#3 (85) March 2015

Can survive the next Mobilization campaign: Reasons behind the sharp winter without Russian gas myths and reality devaluation of the hryvnia

Crimea: The unfinished war

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|contents Briefing The New Greece in the East:Without a much bigger, long- Branding the Emperor: term investment program, Ukraine’s economy will continue to New implications of Nadiya flounder Savchenko’s case for 31 Let Bygones be Bygones: Attempts to preserve the Russian 4 market for Ukrainian exporters by making concessions in EU- Leonidas Donskis on the murder Ukraine Association Agreement hurt Ukraine’s trade prospects of 6 32 Focus Security Kyiv – : the State of Fear of Mobilization: Uncertainty Myths and Reality Has Ukraine learned the An inside look at how lessons of occupation? the army is being formed 8 34 Maidan of Foreign Affairs’ NearestR ecruiting Station: Andrii Klymenko on Serhiy Halushko, Deputy Head ’s troops and nuclear of Information Technology weapons, population substitution and techniques to crush protest Department of the Ministry of Defense, talks about practical potential on the occupied peninsula aspects of the mobilization campaign 12 38 Freedom House Ex-President David Kramer on human rights Society abuses in Crimea, the threat of its militarization and President Catching Up With Obama’s reluctance in arming Ukraine the Future: Will 14 the IT industry drive economic Politics development Villains' LastR efuge: Why the and innovation in Maidan didn’t win in Donbas Ukraine? 16 40 Hennadiy Moskal, Head Emmy Gengler on investing in and doingI T business in Ukraine of OblastS tate Administration, on 43 administration of his territory, Oleksiy Skrypnyk: lustration of the oblast police "All Ukrainian IT companies and pro-Russian sentiments among the locals understand that outsourcing is not a panacea" 18 MP and former CEO talks about the local IT industry and neighbours potential in hi-tech products EU Police Mission At an Impasse: Deployment mechanism Is the international peacekeeping 44 Ukraine has to address the EU with the respe ive demand for operation possible in Donbas? 1 the decision to send the mission to be taken; History

The EU is to receive the UN mandate, 2 however, missions to Macedonia in 2003 and Libya in 2011 were 20 Lilly, The Hetman's Daughter: Yelyzaveta Skoropadska in art, sent without said mandate politics and charity during some of the most tragic years of Economics • A civil EU mission is already operating Ukrainian history in Ukraine. It has been sent in July 2014 in order to assi the police reform Oiling Your Sled in Summertime: and rengthen the rule of law How Ukraine can survive the next 46 • A civil EU mission also operates on the ate border between Ukraine and Moldova. Its obje ive is to provide border assiance to both countries heating season without Russian gas Culture & Arts • At present there are 18 a ive EU missions, and coal including 5 military missions Folk music, wine and space 24 exploration: The Ukrainian Week offers a selection of The Revenge of the Money-Grubbers: What and who caused events to attend sharp devaluation of the hryvnia in March 28 50

E-mail [email protected] www.ukrainianweek.com Tel. (044) 351-13-87 The Ukrainian Week № 3 (85) Martch 2015 Editors address 37 Mashynobudivna str., Kyiv, 03067, Ukraine Founder ECEM Media GmbH. Publisher ECEM Media GmbH Print run 15 000. Free distribution Address Austria, Am Gestade,1, 1010 Vienna Our partner State registration certificate КВ № 19823-9623ПР 19.03.2013 Chief Editor Alla Lazareva Editors Anna Korbut, Natalia Romaneс, Shaun Williams № 3 (85) march 2015|the ukrainian week|3 Briefing|Crossing the line

4|the ukrainian week|№ 3 (85) March 2015 Crossing the line|Briefing

Branding the Emperor Author: Yulia Oliynyk

ot long before he was assassinated, Boris Nemtsov remarked that if Ukrainian pilot were to die in a Moscow prison, the blame would be laid directly at the feet of Vladimir Putin, mean- Ning that personal sanctions and a trial at The Hague would await the Russian leader. This murder would not be forgiven. Today, the freeing of Nadiya Savchenko is growing in symbolic meaning. Of course, no one knows what the specific intentions of the Russian President are regarding this young Ukrainian officer. But it’s obvious that, with the murder of Boris Nemtsov, the ZAO1 Siloviki at long last deprived its long-standing protégé of a choice, having eliminated the once-almighty ZAO Oligarkhi. In one of his last interviews, Nemtsov described the situa- tion in Russia thus: “The paranoiac isn’t afraid of sanctions. He’s afraid of losing power. And he’s afraid of dying. And the paranoiac who’s afraid of death will always be true to his clan, which means dependent on it. The si- loviki know this. That’s why they will continue to support the ordinary Rus- sian’s fantasy about their powerful president, the man who inspires these

‘ordinary citizens’ by making the whole world shake in fear, making it ‘r-e- ар photo:

№ 3 (85) March 2015|the ukrainian week|5 Briefing|Crossing the line 1 s-p-e-c-t’ them. Just you watch us Closed stock around the idea of a Great Russia the presidential address. Not to lis- get up off our knees and give you company in and the Holy Mission to fight evil in ten to him and not to respond to Russian what for! What’s more, according the world, a role that is not cur- him will be at our own peril.” to the rules of clans and packs, the rently being played by world capi- Surely, those to whom this “appeal” siloviki have to continue to con- talism but the USA. Every true pa- is addressed are already preparing vince their protégé that he is great, triot, from a biker to the president, a response? messianic and chosen, because, af- should be dedicated to this idea. No The one thing are ter all, they spent so many years desertion allowed. In the past year, avoiding talking about now is this: systematically working together to Putin only kept growing with his The killing of Nemtsov and its con- get to power. inner circle, and in the end became sequences will make no difference In fact, ZAO Siloviki never their hostage. And that’s the law of at all to how things unfold in the stopped its activities, except maybe the ZAO Siloviki clan: You have to Russian Federation. Just like the for a very brief period when it pay for the Emperor’s Crown. murder of Politkovskaya, Magnits- moved into the shadows. And even This state of being a hostage is kiy, Novodvorskaya, and many oth- that was only to regroup, to pre- not something that just emerged in ers. Because, in the depths of its pare for revenge and to bring its the last year. Beslan. Nord-Ost. heart, this is a society that fears own man to power. Maybe Putin Anna Politkovskaya. Sergei Mag- change and does not want to see it. wasn’t the only candidate for the nitskiy—all of these inexorably Unless maybe when a new “baron” role of top dog, but fate would have made the regime and Putin in par- comes to power and proposes a it that, with the help of his own ticular authoritarian and repressive new “thaw” or “perestroika.” It’s ZAO, the Petersburg lieutenant- in the eyes of the western world. scary and strange to violate the ex- colonel rose to the very pinnacle of Meanwhile, the Kremlin’s active, isting order, even if it has an ever- the pyramid. aggressive propaganda was busy stronger whiff of prisons. What for From the early 1990s, ZAO Oli- brainwashing the territories of the anyway? There’s no reason to garkhi was in control of the gov- former and its satel- change. Every layer of Russian so- ernment in Russia. At that point, lites, and raising an entire army of ciety, from top to bottom, wants to there was still talk of implementing vatniks2. stay buried in its mythical values, reforms, instituting democracy and Russians have found them- even if they’re in fact all different. a free market, rendering private selves disoriented and frightened Meanwhile, the political elite in ownership inviolable, and guaran- by the killing of Boris Nemtsov. the US and Europe continue their teeing freedom of speech. Boris They are struck by the wide range dangerous game with Russia, stu- Yeltsin had every reason to rely on of answers to the question, “For pidly demonstrating self-deception his nouveaux riches and not to whom was this convenient?” Every and a lack of understanding of the trust the new-old siloviki. But then one can choose the answer that Kremlin’s true aims. Events in reforms were derailed, two suits them best: from Ukrainian Ukraine force them to at least ad- Chechen wars took place as well as nationalists and “the McCains of mit to it publicly. With the killing of a number of terrorist acts, and sud- the world,” to patriotic sharpshoot- Nemtsov and the tenuous hold on denly the line-up of forces dramati- ers and Kadyrovites, from gaybash- life of Nadiya Savchenko, there re- cally changed—and with it, the na- main even fewer options and desire tional mood. The seeds of hatred to maneuver. and desire for revenge for being The one thing Russians are Will the West really shake impoverished that had been sown avoiding talking about hands with a murderer? It did so much earlier were just waiting for after Politkovskaya, and after Mag- the fresh rain of a myth of lost now is this: nitskiy. Will it do so after Nemtsov? grandeur and an appeal to “get up The killing of Nemtsov and There’s no doubt that the answer to off your knees.” that is yes. Those politicians will do Vladimir Putin simply had to its consequences will make everything they can not to recog- straighten out one unfortunate no difference at all to how nize that Putin is a killer because misunderstanding of the era of his Realpolitik demands that they con- predecessor. And here it’s already things unfold in Russia tinue to do business with him, talk 15 years that he, together with ZAO to him, and shake his hand. And Siloviki, has been in power. This ers and anti-liberals to Putin and even this strategy has its limits, a last year has been a difficult year, at Medvedev. In short, it was good for line that, once they have crossed it, best: the plan to occupy Ukraine everybody. Not for nothing did Chancellor Merkel and President through the criminal hands of Vik- Gleb Pavlovsky, a pro-Kremlin Obama risk being added to histo- tor Yanukovych failed; not only did pundit originally from Odesa, im- ry’s “list of shame” of world lead- efforts to tear the country apart us- mediately present a subtle threat: ers. ing weapons fail, but also efforts to “Whoever is driving somewhere, Whatever decision Putin makes sow discord among the new forces not just anywhere but towards Red regarding Nadiya Savchenko, he in power in Kyiv; and, last but not 2 Square, to kill a former Member of crossed his Rubicon on the night of least, a direct attack by the Russian Literally, February 27, 2015. That bridge has cottonheads, the Russian Government, the face army also proved a failure. The si- meaning of the opposition, under a street been burned and there is no way loviki now have some serious chal- people who lamp and the Kremlin’s surveil- back. The only positive glimmer is lenges on their hands, ones that, so blindly follow lance camera, is engaged in a politi- the ghost of a chance that Nadiya far, they have no response to. their country’s cal demonstration. This is a state- will be released. After all, it’s im- One way out for them is to fur- line no matter ment to the country and to those in possible to cross the Rubicon twice, ther consolidate their society what power that is no less powerful than let alone in the same direction. 6|the ukrainian week|№ 3 (85) March 2015 Opinion|Briefing Russia’s Unholy War Against Its Best People

met Boris Nemtsov in Brussels during my term as a him before he published some eye-opening materials member of the European Parliament (2009-2014). To- exposing the role of the Kremlin and the Russian mili- gether with his friends and brothers-in-arms Mikhail tary in Ukraine. IKasyanov and Gary Kasparov, he attended one of those Whatever the case, Boris Nemtsov paid the highest price countless seminars and hearings on the situation of hu- for his freedom and also for the ideal he cherished all his man rights and civil liberties in Russia that the European life, the ideal of yet another Russia. I knew the unforget- Parliament and especially its liberal faction was organiz- table Anna Politkovskaya whom I met in 2003 and who ing. He spoke with nonchalant dash, courage, ease, even was killed in 2006. I felt that an epoch was brought to a playfulness – everything that was at odds with that sort of close with her passing; I have the same feeling now. Bo- dramatic fashion in which the opposition folks and hu- ris Nemtsov’s death signifies the arrival of a new epoch, man rights activists are expected to send their message. and the world will never be the same. Author: He appeared a bon vivant of the Russian opposition: True, we knew and understood how brutal the regime is Leonidas amidst other dissenters and critics of the Kremlin, and how dangerous it could be; yet it never occurred to Donskis, Nemtsov struck everyone as a person devoid of any us that the former governor and vice prime minister of Lithuania sense of fear and insecurity. He had lust for life celebrat- Russia could be assassinated in the heart of Moscow. ing its every episode. People, who are in existential rush There was a feeling then that some characters, no mat- or who do everything to the full never being quite con- ter how daring, would be left in peace and security for tent with half steps and half measures, usually have a the sake of the show, as if to say that Russia is a truly strong feeling of their mortality and vulnerability. This “sovereign democracy” (to echo the pearl of Vladislav seems to have been the case with Boris Nemtsov. He Surkov’s demagoguery) – well, a travesty of democracy, spoke with courage and resolve, yet with the smile on his but still, as one would have thought, something different face, about war crimes and from overt tyranny and violations of law, both fascism. For now, this feel- Russian and international, Boris Nemtsov paid the ing is gone along with committed by the Krem- highest price for his other hopes and illusions. lin. He was always unam- The system proved capa- biguously clear about Rus- freedom and for the ideal ble of assassinating not sia’s war in Georgia as well he cherished all his life – only Politkovskaya or Na- as about Russia’s aggres- talya Estemirova, but Bo- sion and war in Ukraine. of yet another Russia ris Nemtsov as well. To put it plainly, however, All in all, this is nothing Nemtsov, no matter how other than Russia’s unholy successful in his young war against the best it has days when he became vice prime minister of Russia un- – its courageous, fearless, and noble-spirited humanists der Boris Yeltsin (whose protégé and political disciple he and nay-sayers. Everything started with Piotr Chaadaev was), was not a direct threat to Vladimir Putin and his and the Decembrists (whose heroic uprising marks 190 regime in terms of popularity and ratings. Over the past years in 2015); everything culminated with the murder years, Nemtsov established his reputation in the eyes of of another bunch of the best people of Russia, from the American and Western European policy makersas an journalists Vladislav Listyev and Yuri Shchekochikhin, embodiment of yet another Russia, rather than as a to the human rights defenders Anna Politkovskaya and challenger of Putin’s establishment. With all due respect Natalya Estemirova, and to the dissenting politicians and admiration, Boris Nemtsov, a bone fide defender of Galina Starovoitova and Boris Nemtsov. Incidentally, democracy and liberal values, was insufficiently popular we know that when Chaadaev was released from his in Russia to live up to the status of a real threat to regime home arrest and allowed to visit friends, once he was ob- and to the criminal state it has institutionalized. Instead, served by a group of young literati with secret admira- he was a living hope for the better times to come. tion. When Vissarion Belinsky who hosted the event be- This means that Nemtsov may have fallen a prey to neo- gan talking about young people in Russia, Chaadaev re- fascist and revanchist forces unleashed by Putin. The acted with a brief remark: “And you still believe that two-minute hate sessions practiced on Russian TV there are young people left in Russia?” channels loyal to the regime, have created the atmo- Boris Nemtsov was a young person in the deepest sense sphere of fear, paranoia, and hatred. Those forces may of these words. He refused to get old in the sense of get- have become close to Victor Frankenstein’s monster ting ready for a compromise for the sake of easy living. that gets out of control and does not obey his master His murder is one more horrible blow to liberty, democ- anymore. At the same time, it may well have been a re- racy, and decency in Russia. We will never forget Boris venge for Nemtsov’s long-standing fight against the Nemtsov whose name was an epoch and an unfulfilled Kremlin, or the last and successful attempt to silence promise of yet another Russia. № 3 (85) March 2015|the ukrainian week|7 Focus|Crimea nian Plast Youth published in New York and Detroit (Issue 2, 113, May 1954), wrote: "...In the future, a situ- ation may occur when we will have Kyiv – Crimea: to defend Crimea, which is now part of the Ukrainian territory, from ene- my's assault." Russia, time and the State of Uncertainty again, demonstrated by its actions what could be expected from it: in Over the past year, Ukrainian authorities have 1991-1994, numerous provocations in and Crimea on the failed to learn their Crimean lessons, leaving the edge of an armed conflict with Ukrainian law enforcement agen- return of it to "children and grandchildren" cies; in 1994, deterioration of rela- tions and concentration of the Rus- year is enough to reflect on Author: Crimea, occupy and annex it." sian troops at the Ukrainian border, what happened in Southern Ihor Losev Maybe, nobody wanted to expect it followed by the easing of tensions, Ukraine in the spring of and to notice the obvious? luckily for us, due to the war in A2014, and to draw conclu- Many analysts (including the Chechnya. Then, Meshkov's "initia- sions. However, the current govern- writer of these words) kept warning tives" in Crimea, bringing once ment is reluctant to deal with the about the threat that came true in again two countries to the brink of a facts. Firstly, the Crimean mistakes 2014 ever since Ukraine gained its clash... are often repeated in the war in the independence. Analytical intelli- Later, Putin began "probing East: the same strategy of non-ac- gence has been published, which de- Ukraine with a bayonet" (as Lenin tion, waiting, handing initiative to scribed step by step how the inter- put it talking about the proper han- the enemy and responding reac- vention would proceed, how Russia dling of the bourgeois Europe), ar- tively, not proactively to the oppo- would establish military control over ranging a provocation with the Tuzla nent’s steps. Secondly, many of Island in the . Of course, Ukraine’s current leaders are not Many analysts kept it was not about a 1 km stretch of personally interested in investigat- sand located between Ukrainian ing the Crimean events, because warning about the threat Crimea and Russian Taman penin- they were involved (and instrumen- that came true sula. Ukraine was tested for its abil- tal) in the defeat. Thirdly, it is not re- ity to resist. ally the best time now since, as the in 2014 ever since Ukraine That was one of the first re- leader Refat Chu- gained its independence hearsals of the "Russian Spring barov said, to solve the Crimean is- 2014." After Russia's attack on Geor- sue, you need to save Ukraine first, Crimea, and how it would attempt to gia in 2008, only the lazy did not and Ukraine's future today is being destabilize the South and East. Ev- write and say that Ukraine would be decided in the East. erything happened as predicted. Un- the next object of aggression. But Nevertheless, even if investigat- fortunately, all those people giving Kyiv kept "not expecting"... ing personal responsibility of indi- warnings were not heard any better For the future of Ukraine and vidual leaders can wait till better than Cassandra in the ancient for its security, it is very important times, we need to analyze the mis- Greece crying out: "I can see Troy in to investigate the events of the late takes right away, in order not to rep- flames!" February and early March of 2014, licate them. Today, a trend can be One did not have to be a genius hour by hour, and to examine the observed to justify Ukraine's defeat to understanding these things, since acts and omissions of all state offi- in Crimea by the suddenness and everything was on the surface. Al- cials involved. This must be done af- the unexpectedness of the Russian ready 60 years ago, when the ter the war, but for the time being, it military intervention. Some state of the RSFSR was is important to have at least a gen- pathetically that "nobody could ex- transferred to the Ukrainian SSR, eral idea of the course of events lead- pect that Russia would attack Young Life, the Magazine of Ukrai- ing to the annexation of Ukrainian 2013 2014

December 2 The State Council of the January 21 Crimean MPs asks Yanu- claimed the new "mayor" of Sevas- February 27 Gunmen seize Crimean Autonomous con- kovych once again "to restore order topol government and Parliament build- venes an urgent meeting and calls on in the country" and to prevent "ex- February 26 Outside of the Crimean ings Viktor Yanukovych to "restore public tremists" from seizing power Parliament building, rallies of thou- February 27 Crimean deputies at a order" January 27 The General Meeting of sands of supporters of the united closed meeting set the date of the December 12 А former MP for the the Association of Local Governments Ukraine and of pro-Russian separat- "referendum" on Crimea’s auton- Vadym Kolesn- of the Autonomous Republic of ists are held. Some clashes occur omy for March 16. Sergei Aksenov ichenko an- Crimea and the City of Sevastopol re- February 26 The State Council of nounces the es- solves to create "volunteer corps" in Crimea tries to convene to discuss tablishment of Crimean regions the resignation of Anatoliy Mogilev's the "self-de- February 23 In Sevastopol, during a government and the situation in fense" groups pro-Russian rally, separatists "de- Crimea. The quorum is not reached, cl es t ion c hroni that are to go cide" not to transfer taxes to Kyiv. only 40 out of 100 deputies are pres- to Antimaidan Businessman Alexei Chaly is pro- ent in the session room in Kyiv Al iena

8|the ukrainian week|№ 3 (85) March 2015 Crimea|Focus everything that they could do well police checkpoint and presented and enjoyed doing. documents. When they saw no reac- When Yanukovych did not panic tion on the side of Ukrainians, they and flee, the “leaders” of the revolu- went ahead, boldly and brazenly. tion started showing signs of con- They did exactly what they were al- cern: when will he leave? Or at least lowed to do by the Ukrainian au- make concessions? The time slowed thorities. Ukraine’s military forces down. If not for the clashes on Hru- were paralyzed not by Moscow's ac- shevsky Street and the radicalization tions, but by the prostration of the of the protest, everything could have Kyiv government, which bears the ended nowhere, with the opposition main responsibility for what has leaders surrendering to the owner of happened. the golden toilet. The ordeals that The Russian troops took the subsequently began in Crimea were building of the Supreme Council of much harder, and entirely of a dif- the Autonomous Republic of ferent nature. In this case, the then Crimea, the Council of Ministers opposition leaders had to deal not and other buildings in , with a puppet, but with the master. without firing a shot. No one showed What could have been the response resistance. Later, the notorious FSB to this formidable challenge by the Colonel Igor Strelkov aka Girkin, ac- representatives of the rubberstamp cording to his own words, with his opposition accustomed to comfort- armed companions, shepherded the able life? A cozy parliamentary seat, deputies of the Crimean parliament MP immunity from any prosecution, to vote for decisions required by regular exercises in eloquence on Moscow, including the announce- TV, and vacations on exotic islands... ment of the "referendum." The futile tactics of the people Valentin But, a Crimean writer from the stage of Maidan were con- and an eyewitness of the events, is Crimea by Russia. Because this UKRAINE WILL tinued in Crimea. The only order right when he insists that these de- course of events poses a lot of pain- BE NEXT: This that Ukrainian troops on the penin- velopments were not inevitable: "... was the cover ful questions. Why were the post- of Tyzhden, sula obtained from the Kyiv authori- Despite the almost total degradation Maidan authorities, when faced with the Ukrainian- ties in a month was as follows: "To of the Ukrainian army, Crimea still the Russian attack on Crimea, con- language stand and not to provoke!". And so had enough combat-ready units, fused and helpless, timid and indeci- partner of they stood, until all the Ukrainian which, if given timely orders, could sive? But were they conceived as The Ukrainian military bases in Crimea were sur- have effectively stopped the disas- anything different during the Week, rounded by the Russian army. They trous developments by taking con- Maidan? We all remember that following surrendered Crimea, but they re- trol of the administrative buildings great crowd of people and the fig- the Russian frained from provocations... At the and major infrastructure objects... ures on the stage, who had nothing aggression same time, Ukrainian government- In a modern war situation, decisions to say to the people, except for the on Georgia in controlled media kept tirelessly tell- have to be taken very quickly. Min- 2008 hackneyed slogans that they could ing us how heroically the Ukrainian utes or hours at the most divide de- remember from the Orange Revolu- military surrendered to the Rus- feat from victory. Delays of days and tion. They obviously (as quite a few sians, singing the national anthem. weeks meant only one thing: defeat. eyes noticed) did not know what to By the way, the aggressor at first This is why, after waiting quite a bit do. Their plan was simple: if a mil- acted cautiously and timidly, waiting to make sure that there would be no lion Ukrainians come to Maidan, for the reaction of the Ukrainian resistance, Putin began methodi- Yanukovych will panic and flee. side. When APCs of the Russian cally to inundate Crimea with Rus- Then again, they would be able to Fleet based in Sevastopol sian troops. Crimea was surren- distribute government posts, estab- moved to the administrative center dered. The and the lish control over financial flows, -ap of the Crimean autonomy, they implementation of Putin's plans for point their own people, that is, to do stopped at every Ukrainian traffic "" followed. 2014

becomes the "Head of the Parliament commanders of the Ukrainian Armed March 8 Crimean women rally ers, the turnout is 89.5%, according of the Autonomous Republic of Forces and Navy defect to the enemy against the war and Russian occupa- to independent estimates it is 32%. Crimea" March 6 The Russian fleet starts block- tion, for peace and unity of Ukraine The highest voter turnout is observed March 1 Sergei Aksenov, the self-pro- ing Ukrainian ships in bay March 11 The "State Council" of in Sevastopol: 123%. claimed "Head of the Council of Minis- Crimea adopts the "Declaration of In- March 18 During the storm by the ters of Crimea" appeals to Putin to dependence of the Autonomous Re- Russian invaders of the photogram- help establish "peace and tranquility" public of Crimea and the City of Sevas- metric center in Simferopol, warrant on the peninsula. With Putin's bless- topol" officer of the Ukrainian Armed Forces ing, the Russian State Duma adopts March 15 Russian assault troops land Serhiy Kokurin is killed the law that allows sending troops to from helicopters near the village of March 18 Acting Supreme Com- Crimea (, Genichesk Dis- mander and act- March 2 Russian military without insig- trict, ) ing Defense Minister al- nia ("little green men") start the block- March 16 The "referendum" takes low the military in Crimea to use ade of the Ukrainian troops. Some place in Crimea. According to organiz- weapons

№ 3 (85) March 2015|the ukrainian week|9 Focus|Crimea A year has passed since the sur- render of Crimea. What has been done to return the peninsula to Ukraine? Practically nothing. The Ministry for Crimean Affairs still does not exist in Ukraine, while the Russian Federation has one. Ukrai- nian officials mention Crimea less and less often, unlike Obama, Merkel, Cameron and Komorowski, who use every opportunity to re- mind Moscow that it has annexed a foreign territory. Meanwhile, Ukrai- nian president does not mention Crimea at all in the Strategy for Sustainable Devel- opment of Ukraine until 2020, caus- ing discontent among Crimean Ta- tars, in particular. Prime Minister Yatsenyuk stated that the problem of Crimea will be solved "by our chil- The aggressor to do so only, so to speak, on a share siders, about 1,000 trucks enter dren and grandchildren." So, the of- at first acted basis with the official Kyiv. The Rus- Crimea via Perekop daily to make ficial Kyiv decided to stay clear of cautiously and sian money in Crimea would have sure that the Crimean group of the timidly, waiting is not starv- this issue. for the reaction long become scrap paper with which In the meantime, Moscow is of the Ukrainian little can be purchased if the Ukrai- ing... At the same time, traffic for or- strengthening its position on the side nian government did not ensure the dinary citizens between the penin- peninsula, bringing it daily to the supplies of food, electricity, gas and sula and the mainland Ukraine has common Russian standard, training water from mainland Ukraine, be- been interrupted, increasing the dis- the "new converts" to be afraid of cause for Ukraine Crimea is a penin- tance between the Crimeans and the the FSB in the situation when any sula, while for Russia it is an island. rest of Ukraine in the human dimen- careless word may result in charges Without the help of Ukraine, Russia sion. The representatives of the of "extremism" and a jail term. Peo- would not be capable of solving the Crimean Tatar Mejlis said on Social ple are scared and try not to talk to logistics between this "island" and Country TV station (former Black strangers. Against this background, the rest of its territory: building a Sea TV station, now broadcasting the statement made by the Russian bridge to unite the two shores of the from Kyiv): "Our elders will under- representative to the United Nations Kerch Strait would be difficult, ex- stand the economic blockade of Vitaliy Churkin that recently some pensive, and technically fantastic. Crimea, but they will not under- German sociological agency con- Using ships from the ports of Nov- stand the breach of human rela- ducted a survey in Crimea to dis- orossiysk and Tuapse would also be tions." cover that 93% of the local popula- expensive and inconvenient, plus, a The issue of returning Crimea to tion support what Churkin called whole fleet would be needed, not to Ukraine heavily depends on the ef- the "reunification of Crimea with mention a major reconstruction of fective and principled policy of Russia," sounds rather touching. In the ports of Kerch, Feodosia, Yalta, Ukrainian authorities, the rate and totalitarian states, any sociology is Yevpatoria, and Sevastopol. To en- success of economic and adminis- pointless, because it is very difficult sure the minimum food supplies to trative reforms in the mainland to find out what people really think, Crimea, at least 500 truckloads of Ukraine, the clear strategy of the since their honesty is often blocked food every day are required. The country's development, and the by their self-preservation instinct. maximum capacity of the Kerch ability of the Kyiv government to ac- Moscow maintains a certain level of ferry is 90 truckloads. This means cumulate the forces and resources material wealth on the annexed ter- that there is an urgent need for help required to resist the aggression in ritory, paying good money to the on the side of Ukraine. The official Donbas. So far, they have not given military, state employees and pen- Kyiv respects the needs of the ag- a reason even for a cautious opti- sioners. However, Russia can afford gressor. According to Crimean in- mism.

2014

March 18 The Agreement on the Ac- and the signing of the annexation deployment of the military and April 4 The withdrawal of Ukrainian cession of the Republic of Crimea to agreement law enforcement agencies from troops from Crimea is completed the Russian Federation is signed in March 20 The Russian Duma rati- Crimea to other regions of the Moscow. The Security Service of fies the agreement on "the acces- country Ukraine institutes criminal proceed- sion of Crimea" almost unani- March 27 A meeting of the UN Gen- ings against all "Crimean signato- mously: only Ilya Ponomarev votes eral Assembly adopts a Resolution ries" against it, while four MPs abstain in support of the territorial integrity March 18 The Ministry of Foreign Af- March 24 Ukraine’s Acting Presi- of Ukraine. This date may be con- fairs of Ukraine voices protest dent Oleksandr Turchynov signs a sidered the beginning of the official cl es t ion c hroni against the recognition by Russia of decree enacting the National Se- recognition of the occupation of the illegitimate "Crimean Republic" curity Council’s decision on the re- Crimea Al iena

10|the ukrainian week|№ 3 (85) March 2015

Focus|Crimea Andrii Klymenko: “One of Ukraine’s most important tasks is to ensure that sanctions for Crimea and Donbas are not separated”

Interviewed ndrii Klymenko, an expert that human rights in their Euro- process is that there cannot be a dis- by Anna at the Maidan of Foreign Atlantic interpretation mean noth- loyal population in a military base. Korbut Affairs think tank and Edi- ing to Russia’s values. These include Crimeans who do not Ator in Chief of the Black Sea want a Russian passport, proactive News portal, has just returned Human rights abuses in citizens, members of NGOs, journal- from Washington where he pre- Crimea. Russia uses five tech- ists, Crimean Tatars and representa- sented his report on Human Rights niques to that end, including coer- tives of religious communities that Abuses in Russian-Occupied cion to quit Ukrainian citizenship do not belong to the Russian Ortho- Crimea at a discussion initiated by and accept Russian citizenship; dox Church of Moscow Patriarchate. Atlantic Council and Freedom forcing disloyal population off the House. He spoke to The Ukrai- peninsula; cynical disregard of the Why are Crimean Tatars nian Week about why an interna- rights of the indigenous people – particularly important? They tional strategy to return Crimea is the Crimean Tatars; establishment are organised, not only in terms of necessary and what implications of an information ghetto, and ex- ethnic solidarity, but because they the ongoing transformation of the propriation of property. live in compact communities. peninsula into a huge Russian mili- 15 independent media and edi- tary base will have for the Black Forcing disloyal groups off torial offices have left the penin- Sea and Mediterranean region. the peninsula is related to the fact sula, as have NGOs that receive in- that Putin is creating a giant military ternational funding, since the Crimea on the interna- base in Crimea. We have been say- anne­xation. All religious organisa­ tional radar. We basically made ing this for the last six months, and tions had to re-register in the Rus- two presentations on March 6 in now, finally, we see intensifying dis- sian jurisdiction by March 1. But Washington. One was for represen- cussions of this on the international the Russians are reluctant to regis- BIO tatives of the White House, State level. This threat was initially under- ter the Ukrainian Orthodox Andrii Klymenko Department, US Congress, editors estimated. Later, when we said that Church, the Ukrainian Greek Cath- is an economist, of several important publications Russia potentially transported olic Church, the Roman Catholic Director of the as well as heads of well-known US 100,000 servicemen and nuclear Church or a range of protestant Tavria Institute think tanks. That one was behind weapons to Crimea, everyone real- and Jewish communities. So these for Regional De- closed doors. The second presenta- ized that this is not about merely a are all likely to have to leave soon. velopment tion was pretty much the same and naval base, but strategic air and mis- An emerging information (TIRR). Under his open to mass media. Overall, sile forces. They have Iskanders, ghetto. All means of communica- leadership, a Americans have a deeper under- Russia’s mobile ballistic systems, tion with Crimea have been liqui- group of TIRR re- searchers devel- standing of the situation in Crimea with rockets that can reach the new dated: There is no radio, TV chan- oped the first and Ukraine compared to Europe- US missile defence base that is being nels (they are still available via sat- strategy for ans, except for probably Poland, built in Romania. Six new frigates ellite), landline communications or Crimea for the the Baltic States and some coun- and six submarines, and new de- mobile operators from Ukraine years of 2005- tries of the Northern Europe. I told stroyers will be put into operation there. Because of this, contacts and 2015, aiming at them that Putin and his puppets over the next two years. The 11 air- exchange of information has turning the vec- are implementing five techniques ports that existed in Crimea during shrunken greatly. Russia started tor of Crimea’s to crush human rights in Crimea the Soviet Union are undergoing laying its own fibre-optic cable economic devel- that are quite closely intertwined. complete renovation; their top-tier across the Kerch Strait last spring opment in the One thing they all have in common runways can receive any aircrafts. A to cut off the one of Ukrtelecom. European direc- tion. Mr. Kly- is the fact that not only are beyond gigantic military base is being estab- I totally oppose the principle menko is cur- international law, but beyond Rus- lished in the centre of the Black Sea. promoted by the President of rently a member sian legislation as well. This will This changes strategic and geopoliti- Ukraine: build a success story in the of the Maidan of make it very difficult for the world cal balance not only in the Black Sea mainland Ukraine and Crimeans Foreign Affairs community to find ways to resist region, but also in the Black Sea- themselves will ask to be returned think tank super- them. Literally days before the pre- Mediterranean area where Asia, the to the fold. I wonder how they will visory board and sentation of our report, Alexey Middle East and North Africa meet. do that from a super-militarised re- Editor in Chief of Pushkov, Head of the Foreign Af- I think that the world has now gion after population replacement. the Black Sea fairs Committee of the Russian started thinking about how to react Plus, I have asked social psycholo- News portal Duma, stated clearly in the media to this. One crucial principle in this gists how long it takes to change the 12|the ukrainian week|№ 3 (85) March 2015 Crimea|Focus One of the most important tasks that Ukraine faces is to en- sure that sanctions for Crimea and Donbas are not separated. But I don’t see this issue being raised in Ukrainian foreign policy. We are currently trying to achieve this – first and foremost with the coun- tries that are our allies. Right now, we need an interna- tional strategy for the return of Crimea – a document, in which the Ukrainian perspective would be in line with that of authoritative Amer- ican and European think-tanks, which could influence their policy- makers. My impression is that our Cabinet of Ministers has zero inten- tion to struggle for Crimea’s return

www.Krimer.org in the short-term. The President is restricting himself to declarations, mindset of someone who, say, sup- company) including offshore oil but at least he is saying something. ported the Maidan in Kyiv and re- and gas reserves, plus its expensive On the third day after the an- turned to the current Crimean envi- equipment, seaports, public re- nexation, Putin decreed the estab- ronment. They give it three to four sorts, objects with 40–50 hectares lishment of the Ministry of months. of land on the coast, wonderful Crimean Affairs. Nothing like this vineyards and cognac plants, pal- has been created in Ukraine to Expropriation of prop- aces and monuments. The way date. Meanwhile, new problems re- erty. Under the Russian legisla- Russia treats private property in lated to the change of citizenship, tion, nationalisation provides for Crimea has shocked the interna- first and foremost, will emerge and monetary compensation to the tional community – that is exactly mount every day and every month. owner whose property has been the reaction Ukraine needs to act They cannot be resolved with just confiscated for public or infra- effectively. The problem is that it one law that has been passed re- structure purposes. In Crimea, ac- doesn’t. cently. An executive body is neces- cording to our sources, property is being blatantly expropriated. On the strategy to return About 400 large state-owned fa- Crimea. What I’m going to say Forcing disloyal groups off cilities have undergone that. The now may sound like blasphemy, the peninsula is related to last two months have seen mas- but Crimea is more important sive expropriation of private prop- than Donbas. If you somewhat the fact that Putin is erty – approximately 300 facili- cynically look beyond the lost lives creating a giant military ties. And I don’t mean kiosks, but and victims of the fighting in East- the equipment of mobile opera- ern Ukraine, similar conflicts have base in Crimea tors, bread-making plants and taken place in the post-WWII Eu- their retail chains, transport infra- rope. But there have been no an- sary to regulate the hundreds of structure and shipyards, bus sta- nexations. If Europe turns a blind new issues. tions, car enterprises and energy eye to the seizure of Crimea, it We need a state strategy for supply companies. means that everyone can do what- Crimea’s return. It must be com- ever they want. This ruins the en- prised of public and, of course, Can Ukraine demand com- tire system of international rela- classified sections. But one must be pensation for the damage? tions in the post-WWII world, developed, and that is only accom- Theoretically, yes. But Ukraine is based on the principle of territo- plishable once a special executive not doing a good job on this. Of rial integrity and sovereignty. We body is set up. course, the government should sue know how two earlier annexations Crimea experts and activists in Russia for expropriating Ukrainian ended. When Argentina tried to “political exile” have adequate coop- property in Crimea in international annex the Falkland Islands, the eration among themselves. I’m only courts. Officials claim that some British Fleet kicked it out. The at- afraid of one thing: any group of files have been submitted already. tempt of Iraq to annex Kuwait “political emigrants” inevitably goes But we did not find them in the ended with Operation Desert through conflicts at a certain point. courts’ public databases. Ukraine’s Storm a month later. Unless the We should prevent this. I’m not say- official estimates of the damage international community and Eu- ing that something like this has be- done by Russia at UAH 1tn seem ropeans understand that Crimea gun – so far, it hasn’t. I’m just offer- ridiculous. According to our esti- must immediately be returned to ing words of caution. This once mates, this property could be worth Ukraine, they will send a message again proves that an executive USD 1tn or more. The assets in that any country, particularly agency around which all organisa- question include Chornomornaf- those with nuclear arms, can take tions and activists will gather is an togaz (Black Sea oil and gas drilling part of their neighbour’s territory. absolute must. № 3 (85) March 2015|the ukrainian week|13 Focus|Crimea you know of any attempts by Ukrainian officials to seek advice or assistance from the David Kramer: international community in terms of finding ways to support the oppressed population in Crimea? “We have an obligation to help Have you seen any strategic plans to that end from the official Kyiv? Ukraine defend itself” President Poroshenko raised the issue of Crimea recently, say- n March 6, the Atlantic Interviewed Kramer left it in November 2014 ing that normalization of relations Council and Freedom by to join the McCain Institute as Se- with Russia would be possible af- House held the discussion Anna Korbut nior Director for Human Rights ter Ukraine regains control over Oof human rights abuses in and Human Freedom – Ed.), Da- Crimea. In that sense, the Ukrai- the Russian-occupied Crimea. Fol- mon Wilson from the Atlantic nian government has done its lowing the event, The Ukrainian Council said that he had an idea of part. Week spoke to David Kramer, one putting together a special report But the problem about Crimea of its initiators, about how visible on the human rights situation in is that Russia’s aggression in the Crimea is a year after annexation in- Crimea. Donbas has been stealing a lot of ternationally, how seriously the The plan is to present this re- attention both of the Ukrainian threat of its militarization is seen in port in Europe. We think it’s criti- government and the international the West, and why Barack Obama is cally important. The presentation community. It means that not so reluctant to provide effective sup- Follow this QR in Washington was part of the enough attention is focusing on code to see port to Ukraine. the “Human strategy to raise awareness of this the situation in Crimea, which is a Rights Abuses issue and to ensure that Western very serious one for Crimean Ta- U.W.: How much is Crimea on the in Russian- leaders don’t let this issue slip off tars in particular, as well as for international radar right now? Occupied of the radars. Since, as I’ve said ethnic Ukrainians or anyone who We sometimes hear it mentioned Crimea” report before, Crimea is not mentioned does not want to take Russian citi- in official statements, but is there in the Minsk Agreements, it is crit- zenship. any practical, strategic attention ically important that we remind to it, rather than declarative? U.W.: In addition to human rights I would say that Crimea has violations, Crimea is turning into fallen off the radar. It is not even a militarized zone with massive mentioned in the latest Minsk population replacement with Agreement, nor was it mentioned Russians underway. Is that being in the September one. There seem discussed as a strategic threat to be very few people who are rais- among international ing the issue of Crimea. Having policymakers? said that, State Secretary Kerry Philip Breedlove (US Euro- raised it before the UN Human pean Commander of NATO Allied Rights Council on March 2. Command Operations – Ed.) Ukraine’s Foreign Minister Pavlo raised this issue recently when he Klimkin raised it during his visit talked about the military threat to Japan. President Poroshenko that is being prepared by Russia in has talked about it. Crimea. There is a growing con- But we all need to do a much cern in the West over the deploy- better job of reminding people ment of nuclear weapons in that the Russian invasion started BIO Russia that the sanctions will stay Crimea. There is a significant in- with Crimea. The crisis had David Kramer in place as long as Russia occupies crease in the number of Russian started much earlier, however. has been the Se- any part of the Ukrainian terri- troops there, and that is a great nior Director for Human Rights tory, including Crimea. strategic military concern that is U.W.: The Atlantic Council report and Human Free- We did not recognize the ab- drawing attention. brings up a number of serious doms at the Mc- sorption of the Baltic States into The US State Department is cases of human rights abuses Cain Institute the Soviet Union for decades. focusing more on the human that have been taking place in since November Then, when the Soviet Union col- rights situation. And again, the Crimea since the Russian 2014. He previ- lapsed, they joined NATO and the fighting in Eastern Ukraine is di- invasion. How often does this ously served as EU. The same policy should be verting attention, which is obvi- kind of information come up in President of maintained towards the annexa- ously part of the Russian design to the international political and Freedom House tion of Crimea by Russia. steal the West’s attention from the media space, and how noticeable (October 2010 – developments on the peninsula. is it? November 2014) U.W.: Andriy Klymenko, the and US Assistant Crimea has become a much Secretary of expert of the Maidan of Foreign U.W.: Is the weak interest for the more restricted area where col- State for Democ- Affairs, who compiled the report issue of Crimea a result of lecting information is getting far racy, Human represents the expert and civil ineffective or no efforts to keep it more difficult. When I was still Right and Labor society community. How about on the radar by the Ukrainian with the Freedom House (Mr. (2008-2009) the Ukrainian government? Do authorities or more of an 14|the ukrainian week|№ 3 (85) March 2015 Crimea|Focus international consensus in de to Ukraine. The Pentagon and the means to accomplish the goal, facto treating the annexation as people in the National Security and that should be to get Russia a fait accompli while struggling Council do, too. The problem is out of Ukraine. That includes pro- to freeze the conflict in Eastern the President of the United viding military assistance to Ukraine? States. He has been very stub- Ukraine. I think it’s a matter of the abil- born in his refusal to do the right Obviously, I haven’t asked him ity of the leaders who are respon- thing. about it directly, but Mr. Obama sible for the region to focus on so I think we have an obligation seems to fear that it could result in many things at once. It’s a matter – a moral and strategic one, as the escalation of tension with Rus- of resources and personnel, but well as one based on the 1994 Bu- sia, and of getting lured into an- also part of the Russian strategy. dapest Memorandum – to help other military conflict by provid- Russia wants the issue of Crimea Ukraine defend itself and its terri- ing weapons and getting deeper to be seen as a fait accompli, and torial integrity as we pledged we into it. part of the purpose behind the would do when we signed it. movements in Eastern Ukraine is It is also a matter of stopping “Russia wants the issue of to make people forget about Putin. If we don’t stop him in Crimea. We shouldn’t let the Rus- Crimea and Eastern Ukraine, the Crimea to be seen as a fait sians have us fall into that trap. risk is that countries under Article accompli. 5 protection will be next, and that U.W.: Looking broader at the will cause a major crisis. We shouldn’t let the Ukrainian issue: we now see Russians have increasing support for helping U.W.: What is holding President Ukraine more decisively in the Obama back? Is he trying to us fall into that trap” American political establishment. avoid confrontation with the EU Do you think it could push or afraid of pushing Putin to But if you look at the US Con- President Obama to act more escalate the conflict? gress, a huge bipartisan majority, effectively? The Europeans for most part, including Democrats and Repub- I hope it will. I fear it will with some exceptions of Poland, licans, favor the provision of mili- not, however. The problem with Baltic States and some others, are tary assistance to Ukraine. And taking these actions is very much not in favor of arming Ukraine. yet the President refuses to do so. on the President’s shoulders. The Germany is opposed to it. I find it hard to understand. I also State Department supports the But unity with the EU should find it to be a huge mistake on provision of military assistance not be the goal here. It should be Mr. Obama’s part.

№ 3 (85) March 2015|the ukrainian week|15 politics|Donbas Villains' Last Refuge Why the Maidan didn’t win in the Donbas

Author: or that there even could have been Denys Kazanskyi any pro-Ukrainian rallies at all. The -supporters stayed near hen in December 2013 the Shevchenko monument 24/7 in Kyiv saw the rise of pro- shifts. At night their numbers test movement, dropped to just a handful, with hun- W Ukraine’s eastern re- dreds gathering in the afternoons. gions remained silent. Not that any- Some, however, were adamant that one expected anything different. rallying in was a pointless Ever since the 2004 Orange Revolu- exercise. They went to Kyiv to sup- tion South-Eastern Ukraine has port what they felt (and rightly so) been known as a reactionary prov- would be the decisive rally for this ince loyal to Viktor Yanukovych. So revolution. it wasn't the silence of the pro-Yanu- At first the authorities com- kovych regions that was surprising, pletely ignored the protest in the but the unusual protest activity of streets of Luhansk and Donetsk. Dnipropetrovsk and Zaporizhzhia: Perhaps the officeholders thought when at the end of January the lo- that the strange and very unusual The Donetsk cals began taking regional adminis- for these parts phenomenon will EuroMaidan trations by storm it became clear somehow dissipate on its own if left predominantly that Yanukovych's authority was alone. It didn't. People would not consisted crumbling even in his strongholds. leave the streets in Kyiv, nor were of local This spelled the end of the regime. they going to in Donetsk. The events intelligentsia. Sparks of discontent flew in Lu- in the capital constantly put fuel in The citizens hansk and Donetsk too. But, unlike the fire of the protest. So eventually that ended up in other regions, they failed to ignite the authorities decided to take dras- facing attacks by outright the flame of popular uprising. The tic measures. criminals lacked protest movement in the Donbas Much like in Kyiv the "January any combat simply was not strong enough. The 16 dictatorship laws" were the cata- skills and simply ruling party and state apparatus on lyst for violence causing uproar in didn't stand a the contrary was stronger than any- the society, which met repression chance where else. In those revolutionary from the government. In response days the Donbas became the last ref- to the lawlessness in the Parliament shed its mask of democracy and uge of the villains, one that they the Donetsk opposition activists launched full-on repressions. As guarded with zeal. started the AutoMaidan and orga- per usual, the latter were enacted This is not to say that Donetsk nized a car rally to Viktor Yanu- by thugs. They were ordered to ter- and Luhansk completely ignored the kovych's residence in Kalynkyne-2 rorize the EuroMaidan in Donetsk, EuroMaidan. Shortly after the stu- village. Naturally, Yanukovych was and this had the desired effect. The dents' protest in Kyiv was violently not there at the time, but the event protesters were threatened and as- dispersed on November 30, little aimed at getting the message across saulted, they had eggs and paint "Euromaidans" sprung up in many through the media. This was un- thrown at them. And each day cities all over the country, Donetsk precedented audacity for Donetsk. fewer and fewer people turned up and Luhansk being no exception. The reaction followed immedi- to protest until, eventually, there Granted, they weren't nearly as pop- ately. Local officials began panicking was practically no one left. ulous as the ones in Kyiv or Lviv, yet and decided to thwart AutoMaidan The activists were up against it they sent considerable ripples in the bud, so they immediately got from the very beginning. The through the media. The local press thugs involved. On the 19th of Janu- Donetsk EuroMaidan predomi- covered the rallies near the Donetsk ary 2014 during another Auto- nantly consisted of local intelligen- Regional Administration building Maidan rally a gang run by tsia. The citizens that ended up fac- and this example inspired the sup- crime boss Armen Sarkisian used ing attacks by outright criminals porters of the European integration their cars to block the cars of Auto- lacked any combat skills and simply throughout the country. Maidan. The activists called traffic didn't stand a chance. Thugs tossed Gathering near the Taras police, which did arrive but did not brilliant green dye even at women Shevchenko monument, the pro- interfere, watching from the side. and the elderly; they knew full well testers in Donetsk did not put up From that day onwards the they wouldn't be punished. By that tents. Looking at modern-day pic- Donetsk activists were subjected to time the situation in the country tures of Donetsk it beggars belief regular attacks. After the escalation heated up so much that small clashes that this used to be the gathering in Kyiv and the first deaths fol- and beatings were going unnoticed, spot for patriotic citizens for years, lowed the government decided to the lawlessness in Donetsk paled 16|the ukrainian week|№ 3 (85) March 2015 Donbas|politics into insignificance with what trans- possessed the critical mass too large within the state with its own ideol- pired in Kyiv. for the government's repressive ap- ogy based on a blend of soviet con- The Donetsk Euromaidan has paratus to cope with. servatism and tribalism. Donetsk been thrashed by thugs. Using their The Ukrainian Donbas fell vic- and Luhansk residents were being own version of the Blackshirts the tim to the historic defeat of the Rus- persuaded for years that they must government managed to suppress sian lobby in Ukraine at large. Re- always support "their own" at elec- the protest in the Donbas. In Febru- treating from Kyiv, the Moscow- tions, no matter how bad these can- didates were. At the same time, the common citizens of Western Ukraine were made out to be the cause of all the trouble for the Don- bas residents. Such blatant popu- lism resonated with the population of destitute worker towns present- ing a convenient myth that the west- erners were the ones living off the benefits earned by the mining and metallurgy workers of the East. For the Donbas, the protests in Kyiv from the word go were made out to be machinations of the West directed against Russia and all those who sympathize with it. The Party of Regions-controlled media aptly set one part of Ukrainian citizens against the other without even pro- viding any new information, but simply regurgitating same old atti- tudes that were firmly instilled in Any criticism directed against the Donbas plutocratic elites was presented to the public as attacks against the Donetsk and Luhansk population ary when the Yanukovych regime backed Donetsk criminal clans people's heads and became stereo- was on its last legs, no methods were vented their anger on the opposition types. Any criticism directed against off bounds. The officials felt they supporters of the region they saw as the Donetsk and Luhansk pluto- were losing grip of their power and their rightful territory. The spring's cratic elites was presented to the were prepared to take utterly despi- brutal suppression of rallies in sup- public as attacks against the Donetsk cable and criminal measures. The port of Ukraine's territorial integrity and Luhansk population. The latter opposition in Donetsk faced tough in the East, violent attacks on the as a result of such manipulations and organized resistance and was peaceful protesters in the centre of naturally took the side of "their out of its depths. A bunch of enthu- Donetsk were nothing other than re- own". siasts were up against the criminal venge for the Maidan and the igno- The Donbas is so used to setting powerhouse that was no stranger to minious retreat from Kyiv. itself apart from the rest of Ukraine, resolving things through violence. It must, however, be noted that so used to politicians speculating Based on how the government the reprisals against the opposition about its exceptional significance was seemingly putting fuel to the fire in Donetsk and the attacks on activ- that it simply followed a predeter- of protest in Kyiv by stepping up the ists had the support among the con- mined path. In the conflict between repressions, conspiracy theories be- siderable portion of the local popu- the government and the people it gan to emerge. Some still believe lation, which not only failed to step took the more convenient side, sup- that attempts to disperse the Maidan in to defend the protesters, but actu- porting which seemed to warrant were provocations, a cunning plan ally approved the brazen lawless- the more comfortable outcome. And by the opposition to discredit Yanu- ness against them. Without this ap- when the Donetsk criminal clans kovych. In reality the representa- proval suppressing the demonstra- were defeated the residents of the tives of Donetsk clan acted in Kyiv tions in the Donbas would be as Donbas took it personal. the only way they knew, the way difficult as it turned out to be in Unfortunately, nobody in they were used to. But while in the Kyiv. Ukraine managed to get through to Donbas such methods did have the Through years of reign in the re- the people and explain the error of desired effect and managed to sup- gion the Donetsk clans managed to their ways and the dangers such a press the protest, the protest in Kyiv create a practically separate state choice posed. № 3 (85) March 2015|the ukrainian week|17 Politics|Donbas death, will be managed by these bodies. County military-civil adminis- Hennadiy Moskal: trations will be in three counties: Stanychno-Luhansk (in the battle “Everyone realizes that members zone), (almost entirely in the battle zone) and Novoaydar (the of the Party of Regions are the war covers part of it, including the infamous Shchastya town). We will not introduce military-civil admin- ones responsible for what is going istrations in other counties. Actu- ally, it can be set up in two cases: on in Donbas” when the county council is not func- tioning or when it is necessary to Interviewed he Ukrainian Week spoke concerned that I alone would be in ensure public order and safety. We by Stanislav to the Head of the Luhansk charge of the Luhansk land – must find a balance between the Kozliuk Oblast State Administration, which is of no use to anyone any- military and civilian aspects. Unfor- Tabout administration of his way. I explained that we cover vil- tunately, we have certain problems territory, lustration in the oblast lages, towns and cities. We don’t and the locals don’t know how to police and pro-Russian sentiments manage land parcels. behave with servicemen. among the locals This law is extremely impor- The establishment of an oblast tant for . The rea- military-civil administration is U.W: The passed son for this is that as soon as there possible in the absence of a func- the Law on the Creation of is fighting in a town, the first to flee tioning oblast council. But the re- Military-Civil Administration, in a car with his family is the head cent law grants us additional pow- designed to simplify the of the town council, followed by the ers. In my view, it is something be- administration of the oblast, last local deputies, then medical atten- tween peace and war. Part of the year. What does it actually change dants, teachers and school direc- powers granted by this law to mili- in practical terms? tors. The only people left in the tary-civil administrations comes We have waited far too long for town are regular people, who have from martial law. The military-civil the President to sign this law. It no vehicles and nowhere to go. The administration can restrict traffic was well overdue. This document is next people to flee are entrepre- on certain streets and territories, like our Holy Bible here. It will ac- neurs. They are afraid of Grad and prevent entrance into the city, ban tually return administrative con- Tornado rockets, or mines, and the sale of alcohol and weapons, trol over the oblast, something that won’t deliver goods to towns under confiscate the latter, even if ac- we lacked badly. The Budget Code fire. This causes a humanitarian quired legally, and ban large-scale has seen changes which allow the catastrophe. Our administration events, if they pose a risk to life. oblast administration to exercise consistently sends food to such the powers of the oblast council towns. In addition to this, there is a U.W: What about curfew? provided that the latter is absent or problem with medicines. There is a The military-civil administra- not functional. That would not shortage of medics. It’s great if tion establishes restrictions for be- have happened if vice prime minis- there is a military unit nearby with ing out on the streets and in other ter, Hennadiy Zubko, had not come doctors or a medical battalion. We public places during certain peri- here and seen the situation on the ask them for help. But the military ods without relevant documents. ground. Luhansk Oblast council are also not fully equipped. We determine the lists of such doc- has dispersed itself; this was a uments. precedent in the history of Ukraine. U.W: How many such problem They did this deliberately. Its settlements are there in Luhansk U.W: How is police lustration in members knew perfectly well that Oblast? Luhansk Oblast progressing? they had all the powers, particu- On the settlement level, there There are very few policemen larly about staff and finances, while are about twelve. I don’t know how left here. I would say not more than we didn’t. So we were left with many there will be tomorrow or the 10% of the workforce that was here nothing, with our hands tied, with day after tomorrow. Military-civil prior to the occupation. As for wars, shootings, ruined schools, administrations will be subordi- cleaning up the police? Show me churches and buildings, the dead nate to both the Head of the Oblast how to do this. Sergeants, warrant and the wounded. State Administration and the Anti- officers and officers did not cooper- Terrorist Operation command. The ate with Yanukovych. As far as I’m U.W: What powers will this law President will appoint their heads, concerned, the fact that they went to give to oblast administrations? and the heads will in turn put to- serve Ukraine after the occupation There are three kinds of mili- gether the military-civil staff. The is the best way to prove their loyalty tary-civil administration: for settle- powers of village, settlement and to their oath of allegiance. Those ments, counties and oblasts. Many city councils will be transferred to facing criminal proceedings should MPs actually lamented that I them. The head will determine the be examined by the internal secu- wanted unlimited powers here; number of personnel and receive rity, the Ministry of internal Affairs that I had virtually become a Pino- funds to meet the needs of the set- and the Prosecutor’s office, not us. chet and the leader of a Severodo- tlement. Absolutely all services and I wonder how I can lustrate netsk junta. They were probably functions, from the locals’ birth to those who have left occupied territo- 18|the ukrainian week|№ 3 (85) March 2015 Donbas|Politics U.W: Did the Party of Regions offer any assistance? There are none here, they all fled. I chased off those who didn’t. For instance, I arrived in one county and found 75% of the county coun- cil there were Party of Regions members. I shouted at one at their party activist meeting. I pushed them out of the council hall another time. And when I went there for the third and fourth time, there were no Party of Regions: they vanished. Of course, some tried to convince us that they were loyal to Ukraine. I suggested that they gather the mass media and small rallies where they would publicly hand in their Party of Regions cards. No one did it. So I don’t really believe them. U.W: Is it expedient to conduct elections in the battle zone? ries. They have left all of their prop- It is impossible to integrate Absolutely not! It was ridiculous erty, including apartments and cars, some of them. At the same time, when all election districts on occu- there. Life has stripped them of ev- there are citizens who under- pied territory were abandoned and erything. Some are guarding check- stand everything. I believe that just a handful of people elected an points in cold and rain for UAH the youth must be integrated. A MP. How can he represent the entire 2,500. Some live in dormitories, child is brought up by grandpar- region when most of its residents others in rented apartments with ents and parents. We have to do couldn’t get to the polling stations? families, others stay with family and the opposite: take the child to This should not happen again. There friends. Some have nowhere to live, see Western oblasts, then come should not be elections in areas and some have nothing to eat. I back home and educate his or where there is on-going fighting. Vil- think that they have been punished her parents. For example, we lage, settlement and county council by all this enough. In my view, even wanted to take the local children members can be elected in areas if somewhere deep down they sym- for New Year and Christmas hol- where there is no war. To hold such pathised with the Party of Regions, idays, and asked all FSU coun- election for the oblast council now now this word combination only tries for help. None, other than is, in effect, to capitulate. We would drives their sugar levels and blood the Czech Republic, responded. thus show that we, the unoccupied pressure up. Everyone realizes that Unfortunately, we also had a parts of the oblast, are not Luhansk members of the Party of Regions are problem with passports, so it Oblast. That cannot be allowed. the ones responsible for what is go- didn’t work out. Instead, all of Constitutionally, the territorial in- ing on in Donbas. I would like those Ukraine’s western oblasts re- tegrity of Ukraine has not been di- conducting lustration to experience sponded. They are taking in our vided. The separatists did this, not this path first, and then get down to children as we speak. Three the Constitution. There are Ukrai- lustration. groups have already holidayed in the mountain village of Nyzhnye as soon as there is U.W: How intense are pro-Russian in Western Ukraine. The psycho- sentiments in the region? logical barrier has been over- fighting in a town, I can’t say that they have disap- come. Sometimes, we run into the first to flee is the head peared. The Party of Regions has utterly comic situations. We been spreading just one ideology asked the locals in Novotosh- of the town council, from 2004 to 2014 here. We are on kivka, a village in Luhansk followed by the local the border with Voronezh, Rostov Oblast, to give us their children and Belgorod Oblasts. Do you think so that we could take them on deputies that it is possible for pro-Russian holiday, we could evacuate them. sentiments to disappear? Obvi- And no one allowed their sons or nian citizens living on occupied ter- ously, not. On some territories they daughters to come with us. Nei- ritories, who have the right to vote. are off the scale, while declining in ther do they themselves want to They cannot be deprived of this others. I would not say that even go. This is because most have right. Lviv, for example, is free of this. It never been outside their town. too was part of the Soviet Union at They tell us “We’ll never see U.W: Do you believe in the some point. them again; they will be used as peaceful resolution of the conflict organ donors!” This is funny the in Donbas? U.W: How can these people be first or second time you hear it, I cannot believe otherwise. I integrated into Ukrainian society? but not when you are hearing it do not believe in the military so- Is it possible at all? over and over again. lution. № 3 (85) March 2015|the ukrainian week|19 Neighbours|Peacekeepers At an Impasse The initiative to invite peacekeepers to the Donbas seems like a desperate move in the situation when traditional means of deterring the creeping Russian expansion have failed

t has been a few weeks since Author: from agreeing to economically The theme of the United Na- the “Normandy format” meet- Oleksandr support these territories to allow- tions peacekeeping mission ing of the heads of states in Kramar ing them to take part in the com- emerged due to the fact that the IMinsk and the signing of the prehensive constitutional reform OSCE mission in the conflict zone road map for implementation of of the country in order to lay the turned out to be absolutely inca- the previous Minsk accords foundations for a quasi-civil war pable of controlling the ceasefire signed back in September. The now on the entire territory of and adherence to the agreements. subsequent developments dem- Ukraine. However, the 70-year experience onstrated that the agreements of the UN demonstrates that its aren't quite working: fighting Peacekeeping barrier peacekeeping contingents can be continues, including the use of On February 18, the National De- efficient only provided that cer- heavy weapons. The withdrawal fense and Security Council ad- tain conditions are met: either of heavy equipment is constantly opted an official address to the there needs to be genuine interest either delayed, or imitated, the UN and the EU regarding the de- of both parties in stopping the process of exchanging prisoners ployment of peacekeeping mis- hostilities, which allows the is on hold, additional terrorist sions on the territory of Ukraine. peacekeepers to keep minor spats forces are being deployed in the During consultations at the UN and misunderstandings under areas adjacent to the confronta- Security Council in New York the control; or there needs to be the tion line and more equipment is Ukrainian Foreign Minister Pavlo peace enforcement scenario crossing the state border from Klimkin has said that “this initia- where the peacekeeping contin- Russia. Statements on part of the tive will by no means discard the gent includes a powerful state ca- OSCE, the EU or the Merkel-Hol- Minsk accords. On the contrary, pable of forcing into peace the lande duo, or even the United it is an irreplaceable tool for im- side breaking it up. States are yet to be backed up by plementing these accords and for Additionally, the conflict of any kind of effective measures in restoring peace. This will be the interest between the world super- terms of punishing the violator of real crash test for the UN's com- powers that happen to be perma- the Minsk agreements, even after mitment to peace and stability”. nent members of the UN Security such a blatantly obvious violation Council complicates the situation as the offensive operation to pres- further. History knows only one sure Ukrainian forces into re- EU Police Mission example when peacekeepers act- treating from the ing under the UN mandate were area. Deployment mechanism successfully used during the Cold This saw the transformation War. It is the peace enforcement of approach towards resolving the Ukraine has to address the EU with in Korea where the North Korean Donbas crisis by the parties in- the respe ive demand for regime had at least one million volved. Now not only the EU is 1 the decision to send the mission Chinese "volunteers" from the to be taken; pushing to freeze the conflict to regular army of the communist hold further advancement of the The EU is to receive the UN mandate, China with the support of the So- 2 however, missions to Macedonia Russian/terrorist troops, but in 2003 and Libya in 2011 were viet aviation and instructors. In- Ukraine as well. Meanwhile the sent without said mandate cidentally, the current conflict in terrorists and the Kremlin behind Donbas has much in common them, seeing that the West is re- with that war, while the DNR and luctant to act in support of LNR (Donetsk and Luhansk Peo- Ukraine and to give adequate re- • A civil EU mission is already operating ple’s Republics – Ed.) have sponse to the violation of agree- in Ukraine. It has been sent in July 2014 rather a lot in common with ments, are taking an increasingly in order to assi the police reform DPRK. The 1950-1953 Korean aggressive stance. Russia and and rengthen the rule of law war, however, stands out by the even the self-proclaimed repub- • A civil EU mission also operates on the ate border readiness of the United States to lics no longer seek the recogni- between Ukraine and Moldova. Its obje ive is to take active part in defending Ko- tion of the fact that their territory provide border assiance to both countries rea and the decisive stance of is not controlled by Kyiv. Instead President Harry S. Truman, they are raising the stakes setting whose name is often associated • At present there are a ive EU missions, the ever-growing demands in re- 18 with the effective response to the turn of them stopping the attacks: including 5 military missions Soviet expansion in the form of 20|the ukrainian week|№ 3 (85) March 2015 Peacekeepers|Neighbours the Deterrence Doctrine. In con- this case Kyiv will completely let trast, today's US President shows go of Donbas. no readiness to such action. On However, the Russian-pro- UN peacekeeping top of that, the peacekeeping mis- posed scenario of reintegration of sion of the United States and the Donbas to Ukraine as a destabi- missions (Blue Helmets) allies in Korea was granted the lizing factor, an uncontrolled fi- UN mandate almost by accident. nancial burden and part of the At that time it was Taiwan that larger plan of nationwide federal- Deployment mechanism: occupied China's place, while the ization is far less acceptable for representative of the Soviet Ukraine than the actual separa- tion of these territories. In addi- A country asks the UN for a peacekeeping Union instead of vetoing the reso- mission; lution simply boycotted the Secu- tion, the effective monitoring of 1 rity Council meeting. Moscow the confrontation line can de- The UN Secretary General provides never made that mistake again crease the danger of further Rus- 2 assessment and report on the situation and shouldn't be expected to. sian expansion. Deputy Head of in the country; The head of the Russian Fed- Ukraine’s Presidential Adminis- The UN Security Council issues eration Parliamentary Committee tration Valeriy Chalyi emphasized 3 a resolution on the numbers, participants, on Foreign Affairs Aleksey Push- that Russia, as the aggressor- obje ives and the term of the mission; kov already went on record say- state, cannot be allowed to par- The UN General Assembly approves ing that “Kyiv will not be able to take in the UN peacekeeping mis- the budget and resources for 4 the peacekeeping operation; push the UN into sending peace- sion. However, even if the peace- keepers to Ukraine without cir- keeping contingent included UN member-ates are requeed cumventing Russia. Such deci- Russian units, this, perhaps, to provide personnel for 5 the peacekeeping mission sions are taken by the UN Secu- wouldn't be the worst-case sce- rity Council. Without our consent nario, as it would make it harder this is impossible.” That being for the Kremlin to avoid responsi- said, Moscow has not explicitly bility for the actions of the mili- Motivation for deployment: opposed the very idea of deploy- tants, forcing Russia to take for- • prevent confli escalation and expan- ing peacekeepers. For instance, mal responsibility for peace. sion beyond the country borders; There are two kinds of peace- the Russian Duma Speaker Sergei • abilize confli following ceasefire; Naryshkin opposed the idea of keeping operations: monitoring deploying peacekeepers only in missions and operations involv- • create an environment condu ive for parties to reach long-laing peace; the terrorist-occupied territories ing peacekeeping forces. Petro and along the state border with Poroshenko stated that for • assi in reaching comprehensive peace Russia. While the head of the Ukraine “the best format is the deals; Federation Council Committee on European Union Police Mission”. • and lead ates or territories through transition period to a point where they Defence and Security Viktor Oze- The EU has sent its peacekeeping get a able government rov even stated that Russia may missions without the UN man- actually agree to the deployment date only twice: to Macedonia in of peacekeepers only on the exist- 2003 and to Libya in 2011. But it ing line of confrontation with the is unlikely that the EU will risk Ukrainian forces, not along the deploying its "blue helmets" Fun ions of peacekeepers: border with Russia or in the occu- along the very dangerous con- • disarmament; pied territories of Donbas. frontation line in Donbas. Ger- It appears that Moscow hasn't man Foreign Minister Frank- • demining; quite realized that at this point Walter Steinmeier has already • reform of defence se or; Kyiv is morally at peace with idea made it clear that stable truce • prote ion of human rights and of Abkhazia scenario for the occu- supported by all sides of the con- assiance in their observance; pied territories of Donbas and is flict is the necessary condition for prepared to abandon the plans to sending a peacekeeping mission • support, recovery and expansion of the ate authority; regain control over them. There- to Ukraine. fore the Kremlin is still counting Unless the West shows real • assiance in social and economic on Ukraine backing away from interest in the idea of deploying a recovery and development; the peacekeeping initiative once peacekeeping mission, or takes • assiance in ele ions it becomes clear that chances of decisive measures in the near fu- deploying peacekeepers on the ture to support Ukraine and to occupied territories or along the increase pressure on Russia state border with Russia are slim, enough to force the Kremlin to • Since 1948, the UN launched 69 peacekeeping as opposed to deploying them give up the idea of furthering its operations along the current confrontation offensive, Moscow's agreement to • line. For instance, the head of the freeze the conflict by using peace- More than 3,000 Blue Helmets were killed on duty during peacekeeping operations Russian State Duma Committee keepers and to establish the de- on Defence Vladimir Komoyedov marcation line is not to be ex- • There are currently 16 a ive peacekeeping showed genuine surprise that pected. missions in the world Kyiv is in favour of the idea to de- In such a case there is ever ploy peacekeepers along the line growing possibility of the Russian of confrontation, saying that in occupation expanding deeper into № 3 (85) March 2015|the ukrainian week|21 Neighbours|Peacekeepers the territory of Ukraine, which with pied territories that are no longer within the frameworks of the sup- the continued inaction of the West eligible for state financing has ply deal signed with Ukrinteren- and the improving weather condi- been adopted. The list includes ergo in December 2014. tions may transform into an all-out the Starobesheve and Zuivska At the same time Russian offi- offensive. In that case all this thermal power stations and four cials are showing serious concerns peacekeeping initiative can amount wind power stations. Similarly, regarding the strengthening to is leverage to demand western February 18 saw the suspension blockade of Donbas by Ukraine support in arms supply in case of natural gas supply to the ter- and even hinting that ceasefire there is no real commitment to rorist-controlled areas. Repre- should be viewed as dependant on guarantee control over the fulfill- sentatives of Ukrtransgaz, a state- the economic support from Kyiv. ment of "peaceful resolution". owned operator of Ukraine’s gas The head of Parliamentary Com- transit system, explain that gas mittee on Defence Vladimir Ko- Economic isolation supply to the zone of hostilities moyedov declared: “ceasing the In the short and medium-term has been stopped due to critical artillery fire is just one aspect, but prospect, Ukraine would suffer damage of infrastructure caused the people need to live on some- from regaining control over the by the fighting. In response the how, to receive wages, pensions”. Russian-occupied territories of Russian Prime Minister Dmitri According to him, if Ukraine im- Donbas. This would require not Medvedev instructed his govern- poses the regime of complete eco- only making concessions to do with ment to “come up with proposals nomic lockdown of these territo- Constitutional amendments and to cover the natural gas demands” ries, it will become impossible for the de-facto suspension of the of the self-proclaimed republics. the occupying forces to provide Euro-Atlantic integration process And so, as of February 19, 3 the population of Donbas with all that are both humiliating and dan- p.m., Gazprom added new natural the necessities. gerous for the future of the coun- gas reception points Horlivka and try. Platovo located at the stretch of Aggression course It is also about the more trivial the Russian-Ukrainian border not In these circumstances, unless the factors. It would be much easier to controlled by Ukraine. The daily West takes effective measures, the overcome the budget deficit issue if volume supplied through them is situation will most likely develop the hostilities in Donbas are to 12mn cu m, or around 360-370mn into further offensive by the stop, and yet without the need to cu m per month, which is worth “Armed Forces of Novorossiya” support the region economically, UAH 3-3.5 billion according to the deeper into Ukraine in order to let alone to restore it. Preventing current price set for Ukraine. destabilize the situation and try to the political counterrevolution of At present Gazprom is cover- imitate “civil war”. The maximum the pro-Moscow forces inside the objective is to fuel a quasi-civil country would be much easier Unless the West takes war on the entire territory of without the votes from the occu- Ukraine, and at the minimum – to pied territories. The threat of such effective measures, the finally create the puppet state counterrevolution is now increas- most likely scenario Novorossiya in Ukraine's southern ingly high considering the deepen- and eastern regions. The "Deputy ing economic crisis in the country is further offensive Commander of the Staff of the which is expected to only get worse of the "Armed Forces of DNR Militia" al- throughout the course of 2015. ready threatened to unilaterally The authorities in Kyiv are cur- Novorossiya" deeper into withdraw from the Minsk agree- rently taking the course of Ukraine to destabilize the ments at any suitable time under strengthening the blockade of the the pretext of “shelling of DNR Donbas territories beyond Ukrai- situation and try to imitate army positions”. nian control, as well as cutting civil war Another occurrence support- other avenues of their financial ing the likelihood of this scenario support. Such a strategy is not pub- ing this supply out of the prior ad- being realized in 2015 is the recent licized and its manifestations tend vance payment by Ukraine’s Naf- flurry of media activity by the fugi- to be justified by objective circum- togaz. Therefore in order to stop tive ex-president Viktor Yanu- stances, but it is becoming ever subsidizing gas supply for the ter- kovych and his former prime min- clearer nonetheless. Recently the rorists, Ukraine must stop the ister Mykola Azarov. Yanukovych Minister of Fuel and Energy has practice of advance payment to declared: “as soon as I get the op- stated that the debt of the uncon- Gazprom, which effectively means portunity, I'll return and do my trolled territories had reached not purchasing Russian gas alto- best to help ease the life for the UAH 7.5 billion for natural gas and gether. The 3.1bn cu m currently population of Ukraine”. Mean- UAH 3.5 billion for electricity. Due stored in underground gas storage while Azarov offered the initiative to this fact the National Regulator facilities should suffice, provided to create “the government in ex- for State Energy and Public Utili- the winter colds are behind. ile”, as a “representative body that ties adopted a decision to suspend There are similar problems will deliver to the public an alter- payments to energy-generating with the Russian electricity supply native point of view and come up enterprises on the aforemen- to the terrorist-controlled areas with concepts for the development tioned territories. via the electric power transmis- of the country… joining all forces On February 18, a compre- sion line "Peremoha-Shakhty". capable of resisting this anti- hensive list of all energy-generat- Currently the Russian supplier In- Ukrainian regime in Ukraine”. ing facilities located on the occu- terRAO is counting the energy And, perhaps, arriving under the 22|the ukrainian week|№ 3 (85) March 2015 Peacekeepers|Neighbours Peace be upon you

EULEX – Kosovo, EUAM – Ukraine, EUBAM – Moldova and Ukraine, EUMM – Georgia, EU monitoring assi ance counseling mission monitoring of the Ukraine-Moldova mission observing the situation in rengthening for public seor reforms ate border focusing on the retch in the borders with Abkhazia the rule of law (police reform, rengthening of border along Transni ria and South Ossetia to avoid with focus of the rule of law) resumption of ho ilities on the judiciary

EUPOL COPPS – Pale ine, counseling mission for development of criminal ju ice legislation and ALTHEA/EUFOR – the rule of law Bosnia and Herzegovina, military mission Ukraine EUBAM RAFAH – border between for maintaining peace Egypt and the Gaza Strip, monitoring EUPOL – Afghani an, mission observing the checkpoint counseling mission Georgia Rafah Crossing EUTM – Mali, Kosovo for reform and creation of public training mission Cyprus Lebanon EUBAM – Libya, police for the armed improvement forces of Mali Syria of security Pale ine on the ate Afghani an borders Paki an North Libya Sahara India

Mali Haiti Niger Abyei Yemen Djibouti Центрально- Darfur африканська Liberia Cote South d'Ivoire Республіка Sudan

Somalia EUCAP NESTOR – Djibouti, Somalia, EUCAP Sahel – Mali, Tanzania Seychelles, Tanzania, Yemen, rengthening mission for support of maritime potential of the five counties Democratic of con itutional order Republic of the Horn of Africa and the we ern part and democratic of Congo of the Indian Ocean government in Mali

EUTM – Somalia, EUCAP Sahel – Niger, military training mission support for the government for support of the interim UN peacekeeping missions EUSEC – of Niger in rengthening security government and (Blue Helmets) Democratic in itutions of Somalia Republic Ukrainian peacekeepers of Congo, EU NAVFOR – Somalia, support EU police missions EUFOR RCA – Central African Republic, for reforming mission of the EU Navy military mission for e ablishing the defence for combating maritime military peace in the Bangui area seor and army piracy in Somalia civil flags of the "Armed Forces of army invading under the "rebels" needed in other regions of the Novorossiya" to take direct con- banner. In this case Russia will Russian Federation. Instead an trol of the territories it seizes. not need to openly carry out full- army of 150-200,000 personnel, The supposed large-scale gen- scale invasion. First of all, it will more than half of them Russian reg- eral mobilization (purportedly not be able to send a ular troops, can become a potent more than 100,000) declared in 200-300,000-strong army with- enough force to carry out a number the self-proclaimed republics on out carrying out at least partial of strategic advances into the most February 11 can become the for- mobilization on its territory. Rus- critical areas of confrontation fol- mal cover for the most combat- sia has only so many combat- lowed by rapid headway deeper ready units of the Russian regular ready units, and some of them are into the territory of Ukraine. № 3 (85) March 2015|the ukrainian week|23 Economics|Energy Oiling Your Sled in Summertime How Ukraine can survive the next heating season without Russian gas and coal

Author: Gas consumption decline during 2014-2015 heating dustrial entities and cogeneration Oleksandr Kramar plants went over their limit of season vs 2013-2014, % 1.3bn cu m. Had they not done so, hen Naftogaz stopped 0 total consumption would have delivering natural gas -4.4 been down to 13.7bn cu m. to the occupied terri- -5 November Fortunately, dire predictions tories of the Donbas, 2014 that the country would be in col- W -11.4 Russia used it as the latest excuse -10 lapse in the energy sector this to once again confront Ukraine December past heating season proved wrong over the blue fuel. Gazprom has -15 2014 -16 for a number of subjective and been supplying Russia’s proxies February objective reasons. For one thing, 2015 with gas against the advance paid -20 the winter was unusually mild for by Naftogaz, reminding Ukraine -23.1 the second year in a row. Gas con- once more how readily it drops -25 -27.2 January sumption went down during this any commitments given half an 2015 period partly because industrial excuse. To resolve the situation, O ober and cogeneration users improved -30 2014 Brussels held a trilateral meeting Source: Derzhat, the ate atiics agency discipline and began to aim for on March 2 involving the EU En- the established caps, while house- ergy Commissar and representa- hold users and state entities sig- tives of Ukraine and Russia. But sian gas after the current winter nificantly cut back on their con- the only outcome was a postpone- package comes to an end. At the sumption as well. ment of the issue. same time, for this potential to Still, industry and the cogene- The gas supplies paid for in turn into a real result and to avoid ration sector did not manage to advance by Naftogaz as part of complaints about the short time- stay within the limits they were the winter package that operates frames like those heard this past given. For instance, they con- until March 31 were supposed to year in August and September, sumed 3.87bn cu m and 4.1bn cu be delivered by Gazprom in vol- it’s time to start preparing m from December 1 through Feb- umes that were clearly specified Ukraine’s power industry now for ruary 28, rather than staying by the Ukrainian side to clearly within the caps set for this period, designated reception points. Pay- There are no real 3.27bn cu m and 3.49bn cu m. In ments for gas to territories occu- part, this was because of a short- pied by Russia’s proxies were obstacles to properly age of domestic coal, which had supposed to be negotiated sepa- upgrading to be compensated for with natu- rately and the delivered volumes ral gas. Otherwise, the level of ex- reconciled separately as well. The and diversifying Ukraine’s cessive use of natural gas did in Russian side continues to claim cogeneration industry, fact go down. Over October-No- that its deliveries are based on vember 2014, consumption was the contract with Naftogaz, so unless there is sabotage 7bn cu m, with the most excessive that, as before, it continues to a possible blockade on the part of consumption appearing in No- tally it up as debt, subject to bill- the Russian Federation. vember, despite the fact that ing at any time that is convenient there was a major decline in in- to Gazprom. Skidding safely through dustrial production by then. This means that 2015 and the 2014-2015 At the beginning of Decem- 2015-2016 heating season will Total domestic consumption of ber, Naftogaz Ukrainy published most likely be a prolongation of gas from December 1 through exhaustive information about the the gas—and more extensively, February 28 this year was limits on natural gas consump- energy—war between Ukraine 14.95bn cu m: 6.65bn cu m for tion by region and by category of and Russia. The analysis pre- residential use, 4.1bn cu m for co- consumer. By tightening disci- sented here shows that Ukraine is generation, 3.87bn cu m for in- pline, excessive consumption re- quite likely to survive this even if dustrial purposes, and 0.32bn cu ally was brought under control. it completely stops buying Rus- m for state entities. Moreover, in- For instance, over-cap use in the 24|the ukrainian week|№ 3 (85) March 2015 Energy|Economics first 10 days of December was els in 2015. This means that not 34%, whereas by February it was Growing discipline only can domestic extraction over down to 5%. The fact that Ukraine Excess indu rial and cogeneration gas consumption, % April-October completely cover stopped supplying gas to the Rus- 35 domestic demand, but it could indu rial users even provide a small surplus of sian-occupied parts of Donbas as 30 of February 18 made a huge dif- +31 cogeneration plants 0.5-1bn cu m for storage. ference, of course. In February 25 If conditions are right, the po- alone, this saved nearly 100mn cu +26 tential import of natural gas via m of gas, and at least as much will 20 Slovakia at a throughput rate of be saved by the end of the heating +20 40mn cu m/day over April-Octo- season. 15 +16 ber 2015 could reach 8.4-8.5bn Meanwhile, more gas was be- cu m. By the end of October, the ing delivered than anticipated be- 10 +11 Polish pipeline could supply an cause of additional supplies com- 5 additional 0.6-0.8bn cu m by the ing in from the EU, while the fact +5 end of October 2015. Despite its that the war in Donbas did not go 0 considerably higher throughput December 2014 January 2015 February 2015 rate—3.2-3.3bn cu m, this past into high gear meant that Russia Source: Naftogaz Ukrainy wasn’t about to tear up its “winter April-October—political obstacles package” contract with Ukraine. such as Budapest’s playing up to Indeed, imports grew in January that even if Russia were to stop or Moscow, it’s hard right now to and February to 1.5-2 times what reduce deliveries to a minimum, anticipate more deliveries from they had been in November and no more than 0.5-0.7bn cu m will Hungary. December. While during the first have to be pumped from the gas In short, using reverse pipe- half of the heating season, Octo- storage system in March. lines from Slovakia and Poland, ber 20, 2014 through January 10, and at least partly from Hungary, 2015, gas stocks in Ukraine’s un- Checking the outlook and providing that domestic ex- derground storage system shrank for 2015-2016 traction is higher than domestic by more than 6.1bn cu m from Even though Ukraine managed to consumption over the warm sea- 16.75bn cu m to 10.6bn cu m, be- get through this year’s heating sons by about 0.5-1.0bn cu m, tween January 10 and March 1, season without excesses and pre- even without supplies from Rus- they only went down by 2.4bn cu dictions of an energy collapse in sia, the stock in Ukraine’s under- m, to 8.2bn cu m. March proved wrong, the issue of ground storage system should be The most noticeable reduc- next year’s heating season is far tion in the pumping of gas from from resolved. The thing is that in Industry and the storage tanks was in February: 2014, the gas storage system was over Feb. 1-21, 2015 1.1 bn cu m actively being replenished with cogeneration sector did were pumped out, compared to Russian gas until mid-June, not manage to stay within 2.1bn cu m during the same pe- which gave Ukraine sufficient riod of 2014, which was also a stores that peaked at 14bn cu m the gas consumption relatively mild winter. During the on June 15, 2014. Meanwhile, limits they were given this last 10 days of February as the Ukraine still hasn’t signed a sum- weather grew warmer, Ukraine mer package with Gazprom for year stopped supplying gas to the ter- 2015, so it will have to arrange for ritories in the Donbas under Rus- this only based on reverse deliv- about 18bn cu m by the beginning sian control just as deliveries eries from the EU and savings on of November 2015. That’s more from the Russian Federation some of the natural gas extracted than the 16.1bn cu m that the sharply increased to prevent the domestically from May to Sep- country had on November 1, delivery of supplies paid for in tember. Based on what happened 2014. advance by Naftogaz to occupied this past year and recent trends, If consumption is kept within Donbas. The juncture of these it’s possible to assess the poten- the caps set this year for industry factors made it possible by Febru- tial balance of natural gas for the and cogeneration use for a poten- ary 25 not only to stop pumping next heating season. tial saving of 2.2bn cu m, occu- gas stocks but even to begin re- Domestic production in April- pied Donbas remains unserviced, placing them in the underground October 2014 was 11.6bn cu m, saving 0.8bn cu m, and residen- storage system, which allowed while consumption during that tial gas rates are raised substan- stocks to be replenished by same period was 13.0bn cu m, a tially so that household consump- 105mn cu m by March 1. shortfall of 10%. But at that time tion is kept down or partly re- As temperatures remain rela- gas was actively being consumed placed by other fuels for a tively high and winter package in occupied Donbas where signifi- possible saving up to 1.5bn cu m, supplies from Russia continue to cant industrial output was still total consumption should go be delivered, by the end of the being produced over April-June down even further in the next heating season, Ukraine will 2014, that is, prior to the start of heating season. In this way, likely to be able to continue to large-scale conflict and the block- Ukraine has the potential not simply store incoming supplies of ade of Russian proxy-held territo- only to get through the next heat- gas. All the more since deliveries ries. As it happens, the volume of ing season without further pur- from Slovakia, Poland and Hun- industrial output in other parts of chases from Gazprom after the gary increased as of March 1, so Ukraine was also below 2014 lev- current winter package expires, № 3 (85) March 2015|the ukrainian week|25 12bn cu m

Economics|Energy Hot times back transit through Ukraine to Over April-Oober 2014, the shortfall of dome ically extraed gas to cover consumption was only 62bn cu m or barely half of the 10%. During the same period of this year, current trends towards reduced consumption and the closure of 121.3bn cu m it delivered to the deliveries to occupied Donbas sugge that Ukraine might not only cover current consumption with EU. Should transit supplies dome ic natural gas but might even be able to add to its ocks in the underground gas orage through Ukraine be further cut sy em (GSS). to 50bn cu m, as predicted, 15- Extraion and consumption of gas over April-Oober 2014, mn cu m 16bn cu m of which will be re- verse-flow, the proportion of 3,000 Total for Consumption Ukraine’s gas delivered via April-O ober Extraion Ukraine’s gas transit system 2,500 could fall to 25-30% of net Rus- sian gas supplied to the EU next heating season. This increases 2,000 12 the risk that Gazprom will cut bn cu m deliveries through Ukraine alto- 1,500 gether in order to increase the shortfall on the European mar- ket, which would be enough to 1,000 11.5 put an end to reverse deliveries bn cu m to Ukraine, yet not catastrophic in terms of covering EU demand 500 for natural gas. Source: Derzh at, All these potential risks de- 2,926.7 1,631 1,783.8 1,677 1,475.8 1,631 1,271.4 1684 1,286.3 1,673 1,498.2 1,605 2,755.8 1,652 the ate ati ics mand that Ukraine use preven- 0 April 2014 May 2014 June 2014 July 2014 Augu 2014 September 2014 Oober 2014 agency tive measures to firstly ensure the maximum volume of gas coming via reverse-flow from the EU in but also to enjoy a surplus of 7.0- mild winters several years in a Q2, without waiting for possible 7.5bn cu m. row now, the chances of a much price reductions in Q3 2015. In colder one in the next heating the end, the surplus of 7.0-7.5bn Cutting obstacles down season are growing. A second cu m calculated earlier here is to size risk is the threat that Russia will more than enough to compensate All these resources will be very sharply cut all gas transit even for a complete halt in re- much needed, especially as the through Ukraine to prevent the verse-flow supplies from the EU assessment is based on a mild accumulation of stores, espe- during the five-month heating winter similar to the 2014-2015 cially along the Slovak branch. season, which requires 6.5-7.0bn one. Since Ukraine has seen In 2014, Gazprom already cut cu m. But for such a reserve to be- Achilles’ Heel come a reality Naftogaz and the All the coal ations in the country’s TES (cogeneration plants) operate on anthracite, the coal that is lea Government even now need to in- available to Ukraine now. Unless they are recon rued, the country’s cogeneration indu ry will remain an crease their efforts with indus- Achilles’ heel for Russia to pressure its energy indu ry, con ituting a national security threat in the next trial and cogeneration consumers heating season. to stop going over the established ’000 mn kWt/year caps. One step that should help in this is Bill №2214 “On changes to 6,000 coal produion coal consumption cogeneration 10,000 certain laws of Ukraine to stabi- lize the financial state of NAK 5,000 Naftogaz Ukrainy,” which has al- ready passed first reading in the 4,000 8,000 Verkhovna Rada. But the Govern- ment also needs to improve the system of carrots and sticks: in- 3,000 centivizing by raising gas rates— and penalizing with fines for go- ing over the limit in the form of 2,000 6,000 double or even triple rates and, in the case of repeat violations, a 1,000 temporary interruption of gas de- liveries altogether.

0 4,000 Cleaning rust off the runners The urgent need for these mea- July 2014

May 2014 sures is especially obvious when April 2014 June 2014 March 2014

Augu 2014 looking at Ukraine’s export-ori- January 2015 January 2014 Oober 2014 February 2014 December 2014

November 2014 ented gas-hungry chemicals in-

Source: Derzh at, the ate ati ics agency September 2014 dustry. The latest data provided 26|the ukrainian week|№ 3 (85) March 2015 by Naftogaz Ukrainy shows that coal both by rail from the EU and above-limit use of gas this past by sea through its ports. winter was highest in Rivne and Finally, the Government Cherkasy Oblasts, where the needs to approve and publicly an- chemicals giants RivneAzot and nounce a principled policy deci- CherkasyAzot belonging to Dmy- sion that states that neither elec- tro Firtash’s Ostchem Holding tricity nor coal will be imported are located. Comparison of the to Ukraine from Russia or Rus- first three weeks of December, sian-occupied Donbas starting January and February show a this summer—regardless of their growth trend in excessive use for country of origin. these two oblasts, rising from There are no real obstacles to 75% and 63% in December to properly upgrading and diversi- 151% and 83% in January, and to fying Ukraine’s cogeneration in- 156% and 87% in February. dustry. There’s also enough time, The other component that unless there is sabotage on the needs economic incentives in part of officials at state and com- Ukraine already this year is do- munity agencies or at private mestic gas extraction. In 2014, power companies. This is pri- Ukraine extracted 20.5bn cu m of marily with reference to DTEK, a gas, but whereas private compa- huge cogeneration conglomerate nies that were able to sell the gas owned by pro-Russian oligarch at market prices increased output , who, for com- by 18%, to 3.3bn cu m, state- mercial reasons as well, contin- owned companies either main- ues to supply coal from his mines tained previous levels or actually to Russia’s proxies in occupied cut back on output. Donbas. This makes it extremely Two more problems that need urgent that proper state over- resolution are coal supplies, as sight over the activities of DTEK they is the main alternative to gas be established ASAP and/or the in the short term, and power gen- company’s power-generating as- erated at cogeneration plants. sets nationalized as strategic to national security under the cur- Setting up a relatively rent circumstances. clear trail Meanwhile, diversification of Still only at the discussion level nuclear fuel has been quite dila- although it needs an explicit ac- tory this past year as most of the tion plan already now, and not in country’s atomic energy stations August or September, is upgrad- (AESs) are supplied with fuel ing the coal-firing stations at rods from Russia. Cooperating Ukraine’s TES or cogeneration with western suppliers in this plants, as well as community and would not only improve agency boiler houses that work on Ukraine’s ability to withstand black coal, which is in shortage the Kremlin’s power blockade, outside the Customs Union and but would actually strengthen in- occupied Donbas. If work is be- terest in its fate among influen- gun in March and not July-Sep- tial western businesses, which tember, then by November-De- could then lobby their govern- cember 2015 Ukraine has enough ments to provide more effective time to mobilize the necessary re- support to Kyiv. sources, using targeted programs Ukraine also needs to take and credit programs from Euro- immediate steps to upgrade and pean and international donors, to develop its trunk and inside re-equip coal blocks and furnaces power lines in buildings to make to work on coal grades that are sure that emergency breakdowns readily available in Europe and during the next heating season elsewhere in the world prior to don’t get in the way of at least the next heating season. Special- partial diversification of sources ists say that about 5-7 months are of power to residential users. needed for this task and almost Above and beyond that, the ex- token investment on the part of tremely uneven increases in domestic power companies—at rates for residential electricity most a few billion hryvnia. and gas planned for this year— Ukraine also needs to already 50-60% for power and 190-350% be preparing its transport infra- for gas—will make electricity the structure to receive several mil- cheaper utility to use, even from lion tonnes of imported heating an economic point-of-view. economics|Monetary policy The Revenge of the Money-Grubbers The government’s ineffective response to the sharp devaluation of the hryvnia constitutes a threat to the national security of Ukraine he last week of February made for the devaluation process to stop. Author: Yet another point: the value of headlines as the country expe- However, some trends have Lyubomyr assets in the domestic banking sys- rienced its latest “cardiac ar- emerged that make it possible to Shavalyuk tem declined 38% in dollar terms in Trest:” panic hit the money look at the problem with the hryvnia 2014, that is, by US $22.3 billion, market when the hryvnia plunged to from a somewhat different angle. which means they actually grew its lowest ever against the dollar. 22% in hryvnia terms. Moreover, This led to mass hysteria among Blame the central bank? hard currency liabilities shrank US Ukrainian consumers, finger-point- When the public panics over sharp $22.1bn, of which US $11.4bn were ing at NBU Governor Valeria Honta- increases in the exchange rate, peo- deposits in foreign currencies that reva, PM Arseniy Yatseniuk and ple start to spread ridiculous rumors were withdrawn from the banking President Petro Poroshenko, and a to explain the reasons for the devalu- system by individuals, businesses swirl of apocalyptic rumors about ation and to look for scapegoats to and other organizations. In other what would happen further with the blame for what is going on on the words, if commercial banks were beleaguered national currency. currency market. One of the myths is not restricted by NBU regulations Within a few days, the hryvnia had that the depreciation of the hryvnia that strictly limited the amount of bounced back from UAH 40/USD, has been caused by speculative be- net hard currency positions—assets but by then store shelves across the havior on the part of selected domes- minus liabilities denominated in for- country had been emptied of flour, tic banks that are supposedly being eign currencies—and wanted to sugar and other staples. What’s go- refinanced by the National Bank of make money on the dollar exchange ing on on Ukraine’s domestic cur- Ukraine and are then buying hard rate, then they would have increased rency market and what happened to currency with these credits in order their hard currency assets in abso- cause this extreme spike in the hryv- to later sell it on at a higher rate and lute terms or relative to their liabili- nia? this is affecting the exchange rate. ties. This never took place and is not The Ukrainian Week previously This is simply not true and flies currently taking place. In short, the wrote (Tracing the Fleeing Capi- in the face of official statistics (see sharp spike in the hryvnia exchange tal in Is. 2(84) Feb. 2015) that, Refinancing myths). The balance rate cannot be blamed on specula- as long as capital continued to flow of stabilization credits issued by the tive activity on the part of the coun- unimpeded across Ukraine’s bor- NBU to financial institutions peaked try’s financial institutions. ders and the current imbalance was in June 2014 and has been steadily not only not being dealt with but falling since then. Yes, there was a Blame the exporters? continued to be covered by the slight increase in December-Janu- One of the other “explanations” printing of more money, the hryvnia ary, but this did not affect the overall given for the steep devaluation of would continue to lose value under trend. As to bonded credits, typically the hryvnia is that exporters are not the current Administration. And OVDP or internal government bringing hard currency earnings such spikes would continue to ap- bonds cannot have an impact on the into Ukraine for the products that pear from time to time. Nothing currency market as the main vol- they make here. There are two much has changed since then, umes are issued for a single day, points to note here. Firstly, the par- meaning that there is still no basis mostly overnight. ent companies of domestic export- ers really do hold their hard cur- The refinancing myth rency earnings abroad in order to Volumes of abilization credits issued by the National Bank of Ukraine peaked in mid-2014 bring them in and convert them at and have been shrinking ever since the most convenient moment. But 140 UAH bn UAH/USD 35 the legal limit for doing so is nor- Refinancing credits on NBU balance at month’s end, UAH bn Real interbank $ exchange rate at month’s end, UAH/USD mally 90 days, and the minute this 120 30 three-month period expires, the hard currency starts entering the 100 25 market in a normal fashion, that is, every day sees earnings for good ex- 80 20 ported 90 days before. In short, the market takes care of its own. 60 15 Secondly, there are cases when the earnings never do return to Ukraine. On one hand, this is the 40 10 problem of capital flight via transfer pricing that Ukraine has been con- 20 5 fronted with for years. It’s not some- thing that appeared or disappeared 0 0 Nov13 Feb14 May14 Aug14 Dec14 Feb15 recently, so the balance of forces on the currency market is essentially

28|the ukrainian week |№ 3 (85) M arch 2015 Monetary policy|economics unchanged, meaning that this factor ports that in QIV 2014, Ukraine ex- 48%, in November 50%, and in De- has not influenced the hryvnia ex- ported 86% less natural coal and cember 63%. The Kremlin clearly is change rate. Of course, if Ukraine 83% less coke. This is not necessar- increasing its trade blockade against were to deal with this problem by, ily the equivalent of reduced output Ukraine and has a clear action plan say, adopting proper legislation levels. Quite simply, having taken along with a clear expectation of the about transfer pricing, then down- control over the mines, DNR and eventual results. ward pressure on the hryvnia would LNR militants can, and sometimes Notably, the National Bank has certainly be reduced significantly do, sell the output to Russia—and very little control over any of the fac- and might even disappear alto- even to Ukraine. They are then paid tors affecting the decline in hard gether. partly in hard currency, certainly in currency earnings through the ex- On the other hand, the devalua- cash, but this hard currency never port of goods from Ukraine. It can tion of the hryvnia means that the appears on the domestic market, al- only restrain by setting up non-tariff production share of income will though it would have been more barriers, which is exactly what it is shrink and this means that a greater than welcome. At best, it is moving doing today. Still, in the longer run, share of income can be left abroad, through the black market, but even this kind of tactic is fruitless, which which exporters might certainly take that’s not certain. means that, in order to get real re- advantage of. It’s a simple-enough Second, the war is having many sults, to stabilize both exports and scheme. If the market price of a different consequences, one of the currency market, the NBU abso- product is US $100 and its produc- which is a decline in exports of oil lutely needs to work hand-in-glove tion cost is UAH 600, then when the and petroproducts, and power, with the Cabinet of Ministers. Right exchange rate was UAH 8/USD, the amounting to 93% and 44% in QIV. now, this is lacking. manufacturer sold the product at What Ukraine earlier exported has Let’s not forget about the IMF. cost, or for US $75, to an offshore become critically necessary for do- In most situations of this nature, the company, which then sold it for at mestic needs during the current en- Fund has recommended devaluat- the market price and left US $25 ergy crisis. This has also resulted in ing the national currency of those profit on its own account, money declining exports and the conse- countries it is assisting. At the end of that never returned to Ukraine. quent reduction in hard currency summer 2014, rumors circulated When the hryvnia was UAH 30/ earnings. that the recommended level was USD, the manufacturer could sell Third, exporters are likely hold- UAH 20/USD. This level of devalua- the product to the offshore company ing back some of their ready prod- tion made sense. But when the hryv- for only US $20, which covered cost, ucts in order to get more for them, at nia plunged to UAH 35-40/USD in and US $80 out of every US $100 least in hryvnia terms. This means February, the four- and five-fold de- remained abroad. that wheat, barley and maize export- preciation in 18 months looked like So some have decided that this ers, representing the main grains it could not possibly meet IMF rec- is what is going on currently in grown in Ukraine, cut volumes by ommendations in any way. At least, Ukraine, reducing the supply of 16% in QIV, equivalent to nearly 2 there was no precedent for this. hard currency on the market and million tonnes, although last year’s Hence the panic in February, the re- causing the hryvnia to depreciate. harvest was bigger than in 2013. sult of nothing more or less than However, if this were the case, prices deeply negative trends that the cur- for exported goods in dollar terms It is quite probable that rent government has not been con- would be noticeably reduced. To the main factor behind trolling in any way. some extent, this is actually happen- ing (see Exports derailed), because capital flight The effect of an old ill, Ukraine’s exports became cheaper capital flight by 8.6% in December, compared to is Yanukovych’s cohort There is one more reason why the December of 2013. However, this Fourth, products whose main hryvnia depreciated so sharply, one shrinkage did not reflect the devalu- market was Russia have also seen that is not only confirmed by statis- ation of the hryvnia, more properly export volumes decline seriously, in- tics but over time, and that is capital reflecting the decline in prices for cluding machinery, equipment, pro- flight, as mentioned above. The raw materials on global markets. In cessed foods and so on. Possibly this main factor driving hryvnia depre- short, this factor is also not having is party a reflection of the severe de- ciation is hidden in the country’s much of an impact on the currency valuation of the ruble and reduced current account balance. In 2014, market in Ukraine. buying power among Russian con- the deficit was USD 8.4bn, after a sumers. However, the hryvnia de- surplus of USD 18.6bn at the end of Exporters: Falling preciated further and sooner than 2013. But who’s taking capital out? volumes the Russian currency. At the same At first glance, it looks like it’s Still, the export of goods really is in time, some of the traditional exports mostly nervous foreign investors. decline and so are hard currency may be shipping unofficially through However, investors flee only to a earnings from it. This is less the re- the two proxy republics, LNR and certain point: when the national sult of declining prices and more a DNR and so are not reflected in offi- currency becomes too cheap, trad- reflection of the volumes being ex- cial Ukrainian statistics, just as their ing it for dollars becomes unprofit- ported. A number of factors are at currency earnings are not showing able because of the risk of a rebound work here. First of all, with the loss up on the domestic currency mar- with the inflow of speculative capi- of control over part of Donbas, there ket. Like it or not, exports to Russia tal. And so the trend tends to wear was a formal reduction in certain ex- continue to decline at an accelerat- itself out and the non-residents port commodity positions. Derzh- ing pace: in 2014, the average de- calm down. In Ukraine, however, stat, the state statistics agency, re- cline was 34%, but in October it was the dynamic with the hryvnia seems № 3 (85) March 2015|the ukrainian week|29 economics|Monetary policy to be having the opposite effect: Exports derailed capital flight keeps growing... The decline in exports and in currency revenues from them continues to accelerate. Individuals are not able to take The main reasons are Russian aggression, loss of control over part of territories and money out of the country. As prices the unallayed desire of certain business owners to make money 20 10 rise, their incomes go to more basic annual growth, % $ bn needs, such as food, clothes, utilities and healthcare. For objective rea- sons, they won’t be buying many 10 8 dollars and will not be hiding them under their mattresses or taking them abroad. Statistics confirm this, 0 6 as for the 11 months since the gov- ernment changed, the volumes of outflow of hard currency from the -10 4 banking system was relatively small: USD 317mn. -20 2 But there is one more possibil- physical volumes ity: capital could be taken out by Prices Ukraine’s oligarchs, in addition to exports of goods -30 0 the method of transfer pricing. Most Nov13 Feb14 May14 Aug14 Nov14 of them registered their assets abroad at one time and now they are terviews, Yanukovych announced situation, the higher the dollar, the moving their shares from their for- that he was looking for a chance to more effort Yanukovych and his co- eign pockets to their domestic ones return to Ukraine and to “initially hort, as well as Russia itself, will while moving their hard currency lead a protest movement and then continue their ruinous course. Nor from domestic pockets to foreign get involved in protecting those who will they stop until they either lose ones. It’s quite possible that they are have found themselves in this situa- all their instruments of influence or so scared by the tectonic changes in tion.” Not finding such an opportu- simply fail altogether. This is a war the domestic political landscape that nity, he is currently “sending people of attrition. And however low and they have been moving their money to Ukraine and monitoring the situ- odious it seems, Ukraine’s history out, regardless of the exchange, ation.” As if to say that as soon as the has plenty of other such examples. whether it’s profitable or not. This is opportunity arises, he will do so. So, Ukraine and its leadership precisely the kind of trend that could These words indicate that absolutely must understand that re- last a long time, until they feel that Ukraine’s “Ancien Regime” is ac- ality and seriousness of this prob- their influence has stopped dimin- tively preparing for a counter-revo- lem. This is something civil society ishing and their assets are no longer lution with the help of the Kremlin. can and must assist and support it under threat. The problem is that Unfortunately, they have plenty of in, joining forces against an external the oligarchs are being aided and economic leverage to succeed. For threat. This is the only way to find a abetted in this by financial institu- starters, they own large businesses way to overcome the threat, which tions, especially the so-called pocket in Ukraine to this day. The problem will be the basis for stabilizing the banks in each financial-industrial is that a big chunk of it continues to currency market. Until that hap- group (FIG). Here is where the main enjoy the monopolist status the pre- pens, downward pressure on the blame lies for the depreciation of the vious regime gave itself while in hryvnia will continue unabated. hryvnia: with the depositary corpo- power. These assets continue to gen- This means that demanding the rations—for which the NBU should erate profits and every month, every dismissal and even punishment of be punishing them severely. week, every day, banks continue to Hontareva, Yatseniuk or Porosh- convert these profits into hard cur- enko will only make sense if they The revenge rency and move it abroad—most show by their actions that they are of the money-grubbers likely to Russia, where Yanukovych playing into the hands of Yanu- Yet it’s quite probable that the main and Co. make use of it. Where ex- kovych and the Kremlin. Judging by factor behind capital flight is Yanu- actly has little impact on the hryvnia the latest interviews with the NBU kovych’s cohort. Whereas Ukraine’s exchange rate. This particular trend governor, Hontareva is evolving other oligarchs are predominantly will continue as long as these Ukrai- very quickly and strongly, rising to motivated by money, that is, the fear nian businesses belong to the old re- the challenges facing both her and of losing their capital and the desire gime, and will keep working and the country. But since the reasons to protect it, then those who formed earning them profits. why the hryvnia is depreciating lie the previous regime are motivated Most likely the Kremlin is using largely outside the competency of primarily by revenge, which Russia its exiles to shake up the economic the central bank, her ability to affect is spurring in exchange for political situation in Ukraine. It’s clear that this process successfully is very lim- asylum. This can be seen in the reg- export dynamics in relation to Rus- ited. She needs strong support from ular and very much scripted appear- sia and Russian gas supplies are not either the Cabinet of Ministers or, as ances of ex-tax minister Oleksandr the only leverage Russia is making Anatoliy Hrytsenko suggested, the Klymenko, ex-premier Mykola Az- use of, but they are among the main National Security Council. The ques- arov and ex-president Viktor Yanu- ones that influence money markets tion is, are other agency heads evolv- kovych in the media although they in Ukraine. And should the exiles ing as quickly as Hontareva at their are physically absent from Ukrai- prove successful, Russia can prom- institutions? The question is, of nian territory. In one of his last in- ise them the throne again. In this course, rhetorical. 30|the ukrainian week|№ 3 (85) March 2015 IMF bailout|economics Hyper-au erity The New Primary budget deficit/surplus as % of GDP, 1 Year before = 100 800 Portugal 700 Greece 600 500 in the 400 300 Spain 200 Greece East 100 + Latvia 0 n March 11 the Interna- Ukraine - 100 tional Monetary (IMF) ap- 1 year year year 1 year 2 year 3 year 4 year 5 Source: IMF proved a new bail-out for before of crisis OUkraine. Worth USD 17.5 billion over four years, the first USD ing this. In a fortnight’s time, retail Total spending on social-assis- 5bn was delivered on March 13. It gas prices for households will rise tance programmes will reach 4.1% has also released its financial plan by 284%. New estimates suggest of GDP in 2015, an increase of 30 for the country. We have pored over that to reach market levels, some percent compared to 2014… In it and have found it wanting in sev- consumers will soon see price rises addition, unemployment benefit eral key areas. of over 200% in dollar terms. spending will rise by 15%. The first is what the IMF ex- Where else will the adjustment This sounds great. But on closer pects will happen to Ukraine’s bud- come from? The IMF does not want inspection that does not seem quite get deficit. It expects the “primary” taxes to increase much and wants right. The statement does not say budget deficit (which excludes in- spending cuts to carry the burden whether these increases are infla- terest repayments) to disappear en- instead (see second chart). For in- tion-adjusted or not. That is really tirely by next year, “setting debt on stance, spending on unemployment important, since Ukrainian inflation a firm downward path”. Is that a lot and disability insurance will, by rate has now reached over 30% a to ask? 2017, have fallen by about 30% year. Last year the primary deficit of from its 2013 level. That is not great So what will actually happen? the government and Naftogaz, the news, especially since the IMF also Figures elsewhere in the document state gas company, was -6.9%. That expects unemployment to hit 11.5% show that it is indeed a 30% rise in is pretty big (Portugal had roughly this year (up from 7.3% in 2013). In nominal terms. Spending on social the same budget deficit in 2009). other words, there will be less programmes will hit 4.1% this year, But as the first chart shows, the IMF money to distribute among more but that is only a rise of 0.3 percent- is asking for some tough reforms. It disabled and unemployed people. age points from last. (And the gov- shows what happens to the budget © 2015 The Nonetheless, the financial plan ernment’s own budget currently ex- deficit when a crisis hits (the first Economist argues that “compensatory mea- pects it to fall by 0.1 percentage year is the one before the crisis). Newspaper sures to protect the most vulnerable points.) The IMF’s projections show Five years following the crisis, the Limited. All are being stepped up”. The plan that the proportion of GDP spent on budget deficits of the four high- rights reserved forecasts that: overall social benefits will fall from lighted countries fell as the effects of 21.1% in 2014 to 18.4% next year. the crisis wore off. When a country Where will the money come from? There are some bright spots. falls below zero on the chart, it is Change in government spending/taxation Government capital spending, for running a primary budget surplus. as % of GDP, 2013=100 instance, should rise. But overall it Greece and Portugal saw especially 160 all looks rather painful. That is the big falls. The IMF expects Ukraine inevitable result of the West trying to achieve a Greek level of adjust- Capital spending to rely on the IMF to prop the econ- ment, that took four years, in just 140 omy up. The fund’s board could not one. And its predictions for eco- have approved the bail-out had they nomic growth are wildly optimistic. thought that the fund would lose What form will this austerity FORECAST money. That is why they are insist- 120 take? Cutting the massive deficit of ing on such austerity. And IMF Naftogaz, the state gas company, funding is limited to budgetary sup- Total revenue should save a lot of money. Naf- port: it cannot offer the long-term togaz has a big financial black hole 100 investment that Ukraine desper- (5.7% of GDP last year) because it ately needs. Organisations such as sells gas to Ukrainians far below the Total expenditure the European Union and America cost of importing it. Rampant cor- 80 should be doing that, but so far they Unemployment/ ruption made this even worse. The have taken a back seat. But without IMF, however, expects Naftogaz’s disability spending a much bigger, long-term invest- deficit to shrink to nothing by 2017. 60 Source: IMF ment programme, Ukraine’s econ- Raising gas prices is one way of do- 2013 2015 2017 2019 2020 omy will continue to flounder. № 3 (85) March 2015|the ukrainian week|31 economics|Trade Let Bygones be Bygones Attempts to keep the Russian market by making concessions in implementing the EU-Ukraine Association Agreement may prevent the Ukrainian economy from turning to new markets

ollowing the meeting with the Author: sons. The objective factors include served until the start of 2016, the Russian Minister of Economic Oleksandr Russia’s long-term strategy of im- share of Russia in Ukrainian ex- Development Alexey Ulyu- Kramar port substitution and the recent ports will have dropped to 10-12% Fkayev in early March, Euro- ruble devaluation that reduced the by the end of 2015. In reality, the pean Commissioner for Trade Ce- purchasing power of Russian con- share of the Russian market in cilia Malmström announced that sumers, as well as the fact that Ukrainian exports has shrunken to she supports the resumption of tri- many companies in the Donbas are 10.1% during the first two months lateral talks between Brussels, Kyiv going out of operation due to mili- of this year. and Moscow to once again try "to tary hostilities. The subjective fac- The postponement of or find ways to address the concerns tors include the ongoing unde- amendments to the implementa- expressed by Russia, within the clared trade war waged against tion of the economic part of the As- flexibility provided by the EU- sociation Agreement cannot Ukraine DCFTA." According to change the long-term trend sources, Ukrainian and European Earlier experience shows whereby Ukrainian producers will sides both agreed that it is impos- that Kyiv does not benefit lose the Russian market. The mini- sible to further postpone the im- mum that is required to keep it is plementation of the FTA, but they from the Association complete surrender in the form of do not rule out possible amend- Agreement-related the complete cancellation of the ments to the implementation. economic part of the AA and the However, earlier experience compromises with Russia beginning of Ukraine's integration shows that Kyiv does not benefit into Putin's Eurasian Union, which from the Association Agreement- Ukraine, despite the "compromise" is not acceptable to either Kyiv or related compromises with Russia. made in Brussels in September Europe. Any other concessions will On September 12, 2014, an agree- 2014, as well as the voluntary with- not force Russia to stop its dis- ment was reached between the drawal of a number of Ukrainian crimination against Ukrainian representatives of Ukraine, EU and suppliers from the Russian market suppliers. Thus, any efforts to Russia in Brussels that in exchange through its unpredictability and achieve another "compromise" for postponing the implementation unreliability. The Ukrainian seem to be just the attempts to of the economic part of the Associ- The share of exports Week predicted earlier (On the turn a blind eye to the reality, re- ation Agreement until 2016, Rus- of Ukrainian goods Road to Total Divorce in Is. fusing an effective compensation to the Russian mar- sia will refrain from introducing ket at 1(83) Jan. 2015) that if the current package, which the Ukrainian restrictions on Ukrainian goods. trends in bilateral trade are pre- Ever since, customs statistics have 10.1% not shown any positive effects of today is compara- ble to that to Mission impossible this "compromise." To the con- Turkey at Monthly dynamic of Ukrainian goods exports to Russia proves that Kyiv's and Brussels' attempts to trary, the exports of Ukrainian preserve the Russian market for Ukrainian exporters by delaying the implementation of the AA economic goods to Russia in the first two 7.7%, part are unnecessary China at USD mn months of 2015 (USD 0.6 bn) 1,200 shrank almost threefold compared 7.4% *September 2014: Brussels agreement between the to July–August 2014 (USD 1.7 bn), or Egypt at 1,000 representatives of the EU, Ukraine and Russia for the the two months preceding the delay in implementing the economic part of the Brussels agreement, and compared 6.7%. EU-Ukraine Association Agreement in exchange for The prospects of 800 Russia waiving re riions on Ukrainian imports to January–February 2014 (USD the Russian market, 1.6 bn). It is unlikely that even if however, are much 600 less promising, tak- the economic part of the Associa- ing into account its tion Agreement had been imple- political depen- 400 mented without delay (in Novem- dence on the Krem- lin ber 2014) and Moscow had can- 200 celled preferential custom duties 1,104.1 1,045.1 9,60.3 1,009.3 982.7 716.2 733.1 660.6 587.6 427.5 291.1 319.6 for Ukrainian goods in response, 0 Ukrainian exports to Russia would have dropped much more.

July 2014 Ukraine is being pushed out of April 2014 May 2014 June 2014 March 2014 Augu 2014 Oober 2014 January 2015 ovember 2014 February 2015 the Russian market as a result of Source: State Stati ics Agency(2014 data) N December 2014 both objective and subjective rea- and State Fiscal Service (January–February 2015) September 2014* 32|the ukrainian week|№ 3 (85) March 2015 Groundless claims control over the implementation of Eu- The volume of Ukrainian exports to Russia no longer gives it the grounds to claim to be Ukraine's main market ropean standards and harmonization of % Ukrainian laws with the European 40 framework. Much more important sup- 35 port on the side of the EU would be to 35.7 30 encourage European manufacturers to 25 establish production facilities in Ukraine to make their parts and com- 20 ponents here, against the guarantee of 15 European institutions, their govern- 10 ments and the government of Ukraine. 10.1 In fact, at the current hryvnya rate, the 5 7.7 7.4 6.7 average salary level in Ukraine today is 0 EU Russia Turkey China Egypt nearing that in the not-so-rich coun- Source: State Fiscal Service tries of Asia, and is lower than in China. At the same time, Ukraine has a num- economy badly needs today from the ber of obvious advantages compared to EU. remote Asian countries. At the same time, Moscow’s contin- As a matter of fact, the volume of ued Moscow's attempts to blackmail Ukrainian exports to Russia since the Kyiv or Brussels after three and a half beginning of 2015 is equivalent to only years of permanent trade wars no lon- 28.3% of Ukrainian supplies to the EU ger have any grounds. Ukraine no lon- during the same period. In this way, its ger depends on trade and economic re- increase by 20-25% could almost com- lations with Russia. Instead, both fu- pletely offset the loss of even all of ture and present of the country depend Ukraine’s exports to Russia. on redeeming the inevitable losses on The analysis of the current customs this market by finding new niches both statistics published by the State Fiscal on the European market and on else- Service reveals the reduction in the where in the world. number of Ukrainian product groups Meanwhile, the "compromise" for which the Russian market remains games send a dangerous message to Pu- the main one, as well as a significant di- tin, encouraging him to continue pres- versification of exports of even those sure on Ukraine and the EU in order to products that until recently were fo- make them freeze the economic part of cused almost exclusively on the Russian the AA, and subsequently have them market. In terms of foodstuffs, these cancel it altogether. The earlier Moscow now include beef (USD 4.8 mln; hereaf- gets a clear message that the economic ter, unless otherwise indicated, the data integration and association of Ukraine is provided for January–February with the EU is a fait accompli (and this 2015) and pork (USD 3.7 mln since the requires the full ratification of the Asso- beginning of the year), frozen and ciation Agreement and its dynamic im- canned vegetables (USD 3 mln), cocoa plementation), the more it is likely to paste (USD 5 mln), salt (USD 3.7 mln) abandon this issue. and wine (USD 2.7 mln). Russia still Instead, Ukraine needs more effi- gets the largest share of Ukrainian ex- cient support from its European part- ports of ceramic products, perfumes, ners that would offset the unavoidable household chemicals, paper, wallpaper, loss of foreign exchange earnings and packaging containers, labels, printed jobs through the final breach of trade matter, and certain types of building and economic relations with Russia. materials (gravel, chippings, and clay). This support should not come from at- However, the manufacturers of all these tempts to preserve preferential terms in products work mainly for the domestic trade between Ukraine and Russia market, the demand on which is much within the CIS FTA Agreement, but in more important to them. promoting increased exports of com- Russia remains a large and almost petitive Ukrainian products to the EU. the only importer of Ukrainian alumi- It should also include the EU-spon- num hydroxide (USD 74.4 mln), which sored microcredit programs and con- currently accounts for 1/8 of all Ukrai- sultations provided to Ukrainian small nian exports to Russia. However, it is and medium-sized producers, giving unlikely that Russia will refuse the im- them information on how and where ports of this material. The exports of they can sell their products in the EU mechanical products still depend and what is required to do so. mostly on the Russian market. But even In order to increase Ukraine’s ex- these goods, whose exports amount to ports to the EU and elsewhere and at- hundreds of millions or billions of tract new investment, incentives from hryvnyas per month, have more diversi- Brussels are also required, as well as its fied market outlets.

Security|War Fear of Mobilization: Myths and Reality An inside look at how the army is being formed

Author: Dmytro Lykhoviy would need to issue nearly 40,000 calls, numbers that recruitment offices said they had no means of he minute every new round vetting, realistically. Instead, they of mobilization goes into had to be satisfied with simply full swing, the Kyiv district taking whoever wasn’t hiding from Trecruitment offices (DROs) their local recruitment office and get endless letters from “well- had normal results from their meaning” residents hinting that, physical. supposedly, this or that bad But the numbers have not neighbor is avoiding the draft, been good. In March-April 2014, while this other alkie/druggie/ 70% of Kyiv reservists ignored the hooligan needs to get a call-up no- call to show up at their recruit- tice, go to war and straighten out ment office, by the second round, his life or at least do penance. 80% ignored it, and by the third Too many Ukrainians still per- round 90% were no-shows. Today, ceive the army as a penal system, starting January 20th with the meting out punishment, not to fourth round, 95% of reservists in distant Russian militants, but to the capital are not showing up—at those being called up to serve. least, that’s what our sources at “The way things are right now, no the Kyiv Municipal Recruitment point in my joining the army” is Office registration and mobiliza- the position of most reservists. tion department tell us. Unfortunately, starting with the These individuals are not draft first round of mobilization a year dodgers as such. These are reserv- ago, the many wrong steps taken ists to whom notice to appear be- by both the government and mili- fore the DRO has not even been tary leadership have been chang- delivered for any number of rea- ing the broadly patriotic mood sons: they may have gone abroad and desire to defend their home- or be hiding on their balcony dur- land to growing skepticism and ing mobilization, or they may sim- distrust in the purpose of joining ply live at a different address, be the . on a business trip, and so on. Poor efforts and even sabotage on the Many are called, few part of business owners, local offi- show up cials, residential services and so Before the fourth mobilization be- on, who are also authorized to de- gan, General Headquarters gave liver DRO notices to individuals, the DROs a clearly defined objec- are all part of the problem. And tive: to provide a far better quality it’s virtually impossible to hold of call in 2015 than the previous any of these 95% “evaders” re- year. One of the key criteria was sponsible in any way. ensuring the proper level of pro- “Because of the insufficient men who never served before and fessional skills and training among numbers of trained reservists who never studied in a military college, reservists being mobilized into the are not avoiding being mobilized, and is retraining reservists who Ukrainian Armed Forces. The plan the General HQ of the Ukrainian are financial specialists to fill offi- was that only experienced individ- Armed Forces has left only two cer positions in intelligence pla- uals with those military occupa- criteria for recruiting men: normal toons. tional specialty (MOS) needed by health and the desire to defend the given army unit would be put Ukraine,” admits Valentyn Ko- 2014 vs 2015: That was “under the gun.” zhukhovskiy, acting Military Com- then, this is now It turned out that to mobilize missar of the Kyiv recruitment of- Nevertheless, the quality of the 1,000 men into the army, they fice. So Ukraine’s army is taking in new troops joining the UAF in the 34|the ukrainian week|№ 3 (85) March 2015 War|Security fourth mobilization has consider- camouflage, ‘Belukha Mountain’ not just in ours, incidentally—re- ably improved in quality, com- soviet underwear of the type mained very tense for a few more pared to 2014—and on a number worn during the civil war. At first, days until higher command al- of levels. we had to sleep without pillows, lowed some half-legal breaks to As one reservist reports, “I blankets or mattresses on bare “recharge” and instituted “open was awakened at 06:00 on a Fri- hardcase beds, covering ourselves house” days. day morning in March 2014 by a with our pea jackets. Some of the “Getting the battalion com- phone call. The call was an auto- men were clearly suffering from bat-ready took less than three mated message from, say, the infectious TB, some even had epi- weeks, after which we were dis- Darnytsia DRO crisply stating: lepsy. We were torn without any persed with substandard equip- ‘According to Presidential De- warning from our families, our ment to a number of checkpoints. cree, you are to appear at your jobs, our businesses, our cities, Some were sent directly into the DRO at 09:00 this morning...’ and our farms. conflict zone...” That was last year. Today, the mobilization process is quite dif- ferent. Those who are called up are not sent directly to military bases but go to boot camp in Yavoriv, Rivne, Desna, and other places for basic training. Over the course of a month, they revive long unused skills or learn new military specializations. Those who are mobilized generally don’t get to the conflict zone directly or quickly. And some don’t get there at all. The military barracks smell just as rank, but the men get con- temporary camo, Canadian boots, and completely different quality ammo than last year. The same is true of the food—all of it is thanks to the efforts of the Defense Min- istry, volunteers and western do- nors. Information wars: Bad news, good news Why don’t reservists know about this? Because, for the entire du- ration of this armed conflict with Russia and its proxies, there has never been a comprehensive ap- proach to building awareness among the general public and shaping the national mood. The information offices of the Defense Ministry have been swamped with useless “soldierly” clichés from the past. “MinStets,” the newly-formed Information Min- istry headed by Yuriy Stets, has also proved hapless, along with the main state media with a simi-

hoto by UN I AN by P hoto lar remit, the National Broadcast- ing Company. Private media op- There was no draft notice and no “Most of us thought this was erate strictly based on corporate physical. ‘We were given our ob- just a 10-day training tour. By the interests, chasing after cheap jective and our timeframe: do it— end of the first week, our unit had sensationalism, while some, like yesterday. And we couldn’t do a real drunken mutiny, complete the free rag “Vesti,” quite openly anything else,’ said recruitment with an attempt to storm the ar- provide the enemy with ideologi- officers. senal. The terrified district re- cal ammunition. “That same evening, we were cruiting officers called out by the Ironically, even those media driven by bus to the First Sepa- brigade commander to explain that praise the noble feats of rate National Guard Tank Bri- the situation ran as fast as their Ukraine’s fighters and offer the gade in Chernihiv Oblast. We legs could carry them. The situa- highest degree of frontline cover- were issued uniforms, boots, tion in the military barracks—and age for public consumption are № 3 (85) March 2015|the ukrainian week|35 Security|War also doing the country a disser- Expert opinion ing journalists, not to carry a ri- vice. War is a tragedy, at times Larysa Voloshyna, psychologist: fle, but to be press officers at- hellacious battles take place, and The first wave of mobilization, whose tached to military units—what’s even during supposed ceasefires, term is now running to an end, was a called embedding. Ukrainian soldiers are getting strange psychological cocktail of three The issue of a single State killed. Heroes should be honored. main groups, each of which had prob- Registry of Reservists has also But readers, whether it’s in- lems with feeling motivated and psy- been raised at last, an area that tended or not, are left with the chologically prepared to serve in the is currently in disarray, as there impression that serving in military. is no unified system for elec- Ukraine’s Armed Forces is one The first group was those who had en- tronic tracking, just rolodexes unending stream of “blood, listed in the Ukrainian Armed Forces during peacetime kept at DROs. The penalties for sweat and tears,” a daily hell that and, having made the decision to dedicate part of their violating the law on military ser- only a miracle will bring you lives to military service, they proved psychologically unpre- vices are minimal, so an entire back home alive from. What no- pared for the dangers of war or for the need to recognize army of reservists isn’t regis- body hears about is that not all their opponent as an enemy. The second group was the tered in any recruitment office, of those mobilized are directly volunteers, who consciously made the decision in a storm which means it can’t be mobi- involved in the conflict and com- of patriotic fervor but weren’t prepared for the structure lized. Reservists are only tracked bat losses are actually only 0.5- and order of an unreformed, still largely soviet, army. The at certain enterprises, so people 1.0% of the total number of mili- third category were those who had never expected to link are genuinely surprised that tary personnel! their lives with trenches and barracks and saw their own someone has brought them a Positive statistics are not the mobilization as the result of force or fatal circumstances. call-up summons at work and only good news the domestic Each of these groups adapted to military realities in its they are expected to get permis- press is not promoting. Accord- own way. So, especially at the beginning, it was easy to sion from their DRO to go abroad ing to law, anyone who is mobi- see misconduct, nervous breakdowns, desertion and so or to move to another city. lized continues to have a right to on. This type of behavior demonstrated just how enor- The recruitment system itself their job and is supposed to be mous the psychological stress was, largely the result of needs serious reforming and paid the average salary for that lack of motivational readiness. streamlining, as it currently of- enterprise or organization. While The current mobilization is bringing individuals into the fers the perfect soil for corrup- in the UAF, depending on their army who are already aware of the dangers and are tion to flourish, while the stream position, mobilized reservists are mostly making a conscious choice. They are moderate, re- of meaningless paper trails, of- paid UAH 2,100-4,500 (USD 95- sponsible and careful, so their expectations of the military ten just pulled out of the air, 205) a month, an amount that is system, will be much higher than those of the volunteers drowns what is most important: doubled while they are on active who were ready to “find their guns in battle” or of those actual work with recruits and re- duty in the conflict zone. That is, who “didn’t agree to this” when they signed their contract servists. if someone who works as a civil- with the Armed Forces. For instance, should DROs ian is called up, they get two sets The exigencies of the first months of the war are in the have an in-house psychologist? of pay simultaneously, in addi- past. Now is the time for systematic psychological work Of course, they should. But it was tional to annual vacations and with both the newly enlisted men and those who are re- only during this fourth mobiliza- additional cash benefits. turning to civilian life after serving their terms... some tion that such a position began to What’s more, soldiers are 50,000 individuals. appear on district recruitment regularly sent home, to handle office staffing lists. Moreover, “social and domestic matters,” moral aspects by the domestic considerable time needs to pass on a sequenced rotation that cov- press? for a checkmark in an HQ report ers up to 30% of units at a time— to turn into a proper working over and above the annual 30- Making silk purse out unit: this psychologist needs to day vacation! Many are being of a “separatist’s” ear be a real professional, not just a deeded small parcels of land by Ukraine is unlikely to win this serviceman who was given the their local governments as well. war if military reform is not un- position “because you’re our guy” And of course, there are the ben- dertaken in parallel to the ATO, when other positions at the DRO efits of being a veteran of the were cut. This psychologist also ATO and combat. If a soldier is has to talk to every individual wounded, compensation is pro- The mobilized men get who is being mobilized and their vided, in line with the individu- contemporary camo, professional assessment should al’s disability. And if a soldier is weigh just as much as the assess- killed, the family is given a one- Canadian boots, ment of the doctors who carried time UAH 609,000 (ar. USD and completely different out the physical. 27,000) benefit. In the end, the Ukrainian All these social benefits add quality ammo than last Government and Armed Forces considerable weight to the indi- year. The same is true of have to understand one thing. No vidual’s honorable duty to de- amount of super-modern lethal fend the homeland. Who is re- the food weaponry supplied by the West sponsible for informing Ukraini- will effectively repel Russia if no ans everywhere about this aspect including the mobilization com- one is able to use those weapons, of going to war, not just report- ponent. The Main Administra- or if those handling such weap- ing on its obviously terrible tion of Defense and Mobilization ons behave inappropriately and sides? Why are material incen- Planning at the General HQ has have no idea what their mission tives not being included with the finally begun to talk about call- is or why they are even there. 36|the ukrainian week|№ 3 (85) March 2015

SECURITY|WAR Nearest Recruiting Station he Ukrainian Week Interviewed necessary, the state will be ready to About 4,500 have already passed spoke with Colonel Serhiy by hold the fifth and sixth stages of medical examination, were found Halushko, Deputy Head of Bohdan limited mobilization this year (in fit for service, and are now in the TInformation Technology De- Butkevych case of escalation in Eastern army. Last year, there were more partment of the Ministry of De- Ukraine or if our country faces other volunteers, naturally, but this is fense of Ukraine, about practical threats of direct military aggres- quite logical, since those who aspects of the mobilization cam- sion). Since Russia is building up its wanted to defend the country and paign. military muscle on a daily basis, serve in the army right away, liter- sending trains of military equip- ally stormed the recruiting offices U.W.: At what stage is the ments and marching columns to from the first day of mobilization mobilization today? Ukraine to support the terrorists, and did not wait for the fourth Mobilization is a huge set of na- we just need to have adequate re- stage. However, in the second year tionwide measures involving not sources to stop the aggressor. there are still a lot of people who only the Ministry of Defense, but go to the army on their own initia- public institutions, such as the Cabi- U.W.: What about the moods of the tive. Recently, a group of drafted net of Ministers of Ukraine, regional conscripts? We hear opposite views officers in one of the training cen- and local administrations, etc. To- ranging from optimism ("this draft ters demanded to be sent to com- day we are in the fourth stage of is only for professionals or those bat units immediately, because partial mobilization, which was willing to go to the front") to their training period was in- launched on March 18, 2014. It decadence ("they draft farmers creased. Of course, the more they started on January 20, 2015, will who do not want to fight").A re learn, the better soldiers they be- last for 90 days, and includes two there many volunteers who want come, but the guys already want to phases. As a result, nearly 50,000 to join the army at this point? perform real tasks. Overall, this people will be conscribed. The num- As of the beginning of March, stage of mobilization is much bet- ber of conscripts in the fourth stage the number of volunteers out of all ter than the previous ones. Note of mobilization mentioned earlier conscripts was 5,700 or over 10%. that no major recruitment cam- was slightly higher but it has been adjusted to meet the actual needs of the troops, the capacity of training centers, and our ability to provide the military with everything they need. In this way, the first phase of the current stage is almost com- plete, by more than 90%. This means that people have been noti- fied, have had medical examina- tions and completed other selection procedures at the recruitment of- fices. They are at the training cen- ters and courses for retraining to- day. At the same time, we proceed to the second phase of mobilization measures, which are more special- ized in terms of human resources, and more limited in number. Dur- ing the first phase people were mo- bilized primarily to the combined arms units of the ground troops. Now they are also drafted into other service arms, such as Naval Forces, Military Police of the Armed Forces, etc., which have more specific re- quirements for personnel. In this phase, there will be a significant percentage of those who have al- ready served in the relevant units or have related experience, as well as volunteers. The lists have already been generated, preliminary inter- views held, and we can be sure that no one will be drafted in a hurry without preparation to such units. If A n driy l om ak i photo: 38|the ukrainian week|№ 3 (85) March 2015 WAR|SECURITY paign had taken place since after ready have experience of fighting anyone who has such information the Chornobyl accident in 1986, in the Donbas and know for what to inform us, and we will react ac- and until last spring. So recruit- they have to prepare the soldiers. cordingly. ment offices simply had no neces- The training time was increased, sary experienced when they faced which means that people will not U.W.: Are those drafted a year ago the current campaign last year. be sent to the front after three or being demobilized, as per Plus, the time pressure was huge. four weeks of short and ineffective schedule? And very few people at the local organizational training. But the Preparations for military dis- level could understand last year most urgent question is junior and charge go along with the mobiliza- what exactly was going on and mid-level commanders, since tion. At the end of this week, a how the situation could evolve. combat training and discipline in meeting will be held at the General The biggest mistake was to draft a company are the responsibility Staff to finally solve all the organi- people from one region or town to of the company commander, and zational issues about the functions the same military unit. In some not Commander General. And fi- of HR departments, finance de- cases, this had a very negative im- nally, much fewer people are now partments and recruitment offices, pact on the moral and psychologi- hiding from the draft notice. what military transport agencies cal state of the units, since the civil will provide transportation, and so life mode was transferred to mili- U.W.: What about food and on. The General Staff is now draft- tary service. Now, this practice is material support of the conscripts? ing a manual for the ex-service- discontinued, and conscripts are Again, some say that everything is men, detailing all the information evenly distributed to all military fine, while others report that the on the documents and procedures units based on what kind of people soldiers nearly starve... necessary to apply for all payments these units need. In this way, con- A lot depends on the unit com- and benefits provided by the state, scripts find themselves in combat mander or the training center. and stating what they have to do at teams with sound army discipline, Speaking of food, which is supplied the recruitment office, what their where they are dissolved, in a by commercial subcontractors, rights to resume work are, and so good sense. The impact of civil life commanders always have the right on. This manual will help people in is smaller there. It is very impor- and even the duty to require proper general to exercise their rights: ev- tant that the system of conscripts food quality and compliance with eryone has to know what to de- training was changed and is still the quality and nourishment re- mand from a state official. I cannot changing, many instructors al- quirements. Of course, there are tell the exact date when everyone some unscrupulous businessmen and unit commanders. This is why Until last spring, Ukraine different units get different meals had seen no major for the moment. But let's not forget that the cost of meals for soldiers recruitment campaign since has not changed since 2008 and is after the Chornobyl about 17 hryvnyas per day. The to- tal cost, including the cost of prep- accident in 1986 aration, is 35 hryvnyas. Obviously, it is very difficult to ensure high- will be sent home, because it quality meals at the current prices. doesn't exist. On March 18 last We know that the Cabinet of Min- year, we only started to send out isters is planning to revise these draft notices, but the peak of mobi- figures to adjust them for inflation. lization was in the second half of As for the material supply, the April. The demobilization schedule terms of sending conscripts to mili- will depend on the arrival of new tary units have been adjusted conscripts from the training cen- based on the schedule of new uni- ters. Actually, it is the key factor for form supplies by manufacturers. demobilization, for who will defend That is, each conscript is provided the country, if we just send every- with a uniform, either locally made one home at the same time? Be- or coming from humanitarian sup- sides, a bill was submitted recently plies, say, Canadian. We now have to extend the term of job preserva- a Volunteer Board at the Ukrainian tion for the conscripts to 18 months Ministry of Defense headed by after the draft. This makes sense, Yuriy Biryukov, and a dedicated since a soldier returning home has Deputy Minister has been ap- the right to take a vacation, rather pointed, to ensure that quality than going back to work immedi- standards are complied with. These ately. Many people have been people are doing their best to mini- wounded and treatment could take mize the supplies of poor-quality months, not days, for them. They uniforms to the troops. I must state have to complete their treatment in that no recruitment office or com- military hospitals, and only then mander has the right to demand retire to the reserve, while the state that conscripts buy uniforms with has to guarantee the preservation their own money. We encourage of their employment. № 3 (85) March 2015|the ukrainian week|39

IT business|Society Catching Up With the Future

iners browse menus and Country Profile 2015, an analytical Authors: competitiveness. “The IT industry order food, show presen- publication by the American Anna Korbut, is an important, independent eco- tations to partners while Chamber of Commerce, quotes Vasyl nomic factor as an ‘enabler,’ or D having an afternoon Yevhen Sysoyev, a managing part- Zadvornyi driver of other sectors: As a cross- espresso, and call a taxi at Ebony, ner at AVentures Capital, project- section technology, the IT indus- a restaurant in Dubai, from inter- ing that the export of software will try has become indispensable, es- active tables that look more like grow from USD 2bn in 2013 to pecially to Germany’s showcase giant tablets. Grammarly finds USD 4bn in 2016. DOU.ua, a web- industry, the automotive sector,” and corrects mistakes in English site that covers IT industry in says Ralph Haupter, Board Chair- texts written by students, writers, Ukraine, estimated the expansion man of Microsoft Deutschland, in journalist and businesspeople all of staff in top 25 IT companies in an interview for International over the world. A new device Ukraine at 34.9% in August 2012 Trade News. According to Mr. called Petcube enables you to from August 2011, 17.9% in Au- Haupter, IT not only generates watch your pet, talk to it through a gust 2013 from August 2012 economic growth but can solve so- mobile app and play with it with a (many blame the slowdown on the cial problems by providing equal laser ray when you’re not at home. Yanukovych regime under which growth opportunities through in- “In the future, I will live at pet business owners and specialists dividual education; improve the shelters, so everyone will have a saw no prospects in Ukraine and balance of work and private life by chance to play with rescued ani- were slowly leaving the country), providing flexibility at work; sim- mals, and maybe adopt one of and 15.8% in July 2014 from Au- plify administrative processes, or them,” says a voice from a little gust 2013, despite even the politi- offer better quality of healthcare. steel cube in a good-quality promo cal turmoil and the war in the However, IT solutions and tech- video in English. Software devel- East. The number of new vacan- nologies should be used and pro- oped for a huge European bank cies shrank 17% from August 2013 moted properly to achieve that, automates its loan-issuance deci- to July 2014, however. Mr. Haupter concludes. sion making process. One thing all The problem with outsourcing Ukraine is seriously behind these innovations have in com- is that what resides of it in Ukraine even its Eastern European and mon is Ukrainian developers. is mostly salaries that local spe- CIS neighbors in that respect, al- When most Ukrainians think of cialists spend on the domestic though the infrastructure of the IT business, they picture hi-tech fu- market and their experience future will largely be shaped by ture, stylish offices, and windfall (many experienced IT-profession- what countries currently invest profits. This is hardly surprising: an als eventually leave Ukraine to into computers, mobile connec- average salary in most IT-compa- work abroad). Most outsourcing tion networks, internet-infrastruc- nies in Ukraine ranges from USD service providers have their head ture and other communication 500-600 for beginners to USD offices in Western countries, so channels. According to IDC, an 3,400-4,000 and more for experi- taxes and intellectual property analytical firm, IT spending per enced specialists and project man- rights remain there. This is some- person is USD 53 in Ukraine com- agers, compared to around USD what similar to outsourcing in pared to USD 90 in Belarus, USD 100 for a doctor at a public hospital China. Most European and Ameri- 108 in Kazakhstan, USD 278 in or USD 300-400 as an average sal- can product companies have their Poland and USD 522 in the Czech ary in a big city. IT-firms offer good manufacturing and compilation Republic. Ukrainians will hardly working conditions and an opportu- facilities there, but brand value start spending more on IT prod- nity to move to a European country, and image, added value of the ucts unless the economy begins to Canada or the United States. Since product, as well as reputation rest grow again. most of these firms are branches of with the Western brand owner, The developers of Skwibl, a Western companies or work with not the Chinese subcontractor. tool for easy interactive communi- Western clients, their US dollar or Meanwhile, the domestic cation between designers and euro-denominated income makes Ukrainian market is too underde- their clients, completed a program them ever more attractive in the veloped. According to IDC, an an- at Eastlabs, a Kyiv-based accelera- eyes of employees and more com- alytical firm, IT services produced tor, before heading to Australia petitive internationally given the for it amounted to USD 320mn in seeking an international launch- plummeting hryvnia. Can these 2013. The domestic market for IT pad for their product through ANZ companies drive Ukraine’s econ- services shrank 40-50%, while the Innovyz START, an Australian ac- omy, as is widely assumed? Can the outsourcing market grew 20-30% celerator. “Our participation in the IT business, as it is now, turn in 2014. This is partly due to a se- program was extremely useful Ukraine into a regional leader in in- rious slack in demand or availabil- given how big and design and novative technology in the foresee- ity of funds to invest into custom- technology savvy the Australian able future? ized solutions and software prod- market is,” says Tetiana Prota- ucts in both private and public sova, member of the team behind Brain drain sectors in Ukraine. Meanwhile, Skwibl. The basic tool is free to use Ukraine has been a leader in ex- when Ukraine does not implement but extra tools will be available for ports of software since 2007. it and other countries do, it loses a monthly subscription. For now, № 3 (85) March 2015|the ukrainian week|41 Society| IT business Despite all this, outsource companies are extremely impor- tant for Ukraine: they create jobs and give people expertise, as well as a sense of stability. In pursuit of innovations Product-oriented startups are mushrooming in Ukraine but few become really successful. The ones that have managed to bring a new product to the market are mostly based in the United States and pay taxes there. Indeed, it is easier for a Western market-ori- ented startup to have its head of- fice in the US or Germany than in Ukraine or Russia. This will con- tinue until Ukraine’s domestic or regional market becomes big and dynamic enough to offer attrac- this would hardly be an option in of IT specialists in the past few Interactive tive prospects to startups and Ukraine, a 40-plus million mar- years. When the “software rush” Restaurant products. Another critical factor ket, due to the lack of money or only began, it lured people with Technology that reveals actual progress in the culture of intellectual product degrees in mathematics and developed by industry and business is the num- consumption. similar fields. “Such specialists the Kyiv-based ber of R&D centers operating in a The war, coupled with political have well-fit thinking, logic and Kodisoft country. These require huge in- company and economic instability, is push- technical approach,” Ihor Lush- at Ebony, a vestment that does not necessar- ing outsourcing companies to re- chyk, a developer at Datamart restaurant in ily pay off soon. Even if Ukraine locate their offices to Ukraine’s Llc, comments. “Today, many Dubai has no spare money to invest into quieter neighbours on a massive people come from completely R&D, it can create an attractive scale, causing huge brain drain. “I different fields. This is not al- climate for investors that can do think four people from my former ways good. They can do simple that. Israel has a government team of five have left Ukraine in things from the beginning and program to encourage the open- the past year,” says Oleksiy, a numerous companies, especially ing of R&D centers through tax long-time IT-specialist. “Two went outsourcing service providers, incentives, government guaran- to Poland, one to Germany, and hire them.” Eventually, how- tees and opportunities to pro- one to Canada. They do not start ever, they gain narrow skills, mote innovations. In the United their life from scratch in a foreign and that affects the quality of Ukrainian States, business representatives country: companies create com- their work in the future. They developers begin to search for their future fortable living conditions for them will also hardly be able to create of Petcube talents in universities. They do so are doing a from day one of emigration.” Most something innovative or unique. crowdfunding by funding R&D centers, giving of the people who leave are experi- “That’s why we are now seeing a campaign on grants to talented students, and enced specialists. slight slowdown in this. And it is Kickstarter to holding annual conferences At the same time, many la- likely to get worse,” Ihor con- expand their where potential tech-stars can ment the declining qualification cludes. project meet with their future employers. The universities, in turn, are in- terested in inviting business pro- fessionals as lecturers: this adds to their prestige and increases the value of their education. In Ukraine, outsourcing companies are mostly luring talented profes- sors from universities, leaving few enthusiasts to educate and motivate young geeks. The ACC’s Country Profile points at three main challenges for Ukraine’s IT-industry this year: the war in the East, the deficit of qualified specialists, and corrup- tion that scares off new investors. Eliminating the first one is diffi- cult indeed. The other two, espe- cially corruption, are only a matter of political will and strategic thinking. 42|the ukrainian week|№ 3 (85) March 2015 IT business|Society Doing IT in Ukraine

Author: Emmy Gengler, co-founder at Softjourn

krainian engineers have a good reputation have relocated to other cities. Service providers and all over the world for being creative, not development companies elsewhere are certainly afraid to give their opinion, not sitting back staying put and are growing in their current cities. Uand waiting to be told what to do. Many in- Many IT-companies working in Ukraine experi- ternational firms have established offices in enced growth in 2014, despite the challenging situ- Ukraine, and have helped spread the word about ation. their experience in the country. Many Ukrainians, However, almost all IT-companies which are able that left the country, have developed a reputation to, are putting in place contingency plans for their as excellent engineers and co-workers. company’s operations and for that of their clients, I have been working and investing in Ukraine for which often includes opening offices in neighboring close to 19 years. Aside from this last year, with its countries such as Poland, Bulgaria, etc. At the same own challenges, every location has its nuances for time, this enables companies to grow as well as pro- running a business, and many things have changed vide assurances that their operations can start up over the years. What I would like to see more of is in another location more easily, if they end up in an increasing cooperation between the IT industry office in Ukraine for some reason. and the government by developing and making it There are many software product companies in more transparent in Ukraine that develop terms of taxes. Addi- products for the local tionally, there should The basics to grow market, as well as the be more cooperation in the entrepreneurial international one. terms of changes in ed- Product companies ucation at the univer- environment have already have been around for sity level. The educa- started in Ukraine years and it is also not tion base is excellent in unusual for a service Ukraine, and many uni- provider to have their versities have improved their computer science own products. Many entrepreneurs are gener- courses, but more improvements could be ating a lot of ideas and developing their own made across the entire system. Some of the op- web or mobile applications. These applications tions include adding more practical computer do not require a lot of capital to build, so the start- courses in the sought-after languages or the possi- upers can self-fund their development to at least bility for students to gain more credits for work ex- get them to a point of growth. Additionally, there perience in lieu of time spent in the classroom. are a number of private equity firms in Ukraine Many cities in Ukraine have excellent universities. which open up capital to start-ups; the capital may A lot of graduates look for opportunities to grow come from Ukraine or international groups. Also, their career in and around where their families are, to help entrepreneurs refine their ideas into fund- where they went to school, etc. Ivano-Frankivsk, able ideas or to help them organize their idea in to a for instance, is one of the cities that provide excel- business which they can fund themselves and grow lent quality of life (Softjourn’s development office it, there are a number of organizations providing is located in Ivano-Frankivsk while the head office training, ongoing seminars, mentors, and weekly is in California – Ed.). Companies that operate conferences. The basics to grow the entrepreneurial there can provide tech people with opportunities environment have already started and we can ex- for growth. pect that all three pillars needed to grow startups - Given the conflict in Eastern Ukraine, those tech ideas, capital and support - will continue to expand companies which were located in the conflict area in Ukraine. № 3 (85) March 2015|the ukrainian week|43 Society|IT business Oleksiy Skrypnyk: "All Ukrainian IT companies understand that outsourcing is not a panacea" The Ukrainian Week spoke to Oleksiy Skrypnyk, Samopomich party MP and former Director General of ELEKS, one of the largest Ukrainian IT companies, about the role of the government in the development of IT industry, problems in the sector and the ability of Ukrainian companies to produce their own high-tech products

hen we talk about IT in Interviewed domestic market, contracts and trepreneurs pay 5% in tax, plus ad- Ukraine, we mean by Olha transparency are the most impor- ditional 3-5% for administrative mostly outsourcing, Vorozhbit tant things where the state could be costs. Any employer will thus opt Wthat is, working for for- helpful, because the preferences for 5%. The government's task is to eign clients. However, if we look at that existed earlier were good for harmonize taxes to make it profit- China or India, a No1 country for nothing. able for IT businesses to pay them. outsourcing, we can see an inter- There are many areas where offi- esting phenomenon: they have a If we look at the scope of cially declared salary can be very very large domestic IT market, that the Ukrainian market for IT beneficial. For example, this is is, the state and commercial com- outsourcing, we can see that what Georgia did during the crisis panies commission a lot of IT prod- we have several important ar- of 2008, when they substantially ucts. In Ukraine, a rough estimate eas. Primarily, it's service, often in reduced taxes, which helped to of the last year's profits in the sec- the form of talent leasing, that is, drastically increase the flow of cash tor was USD 2bn, of which the do- when the brains of talented people into the budget. Unfortunately, we mestic market accounted for hun- are "leased out." Secondly, it's proj- don't have such mechanisms. It dreds of millions of dollars. These ects where companies bid in ten- were mainly government contracts, ders, win projects, and do serious and 50% of their amounts were things. Thirdly, it's the develop- probably bribes. In fact, Ukraine ment of unique products. For in- still had several companies stance, in Ukraine there are already that specialize in using IT sec- enough game studios that create tor for money laundering un- serious games and content. Not til recently. many people know about them in Ukraine, but they are well-known The role of the state in de- abroad. There is also the freelance veloping the IT industry is a sector, which today operates in the complex question. I would di- shadows, so it is hard to make esti- vide it into several issues, because mates in this area. By my count, it it conceals a whole layer of prob- accounts for at least 30-50% of the lems. Firstly, until recently, nobody official market. There's a rather paid attention to IT, so nothing large range of companies working hindered our development. Sec- for the international market. There ondly, there was no domestic mar- is also a smaller amount of firms ket as such to stimulate the sector. focused on the domestic Ukrainian Thirdly, the government did not market. Recently, many companies think at all about what to do with have become involved in military the IT industry. products, such as drones, weapons, and tablets. Anything that the The best example among Ukrainian army may need. the European nations is prob- As for their interaction with the ably Estonia. This is the case state, taxes, etc., most companies when the state, realizing that IT have employees registered as pri- may become a driver for its devel- vate entrepreneurs and working for opment, is doing two things at a them as freelancers de jure. Today, time: firstly, developing the coun- companies can pay about 40% as try, and secondly, developing the total tax per full-time employee IT sector. The development of the (previously up to 58%). Private en- 44|the ukrainian week|№ 3 (85) March 2015 IT business|Society takes courage to make radical steps that customers are insecure, with tion. For example, MagneticOne that, in my opinion, would have in- many companies fleeing abroad. If from Ternopil, which develops creased significantly the level of tax we look at the situation with large products to facilitate logistics and revenues, at the same time improv- companies, they have already automation of daily operations, has ing the cooperation with the repre- opened offices in Poland, Bulgaria, also switched from outsourcing to sentatives of the IT industry. and Romania. And, interestingly production. enough, local municipal authorities The Silicon Valley was built Another major Ukrainian there are asking companies how with the investment of the US De- problem is the lack of copy- they could help. partment of Defense and thanks to right and intellectual property the first contracts obtained by Intel protection. That is why, when it I think we need to com- and Hewlett Packard. Later on, the comes to selling copyright, such pletely change the vector of deals are not governed by the cooperation: the state must We need to completely Ukrainian law. People go either to understand that business is Cyprus or to other countries just to the crucial element of its de- change the vector of abide by the English law. They un- velopment. In fact, business is cooperation: the state derstand that if a deal is not in the what contributes to the country's jurisdiction of Ukrainian courts, development, and the officials' must understand that the agreements will be imple- function is not to "fleece" busi- business is the crucial mented. nesses, but to increase their num- bers. This requires a paradigm element of its development However, companies still change in psychology and thinking. have their residence here, be- big money came, people wanted to cause Ukraine has cheap, I know for sure that when reinvest it somewhere. Google smart, and educated profes- a company has money, it earned its first million from the sionals. This was a major incen- starts working on R&D. At first, state to do research on search en- tive for a company having no capi- there were no funds available for gines at Stanford University. The tal at all at the beginning, like the such work, so IT companies in US authorities realize that one that I managed before being Ukraine were engaged in outsourc- when a private businessman elected to the Parliament, to grow ing. One has to make money first. uses even those products that from two to a thousand employees. Everyone understands that out- were created with the help of Unfortunately, the state has never sourcing is not a panacea. Every- BIO the state, it is be better for ev- helped me, but only interfered. one wants to develop products. Oleksiy eryone. They are not afraid of giv- Today we can see, especially There are many outsourcing com- Skrypnyk is ing technology into private hands, given the fact that we are in a war, panies that later switch to produc- Member of Par- realizing that it is much more effi- liament of the cient than giving it to the state. If 8th convocation we look at all the technology parks for Samopomich and all the developments in the party. Born in world in this area, we have to talk 1964 in Lviv, he graduated from not about IT, but about biotechnol- the Electrical En- ogy. Whereas in IT sector all you ergy Department need is a couple of programmers of Lviv Polytech- and computers, biotechnology re- nic Institute quires a laboratory worth tens of (now Lviv Poly- millions of dollars that would pay technic National back in 10-15 years. Such things are University) in not possible without the support of 1986; since the government who realize their 2008, he was importance. The Lviv cluster has senior lecturer at the Institute of been operating for a long time now. Computer Sci- We have launched the best IT- ences and Infor- management program in Eastern mation Technol- Europe, that is, no Skolkovo can of- ogies of the Lviv fer anything similar to what we Polytechnic. In have in UCU. In this case, we suc- 1991, together cessfully interact with the munici- with his father, pal authorities and the state, al- he founded though this is not the kind of sup- ELEKS LLC. Olek- port that we could count on in the siy Skrypnyk is a member of West. The state at the municipal Ukrainian IT As- level realized that by helping us, it sociation and a is helping itself. The state has to member of the provide support, while com- Supervisory panies have to cooperate with Board of Lviv IT- it. At the confluence of such BPO Cluster As- cooperation, successful proj- sociation ects can be developed. № 3 (85) March 2015|the ukrainian week|45 history|People Lilly, The Hetman's Daughter Yelyzaveta Skoropadska in art, politics and charity in some of the most tragic years of Ukrainian history

Author: Tetyana Ostashko

amily and friends called her Lilly. Ukrainians, who dur- ing the Second World War Fwere forcibly taken to Ger- many by the Nazis, called her "our Liza" and "our Yelyzaveta." A talented sculptor, secretary and assistant to her father, Het- man of Ukraine Pavlo Skoropad- sky, and the leader of the Ukrai- nian Hetmanite Movement, Ye- lyzaveta Kuzhim-Skoropadska is still little known to the general public in Ukraine. She consid- ered herself to be Ukrainian, same as her older sister Maria and brother Danylo. However, her national sentiments, accord- ing to her sister Olena Ott-Sko- ropadska, were stronger: "My sister Lilly... considered every- thing that was not Ukrainian to be of little value." The second daughter of Het- man Pavlo Skoropadsky, the Hetman of the Ukrainian State in the turbulent 1918, and Oleksan- dra Skoropadska (nee Durnovo), Yelyzaveta, was born on Novem- ber 26, 1899 in St. Petersburg. She was named after her father's aunt Yelyzaveta Myloradovych, the principal founder of the Shevchenko Scientific Society and a well-known patron of the Ukrainian educational move- ment. "Lilly once told me much later," her younger sister Olena Ott-Skoropadska recalled, "that she always, even as a child, con- sciously felt herself Ukrainian. When the family moved in the Hetman Pavlo summer months to our Ukrai- Skoropadsky with his nian estates in Poloshky and daughter Yelyzaveta in Trostyanets, she always per- Wannsee, 1933 ceived it as a kind of a homecom- 46|the ukrainian week|№ 3 (85) March 2015 People|history ing." Yelyzaveta kept the memo- world around her. Most of her ries of her life at her great- personal archive was destroyed grandfather's estate of during the Second World War, Trostyanets, with its old trees but some of her memoirs and es- and romantic stories, for the rest says have survived. "The soul of her life "as a wonderful must be spacious, so that dream." thoughts can whirl in it like a In fact, in Chernihiv neigh- wind in an open field," she wrote borhood, the children of Skoro- in her memoirs in 1932. "People padskys family immersed in open windows in their houses to Ukrainian environment, simply let in fresh air and sunshine. and routinely communicated Similarly, the soul must be with village children, and later opened to air and sunshine, and learned the language by reading it should have no sickly, closed Ukrainian books. Yelyzaveta places. For it is a poison to the Skoropadska began studying soul that brings death." Ukrainian as a small child, be- Another vivid memory is re- fore even learning to write. She lated to her choice of profession. later started a separate note- Since childhood, Yelyzaveta book, where she would write dreamt of becoming a sculptor. down words and phrases, and "When we were young and lived much later, in Berlin, she aston- in our estate in Poloshky near ished a famous Ukrainian scien- the town of Glukhov, we went tist Zenon Kuzel by her precise with great enthusiasm to watch knowledge of Poltava region idi- clay mines near the village of Po- Yelyzaveta the review the artist's talent. Ye- oms. Yelyzaveta made good loshky... I cannot forget how Skoropadska lyzaveta made sculptures com- friends with village children, and good it was to see girls sitting at work in missioned in the Netherlands and breaking off lumps of clay. her studio. and Finland. in winter, while in St. Peters- Wannsee, 1926 burg, she exchanged letters with Even better was to hear them a few peasant girls, of course, in sing Ukrainian songs. They sang A lifetime project Ukrainian. in several voices. Their songs But the true calling of Yelyzaveta "Once as a child, I read a and the white clay..." Hence the Skoropadska was the service of book about Ukrainian Cossacks, desire to embody images in clay. her homeland. Her spontane- unfortunately I can't remember "...As a child, I liked to mold all ously formed Ukrainian identity now what it was," Yelyzaveta sorts of shapes," Yelyzaveta Sko- was beneficially influenced by her wrote in her memoirs. "From ropadska wrote. "My mother of- acquaintance, during her last this book, I still have one picture ten said that when I grow up, year at high school in the city of kept in my memory. A Cossack they would have to find a sculp- Orel, with a young teacher, who spent a long time in jail. The en- tor to teach me. She drew very was a convinced Ukrainian. Un- emies tortured, insulted and well and was an art connoisseur. der her influence, Yelyzaveta mocked him. Then one day, a She had many good books on art, learned about the Ukrainian lib- man came to him from the en- and my sister Maria and I often eration movement, and started a emy camp and promised to set looked inside when we were him free, if only the Cossack said small. Parents always told us one word, that he forsakes his that when we grow up, we would Yelyzaveta headed a God and his homeland... But the go to Italy to see for ourselves charitable organization, Cossack refused..." Yelyzaveta the great works of the old mas- admitted that this Cossack re- ters." the Committee mained for her throughout her Yelyzaveta Skoropadska, af- for Famine Relief lifetime an example of the great ter getting home education, heroism and chivalry of Ukraini- graduated from the state high in Ukraine, in 1929 ans. "I often pray to God that He school for girls with a gold never puts me in such situation," medal. She got her vocational serious study of the Ukrainian she wrote. "I imagine the terrible training when she studied sculp- history. She later wrote: "Only burden that would carry the soul ture at the St. Petersburg Acad- the sense of the accomplished of a man who forsook even for an emy of Arts under Maria Dillon, duty and clear conscience have a instant the holiest of all... Be- and resumed her studies in Ber- value. Probably it is easier to lay trayal for me is something terri- lin and Florence under the fa- down one's life at the time of a ble and, conversely, loyalty is mous engraver Federico An- great excitement, to rush in de- one of the highest qualities and dreotti in 1925. Her very first light into a battle or into a fire, signs of human dignity." pieces of art promised a great than to live a life without waiting The subtle nature of Yelyza- success. In Berlin, the young for glory, with joy and without veta Skoropadska sought fulfill- sculptor had many orders for complaints, to bear the cross that ment in philosophical ideas and portraits. Her works in plaster we must bear in everyday life." It artistic images. History has pre- and bronze appeared in exhibi- is easy to see that these words served for us only some of her tions, and the German press gave were addressed to her father, memoirs and notes about the them a good critique, stressing in Hetman Pavlo Skoropadsky. № 3 (85) March 2015|the ukrainian week|47 history|People In her memoirs of the years 1928, after her brother Danylo 1917-1918, Yelyzaveta writes that graduated from the Higher Tech- for her family, the election of her nical Institute of Berlin and father as the Hetman of Ukraine started working as an engineer. came as a great surprise. "During Lilly took over the work that was the revolution, we lived in St. Pe- previously done by her brother, tersburg, and for a long time we primarily, the Hetman's personal did not hear anything from the correspondence. Besides, she as- father," she recalls. "There were sisted him with the publication no letters for several months. On of political articles, some of Good Friday before Easter 1918, which were printed in Skoropad- at the Gostiny Dvor there was a skys' apartment on a handpress. crowd and newsboys shouted the At that time, by her own admis- news. We heard something about sion, she was really happy, since a coup, Kyiv, some names, some- she worked for the Ukrainian thing about Skoropadsky. But we cause, for which she had a "real were so far from thinking about a inclination." coup associated with the father From 1923, she worked at the that we paid no attention... The Ukrainian Red Cross Assistance, next day, we actually read about which was also called the Ukrai- Skoropadsky's coup, and were nian Refugee Assistance and was terribly surprised and worried... headed by her mother, Oleksan- We bought all the magazines we dra Skoropadska. The main pur- could find, and all accounts were pose of the organization was to different, the details were con- assist the refugees who kept ar- troversial, but there was no lon- riving in Germany. In 1929, Ye- ger doubt that a coup really took lyzaveta headed a charitable or- place. But no one knew what ganization, the Committee for happened in reality..." Famine Relief in Ukraine. The "The beginning of her fa- Committee deliberately re- ther's Hetmanate in 1918 became stricted its functions to material a decisive event in Lilly's life," assistance to the starving, trying Olena Ott-Skoropadska recalled. to provide to the whole of "Her dear, adored father was the Ukraine. "Immediate material Hetman of Ukraine! She was full aid to the starving in the USSR is of romantic ideas – she was then Yelyzaveta eryday life, though, she was very only possible if we completely Skoropadska. 18 years old – and she saw in Villa La Bruyère modest, "as a thin gray mouse." Ac- separate the relief campaign him the embodiment of her ide- boarding cording to her younger sister from any political activity," a als." According to her sister, Ye- school. Olena, "she did not give any impor- statement of the Hetman's gov- lyzaveta "happily jumped on the Lausanne, 1920 tance to dresses." Usually, she wore ernment said. Yelyzaveta orga- general mood of enthusiasm skirts sewn with her own hands nized extensive correspondence, prevalent in Ukraine at that time and knitted pullovers. trying to involve more people in to build a new Ukrainian Het- Yelyzaveta, with her "delicate raising funds to help Ukrainians man state. The glorious past of features and Madonna-like hair", before and during the famine of the ancient times and the old Olena recalls, was considered 1932-1933. The fact that these hetmans again came alive for her "the beauty of the family." In charitable organizations were in her father's person. Young and fact, she took after her mother, headed by the ladies from the older gentlemen from her fa- who was usually kind and re- Hetman's family encouraged ther's entourage admired Lilly: a strained, all loved for her tender- women to take part in the Ukrai- young and beautiful Hetman's nian charitable movement. daughter and, besides, a true Yelyzaveta Skoropadska: Ukrainian patriot. Lilly, from the Trial of war beginning, became for the Het- "Only the sense of the During the Soviet-German war, man's supporters a kind of an accomplished duty the Hetman's daughter Yelyza- icon and, in any case, the most veta took care of the Ukrainian beloved member of our family." and a clear conscience have women deported to Germany for The fall of the Hetmanate in a value" forced labor, visited their camps 1918 was perceived by Yelyzaveta and tried to provide them with as a personal catastrophe. Her food and clothing. At the same family noticed that she looked de- ness. At the same time, Lilly felt time, Hetman Pavlo Skoropad- tached and dry. But her ostenta- herself to be a privileged daugh- sky tried to improve their living tious inner loneliness disappeared ter, since she was the only child conditions, using his connec- completely at Ukrainian festivals to inherit her father's gray eyes, tions in German political circles. that took place in the Skoropadskys and sometimes he gently called A close friend of Yelyzaveta, a family or at the official Ukrainian her "my gray-eyed girl." well-known historian Natalya events in Berlin, where Yelyzaveta Yelyzaveta started to take Polonska-Vasylenko, who during could show her real charms. In ev- part in her father's activities in the Second World War moved 48|the ukrainian week|№ 3 (85) March 2015 People|history from Ukraine to Germany with when time comes, the idea of the At the head of the her husband and escaped Soviet great independent Ukrainian Hetmanite Movement claws, wrote: "Our Liza" and state." Her thoughts are the most From June 1945, Yelyzaveta Sko- "our Lyzaveta" is what the girls convincing manifestation of the ropadska resided in Oberstdorf. from Ukraine called her, and deep national feelings that the She was actively involved in po- they waited for her visit as if it Hetman instilled in his daughter litical activities, contributed to were a great holiday. They were and the rest of the family. At the the development of the Hetman- so surprised to learn who she same time, they are an irrefut- ite movement among Ukrainian was... The fate of most of them able proof of the falsity of Pavlo immigrants in Germany, and was dark and terrible: they had Skoropadsky's accusations of earned significant popularity in to wash away their unwitting "being Russian," since they dem- this path. In 1949, she married guilt of finding themselves in onstrate that he was among the Vasyl Kuzhima, one of the active Germany in remote camps of Si- most prominent figures of patri- leaders of the United Hetman Or- beria... There they took with otic statesmen in the modern ganization and an ally to Hetman them the memory of "their Liza" Ukrainian history. Pavlo Skoropadsky, who was as a ray of light that shined to "When I think of my father, close to his family. Lawyer by them during their hard forced la- what I value the most is what he profession, in 1918 he was ap- bor. did in exile," wrote Yelyzaveta in pointed Ukrainian consul in the In 1945, on the eve of the So- 1945. "Some would say that it Caucasus. After the establish- viet troops' attack on Berlin, Ye- was a heroic act to go to St. Sofia ment of the Bolsheviks regime in lyzaveta, along with her father, Square in 1918 and to con- Ukraine, Vasyl Kuzhim immi- moved to Oberstdorf, where her Yelyzaveta sciously take the burden of grated to Germany. In Berlin, mother Oleksandra already lived Skoropadska- power and responsibility. This is among Ukrainian émigrés, he was at that time, with her sister Ma- Kuzhim and true, but I would say that even a welcome and respected figure. historian ria and brother Petro. Yelyzaveta Natalya more heroism, willpower and pa- Along with Ivan Mirchuk, Dmytro was the only witness to the tragic Polonska- tience were required in order to Doroshenko, Oleksandr Skoro- death of Pavlo Skoropadsky on Vasylenko. not lose courage in exile and to pys-Yoltukhovsky and Volodymyr April 26, 1945 due to a serious Darmstadt, keep the Ukrainian cause in Korostovets, he belonged to the injury obtained during an air 1954 clean hands." circle of political figures who of- raid. After a long search for a ten visited the Skoropadskys fam- Ukrainian priest, she managed to ily in Wannsee. find a Greek Catholic confessor The marriage of Yelyzaveta (Father Hryhoriy Onufriv), who Skoropadsky, which lasted for held a service over the body of only nine years, was a happy one. the Hetman in Bavaria, which Besides the fact that she and Ku- had already been occupied by the zhim were kindred spirits and Americans. found solace in Ukrainian social Later in her memoirs, re- and political life, both loved to counting the hard circumstances work. Vasyl performed account- of Pavlo Skoropadsky's funeral ing orders for German firms, during the harsh times of war, while Yelyzaveta embroidered his daughter Yelyzaveta recalled: national ornaments on blouses "Who could have thought that for a Hungarian company. In my father, one of the greatest summer, the couple traveled to Ukrainian patriots, would be the mountains and gathered ber- buried like this? Everything was ries and mushrooms, which they so unfriendly, alien, and hope- supplied to the best hotel in less. Yet in those harsh times I Oberstdorf. had some comfort, and my heart In February 1959, after the became lighter. At the last min- death of her older sister Maria ute, when the coffin was brought, Skoropadska-Montrezor, accord- a priest was found. I had a feel- ing to the "Acts of heirdom of the ing that it was God Himself who Hetman power and the order of sent him. Although he was not an succession in our family based Orthodox priest, he was a Ukrai- on the principle of seniority," Ye- nian. I had a feeling that my fa- lyzaveta Skoropadska took over ther and I were not disengaged the leadership of the Ukrainian from Ukraine, and would never monarchist United Hetman Or- lose touch with it, no matter ganization. At the end of her life, what happens. It was as if Father she gave Skoropadskys' family Onufriv expressed the sympa- archive, which was kept in her thies and condolences of the private quarters, to the Lypynsky Ukrainian people." East European Research Insti- Later Yelyzaveta recalled that tute in Philadelphia (USA). "all the work of my father in exile Yelyzaveta Skoropadska-Ku- was focused on maintaining, de- zhim died on February 16, 1976 veloping and implementing, in Oberstdorf (Bavaria). № 3 (85) March 2015|the ukrainian week|49 CULTURE & ARTS|calendar of events March 12 – 20 March 18 – May 31 March 21, 7 p.m. Francophonie Week The Space: Time Machine DakhaBrakha Dnipropetrovsk, Zaporizhia, Kyiv, Atmasfera 360 Kyiv Polytechnic Institute Palace Lviv, Odesa, Rivne, (57/3, vul. V. Vasylkivska, Kyiv) of Arts (37, Prospect Peremohy, Kyiv) The purpose of this international fes- This huge project dedicated to the tival is to promote the French language 50th anniversary of man’s first venture The Kyiv-based world-music band as a language of communication, demo- into space, will allow everyone interested widely known by the lovers of modern cratic values and human rights, as well as to see how it happened. Hundreds of Ukrainian tunes will once again groove to popularize cultural diversity. A range of rare objects that show the early days of and melt the hearts of its fans with a events will be taking place in seven cities the space age in progress will send you magical blend of Ukrainian singing and of Ukraine. One of them is the exhibition travelling into the past. Visitors can join Oriental rhythms. From the day it was of works by French caricaturist GABS who the journey through key events and dis- founded in 2004 and to this day, the transforms the spontaneous ideas that cover some of the most famous people band continues its search for new folk occur to him when reading poetry into il- in the science of space travel. The pro- motifs, travelling through the various re- lustrations. Other events include the gramme includes numerous film screen- gions of Ukraine. The authentic style of screening of films in French and a round- ings, lectures, meetings with scientists their singing and performance is framed table on “Multilingualism. The experi- and astronauts, excursions, workshops, with original sounds of Indian tabla ence of the French-speaking world” that premiers of spherical 3D films, and many drums, a Buddhist gong, maracas and will involve international experts. The more interesting things to discover. other instruments. This blend is widely music part features the Swiss oratorio recognized as DakhaBrakha’s go-to Jeanne d'Arc au bûcher (Joan of Arc at sound. the Stake), which will be performed at the National Opera House in Kyiv.

March 21 – 22, 10 a.m. 3 April, 7 p.m. April 16, 8 p.m. Kyiv Food & Wine Festival: Lviv Jazz Orchestra. Jazz Pianoboy wine and poetry legends Atlas (Yunist) Lavra Gallery Kyiv Polytechnic Institute Palace (37-41, vul. Artema, Kyiv) (1, vul. Lavrska, Kyiv) of Arts (37, Prospect Peremohy, Kyiv) Joyful news for the fans of Dmytro Kyiv will shortly host the second Shurov, ex-pianist for Okean Elzy, Esthetic Kyiv Food & Wine Festival, which Lviv jazz is a tandem of 45 musicians, Education and Zemfira. He will shortly be promises to be as successful as the who love experiment, and are praised for playing as Pianoboy, his solo project, in first one. This year’s event includes their professionalism and virtuoso perfor- Kyiv. Dmytro has long been working on five zones, featuring various activities mance. As part of the Lviv Jazz Orchestra, it, and the project is gaining greater pop- and events: a wine fair, a food mar- the performers travel from one jazz festi- ularity year after year. Pianoboy’s pieces, ket, the main stage, a lecture zone val to another, gaining more and more with lyrics written in Russian and English, and a relaxation area. Visitors will fans. Their dynamic and unique jazz is are largely his own work, filled with sin- have the opportunity to taste various imbibed with the best traditions of the cerity and authenticity. The most com- kinds of wine, cheeses and other deli- Duke Ellington, Count Basie and Glenn mon result of this is packed audiences cacies, learn more about wine making Miller orchestras, as well as of other and fans looking forward to more new and simply take pleasure in a nice at- legends of swing. This time, the shows. mosphere and jazzmen will communica- perform the tion. All of this g r e a t e s t will take place hits of Frank on a back- S i n a t r a , ground of Louis Arm- soothing mu- strong and sic performed Bobby Da- by Ukrainian rin. musicians.

50|the ukrainian week|№ 3 (85) March 2015 March 21, 7 p.m.

April 16, 8 p.m.