appetites of the production of clothes and leather goods, and wood processing, fell government and the sluggish economy significantly, sometimes at a dou- ble-digit rate. Ukrainian producers pressure on business, depleting its Ukrainian consumers will spend Author: lost part of the domestic market as working capital. less, decreasing retail turnover, Liubomyr a result of tax and regulatory pres- In addition, the government tol- which has been growing so far, al- Shavaliuk sure, as well as the overvalued erates raider attacks which aggra- beit slower every month. Price cut- hryvnia, despite growing consumer vate the business climate and scare ting against the backdrop of declin- demand backed by increased nom- away investors. As a result, the po- ing output signals falling purchasing inal salaries. This was the result of tential for economic growth and the capacity which is extremely danger- the government’s efforts to please choice of tools to resist the looming ous for the economy. Shrinking de- the electorate using budget funds. crisis show a marked decrease. mand will inevitably reduce output. Imported, rather than Ukrainian Meanwhile, the NBU’s ineffective Since the government has no strat- goods flooded the market as im- monetary policy has led to critically egy to stimulate domestic demand ports grew by 8.5% over the first high interest rates, making loans in- and cannot stop this process, output six months of 2012. accessible and provoking money is likely to fall further. This will trig- Affected by the sluggish global deficit in the economy. Before the ger a full-scale recession that may economy that hit exporters, Ukrai- election, the government raised the harm all branches of the economy. nian industry stagnated, experi- minimum salary rate. This imposed Economic decline in 2012 had the encing a 1.4% decline over 10 a huge financial burden on compa- worst impact on the earnings of big months compared to the respective nies as they had to raise salaries for enterprises. In 2013, small and me- period in 2011. their staff with no added efficiency dium businesses will suffer most, as The construction industry also to offset extra spending. As a result, they are largely oriented at the do- operated at a loss, its output falling many companies became uncom- mestic market, operating in trade, by 10.2%, while cargo turnover de- petitive, went partially into the real estate and farming. clined by 6.4%. The unfolding finan- shadow and suspended investment. A combination of negative fac- cial crisis saw business profits de- The number of companies oper- tors, such as tax and administrative cline more than two-fold in Q3’2012. ating at a loss will increase dramati- pressure, with objective economic 2013 promises more difficulties cally. They will cut salaries and re- difficulties, will push business own- for non-oligarch business. Pressed duce the number of staff, therefore ers to switch into the shadow or the by the budget deficit, the govern- official and hidden unemployment closure of businesses on a massive ment will exert unsustainable tax is bound to increase. Eventually, scale, until better times.
OPERATING AT A LOSS THE VICIOUS CIRCLE Pre-tax financial performance and corporate income tax No profits – no inve ment UAH bn UAH bn Pre-tax earnings and DFI into Ukraine per quarter 120 Income* *The data does not take into account the performance 20 USD, bn UAH, bn Loss* of public se or entities and small enterprises. 2,5 50 Income is the taxable earnings amount of profitable DFI into Ukraine, USD bn Volume of paid corporate companies 100 income tax (scale Pre-tax earnings, UAH bn** Loss is the absolute value of the loss amounts on the right) (scale on the right) of companies operating at a loss 40 80 2,0
30 60 15 1,5
40 20
20 1,0 10 *Inve ment data for Q3’2012 is approximate 0 10 **Li ed data does not take into account the performance of public se or entities and small enterprises I II III IV I II III 0,5 2011 2012 I II III IV I II III 0 Sources: State Stati ics Committee of Ukraine; State Treasury Service of Ukraine 2011 2012 Sources: State Stati ics Committee of Ukraine; NBU № 20 (43) DECEMBER 2012|the ukrainian week|25 Economics|Oligarchonomy Ukraine’s Robber Barons: Where They Come From ligarch clans today have richment comes from political pouring money into “independent” the financial, economic rather than economic arrange- parties and some self-nominated and political tools to domi- ments that are often illegal. candidates. Onate society. They are Oligarch-controlled capitalism based on production assets gained is at its peak today, as power is al- Tycoon empires: through the privatization of state- most entirely distributed among ghettoes for the nation owned enterprises in various forms oligarchs. Before the parliamen- A characteristic of the oligarchic and other social benefits. These in- tary election, Ukraine had no system is that it cannot co-exist cluded the open, yet government- money to pay basic social benefits with either domestic or foreign, Author: controlled sale of stock in tenders to pensioners, invalids and other small or big business. Tycoons are Volodymyr at knockdown prices; the shadow underprivileged categories, while the first enemies of innovation, Lanovyi, expropriation of state-owned facil- Doctor of ities by means of setting up joint Economics, ventures with the government or Chairman simply buying them; the fake bank- of the Centre ruptcy of state-owned companies for Market accompanied by illegitimate court Reform verdicts to transfer ownership to private companies that covered commitments to pay their debts which, for the most part, were sig- nificantly lower than the cost of the respective assets – this one was particularly popular in the Donbas; the granting of exclusive licenses to exploit mineral deposits and radio frequencies to the nouveau riche, essentially for free; assistance from officials in winning big and profit- able public tenders and construc- tion contracts, and so on. The soon-to-be-rich also took over the trade of imported gas, oil, nuclear fuel, coal and grain; and the servicing of tax, customs, pen- sion, police, budget, social and other contributions and benefits. Windfall profits and endless assets were mostly appropriated under Leonid Kuchma’s presidency, yet oligarchs continue to mushroom today. The newly enriched “masters of life” did not stop with their eco- nomic accomplishments and en- tered the political domain, to fur- ther guarantee their corrupt prof- its. Top officials encouraged them to do so as they themselves looked for partners for corruption deals. Without their support and that of the police, oligarchs would not ex- ist. In turn, the latter encourage corrupt officials to produce laws that suit business owners. One could not exist without the others. Together, they have constructed a new type of business, where en- 26|УКРАЇНСЬКИЙ ТИЖДЕНЬ|№ 50 (267) 14 – 20.12.2012 Oligarchonomy|Economics competition, market self-regulation branch corporations, oriented to- into politics, where they could cre- and equal rights. They prefer man- wards business profits and up- ate competition in corruption and ual control of the economy, bureau- grade. Unable to compete with political fields – for instance, by cratic market regulation, central- them, oligarchs use both legitimate funding alternative parliamentary ized distribution of resources and (overpriced raw materials, artificial or presidential candidates . pricing. At the same time, they fear tax claims and so on) and illegiti- They are also afraid of transna- small producers, which are more mate (raider attacks) means to re- tional companies that are more flexible and dynamic in following move them from the scene. Ulti- powerful, financially sound and market trends, hence more com- mately, they try to swallow them technologically modernized. Since petitive than oligarch-owned dino- up. Numerous examples include the Viktor Yanukovych became presi- saur conglomerates. As a result, Stirol chemical plant in Horlivka, dent, entrepreneurial transna- pro-government clans attempt to the Nikopol Ferroalloy Plant, the tional companies have essentially crush small and medium busi- MMK Illich in Mariupol and so on. suspended the opening of their nesses by restricting their access to Today, oligarchs partially or subsidiaries in Ukraine. Instead, loans and investment, and causing fully control all the facilities that international giants, such as oil them problems, via the rules of the look as if they could generate vast and gas companies, have been of- game that they have established short-term profits in Ukraine. fered the opportunity to operate in and law enforcement agencies. In addition, tycoons make ev- Ukraine with the aid of monopoly They are also antipodes and the ery effort to prevent the owners of abuses, rent privileges and the sup- mortal enemies of big private one- competitive businesses from going port of their own governments. The fact that these relations are ex- clusive, is confirmed by the deals signed this year on the allocation of pro-government clans crush small and medium businesses by restricting their access to loans and investment the energy resources to be ex- tracted in Ukraine at a rate of 70:30 in favour of foreign companies. Such concessions are rare in inter- national practice as the maximum usually granted by governments to foreign companies is 50%. What does it take to ru(i)n a business? Unlike Western countries, but just like in Latin America and Asia, Ukrainian oligarch business struc- tures are multilayered and highly diversified holding corporations with a limited number of major stakeholders – generally less than 10. Very often, the interests of oli- garchs do not correspond with those of top managers whose inter- est do not extend further than their own salary increases. Meanwhile, business owners do not effectively control their managers’ activities. These discrepancies, as well as the owners’ inability to control all fields of the corporation, result in a burdensome bureaucracy, swelled administrative costs of running the business and make it impossible to make the right strategic decisions regarding business development and raising capital on the highest level. One example was the recent scandal with Roshen, a well-known № 50 (267) 14 – 20.12.2012|УКРАЇНСЬКИЙ ТИЖДЕНЬ|27 Economics|Oligarchonomy
Ukrainian chocolate empire owned new business projects is also to Ukrainian financial and industrial by Petro Poroshenko. Its managers conquer markets and cut produc- groups (FIG) are banks and lending decided to make all packaging in tion costs in conglomerates. institutions. Oligarchs use them as Russian. After a massive protest Optimizing business by means channels with all the necessary in- campaign on the web, Petro Po- of moving capital abroad is another struments and legitimate opportu- roshenko said that he had been un- downside of oligarch-style busi- nities to transfer their assets aware of the decisions of his execu- ness management. Ukrainian ty- abroad. Also, they work as mecha- tives and would do everything to coons buying companies in Euro- nisms to get newly-printed cash cancel them. pean and other Western states has from the National Bank intended Moreover, multilayered and di- become the latest trend, and is part for all citizens, including the entre- verse structures prevent the timely of their strategy to take capital out preneurial segment of the economy. reaction of their owners to market of the country on a massive scale. In addition, they service the debts changes in every field. Weak ad- Firstly, their huge facilities based of the oligarchs’ entities, saving ministrative and financial control on obsolete Soviet plants are un- them from bankruptcy and real re- over production facilities under- competitive. Secondly, some oli- sponsibility under their liabilities. mines internal financial discipline. garchs convert Ukrainian assets In this case, powerful banks that Late reaction to market changes re- are part of the biggest FIGs take sults in difficulties or the failure to buying companies in over the actual financial accruals of meet external financial liabilities. the economy to cover the needs of Thus, the domination of oligarch European and other their loss-generating enterprises. clans in the economy makes it un- Western states is part competitive, financially vulnerable, Carthage must fall unstable and weak. of their strategy to take Highly diversified corporations capital out of the country owned by one or several people are Capital drain unnatural and harmful for the Striving to increase the overall on a massive scale economy. The goal of economic and profits of their corporations, in ad- political change should be to de- dition to searching for extra privi- into foreign ones in an effort to mo- prive owners of huge business em- leges and benefits from the govern- nopolize international raw mate- pires of the opportunity to shape ment, tycoons focus on upgrading rial markets. Privat Group is one of the government, dictate its deci- the structure of their assets. How- them, trying to take over the fer- sions and employ corrupt financial ever, the efforts are not innovation roalloy market. Although unlikely deals to grab national wealth. Nec- or business-oriented, and do not to succeed, its aspiration to use essary reforms include: involve any special technological or non-business methods on an inter- • Criminal liability for corrup- marketing solutions. national level are obvious. This ex- tion in parliament, such as bribes Instead, Ukrainian oligarchs port of capital is sooner an irre- for votes and the appointment of have focused on the grabbing of ad- versible drain of assets, bringing parliamentary committee heads, ditional energy facilities, land, no future profits to Ukraine. ministers and judges. loans and professional managers – For this reason, the most valu- • Restrictions on contribu- mostly foreign. The goal of their able sub-divisions of the biggest tions to election campaigns from 28|УКРАЇНСЬКИЙ ТИЖДЕНЬ|№ 50 (267) 14 – 20.12.2012 Oligarchonomy|Economics one person, the violation of which • Direct public control over • A ban on private companies should result in significant pun- the actions of officials. purchasing enterprises in order to ishment. Corrupt tycoon-controlled cover their debts, resulting from • Criminal liability should ex- business should be deprived of its the deliberate overpricing of raw tend to party functionaries and material basis. Measures for this materials and services by their sup- individual candidates for the ille- include: pliers. gal funding of election campaigns. • The drafting of government • The introduction of a system • A ban on the appointment of programmes and plans based on of market – non-targeted and non- powerful capitalists to govern- interests in the development of exclusive - monetary refinancing of ment or other top positions, or a the national economy rather than the economy by the NBU. restriction on the amount of prop- individual lobbyist groups and Accomplishing all this is a erty owned by potential candi- their projects. great challenge. The “masters of dates. • The reintroduction of trans- life” are able to quickly concentrate •The modernization of public parency in privatization tenders. significant funding on certain po- governance, including a ban on • Restriction of the share litical projects, stonewall bills and official interference with business packages one person may acquire regulations aimed against them processes and operations; the de- through the privatization of and unite against common threats, centralization of financial, invest- state-owned companies to no no matter how fiercely competitive ment, fiscal and budget flows; the more than 10-15%. they are in the struggle for re- cancellation of the police methods • Keeping intermediary pri- sources and production facilities. currently used by tax authorities; vate firms out of trade and finan- Moreover, the parties currently in ensuring equal rights for taxpay- cial transactions involving state- parliament do not see the oligarch- ers and customs duty collectors; owned companies and institu- controlled government and econ- consumer protection and so on. tions. omy as one of the biggest dangers • Increased criminal liability • Criminal liability for raider for Ukraine. Therefore, efforts for civil servants, law enforcement attacks on companies and court should be taken to unite society officers, SBU (the Security Service support of raiders. around political forces that will of Ukraine) employees, prosecu- • The introduction of compet- fight for Ukraine’s transition to an tors, judges, tax inspectors and itive licensing for the extraction egalitarian system that acts in the customs officers for corruption. of minerals, radio frequencies, interests of most citizens, free mar- •A ban on the ownership of subcontractors in public tenders, kets and a pluralistic political more than one national TV chan- construction contracts, and so model that is free of tycoon influ- nel or media group by one person. on. ence. Investigation|dying towns
The Ghosts of Industrial Past Industrial depression in the Donbas depopulates towns once built around plants and coal mines
Authors: ust like any historically indus- late 19th-century. Both the eco- even the little you have now. This Bohdan trial region, most populated nomic cycles and local mentality is the obsessive desire for ‘stabil- Butkevych areas in the Donbas sprung revolve around large industrial ity’ which spin doctors are exploit- and Jup near plants and coal complexes as a certain sacral sym- ing. However, the impact of dein- Kostiantyn mines. However, a growing num- bol, an object of pride and even a dustrialization has gone much Skorkin ber of unprofitable enterprises totem. “To me, a city without in- deeper. have been shut down in the past dustry is kind of fake,” says Oleh Given the industrial orienta- two decades, causing a cata- Sestrin, a Mariupol-based worker tion of all aspects of local life and Photos: strophic loss of jobs and complete who comes from a family of work- workers’ traditions like coal min- Andriy decline of infrastructure. To the ers. This type of thinking predom- ing dynasties, shock-worker re- Lomakin locals, this means no traditional inates in the region and has driven cords and proletarian pride in sources of support. Migration en- the locals into a dead end over the one’s own plant, people without sues, and entire districts turn into past decades. their enterprise tend to lose their ghost towns. Underlying all these “The catastrophic decline of sense of purpose in life. The tra- sad developments is the overall in- industry in the Donbas has af- ditional foundations of their lives efficiency of the social economic fected the psyche and mentality of have been ruined. Citizens stop system in the Donbas. the population in several major appreciating and loving the place ways,” Donetsk-based psycholo- where they were born and lived Deadly restructuring gist Andriy Bashkirov says. “Of their entire lives. This is the root Deindustrialization and depopula- course, when you lose nearly all of all the problems in Ukraine’s tion are typical of any post-Soviet your usual ways of making money black belt – alcoholism, disregard city or town, but the Donbas is virtually overnight, you become for the law, rampant crime, and special in that it is a purely indus- terrified at the prospect of any fur- so on. The Donbas is still living trial region in the manner of the ther change and will hold onto with the consequences of this his- 30|the ukrainian week|№ 20 (43) DECEMBER 2012 dying towns|Investigation mining industry was de- Dying towns stroyed on purpose in the Stepnohirsk is a small town in Zaporizhia Oblast located on 1990s. The local authorities the bank of the Kakhovka Water Reservoir. It was abandoned were given a carte blanche by residents after its coal mines closed from Kyiv to sell off products, extremely expensive equip- Snizhne is an oblast-level town in Donetsk Oblast which is ment and enterprises into pri- suffering from continuing depopulation caused by deindus- vate hands. The entire region trialization was on the edge of survival, while a handful of those who Petrovske is a country-level town in Luhansk Oblast which now make up the so-called lo- has been dying since the closure of the Hryhoriy Petrovsky cal elites filled their pockets. Chemical Association This process has slowed down Vuhlehirsk is a country-level town in Donetsk Oblast located somewhat but continues even near Yenakievo. The breakdown of the coal mining infra- now, because 90% of enter- structure triggered emigration there. prises that were closed will never resume operation. Con- Torez is an oblast-level town in Donetsk Oblast which has sequently, people who used to been gradually losing its population after all of its coal mines work there have been forced and plants were closed to seek a better life outside their own home towns be- cause they can no longer sur- workers a long time ago, with zero vive in them. Neither the local chance of returning. The true nor the central authorities are number of abandoned homes may doing anything to offer resi- be 2-3 times higher. dents of what used to be coal Entire districts have become mining settlements any other desolate in some depression- economic prospects.” struck cities. For example, 9 out of 12 coal mines that provided jobs Abandoned mines, for the coal mining town of Bri- abandoned homes anka, 58km from Luhansk, were Luhansk Oblast is a vivid ex- closed during large-scale indus- ample of the overall situation Stuck trial restructuring. This govern- The Ghosts of Industrial Past in the Donbas. As of early 2012, between ment manoeuvre triggered a hu- there were 11,500 abandoned epochs. manitarian catastrophe. The pop- flats and homes in the oblast. Residents of ulation of the town has dropped Zorynsk do This official number is just the not see any nearly 50% in the past 20 years. tip of an iceberg. Experts say prospects for People fled in different directions that in many cases officially the future and to survive, abandoning their registered residential property are nostalgic homes. In the mid-1990s, selling a owners left the area as migrant about the past piece of residential property in the
tory, to say nothing of the real de- population of small towns and villages.” The bankruptcy of a coal mine is often a real death verdict to a coal mining settlement and its in- habitants, because it forces locals into subsistence agriculture. A coal mine means not only jobs that are a source of living but also a utilities infrastructure, social and other provisions, a sense of being needed, and more. No-one offers any alternative jobs when enterprises close, and since the 1990s, the region has suffered from depopulation and extreme social labour emigration. “The so-called restructuring was in many cases unnecessary,” Oleksandr Ilchenko, a public ac- tivist, entrepreneur and former coal miner from Sverdlovsk, Lu- hansk Oblast, says. “The coal № 20 (43) DECEMBER 2012|the ukrainian week|31 Investigation|dying towns
Luhansk hinterland for US $100- The order A major problem for resi- your flat, then so be it – it can go is to survive. 300 was considered a great suc- Sukhodolsk dents who are not even directly to hell.” cess. tries to attract linked to industrial production is “I don't remember my home- Oleksandr, 30, a Luhansk resi- new residents the absence of any alternative in town very well,” Serhiy Halkin, a dent, remembers that in 1996, his by offering the local economic system, which native of Snizhne Donetsk family sold a two-room flat in the abandoned is another cause of permanent Oblast, says. His family was for- depressed town of Zorynsk with a flats free emigration. “No-one will under- tunate enough to be able to move plot of land as a bonus for US of charge stand you, if you don’t want to to Boryspil, near Kyiv. “We left $300. He believes they were lucky, work at a plant,” painter Andriy Snizhne in 1997 when the local because one year later their neigh- Siry, a Yasynuvata native and coal mine where my father and bours were unable to find a buyer now Kyiv resident, explains. grandfather worked was shut for their flat, so they simply locked “They put pressure on you since down. There were no jobs avail- it up and left for Russia. childhood if you dare dream of able, and the situation was so As we enter Zorynsk, the cone something that does not fit into desperate that even food prod- of a coal mine welcomes us. The the local cultural code. What? ucts were not delivered to gro- coal mine is no longer operating cery stores on a regular basis. and looks like the skeleton of a But we didn't have money to buy huge iron monster. What immedi- The bankruptcy of coal them anyway. There is not much ately catches the eye is the multi- mines forces people into I remember from my childhood tude of abandoned houses, first years in Snizhne, except a lot of individual homes and then entire subsistence agriculture Lenin statues. I have never gone blocks of flats. The destruction of there after we left, and, frankly, I the town is close to complete – You want to paint? Plants are don't feel particularly drawn.” nearly all the locals we met said standing idle in the country, but they worked outside of town and everyone wants to be a painter, Reducing dependency dreamt of leaving it as most of they will tell you. So people like The cities where the coal mining in- their relatives and acquaintances myself have never had a choice dustry kept at least some of its posi- had done. The only thing that per- in contemporary Donbas – we tion thanks to privatization have a mits several thousand local resi- have had to leave as soon as an lower depopulation rate. For exam- dents to survive there is the M-04 opportunity presented itself, ple, the infamous town of Suk- highway to Izvaryne on the border without waiting for a better hodolsk, where 28 coalminers were and jobs in Alchevsk. chance. If you need to abandon killed in an accident in 2011, has 32|the ukrainian week|№ 20 (43) DECEMBER 2012 dying towns|Investigation
started to see people returning to free of charge, but the cost of re- Going of labour and dependence on raw nowhere. their abandoned flats. This is even modelling falls on the new owners. The absence materials rather than finished despite the fact that, statistically, In this way, some ghost buildings of any products. Most production facili- this town is among the fastest are coming back to life. alternative ties are privately owned, but the shrinking municipalities in Ukraine. But will it last? For the past is gradually owners invest almost nothing in From the very first glance, two years, the Mykola Azarov killing the upgrades. If this situation contin- Sukhodolsk appears depressed: government has repeatedly de- Donbas ues, plants and coal mines will grey streets, battered houses that clared that the coal mining indus- continue to close and towns will have not been kept up or remod- try is very significant for the state lose their inhabitants. elled since the breakup of the due to its desire to reduce depen- In short, the entire socioeco- USSR abound and locals are few. dency on Russian natural gas. nomic system of the Donbas is in Abandoned flats are reminiscent Hence a revival of this sector was a dead end and mere production of all the depressed towns in the to be expected, the government region. Especially phantom-like assured. However, economic ex- are blocks of flats with alternating perts say that powerful oligarchs Both the economic cycles populated and abandoned floors. have much to lose if they decide and the local mentality For example, there is a grate on to switch to coal: they will have to the fourth floor in a 12-storied overhaul their production lines at revolve around coal mines building in the city outskirts – great expense. In other words, and plants there is no way up from there. “It’s these coal mining regions should a good thing that they blocked the not expect any positive changes reform will not suffice to revive passage not so long ago,” a local soon. it. Measures must also be taken resident says. “Drug addicts used The biggest problem is that the to help people who have lost to have a den up there. On the authorities are not even trying to their jobs in industry after re- other hand, a young couple re- diversify the economy of the Don- According to a UN structuring. The Donbas will cently got permission to occupy an bas, which remains dominated by report, have to go through this painful abandoned flat nearby. And they heavy industry and coal mining. 5 but much needed process at Ukrainian cities did move in. Now they are trying This perpetuates the dependency (Dnipropetrovsk, some point, just like its foreign to remodel the place.” of the local population for survival Donetsk, Zaporizhia, counterparts have done, from the The Sukhodolsk authorities on these sectors, which are now Kharkiv and Odesa) Ruhr region in Germany to are among the top encourage people to occupy aban- uncompetitive due to their out- 30 cities in the world Wales in the UK. And this should doned flats. They are handed over dated technology, inefficient use by depopulation rate be done before it is too late. № 20 (43) DECEMBER 2012|the ukrainian week|33 Society|Environmental activism The half-million population of Mariupol in Eastern Ukraine is Stolen Air standing for its right to breathe safely
Article and photos by Natalia Kommodova, Mariupol-Donetsk
ver 10,000 people recently took to the streets, de- manding an end to the Oemission of the poisonous smog that covers Mariupol virtu- ally every day from the Azovstal and MMK Illich Steelworks, both owned by billionaire Rinat Akhmetov’s Metinvest Holding. Despite reports by the plants and the authorities of reduced emis- sions, locals claim that the indus- trial giants continue to blatantly poison the oxygen they inhale and that Mariupol is gradually dying, at the same time, killing the Sea of Azov with its unique flora and fauna. Meanwhile, regulators are turning a blind eye to the environ- mental abuse and its devastating effect. Thousands of people signed an Mariupol is the only The annual share of industrial mote from the plants, while the city in Ukraine where anti-smog resolution and pre- citizens are not offi- pollution per citizen is 800kg. suffocating mist now covers the sented it to the president, the gov- cially warned of This is almost eight times as much city every day. weather conditions ernment, the ombudsman and that make it danger- as the average pollution per per- Mariupol is the only city in even the Green faction at the Eu- ous to go outside son in Ukraine. Lung cancer kills Ukraine where citizens are not of- and even air out ropean Parliament. Discouraged apartments every fifth citizen of Mariupol, ficially warned about bad weather protesters were prepared to block while the local cemetery is report- conditions that make it dangerous the work of the city hall and the edly the biggest in Europe. Sociol- to be outside or even open win- major polluters for as long as it ogists report a massive migration dows. On windless or foggy days, takes them to implement modern out of the city and a steep devalua- industrial emissions do not diffuse air cleaning solutions and for mu- On average, tion of real estate. Meanwhile, nei- fast enough, concentrating in resi- polluted air cuts nicipal authorities to report accu- lives by ther the governor nor environ- dential districts near the plants rately on what people inhale. The mental watchdogs think that the instead. Whenever that happens, unprecedented scale of the rally 8 situation in Mariupol is disas- the streets turn into gas chambers. pushed plant owners to make con- months, trous. The most damaging effect is on cessions. and by Azovstal and MMK Illich steel- children. works produce 98% of all emis- “Our district was previously The gas chamber 2 years sions. They also support the city, considered to be clean, because in dangerous zones by the sea since they own stores, food pro- it’s far from the plant,” says Inna Mariupol, a city on the sea shore, Source: ducers and drug stores, while the Dmytryshyna, mother of Maryana, The European plants employ nearly 40,000 local 2, and Daryna, 4. “Now, even shut has the worst air pollution in Environment Ukraine. It is home to the biggest Agency (EEA) residents. People patiently grew windows no longer protect us steel and coke plants in Ukraine. used to the dust and char that from dust and smoke. My daugh- They generate 25% of all emis- cause eyes to burn and dizziness ter has chronic bronchitis and she sions in Donetsk Oblast. “It is pos- before things got much worse this can’t breathe without an inhaler. sible to touch as well as see what fall. The caustic “smell of money” Local pulmonology units are all you inhale in Mariupol,” the locals – this is how the locals refer to packed with patients. “What’s go- joke. smog – has spread to districts re- ing on there? We seem to run out 34|the ukrainian week|№ 20 (43) DECEMBER 2012 Environmental activism|Society vice finds excuses not to do it, such as an ongoing reform or the lack of petrol for the car. Licensed to poison? Stolen Air The reconstruction of a sinter plant and reduction in emissions from Azovstal by 2012-2013 were the requirements for the plants to be granted licenses by the Minis- try of Environment. In September 2012, the local authorities along with Akhmetov’s Metinvest passed a new Health Improve- ment Programme in Mariupol that postponed modernization for four years. After 4 November, a decision was taken to suspend it altogether. As a result, the next smog attack pushed a record- breaking 10,000 protesters onto the city’s main square. Wearing respirators, they stormed City Hall, demanding the resignation of the inactive mayor, Yuriy Khot- lubey, and other officials. Several days later, the management of Azovstal announced a stoppage in operations in order to conduct renovations, declaring smoke from the processing of recover- able resources containing peat, as a possible source of the suffocat- ing smog. Plant employees claim that the real cause is spending cuts. With obsolete purification facilities and production tech- niques that are over 100 years old, steelworks cannot but violate of inhalers before we deliver vide first aid to children who don’t Almost emission requirements. If they them,” wondered a supplier from feel well.” She says that children 80% try to meet them, steel and coke Donetsk when I bought one for my get sick on a massive scale, espe- of industry in Donbas will become too expensive. daughter.” cially during these smog attacks. is dangerous to the “Unfortunately, Ukrainian in- environment. Over a period of 10 months, Doctors diagnose them with acute Top offenders include dustrial plants do not take envi- Mariupol was engulfed in thick respiratory viral infections as op- steelworks, ronmental risks into account when coal plants smog for 187 days – more than posed to chemical bronchitis and fossil-fuel doing their financial calculations,” six months. In September, 23 of caused by toxic emissions. As a re- power stations says Pavlo Khazan, leader of the 30 days were dangerous for sult, parents cannot prove that lo- sustainable development and en- breathing. Mid to high levels of cal industry has damaged their ergy campaign at the Green World pollution were announced three child’s health in court. Ukrainian Environmental Associ- times in October alone. These are In fact, the Sanitary Service ation. “Paradoxically, Ukrainian the periods when people are offi- has been reporting that the levels environmental legislation is con- cially recommended to wear spe- of dust and toxic substances, such Rinat Akhmetov’s sidered to be one of the most ad- cial protective masks and clothes as hydrogen sulfide, carbon mon- Metinvest is vanced in Europe, but it’s not oxide, phenol and formaldehyde, a monopolist on the working. Regulators have essen- outdoors. domestic steel “It only takes seconds for exceed the acceptable level in and iron ore market tially given the green light for big smog to cover an outdoor sports 25% of all air samples. They claim industrial plants to emit levels of ground where school kids have that sanitary areas which are sup- poisonous chemicals into the air their PE classes in warm seasons. posed to protect people from poi- and water that pose a threat to The children begin to suffocate. It sonous emissions are no longer people’s health. Environmental of- is common now to “evacuate” effective, and pollution has ficials and local authorities put them immediately back to school reached residential areas. How- Mariupol citizens under threat, if this happens,” says Eleonora ever, when environmental activ- saying that the city’s steelworks Haivoronska, a PE instructor at ists requests measurements of cannot curb emissions because of School 53 and activist in the local pollution levels to find out what current technological processes.” environmental protection cam- people really inhale when smog According to Mykola Afa- paign. “Sometimes we have to pro- covers the city, the Sanitary Ser- nasiev, ex-Director of the now dis- № 20 (43) DECEMBER 2012|the ukrainian week|35 Society|Environmental activism
▶ Mariupol is the second large city in the Donetsk Obla and the 10th mo DANGEROUS MARIUPOL populated city in Ukraine
▶ ndu rial plants emit over 800kg of poisonous chemicals per citizen per year in Mariupol which is twice the average level in the Donetsk Obla and eight times that of Ukraine as a whole
▶Major polluters of the city on the shores of the Sea of Azov include Azov al and the Illich Steelworks, which was transferred to Rinat Akhmetov’s portfolio in 2010. They account for 98% of all emissions
▶ According to the State Environmental Prote ion Agency, emissions in Mariupol rose by more than 22% in 2011
▶ Over the fir 10 months of 2012, the city spent 187 days or more than half a year covered in dense smog
▶ The programme to improve the environment in Mariupol by 2020 will co UAH 6.3bn ▶ The monitoring carried out in the mid-1980s in Mariupol revealed that the damage to its citizens’ health significantly exceeded the financial equivalent of the entire eelworks complex at that time
banded State Inspection for the not demanding the closure of the spite of our losses, we continue to Protection of the Sea of Azov, the plants, but transparency and re- finance reconstruction at a scale plants have been postponing im- sponsibility, compliance with en- unseen in the past 50 years,” the portant environmental measures vironment protection laws and re- holding’s press service said. every year. As a result, the level of spect for the right to a safe and The Health Improvement for the least harmful and visible chem- healthy life. 2012-2020 Programme, drafted icals in the air in Mariupol has de- “Our rally is a red flag, warn- with Metinvest experts and ap- clined while that of barely notice- ing the system that our patience is proved by the city council, pro- able yet extremely toxic gases in running out,” says the anti-smog vides for a 40% reduction on emissions remains unchanged. resolution. “Driven to boiling emissions, “provided that the Experts propose several solu- point, the public is demanding market situation is sufficiently fa- tions, including a significant in- that the authorities solve the prob- vourable”. However, steelworks crease in fines and stricter punish- lem here and now. We no longer are facing a grim future as the cri- ment – including criminal – for trust sham pretence measures sis unfolds again, thus people in breaching environmental protec- taken by the government and the Mariupol have good reason to tion laws. Plants would no longer plant’s administration!” mistrust official pledges. benefit from violating require- Protesters urge the Verkhovna Currently, the residents of ments, while authorities will not Rada to amend the Law On Envi- Mariupol are getting used to open be able to pretend that problems ronmental Emergency Zones so windows, walking in parks and in- do not exist. that a relevant status is designated haling air without char as long as for cities and towns that are envi- the operation of Azovstal’s toxic A red flag for the system ronmentally dangerous as a result sinter plant is suspended. Activists Over 13,000 people signed the of both disasters and long-term say that they will not attend rallies resolution before the Stop Smog damage to citizens’ health. as long as the air remains unpol- rally. On 4 November, protesters Metinvest, in turn, promises to luted. The anti-smog protest in urged the MPs representing their invest over USD 620mn to im- Mariupol signaled a surge of civic city to initiate necessary legislative prove the environmental situation activity never before seen in Don- changes, having considered the in Mariupol by 2020, while issu- bas. Experts assume that it could situation in the new parliament. ing a reminder that the local steel- serve as a model for other envi- They made it clear that they are works operate at huge losses. “In ronmentally dangerous cities. 36|the ukrainian week|№ 20 (43) DECEMBER 2012 Marriage |Society ver the past few years, Ukraine’s divorce rate has risen to the top among Eu- Oropean countries, with 5.3 Easy Come, divorces per 1,000 people. This de- spite the fact that Ukrainians are overwhelmingly eager to get mar- ried – more so than people in West- ern Europe where every third mar- riage is civil, compared to every Easy Go tenth in Ukraine. Experts claim that while Ukrainians often get married as early as possible, they do not Uncertain futures, hypersensitivity, know how to maintain their mar- and the burdens of the 1990s riages. The major factors leading to broken families include constant fi- are eroding Ukrainians’ trust nancial strain and the fact that the in the institution generation raised in the 90s – when Ukrainian society plummeted into a of marriage psychological and demographic abyss – is now ready to get married. Author: Bohdan Butkevych ALCOHOL, CHILD SUPPORT AND POVERTY “Ukrainians are a matrimonially active nation,” says social psychol- ogist Andriy Strutynsky. “But this is more of a bubble: people get married early and easily, and they split up the same way. The family is no longer the crucial element hold- ing society together. Very often, we don’t take marriage seriously, and we break it. Financial factors mat- ter, too. As a result, respect for marriage fades. And remember al- coholism, one of the fiercest pan- demics tormenting Ukraine. It de- stroys 20-25% of all marriages.” Serhiy and Liudmyla, a Zhyto- myr-based couple, have lived to- gether for six years. They have a son, Oleksiy. Serhiy wants a di- vorce because he has met another woman and wants to start a new life with her. The only unresolved issue between him and his ex-wife is the child: Liudmyla threatens never to allow him to see his son. However, Ukrainian statistics sig- nal that children rarely hold mar- riages together, as up to 50% of di- vorces occur in families with chil- dren. The number of single-parent families increases annually, hitting 20% in 2012. Children remain with the mother in 90% of all cases. The Kyiv-based Okhrymenkos are in the process of getting di- vorced. Oleh and Olha have spent nine years together. They have no children although they had been planning to have one this year. Both say that they got married for love. “It’s hard for me to live with a woman who, after so many years together, does not understand that № 20 (43) DECEMBER 2012|the ukrainian week|37 Society|Marriage every man has hard times some- An average divorce procedure independence, the Ukrainian gov- times – financially and psycholog- in Ukraine takes a month and a ernment has never articulated a ically,” Oleh says. “My business half compared to at least a year clear marriage or family policy.” has been declining over the past for the court to register the ap- two years as a result of the ongo- peal in many European countries. THE LOST GENERATION ing pressure from tax authorities. Child support usually costs the According to research conducted Obviously, we’ve had a much husband a small percentage of his by the Research & Branding lower income and could no longer official salary (excluding unre- Group, 79% of Ukrainians got afford the life we were used to. In- ported earnings) and rarely pre- married following their emotions, stead of supporting me during this vents the divorce. At just UAH while 15% were guided by reason- difficult time, my wife began to 300-400 or USD 36-50 per able motives. “An important rea- nag at me. I had not agreed to that month, child support is very af- son for the irresponsible attitude when we got married.” fordable for most men working in towards marriage in Ukraine is Olha says that her husband is big cities. Ukrainian law only pro- the immature hypersensitivity insensitive and cannot be the head vides for child support, while about family life,” says psycholo- of the family. “He often comes many foreign jurisdictions re- gist Nadiya Artyshko. “Most get home drunk, and that has been quire an ex-husband to support married because they are carried the last straw for me. I won’t toler- his ex-wife through alimony until away by their emotions, which is ate an alcoholic at home. My fa- she remarries. not inherently bad. The problem ther drank and it was terrible,” she “A normal government is al- with marriage is that feelings complains. ways interested in encouraging alone can not solve any problems This is typical for Ukraine. Ac- once the initial wave of emotions cording to experts, an average in 20 years has faded, leaving bare routine married couple in Ukraine di- and reality. There is another inter- vorces after 11 years of marriage of independence, the esting difference: most Western driven by a crisis in the relation- Ukrainian government has Europeans first live in a civil union ship. The most widespread rea- and then get married officially. By sons include financial difficulties never articulated a clear contrast, most civil unions in accompanied by alcohol addiction, marriage or family policy Ukraine fail to generate a full- ultimately leading to irreconcil- scale family and eventually fall able differences. Moreover, the di- people to get married and keep apart. This is because Ukrainians vorce procedure is very simple and their marriage strong,” claims so- have no confidence in the future the cost of child support is ab- ciologist Serhiy Mazurets. “Family or themselves, and society is in- surdly low. These are two more is the cornerstone of society. Ear- fantile.” factors that encourage Ukrainians lier, it was supposed to provide “Like other post-Soviet coun- to treat marriage irresponsibly. new hands to work and fight. To- tries, Ukraine has one of the high- day, it has become an important est divorce rates in Europe,” 400 socio-economic unit. Statistics claims Liudmyla Sliusar, a re- Regi ered show that married people spend searcher at the Institute for De- marriages twice as much as single people do, mography and Social Studies. thus families make a much more “The first surge came in the late 350 up 16% significant contribution to a stable 1960s after the complex two- ↑ social life. Moreover, single men tiered divorce procedure was sim- tend to be more aggressive and plified. Virtually unchanged until 300 radical. However, in 20 years of the late 1980s, the divorce rate soared again during the crisis of 80 Divorces the early 1990s. After the 2000s, it 250 slowed down but the process is 70 not consistent, and is prone to fluctuations. We saw the divorce 200 60 rate rise in 2010-2011.” 356 000 Experts project that the trend 50 will intensify. Ukraine has not yet ↑ fully overcome the 2008-2009 fi- 150 up 39% 40 nancial crisis that hit both peo- COUPLES ple’s wallets and their confidence in the future that had just begun 100 306 000 30 to flourish after a moderate rise of 62 000 welfare in the mid-2000s. Sociolo- 20 38 000 gists note that Ukrainians are cur- 50 COUPLES rently rolling back to the 2000s in 10 terms of their mindset and expec- tations. Since economists project 0 0 another wave of crisis, a plausible 2010 2011 2010 2011 assumption is that many people Source: Ukrainian Department of Vital Stati ics and Civil Status will soon file for divorce due to the reasons mentioned above. 38|the ukrainian week|№ 20 (43) DECEMBER 2012 Marriage |Society There is another important so- OPINION cio-demographic trend causing the current divorce situation in Ukraine. “In the past two to three Why Marriage years, the generation that was born in the 1980s and grew up in the mentally and psychologically tur- is Declining bulent 1990s has reached the mat- rimonial age,” Andriy Strutynsky explains. “That was when the di- in France vorce boom occurred, as most peo- ple who suddenly found them- selves in a new world had no chance to live the life they were used to, including the usual life of marriage. Children raised in an at- mosphere of chaos, complete de- struction of the usual order and the lack of an understandable moral Author: code absorbed this lack of confi- Michel Wieviorka dence in the future and reluctance to undertake long-term obliga- tions. Now, this ‘crisis generation’ ld sociology textbooks analyze only one type of modern family: a is getting divorced just as quickly nuclear formation with the father and the mother linked by mar- According to as it got married because it does the Institute riage and children. Today, the classic family model no longer exists not view marriage as particularly of Demography and and the institution of marriage is being constantly diluted. Social Studies, over O important and does not believe This trend is now evolving in France. According to data from the National In- that it is worth saving in a crisis 80% stitute of Statistics and Economic Studies (INSEE), the number of marriages of Ukrainians aged situation. It is also influenced by 50-54 are married, registered annually went from 290,000 in 2001 to 235,000 in 2011. The av- the common European trends of compared to only erage marriage age went from 28 to 30 for women and 30.2 to 31.8 for men increased marriage age and num- 44% between 2001 and 2011 respectively. ber of unregistered unions. Unlike of Ukrainians under The first reason for this is that more and more people opted for civil unions, 30. The average mar- Western Europeans who treat the riage age in Ukraine known as PACS in France. This is the Civil Pact of Solidarity introduced in 1999 civil union as a test before married is 30 for men and 27 as legislation that allows two people of different genders or the same gender life, Ukrainians use it to escape the for women. to arrange their life together in compliance with rights and duties similar to burden of excessive financial and 10-12% those of a marriage. In 2010, 203,882 couples chose PACS, almost catching of couples, predomi- psychological obligations.” nately young people up with the rate of marriages that year. The share of same-sex PACS unions is According to the Institute of under 35, do not reg- just 6%. ister their relation- The second reason is the fading social role of the Catholic Church that has Demography and Social Studies, ships over 80% of Ukrainians aged 50- virtually lost all its power and no longer promotes and imposes conventional 54 are married, compared to only values, marriage and family first and foremost. 44% of Ukrainians under 30. The The third reason lies in the public opinion, which calls on societies to create average marriage age in Ukraine is conditions that would allow same-sex couples to live together, agree on heri- 30 for men and 27 for women. 10- tage rights, adopt children legitimately and have family medical insurance. 12% of couples, predominately News about the drafting of a law on same-sex families announced by France’s young people under 35, do not Minister of Justice Christiane Taubira in September 2012 fuelled much de- register their relationships. bate, especially among conservative citizens and the Catholic Church. “Family and marriage are los- The fourth reason is medical and technical progress. In vitro fertilization and ing their conventional roles in Eu- more possibilities for using surrogate mothers open new prospects described rope and the US,” states Nadiya in detail by biologist and philosopher Henri Atlan in his book Artificial Womb. Artyshko. “In this sense, we’re These prospects create new forms of life. Differences in legislation among pretty close to developed coun- countries has resulted in the establishment of a fertilization market of sorts: tries. However, the biggest prob- different couples, both homosexual and heterosexual, travel abroad seeking lem is that the old religious con- medical aid that is forbidden in their home countries. servative essence of marriage is Finally, economic and social difficulties and the need to work abroad create gradually replaced with a new so- an additional burden on family lifestyle and structure. An incomplete family cial role in Europe and the US, in France often includes a poor migrant woman bringing up her children and a social, psychological and alone. moral vacuum in Ukraine.” The These profound transformations have provoked ardent debate where differ- challenge is not so much about the ent religious, moral, ethical and pedagogical concepts collide. Is it acceptable growing rate of divorces and civil to tackle deep differences between genders and generations? Do they com- unions as it is about the need to ply with Christian dogma? To what extent can technologies that modify cul- gain confidence in the future, ture, and therefore our concept of human nature, be applied? Does a child which will in turn raise people’s really need both parents? Is it acceptable for a child not to know its biological self-esteem and allow them to origin? These debates are renewed in the intellectual arena. The decline of treat their personal life with more marriage essentially reflects an aspect of the general changes facing of our attention and care. society. № 20 (43) DECEMBER 2012|the ukrainian week|39 history|Marriage To Marry or not to Marry The evolution of marriage from forced to voluntary, from church to civil, and from convenience to love Author: portantly, both brides and hands, often encouraged by a Volodymyr Masliychuk grooms made a voluntary choice. good dowry. In addition to this, Christianity brought a special in many cultures, the groom was he history of marriage is attitude towards marriage that supposed to buy the bride. Par- one of the most confusing was interpreted as a sacrament ents and church or secular hier- aspects of private life. On through a church wedding, while archies were often the ones Tthe one hand, it has always monogamy was recognized as the choosing spouses for their chil- been subject to strict regulation only form of family and spousal dren. by laws, religious dogmas and relations. Still, the church began The religious role of marriage traditions. On the other, history to regulate marriage fairly late in that gradually became essential offers plenty of examples when history, introducing its control and widely-accepted also had all these formalities were broken. over matrimony gradually, leav- many interesting aspects to it. The change of attitude towards ing numerous exceptions and The church worked on control- family relations in Europe – and pre-Christian rituals intact. ling both family life and divorces. Ukraine – reflects civilizational Byzantium did not intro- In this case, Orthodoxy went shifts in societies. duced church weddings as a along with folk traditions. This mandatory ritual until the 10th was one of the reasons why the A union with blessing, century. From there, it was ad- Pope reproached Orthodoxy, but not love opted in Kyiv Rus. A century since the Orthodox Church al- Church Conventional norms of family later, it was introduced in West- lowed its followers to get di- weddings: life and marriage were extremely ern Europe having absorbed vorced up to three times, provid- Pressure from sacral in ancient communities. strict elements of Germanic laws, ing they had sufficient grounds, the clergy “The Primary Chronicle” offers a which viewed monogamy as a while the Catholic Church for- shaped the religious role of vivid description of relations be- top priority, imposed heavy pun- bade it. marriage tween men and women in East- ishment for cheating and losing ern Slavic tribes: “The Polans virginity before marriage, yet al- followed the tradition of their lowed women and children to be ancestors, quiet and gentle… sold. All this was also affected by They also had a wedding ritual: a the social order: common people groom did not go to the bride’s were quite distant from the home; instead, she was brought church at that time, celebrating to him in the evening and the marriage with weddings and next day whatever was paid for dancing. Church marriage was her was taken to her family. The left to the wealthy. Drevlians lived like animals, like Traditional marriages in- cattle: they did not have wed- cluded plenty of symbolic acts. dings. They would capture girls The complex marriage ceremony when the latter went out to get was often preceded by various water. The Radimichs, Severians betrothals, engagements and and Vyatichi had a tradition… matchmaking. The bride and Instead of weddings, they had groom did not know each other games between villages, dancing before the matchmaking and be- and singing demonic songs, and trothal. What people interpreted stealing the women they had an as love was supposed to come af- arrangement with. They had two ter years of living together, keep- or three wives.” The chronicler ing house, raising children and focused on Christian morals and going through bad times to- the crucial role of marriage in gether. The groom’s parents took the eyes of God, as well as tradi- a daughter-in-law into their tional wedding rites. Most im- home as a new pair of working e Dor . 1860 s G u stav i mo n y by matr 40|the ukrainian week|№ 20 (43) DECEMBER 2012 Marriage|history mony, not waiting for the actual wedding. This pressure resulted in a new practice of getting mar- ried in church and celebrating the wedding on the same day. This tradition has continued un- til the present. The church continued to control the marriage issue for a long time after. The divorce pro- cedure was based on old tradi- tions of “divorce letters”. Mean- while, common people in the Hetmanate and Slobidska Ukraine largely viewed marriage as a voluntary and free agree- ment in the late 18th century, of- ten living as couples “in faith”. Sacramental no more Marriage in Western Europe be- gan to transform with the Re- naissance and Reformation. As culture grew more focused on individuals and many spheres of life were secularized, a different interpretation of marriage evolved. Martin Luther, a lead- ing figure of Reformation, strug- gled to deny the ecclesiastic sac- ramental nature of marriage, setting childbirth and life in fi- delity as its priorities, which was
by Pie t e r B uegel th E lde A Co un try W edding by beyond the competence of reli- gion. Protestant morals inter- Ukrainian history features National other man, thus disgracing preted marriage as the spiritual several important points about traditions: Wygowski. At that time, the act unity of a man and a woman marriage. Living on the border Average people of a church marriage was not above anything else. Meanwhile, facilitated democratic family re- saw actual viewed as something important. the problem emerged of the vol- lations in Ukraine and the spread wedding parties With time, church practices untary choice of a spouse. The rather of voluntary marriages. Unlike than with their numerous exceptions attitude towards love changed, the clergy, which viewed matri- matrimony as took over customs. In 1634, the too, as it was no longer viewed mony as a mandatory procedure, the key part of Archbishop of Chernihiv, Isaya as a sickness. From then on, customary law viewed marriage getting married Kopynsky ordered priests to ex- meetings, infatuation and the as an agreement that was volun- for a long time communicate those who lived sentiment of love became an in- tary in most cases. together without a church mar- tegral prerequisite for marriage. Historian and writer Orest riage. State authorities that de- Enlightenment determined Levytsky describes quite a few cided on issues of inheritance the free choice of a future hus- episodes from marital and family and the care of the children of a band or wife, which often con- life in the 16-18th centuries. “a couple that had not married in tradicted church and conven- church marriage ceremony in it- church, also considered church tional norms. The latter treated self, without the traditional wed- a choice not approved by parents ding ritual, had no significant Living on the border as something extremely negative meaning in matrimony, and was facilitated democratic –often for good reason. The celebrated as a purely religious French Revolution was the peak act,” he writes. It was more im- family relations in of the implementation of Re- portant to cut a deal after the Ukraine and the spread of naissance ideas on marriage. matchmaking and betrothal. The equality, liberty and strug- Wasyl Wygowski, a Greek-Cath- voluntary marriages gle against the church brought olic nobleman from Ovruch (now their fruit, facilitated by one in Zhytomyr Oblast) complained marriage to be legitimate. On 18 precedent. After the first in 1726 that the Werbytskis, a November 1744, the Synod of changes and upheavals brought noble family, had agreed to his the Russian Empire instructed forth by the revolution, Fran- marriage with their daughter. Af- its clergy to make newly-weds çois-Joseph Talma, a well- ter the betrothal, they did not sign a pledge to start living to- known French theatre actor and wait for the actual wedding cere- gether as a married couple im- revolutionary activist, decided to mony and married her off to an- mediately after the church cere- marry a rich courtesan, Julie № 20 (43) DECEMBER 2012|the ukrainian week|41 history|Marriage
A PROLETARIAN WEDDING: Marriage held an exclusively civil status in the Soviet Union ar d c y 20th- cen t u ry post A Ukra ini a n W edding o th e ar l Carreau, in 1790, but the priest Ethnic ments to understand the role of a result, legislature made the refused to bless the marriage of background: marriage. Sharing common wed- state (or civil) registration of a “clown”. Talma began the Common ding rituals often inspired a marriage prevail over its sacra- struggle for his rights. Eventu- wedding rituals sense of unity among represen- mental role. By that time, civil ally, the National Convention were among tatives of one nation that were marriage had become wide- recognized civil marriage as the the signs of a territorially and administra- spread in European countries, nation's unity as sole mandatory act in 1792, in- modern nations tively divided. One of the first especially Holland (since 1580). troducing the registration of were shaped printed ethnographic works on England recognized it in 1836, civil status acts all over France Ukraine by Hryhoriy Kaly- followed by Germany – espe- that would only be performed by novsky, published in 1776, con- cially its protestant regions – in secular authorities. Napoleon tained stories about wedding the late 19th century. In 1783, the Bonaparte supported the inno- traditions in the Hetmanate and legitimacy of civil marriage was vation and fixed the replacement Slobidska Ukraine. In both, mar- recognized in the USA. of church marriage with civil riage was supposed to symbolize After the Bolsheviks took registration in the 1804 Civil both spiritual and national power in Petrograd, they sped Code. During the Napoleonic unity. That was the reason why up the legalization of civil mar- Wars, Bonaparte’s legislation Ivan Franko married Olha Kho- riage in Russia. On 4 December became widespread in the parts ruzhynska from Kharkiv Guber- 1917, the Decree on Civil Mar- of Europe occupied by the nia in Eastern Ukraine; and East riage, Children and the Record French army. Ukrainian-born Mykhailo Hru- of Civil Status Acts, was passed. During the Restoration, the shevsky married teacher Maria It stated that the only marriage accomplishments of the French Voyakivska from Western recognized by the Soviet govern- Revolution in terms of marriage Ukraine. ment was that registered by state were abolished. Church mar- authorities, while church mar- riage was once again recognized Secular divide riage was a private matter. On 16 as the only legitimate one, with The process of filling marriage September 1918, the Civil Code the ban on divorces remaining in with a civil sense is clearly was introduced to set the ground effect. Yet, it failed to completely linked to the separation of in attitudes towards marriage. It wipe out the innovations of rev- church and state. Passed on 9 determined marriageable age; olutionary France. Throughout December 1905, the law on secu- did not require any consent from the 19th century, both church larization in France served as parents, caretakers or adminis- and civil marriages coexisted in the basis for similar acts in So- tration; and abolished punish- Europe. viet Russia, which was passed on ment for cheating and incest. It Another important point was 20 January 1918, and the Turk- was enacted in Soviet Ukraine in for leaders of national move- ish Republic, passed in 1925. As 1920. 42|the ukrainian week|№ 20 (43) DECEMBER 2012 World music|culture & arts CAROL OF THE BELLS: BACK TO THE ORIGINS Hundreds of years ago, pre-Christian Ukrainians welcomed New Year with the tune that sounded like a swallow’s song. Today, its tender bells chant for Christmas in European concert halls, jazz concerts and Hollywood movies
Author: krainian Shchedryk, the new year in spring – on the first slowly; Slowly and quietly it Olena generous one, has spread day, March 1, or the day of comes; Oh, my children, my flow- Korchova all over the world as a spring equinox, March 21. ers – don’t let her in; Don’t let me Uhugely popular Christmas That’s why archaic ritual songs die,” were the lyrics. tune, Carol of the Bells. Mykola portray emotional upheaval in In 1919, Shchedryk stepped on Leontovych composed the choir spring and the joy of young na- its triumphant path through West- arrangement used in all further ture’s beauty that birds are the ern Europe and across the Atlan- versions, from pop to jazz, club first ones to herald. Another tic. Eventually, Peter Wilhousky - and rock. Choir conductor and message of the song is the birth another immigrant from the East composer Aleksander Kozhets in- of a new life as the original lyr- - wrote the English lyrics for it in troduced Shchedryk to the USA ics mention a sheepfold with 1936, turning it into the Carol of and Canada. Meanwhile, Ukraini- new-born lambs. This flows har- the Bells. ans hardly remember him because moniously into the Christian Apart from Shchedryk, conduc- of Soviet historians who elimi- motif of the baby Jesus being tor Alexander Koshetz popularized nated him from the 20th century born in a Bethlehem stable many Ukrainian folk songs ar- Ukrainian music as a migrant trai- which was added to it later and ranged by Leontovych. During the tor. become pivotal in modern Ukrainian People’s Republic Tracing back the history of times. The first four notes of the (UNR), Koshetz was appointed the song that counts centuries is tune are all in a minor third, a head of the Ukrainian Republican almost impossible today. It was musical interval that is among Choir set up to promote Ukrainian Mykola born in the mysterious archaic the most pleasant for the human music in the world. Supported by Leontovych layers of Ukrainian culture. The ear and a basic interval for lul- Symon Petliura, the choir went on composed original lyrics that rhythmically labies which are the first music a West European tour in 1919. Af- the choir repeat a swallow’s tender spring a child hears. ter the UNR government was over- arrangement for Shchedryk song had appeared in pre-Chris- Before it became popular thrown and the Bolsheviks came to used in tian times when the language of worldwide, the song lived a mod- power, Koshetz along with some all further nature served as the basis for est life entertaining villagers in the choir singers decided to remain versions, from human language. Back then, the Right-Bank Ukraine, especially abroad. In 1922, they moved to the pop to jazz, club ancient farmer ancestors of Podillia and Volyn. In 1914, USA. For the next two decades, and rock modern Ukrainians started their Mykola Leontovych created the they performed successfully in the best choir arrangement for it. On USA, Canada, Cuba, Mexico and December 25, 1916, the student Brazil while being based in New choir of St. Volodymyr University York and Winnipeg. Virko Baley, a – currently Taras Shevchenko renowned American-Ukrainian University in Kyiv – conducted by composer and conductor, as well as Alexander Koshetz performed it Alexis Kochan, a Ukrainian-Cana- for the first time on stage. That dian singer and composer, once was the beginning of the brief rec- suggested that the tune of the old ognition for Leontovych as one of Ukrainian lullaby Oy Khodyt Son the most talented Ukrainian com- Kolo Vikon (The Dream Passes by posers until he was shot by an “au- the Windows) inspired George thorized” Bolshevik agent on a fes- Gershwin’s Summertime. Later, tive winter day in January 1921. Shchedryk won over Hollywood in His biography suggests that a few Chris Columbus’ comedy series days before his death Leontovych Home Alone. had been working on his next ar- According to the English-lan- rangement for a folk song about guage Wikipedia, over 150 version death. “Death is walking around of Shchedryk had been written by my yard; It is getting closer to me 2004. № 20 (43) DECEMBER 2012|the ukrainian week|43 Culture & Arts|Music, education and identity Learn to Listen to Yourself Composer Cai Caslavinieri talks about Ukrainians in Poland, commercialized music culture, and freedom of musical choice
Interviewer: were Ukrainian. Meanwhile, the Bohdan Butkevych older generation of Ukrainians who survived Operation Vistula have sim- ai Caslavinieri is a popular Pol- ilar sentiments about the Poles. They ish composer and DJ. Mykhailo hate the Poles because they see them Jankowski – that’s his real as the primary oppressor. Of course, Cname – has Ukrainian roots. all these conflicts arose simply out of His grandparents moved to north- human folly, not because of some in- western Poland in 1947 during Oper- nate national animosity. But now, ation Vistula, the forced resettlement with access to huge amounts of infor- of the Ukrainian ethnic minority mation about anything in the world, from Polish territories near the bor- even the least educated people are der with Ukraine. He never hid his beginning to realize that culture is roots despite the many troubles they the only thing that makes us different caused him, and eventually achieved from each other. And culture is gain- remarkable success as a musician. ing immense value in the globalized Today, he is known as an electronic world. Ukrainian culture in Poland is musician and DJ, and has composed no exception. many tracks for global corporations and fashion houses. Cai also works There is a persistent with Ukrainian musicians. He re- hunger for pro-Ukrai- cently remixed a song by the Ukrai- nian initiatives, especially nian folk-rock band Haydamaky, with the emergence in recent which became quite popular in Po- years of a new wave of Ukrainian land. migrants who now work here on a permanent basis. For instance, behaviour during the championship. You have to live and fight Ukraińska Watra (Ukrainian Bon- The key thing is that both nations your way through the circum- fire) has been the largest festival and hosted the championship – and they stances into which you were gathering place for Polish Ukrainians did well. Now they share this good born. I was born in Poland, although for 30 years, connecting generations feeling of having accomplished a dif- I consider myself Ukrainian. Actually, of families. I remember my mum ficult task. In Poland, everyone was I don’t know where whether it’s better taking me there every year since my very serious about preparations for to be a patriotic artist in Poland or early childhood. She told me that her the Euro – it was the key theme in Ukraine. Of course, many people be- parents had done the same thing. the country’s life for a while. lieve that the grass is greener in one’s Surprisingly, the Poles grow more homeland. But Ukrainians now have and more interested in the festival. COMMERCE & ART a good life in Europe, especially Po- Now, as the number of Ukrainians in When I compose music for cor- land, because all of their former prob- Poland grows, any Ukrainian initia- porations, it’s exclusively my lems and conflicts have faded away. tive will be successful because people creation. Clients do not interfere at It’s a powerful thing to feel that you look forward to it. They don’t just all. Moreover, the companies I work belong to a community. I’m happy to want to talk and listen to Ukrainian with prefer this approach. They are be Ukrainian, even in a different songs, but truly unite. happy with it because they want to country. But I would choose to be have something exclusive in the end. born in my historical homeland if I Only after Euro 2012, aver- My interest as an artist is to create had that choice. My grandfather age Poles began to realize that good alternative music for a compa- helped open the first Ukrainian Ukrainians are not Russians. ny’s advertising campaigns. Most school in post-war Poland and still Before that, everyone had been Rus- people involved in business don’t only speaks Ukrainian to this day. sian for them – all thrown into one know much about music. They listen pot, and that was a huge problem. to whatever is on the radio. That’s It is no longer shameful or Experts say that the championship why it’s nice to know that something dangerous to be Ukrainian in did not draw anyone closer, but as an you created is not only good com- Poland. I myself experienced being ethnic Ukrainian who lives in Poland, mercially, but contributes to the de- pointed at, called a “banderite” and I can say that the positive change in velopment of their taste, and is some- judged – especially in school. I re- the attitude towards Ukrainians is re- thing they really like. member that in those days, someone ally palpable – especially compared I used to have little contact could beat you up just because you to Russian fans and their outrageous with Ukrainian artists. But we’ve 44|the ukrainian week|№ 20 (43) DECEMBER 2012 Music, education and identity|Culture & Arts been working closer lately. Director Artists need to eat. Nobody the young artists who represent this Svitlana Fedoniuk (under the pseud- brings us chicken, eggs, or bread just trend are searching for a style of their onym Dominika Domal) used my for having beautiful eyes or talent. We own. Naturally, they have to experi- music in her film God’s Miracle have to pay money for everything just ment with everything before finally (Chudo Hospodnie). The film was like everyone else. All work is com- finding one. awarded a gold medal at Kinokime- mercial in essence because it is sup- ria, a festival for independent films in posed to provide the performer with I don’t listen to music be- Kherson. I also remixed a song by the the means for survival. And all art is cause I want quiet and rest af- band Haydamaky. work essentially—there is no such ter I compose my music or play thing as non-commercial art or non- eight fashion shows in a row. In Ukraine needs to develop commercial artists. That’s only possi- fact, music begins with internal har- the habit of paying for art. You ble if art is not a job or work for some- mony and the ability to listen to your- want a song, you should pay a euro or one. A long time ago, kings and lords self. That’s why I try to not imitate a dollar for it. It’s not much but it’s paid to support artists they liked. To- anyone. Still, I look up to the best pi- supposed to breed this cultured atti- day, gifts like this no longer exist. ano performers or composers when- tude towards the artist and their in- tellectual work. I highly respect all people involved in art. It takes courage There is a persistent not to simply go work at a bank to hunger for provide oneself with sustainable in- come for life, and instead bet every- pro-Ukrainian initiatives thing trying to earn something with in Poland such an uncertain occupation as art, where there is a huge risk of never ever I have to compose a piano piece, achieving any success. That’s why I or the best violinists when I do a have equal respect for big-screen ce- piece for the violin. lebrities and guys playing the violin on the street. I never write lyrics to my tracks. Whenever I work with a vo- COMPUTER FREEDOM calist, his or her vocals should be a Computers have rapidly trans- different instrument with its own formed from productivity tools emotions, feelings and ideas. The vo- into musical instruments. This calist has to contribute something of process will be the key musical trend his or her own into the piece for it to – and the new era in music that is be- become live and real. Every instru- ing born in front of us – for the com- ment has to tell a story of its own. ing decades. Earlier, you would hear Then, they intertwine into one big the term “electronic music” for any story. A composer should be open to music made on the computer. Now, the world. Otherwise, he will be the everything is changing. Computers only one who loves and understands are no longer note calculators for his music. sounds and effects. They are a sepa- rate world where totally new musical The barrier between com- realms emerge. A special trend – or posers and listeners is dissolv- style – will be the fusion of ethnic in- ing more and more every year. struments and folk music with mod- Earlier, very few people could do mu- ern computer technologies. We will sic because all of the equipment was add multimedia to this, turning it expensive and inaccessible. With the into a complete show of music and appearance of the Internet, every- other art forms. thing changed. Now you just need a PC and a few instruments to record The analog sound of real in- beautiful music at home without an struments is sort of coming expensive studio. And it takes sec- back, bringing back the music, onds to distribute it around the the sound and the style of the world. That’s why conventional show 1970s. Remember that hugely popu- business, television and radio are suf- lar “Barbra Streisand” track by Duck fering. In Poland, for instance, MTV Sauce? It was just a song by Boney M is mostly watched by people with put to a primitive dance loop. People limited taste in music. Today, every- just experimented with it, and it grew one has freedom of musical choice. into a huge success. Partly, this is the People no longer want their choices reaction to all spheres of life growing dictated by someone else. That’s why ever more computerized, while peo- the most popular artists today are the ple want to grasp the simplicity and ones who proactively share their neatness of the 40-year old sound, product with the audience and bring and take the best from that interest- the barriers between themselves and ing period. It’s quite logical, because the users to a minimum. № 20 (43) DECEMBER 2012|the ukrainian week|45 culture & arts| Reviews and event calendar Authentic Christmas in Music and Films Shadows of Forgotten Ancestors (Tini Zabutykh Predkiv) Directed by Serhiy Paradzhanov (1964)
The classic film is based on the novel by Mykhailo Kotsiubynsky, one of the best Ukrainian modernist writers. The story takes place in the whimsical Hut- sulshchyna, a Carpathian region known for its unique traditions, preserved from old times. One of the first episodes shows Hutsuls celebrating Christmas: they put on colourful and spooky costumes, arrange a fair, play music, dance and have fun. Then, an authentic Carpathian church appears in the scene. Such wooden shrines do not exist anywhere else in the world, but being vulnerable to the aggressive environment there, they are also rare in Ukraine. The film was shot in an authentic location, the village of Kryvorivnia in the Carpathians. Locals played in crowd scenes, singing folk songs and speaking the local dialect in the back- ground. This authenticity and the mysterious rituals, surrealistically intertwined with regular village life, reveal the unique psychological portraits of the char- acters. One of the best poetic films, it brought its Ar- menian-Ukrainian director, Serhiy Paradzhanov, worldwide fame, and revealed many talents among his film crew. Shadows of Forgotten Ancestors won the Grand Prix at 24 festivals, wowing renowned di- rectors including Federico Fellini, Michelangelo An- tonioni, Akira Kurosawa and Andrzej Wajda.
Events 17 -22 December, 6 p.m. 19 December, 7 p.m. 6 January, 5.15 p.m. Music Christmas Art Fair Strauss Festival Orchestra The Legend of Mulan Vienna Ya Gallery Sports Palace (17, vul. Husenka, Palats Ukrayina (1, Sportyvna Ploshcha, Kyiv) Dnipropetrovsk) (103, vul. Velyka Vasylkivska, The grand show of the Paris circus Pavlo Hudimov’s Ya Gallery invites Kyiv) is based on an old Chinese legend everyone to an original Christmas Conducted by violinist Peter Guth, about Mulan, a courageous girl fair. Instead of being plied with the the Vienna-based orchestra will who went to serve in the army mulled wine and sweets offered at present its original arrangements instead of her old father and 12 traditional festive fairs, the main of Vienna music and classical years later, became a general of point of this one will be to treat repertoire, Monika Mosser singing the emperor’s army. The Legend the audience to films about art, with her brilliant soprano. Renowned of Mulan includes over 95 artists, lectures on art collections and an musicians interpret popular classical hundreds of costumes, amazing art exhibition. The paintings were pieces and less familiar tunes, music make-up and breathtaking props. specially selected for the jokes and pieces of The unparalleled fair and will stay there operettas accurately, show that presents till the very end of the carefully following the the entire range of show. Visitors can buy best traditions. This human emotions the pieces they like, but captivates both music on stage will leave can only take them after critics and music lovers unforgettable the fair is officially closed, all over the world, from memories. because each item on Berlin, Paris, and Rome show is an integral part to Tokyo, Mexico and of the art project. many more. 46|the ukrainian week|№ 20 (43) DECEMBER 2012 Reviews and event calendar|culture & arts Our Christmas (Nashe Rizdvo) modern sound. Recorded 15 years ago, this Skriabin, Taras Chubai and friends album can be seen as the forefather of the (Caravan CD, 1999) trend. The fusion of original folk rhythms Ukraine’s most popular rock musicians and festive ambience are easy to listen to of the 1990s, including Taras Chubai, Yulia and enjoy. The electronic basis is laced with Lord and Skriabin, joined efforts to create live violas, trumpets, percussion and gui- Our Christmas. A collection of traditional tars. This CD sounds like a music miniature, Ukrainian Christmas songs performed in playing only thirty minutes, made up of acoustic and electronic short and somewhat arrangements, the proj- naive tracks, which can ect has a vintage feel to it. be associated with a toy As reviving local folklore “vertep” – a nativity is growing more and scene. The record is al- Rejoice (Raduysia) more popular in Central ready part of the Ukrai- Yulia Roma, Natalia Lebedeva, and Eastern Europe to- nian music legacy. Re- Kostiantyn Ionenko, Alik day, musicians look for leased a while ago, it Fantayev (COMP Music EMI, authentic songs and sing- has now become rare, 2012) ing techniques, brush off but music lovers can lis- Once again, talented musicians the dust and insert them ten to the tracks online celebrate Christmas with modern, into the framework of for free. classy jazz. They show their love for what is dear to them, rethinking it and placing it into an alternative A Lavish Night with Good Jazz (Shchedriy Vechir z Dobrym Jazzom) background of music and mischie- ShockolaD (Dzyga, 2010) vous jazzy rhythms. The Ukrainian Young Ukrainian band ShockolaD describes its style as world music. Performances at jazz scene is far from being satiated, many festivals in Ukraine and abroad have opened its members to different genres, experi- since this style only came to Ukraine ments and improvisation. The record is a perfect example of how a folk Christmas song is less than a decade ago. That’s why played in the jazz style, offering brilliant interpretations every new attempt is like a gunshot of Ukrainian ritual songs in acid jazz, cool jazz, fusion, – it takes courage and professional- swing and reggae. A Lavish Night with Good Jazz is the ism. Rejoice is a record of laconic yet band’s fourth record in its six years of recording and elegant music, flowing in waves, performing experience. The band presented its record with breakers of emotional and tem- at the Lviv Philharmonic – to a packed Lviv audience, peramental vocals. According to crit- which knows about good music. In their career, Shock- ics, the Ukrainian songs performed olaD follow one rule: think globally and act locally. They by Yulia Roma and her band create make music that anyone in the world can understand, the ambience of authenticity and yet use the original Ukrainian music canvas with its mystery, comparable to the feel of unique local motifs and textures as a basis. Nikolai Gogol’s early novels.
6 January, 5.15 p.m. 6-19 January 7 -9 January 8 – 13 January
Christmas festivities Donut Festival Christmas Decoration Festival Mamayeva Sloboda Lviv Centre for Ukrainian Culture (2, vul. M. Dontsia, Kyiv) Christmas celebrations in Lviv and Arts Everyone has the opportunity to come are accompanied each year by (19V, vul. Khoryva, Kyiv) to Mamayeva Sloboda and join in the the Donut Festival. It is known It is hard to imagine winter celebration of Christmas. The Cossack as one of the tastiest events in holidays without Christmas trees, village will offer an authentic Holy town. It involves baking and especially in Kyiv. Christmas Supper with hay under a homemade eating all kinds of donuts and decorations have become a special tablecloth, twelve lean dishes on the introducing visitors to Ukrainian symbol of a festive mood, common table, carols and verteps – nativity traditions. Performances of joy and Christmas dreams. Guests plays. The Fifth Winter Christmas verteps, loud games and carol will have the chance to enjoy not Dreamland will feature a craft fair, singing have become an integral only an exhibition of Christmas singing, sleighing and concerts. part of the programme, decorations, but also The Old New Year or Malanka and supplemented by new New Year’s workshops, Vasyl’s Day will be celebrated in surprises year after music concerts, line with all rituals, to the smallest year. The 2011 Donut tours and good old detail: while the Epiphany will Festival was entered Christmas cartoons. offer everyone the opportunity in the Guiness World A Christmas tree to bathe in an ice-hole, followed Record Book: participants decoration made with by Cossack wheat porridge called made the biggest ever your own hands will kulish and the alcoholic drinks that presentation of 7,040 become special for the Cossacks used to enjoy. donuts. family. № 20 (43) DECEMBER 2012|the ukrainian week|47 navigator|open-air museums Back to the Village
drawback is its location. It is sur- The world love for all things ethnic has reached rounded by the city, so it is some- Ukraine. As a result, the number of open air folk times hard to ignore the clumsy multistoried buildings towering museums – skansens - is growing along with the over a cosy recreated village house or threshing barn. To help interest in them Kyiv residents, who are generally reluctant to spend their vacations Author: s the capital of Ukraine, new skansens: peoples’ interest in on an ethnographic expedition, a Dmytro Kyiv has its own open air them, particularly during folk fes- brand new museum complex, the Antoniuk museum – the National tivals leaves no room for doubt. Ukrainian Village, was built near AMuseum of Folk Architec- For example, Mamajeva Sloboda, the village of Buzova in the Kyiv- ture and Life of Ukraine, gener- located in a park next to the Na- Sviatoshyno District. ally known as Pyrohovo. It has tional Aviation University, has been around for over three de- been a great success since its The life of ancestors cades, having opened its doors in opening in July 2009. The place The museum itself is divided into 1976. Sprawling across 133.5 is packed during festivities. Visi- six mini-zones, representing dif- hectares of land, this is the largest tors can spend time in the recre- ferent regions of Ukraine. Each museum of its kind in Ukraine. ated living quarters of regular features authentic houses (some Despite its impressive size, Kyiv and senior Cossacks, attend a Lit- over 180 years old) which were residents and visitors are well-ac- urgy at a wooden church, built in transported from these regions quainted with it and have seen line with the canons of ancient and painstakingly put together by most of its buildings, which, by Ukrainian architecture, get a bite specialists who were advised by the way, are not in the best of to eat in a real tavern and learn ethnographers. Not only the shape now. So it makes perfect interesting crafts during master houses and their full decorations business sense to invest in similar classes. The museum’s main but also numerous outbuildings 48|the ukrainian week|№ 20 (43) december 2012 open-air museums|navigator have been reconstructed – thresh- ing barns, potteries and black- smith’s shops. The Sloboda Ukraine zone even features a min- iature operating distillery and conducts master classes in the making of moonshine. Nearly all the structures at the open air mu- seum are functional, so they are not in danger of going to rack and ruin. There is a house on either side of the entrance to the Ukrainian Village: one dated 1888 from the village of Pyshnenky (representing the region of Ukraine along the middle reaches of the Dnipro River) on the left and a Hutsul house from the Carpathians on the right. The former has an interesting oven that is characteristic of the Poltava region. In the larder of the Volyn Hi ory of Volyn-South UPA Sarny Hi orical- National Museum of Folk Museum of Folk Archite ure and Life of Middle Naddniprianshchyna Camp Open Air Ethnographic Museum Archite ure and Life latter, there is an unusual bed Agriculture Museum of Folk Archite ure and Life (part of the Posullia Museum of Ukraine (the village of Pyrohiv) Museum Ukrainian State Hi orical-Cultural Preserve, the village (the village of which appears to bulge up in the (the village of Village Museum Mamajeva Sloboda of Pu oviytivka) Antonivtsi) Rokyni) Complex middle. According to tour guides, (the village Ukrainian Sloboda Ethnographic Museum it is supposed to create some pri- of Buzova) Chernihiv Sho ka (the village of Pysarivka) Sarny Konotop Shevchenkivsky Hai or vacy for the husband and wife, be- Koro en Desna Ukrainian Cossack Lands Shevchenko’s Woods, Hi orical-Ethnographic Museum an authentic cause sex life was virtually impos- Rivne Pryluky Sumy (the village of Veremiyivka) archite ure and life Lutsk sible in houses which traditionally museum in Lviv Zhytomyr Kyiv Dnipr o also accommodated many chil- Pereyaslav-Khmelnytsky Lviv Kharkiv dren. An important detail: there is Khmelnytsky Bila Tserkva Poltava a playground (the smaller one of Ternopil Ivano- Cherkasy Kremenchuk Uzhhorod Vinnytsia Kramatorsk the two there) near the Hutsul Frankivsk Uman Luhansk house, so children are sure to have Kosiv Dnie er Tysa Chernivtsi Kirovohrad Dnipropetrovsk fun. Transcarpathian Donetsk Zaporizhzhia Museum of Folk Museum of Folk Chernivtsi Obla Museum Located on the museum’s ter- Archite ure, Life Archite ure of Folk Archite ure and Life ritory is the Saint Demetrius of and Life and Children’s Art o (the village Mariupol Mykolaiv Melitopol of Prelesne) Dnipr Thessaloniki Church, which is al- Old Village Museum Zaporozhzhian Sich Hi orical-Cultural of Folk Archite ure Open Air Museum Odesa ways open. Its iconostasis, carved Complex (part of the Khortytsia and Life of Hutsul Culture Kherson by contemporary specialists, is al- (the village of National Reserve) Kolochava) Subcarpathian Museum Cossack Hamlet most comparable to ancient mod- of Folk Archite ure and Life Izmail Ethnographic UKRAINE’S (the village of Krylos) els of Ukrainian Baroque. The Touri Complex (the village of OPEN AIR church’s policy is to attract rather Stetsivka) than repel people, so no critical re- Simferopol Seva opol MUSEUMS marks are made regarding visi- tors’ external appearance. There are four more home- steads on the neighbouring, larger part of the Ukrainian Village. These represent Sloboda Ukraine, Southern Ukraine, Polissia and Podillia. Curiously, the house from Podillia has painted images both outside and inside, all made by professional artist Oksana Horo- dynska. She made the oven espe- cially vivid by covering it with classical images of roosters, guel- der-rose, oak leaves and numer- ous flowers. Visitors who come to the mu- seum on Saturdays can buy freshly baked bread and participate in the baking process. This is just one of eleven master classes conducted by the museum. In addition to № 20 (43) december 2012|the ukrainian week|49 navigator|open-air museums baking, instruction in offered in living authenticity. Three other The best-known open air museums of the world Petrykivka painting, pottery, open air museums focus on the Skansen. Djurgarden Island, smithing, Easter egg painting and life of the highlanders. An excep- Stockholm, Sweden. even chopping wood. There is also tion is the Chernivtsi Museum of Founded in 1891 by Artur Ha- a small zoo. Just don’t expect to Folk Architecture and Life, which zelius, it is the world’s first- see any exotic animals there – the generally focuses on the lifestyle of ever open air museum. It de- zoo only has traditional Ukrainian people living in the lowlands of rives its name from a nearby domesticated animals: piglets, Bukovyna. This museum has a fortress, skans, which means rabbits, sheep and guinea fowl. rich tradition of carnivals, particu- ‘fortification’ in Swedish. Nevertheless, this does not take larly the Epiphany, for which par- away from the joy of interacting ticipants come from a number of WestphalianO pen Air with them, especially for children. villages in the region. The lifestyle Museum, Detmold, Ger- of the Hutsuls and their neigh- many. The museum rep- resents the rural architec- Exploring ethnic variety bours, the Boikos, from either side ture of the North Rhine- Compared to other post-Soviet of the Carpathians, is represented Westphalia region, countries and even its Western in two open-air museums: one in including windmills, neighbours, Ukraine has quite a the village of Krylos near Halych thatched cottages, tim- few open air folk museums. Most and the other in Uzhhorod. Both ber-framed houses, etc. of them are located in Western are quite compact, but the latter is Ukraine, and just two are to the perhaps the most photogenic, Korean Folk Village, Yongin, East of the Dnipro River. One is since it is located in a picturesque Gyeonggi, South Korea. The the diminutive Museum of Folk area under the walls of an ancient village is made up of 260 Architecture, Life and Children’s castle. traditional houses, dating Art in the village of Prelesne, The old-timer among Ukrai- back to the late Joseon Dy- Donetsk Oblast, which consists of nian skansens is the Museum of nasty period and includes just one village homestead typical Folk Architecture and Life in Lviv, some 30,000 specimens of of Sloboda Ukraine. In contrast, known as the Shevchenko Or- local folk culture. the other – the Middle Naddnipri- chard. It received its first exhibit, anshchyna Museum of Folk Archi- the Saint Nicholas Church from Pioneer Settlement, tecture and Everyday Living lo- the village of Kryvka, back in 1930 Swan Hill, Victoria. Aus- cated in Pereyaslav-Khmelnytsky, thanks to the efforts of Metropoli- tralia's first open air -mu is vast. It is big enough to keep tan Andrey Sheptytsky. The mu- seum, has up to 10,000 visitors on their feet for an entire seum continues to make acquisi- exhibits on display, day or even longer. One of the mu- tions and is now waiting for one of showing the everyday liv- seum’s biggest draws is its wooden the few surviving wooden Roman ing of European pioneers who colonized the conti- churches. Taras Shevchenko once Catholic churches from the village nent. painted its Saint George’s Church. of Yazlivchyk, near Brody. The Another, Saint Paraskevi of Ico- Shevchenko Orchard quite suc- Norwegian Museum nium, is home to – surprise! sur- cessfully competes with Kyiv’s Py- of Cultural History, prise! – the Space Exploration rohovo in terms of the number of Oslo, Norway. The Museum with a Foucault pendu- events it hosts and has the major main exhibit of this lum in the middle. advantage of being centrally lo- skansen is the Gol Understandably, museum spe- cated. It is within walking distance Stave wooden cialists have paid particular atten- of Lychakivska Street and the Lviv church built in 1212. tion to the Carpathians with their High Castle (Vysokiy Zamok). The museum also features one of the world’s largest archives of early 20th-century photographs.
LuostarinmäkiH andi- crafts Museum, Turku, Finland. The museum consists of 18 city blocks built in the late 18th cen- tury for the middle class and artisans. It includes, among other things, the workshops of a carpen- ter, watchmaker, sailor, tobacconist, etc.
Árbæjarsafn, Reykjavik, Iceland. The museum is a mini- model of the entire country. Founded in 1957 just outside the capital, it has expanded and become part of the city. It fully represents the archi- tecture and everyday living of peasants, city dwellers and fishermen. 50|the ukrainian week|№ 20 (43) december 2012