The Ukrainian Week № 13 (55) July 2013

Operation "Premier Yanukovych": How the government will save the The KGB in Bulgaria: The impact Why those in power are rewriting budget at the expense of former agents on the country's the Constitution of non-oligarch business life today

№ 13 (55) jule 2013 Will Ukraine Rebel?

Government! www.ukrainianweek.com Featuring selected content Taksim is near from The Economist for free distribution

|contents BRIEFING FOCUS The Post-Vradiyivka The Land of Fury: Ukrainian society Will Ukraine Rebel? Local Syndrome: The has reached its highest protest protests could escalate risks of escalating potential over the past three years into a nationwide public frustration – The Ukrainian Week draws a movement well before the with the police for map of the most significant rallies 2015 presidential election those in power 4 6 8

The March of Protest: No Holds Barred: Thugs, inert Why politicians should police and villagers protecting beware of the wave of their rights – an eye-witness report anger sweeping the from one of the protesting regions cities of the world 10 12 Society POLITICS The Looming Revolt in Lysychansk: Operation “Premier Yanukovych”: The decline of the city in Luhansk Planned amendments to the Constitution Oblast as a result of the oligarch- could give the Yanukovych premiership with controlled economy that rules out free extensive powers, should he lose entrepreneurship and competition the 2015 race 14 16

NEIGHBOURS ECONOMICS The Red Card % of respondents

for Corruption 88% 84% 83% 80% 43% 4% According to the late Global Corruption say that corruption believe that the government believe that it’s believe that believe that say the government’s Barometer by Transparency International and is a serious problem is run by a few big entities important the government’s corruption anti-corruption or a problem in a ing in their to have personal anti-corruption has increased a lot a ions are effe ive Gallup International Association, every third the public own be interes entirely conta s to solve issues a ions are ineffe ive Ukrainian is ready to take it to the reet to se or of Ukraine or to a large extent in the public se or or very ineffe ive Abuse of Power: PACE Resolution Where’s the Money? The plight of local fight bribery. Every fourth citizen in 107 countries is involved Bribery rates in bribery. Meanwhile, nine out of ten people on the planet are willing to take a ion to around the eliminate it. Ukrainians are among those who world believe the lea that they can eliminate (the survey covers bribery: only 29% of them believe that 36% 30% 19% 14% on keeping political and criminal communities whose funding has been blocked 107 countries) ordinary people can make a difference in the 54% will join will spread will join will pay more % of respondents 100% fight again corruption. will sign a petition a peaceful the word about an organization to buy from who reported to the government anti-corruption corruption through a corruption-free is high having paid of Ukraine prote social media company corruption a bribe The mo corrupt in itutions in Ukraine Respondents who paid bribes

responsibility separate provides the by the State Treasury reveals a dire public Police Judiciary 66% 49% Liberia 75 Police 64% 41% Medical and Mozambique 62 health services Libya 62 Zimbabwe 62 legal foundation for prevention finance crisis that shows no sign of improving Civil servants 56% 33% Education Mongolia 45 The mo popular Medical and Land services Algeria 41 health services 54% cause of a bribe 25% Regi ration Ukraine 37 Parliament 53% 22% and permit Egypt 36 services of political vendettas in the future Kazakh an 34 Political parties 45% 21% Courts To get a service Finland 1 A ge ure of gratitude Education 43% cheaper 18% Tax revenue Denmark 1 6% 33% Au ralia 1 0% is low Business 28% Japan 1 36% 33% 6% Utilities corruption

Military 28% Impossible to get the To speed up the process service otherwise % of respondents 18 20 Media 22% do not report Religious bodies corruption 21% 35% 53% 74% are afraid of consequences 24% of respondents admitted refused NGOs 20% believe that this will not change anything 63% HISTORY to having been demanded a bribe to give one Patchwork Solution: Cash Leszek Balcerowicz on how You Have the Right to Know: needed to avert Ukraine’s Ukraine can embark on Recently published lists of public finance disaster will be market reforms and the role former KGB agents in Bulgaria pumped out of non-oligarch of private entrepreneurs in reveal the hidden impact businesses the economy of its totalitarian past on its 22 24 current life 26 CULTURE & ARTS The Other Side of History: Watch Ukraine: Serhiy Hrabovskyi on the Volyn 10 feature massacre films here and coming soon

29 30 Navigator Between Heaven and Earth: Odesa’s Opera House rooftops and 3,000km of underground tunnels, bomb shelters, abandoned mines and ruined cognac cellars 34

E-mail [email protected] Tel. (044) 351-13-87 www.ukrainianweek.com The Ukrainian Week № 13 (55) July 2013 Editors address 37 Mashynobudivna str., Kyiv, 03067, Ukraine Founder ECEM Media GmbH Print Novy Druk LLC, 1 Mahnitohorska str., Kyiv, 03056, Ukraine Publisher ECEM Media GmbH Ordering number 13-7108 Sent to print on 18 July 2013 Address Austria, Am Gestade,1, 1010 Vienna Print run 15 000. Free distribution State registration certificate КВ № 19823-9623ПР 19.03.2013 Head of editorial board Roman Tsupryk Our partner Editors Anna Korbut, Natalia Romaneс, Shaun Williams № 13 (55) July 2013|the ukrainian week|3 briefing| 4-17 July Parliament adopts the law on Russia plans to raise duties on The opposition disrupts the vehicle utilization fee. As a chocolate, coal and glass im- the attempt to hold a result, the price of imported cars ported from Ukraine to Customs Kyiv City Council ses- could increase by UAH 5,000- Union states. This is in response sion, which it considers 60,000, based on engine to the new duties on imported to be illegitimate capacity vehicles introduced by Ukraine

enforcers. They have now become a clear trend: popular resistance against the police is increasing in The Post-Vradiyivka Ukraine. Public opinion shows that the body that should be protecting the law is now operating outside the law. It is synonymous Syndrome with murder, torture, corruption and the purchase and sale of criminal cases. In May, the Sociology The Yanukovych regime does not realize all the Institute of the National Academy of Sciences of Ukraine published risks of de-legitimization in the eyes of the people the shocking data of a public opinion poll: only 1% of Ukrainians have complete trust in the police. This is a striking contrast with neighbouring Poland, where the police enjoys the complete trust of more than 50% of the population, or Georgia, where this index ex- ceeds 85%. In a civilized country, a low level of trust in its law enforcement agency would be a signal for immediate reform. In the case of Ukraine, instead of reform, the police was involved in a range of public scandals, which compro- mised it even more. Police officers have demonstrated either a complete lack of action, as was the case with the seizure of the home of Kyiv teacher Nina Moskalenko, or the blatant and brutal execution of political orders, such as during opposition rallies, “language” protests and the 2012 election. Obviously, public distrust for Author: uly 2013: a popular uprising tivists are forcing their way into the police stems not only from its Andriy Duda has sparked up in the town of the Fastiv regional police station critical degradation as a law en- Vradiyivka, caused by the at- in Kyiv Oblast, demanding that forcement system, which people Jtempts of local law enforce- the police allow them to inspect its have long stopped viewing as their ment agencies to cover up the rape premises in order to check infor- protector. The reaction of the po- and beating of a town resident by mation provided by local residents lice to protests against the govern- policemen. In the Sviatoshyn dis- that there are special rooms there, ment clearly demonstrated that it trict of Kyiv, workers of the Sh- designated for the torture of peo- is the guard dog of the Yanu- lyakh (Way) market are storming ple who have been detained. kovych regime. So society no lon- the district police station, rallying In the last three years, there ger views the police as a separate in defence of a girl who was struck have been ever more rallies caste, but as part of the current by a law enforcement officer. Ac- against the illegal actions of law government system. People are The month in history 11 July 1533 15 July 1410 16 July 1919 Pope Clement VII excommuni- The joint Polish- UHA, the Ukrainian Halychyna cates Henry VIII from the Catholic Lithuanian army Army, crosses the Zbruch Church for the breakup of his defeats the Teu- River and leaves the territory marriage with Catherine of Ara- tonic Order in the of Halychyna for Naddniprian- gon. This results in the emergence Battle of Grunwald shchyna under the pressure of of the Church of England the Polish army 4|the ukrainian week|№ 13 (55) July 2013 |briefing

Riots against the police The Polish Sejm passes The European Court of in front of police stations the resolution on the Human Rights begins the in Fastiv, Kyiv Oblast, and Volyn tragedy, qualify- consideration of the second Sviatoshyno, a district ing it as cleansing with appeal from Yulia Tymosh- in Kyiv elements of genocide enko on criminal persecution

How many Ukraini- not storming regional police sta- tivists who participated in rallies ans trust the police light from the president appar- tions simply because that they re- to account. Don't trust at all ently. Attacks on police stations sist the arbitrariness of the police, In spite of the fact that the In- 30.9% appear to be a secondary issue but probably first and foremost terior Ministry did not immedi- Trust to some extent provided that the most important because the police, as a represen- ately react to the events in Vradiy- one is resolved: the position of tative of the regime, is closest to ivka (the public uprising could 35.6% chief of police is his for several the people. It seems to have be- have been diffused by rapid and Trust completely more years. Hated by the people, come the first victim of the gov- professional action: the dismissal 0.8% but trusted by the president. On ernment’s de-legitimization in the of the heads of the oblast police of- Don't know the eve of a difficult presidential eyes of the public. fice and the regional police sta- election, this is exactly the kind of The government had two option, the detention of Dryzhak – 24.6% interior minister he needs – a tions in reaction to the public up- the rapist police officer, etc.), the No answer loyal chief of police, who will exe- rising against the police. government seemed willing to opt 0.1% cute any order he is given for the The “adequate” scenario pro- for the “adequate scenario” after president’s trust he enjoys now. vided for the dismissal of Vitaliy the storming there. At least, this is However, if the government is Zakharchenko. Even though he is what the initial dismissal of law truly counting on the “aggressive loyal to Yanukovych, this could be enforcers on the regional level im- scenario”, it is making a great mis- an option since there is a so- plied. But after the rally at the Svi- take thinking that in the hour of called gas group in the govern- atoshyno police station in Kyiv, need, all policemen without ex- ment that has long been trying to the rhetoric took a different tone. ception will execute any order. get rid of him. Then, a new minis- Deputy Head of the VR Anti-Cor- The first protests against the po- ter could be appointed who would ruption and Organized Crime lice have already alarmed police declare the reform of the law en- Committee, Party of the Regions’ employees. Still, no way are all of forcement system. The latter Mykola Dzhyha, said that “acts are them ready to go along with the could nominally change com- being drafted to increase responsi- proposals of their colleagues on manders of several oblast police bility for attacks of police officers.” the online police forum (where offices and begin showcase trials Law enforcers on different levels many professional provocateurs against two or three officers. In have been threatening to bring the operate by the way) to “open fire addition, he could respond to initiators of the Sviatoshyno rally to defeat storming attempts” and complaints regarding torture to account. Pro-government mass “act very severely, not paying at- against suspects with a few more media buzz about police officers tention to any liberal blah-blah.” criminal cases. A number of “injured” in the storming. “Police “I wouldn’t be so sure that force oblast offices could undergo re- officers” are debating the need of will end the Vradiyivka syn- attestation. The government forced crushing of protests in so- drome… this is Kyiv, and the reac- could grant amnesty to people cial media. Thus, it looks like the tion of people there is unpredict- who committed minor breaches government has chosen the most able… 4.5 million people who, to when storming regional police aggressive option of reaction to put it mildly, are dissatisfied with stations. In other words, every- protests against the police, thus the government – it’s a powder thing could be done to stage a once more telling the latter that it keg … I personally would not take beautiful show of energetic activ- is completely satisfied with the the risk...,” said a post by An- ity, which the regime has been current hierarchy, there is no gelys007, a police officer from doing all the time lately. Even point in changing anything, and Cherkasy, on the forum. Many po- such superficial measures would most importantly, that people in lice employees share his opinion. win back some votes to add to Ya- uniform continue to serve and It was always like this in his- nukovych’s plummeting rating. protect the regime. tory: The majority always put The “aggressive” option would This must be why the Interior pressure on collaborators, until not provide for any notable dis- Minister, Vitaliy Zakharchenko, there are fewer and fewer people missals and trials of highly-placed decided to go on holiday with a for the regime to rely on. Eventu- police officials, while bringing op- clear conscience, the feeling that ally, this leads to its inevitable col- position members and public ac- he has fulfilled his duty, and green lapse.

17 July 1918 18 July 1918 20 July 1903 23 July 1918 Bolsheviks shoot Hetman Pavlo Skoropad- The Ford Mo- The Omsk-based Nicholas II, the last sky approves the naval tor Company government of Admiral Russian Emperor, and flag of theU krainian releases its first Aleksandr Kolchak his family in Yekater- State Model A car declares Siberian inde- inburg pendence and abolishes all Bolshevik laws № 13 (55) July 2013|the ukrainian week|5 focus|Protest sentiments

5 10 13 20 November 16 – December 3, 2010* September 2011 December 20, 2011* November 2012 Mass prote s again the Tax Code that in the fir A rally to support Vitaliy Zaporozhets who killed Arti s prote again a draft law on touring Rallies again parliamentary eleion rigging in front version adopted by Parliament, abolished a flat tax a police officer who had been terrorizing village in Ukraine, which proposed new taxes for Ukrainian of the Central Eleion Commission and in troubled THE LAND for SMEs residents arti s. The law was never enaed eleion di ris where vote counting was dragged out and disrupted (Nos. 94, 95, 132, 194, 197, 211 6 11 14 and 223) February 2011 – February 2012 September 20, 2011 – December 2012 March 2012* 21 Prote s again the closure of Ukrainian language Chornobyl liquidators and Afghan war veterans rally Rallies to support Oksana Makar, who was raped OF FURY schools in front of the Cabinet of Mini ers and Parliament, and violently beaten by three young men (she died February 2013 1 14 prote ing again plans to abolish their social of her injuries 20 days later) Car owners prote again the inaivity of the Ukrainian society has now reached the high- 13 3 24 15 benefits UkrAvtoDor ate agency that is responsible for the 15 condition of Ukrainian roads est protest potential over the past three years. 12 4 23 17 22 1 5 1 1 July – Augu 2012* 22 The Ukrainian Week has singled out the 11 5 22 18 15 14 2 Prote s again the Kivalov-Kolesnichenko (Ka-Ka) language law; a total of 407 rallies take place all March 14, 2013 – present* 9 7 21 19 22 16 5 over Ukraine Rise Ukraine! national campaign arranged by the most significant ones 8 26 20 opposition that included rallies in 18 cities with 1 22 8 16 an average of 5,000 participants The number of protests in Ukraine 1 15 22 Augu 2012 – present has grown since 2010 when Viktor 15 11 23 Chernihiv Students and college professors prote again the Yanukovych became president. April 2, 2013 1 22 14 Education Mini ry’s initiative to reorganize and merge various higher education in itutions Nearly 6,000 Kyivites rally in front of the Verkhovna According to studies by the Society 22 4 10 Research Centre, 2012 saw a surge in 22 Sumy 15 Rada demanding that it sets a date for the Kyiv Lutsk 1 mayoral eleion political and human rights protests. Rivne 20 25 11 16 5 Semypolky 22 Politics fueled 15% of all protests in 15 Kyiv 24 2010, 25% in 2011, and 34% in 2012. 15 15 11 22 Zhytomyr May 18, 2013 – present In 13% of the protests in 2010, people 14 Pereyaslav- Journali s and NGOs prote again the beating Khmelnytsky of journali s Olha Snitsarchuk and Vlad Sodel rallied for their freedoms – in 2011 Lviv Kharkiv Ternopil 20 and 2012 the number hit 17%. Mean- Кaniv Poltava by thugs hired by those in power at the opposition’s 1 15 22 Khmelnytsky 11 Rise Ukraine! rally in Kyiv while, the number of protests for Cherkasy economic reasons declined from 49% Ivano- 15 25 15 16 22 Frankivsk in 2010 and 60% in 2011 to just 43% Vinnytsia Lysychansk May – June 2013 Uzhhorod 22 Dnipropetrovsk Luhansk People in Lysychansk prote again the closure in 2012, although this motivation still Zadubrivka 6 11 16 Mukachevo dominates others. Notably, the Donetsk of the plants around which the city was built and Kirovohrad operates, and again the loss of jobs number of small protests arranged by 5 15 22 Chernivtsi 1 15 Pervomajsk ordinary people without links to any 1 22 26 organizations or parties that rose Zaporizhzhia 6 March – June 2010* 26 22 July 1, 2013 – present Vradiyivka against injustice in a specific matter, A campaign by civil, udent and youth organiza- 1 27 5 Prote s in Vradiyivka, Mykolayiv Obla , again rather than for political demands, tions, local governments, political parties, education police violations, with demands to punish the Mariupol has increased. So far, the opposition employees and scienti s to dismiss Dmytro Ta- 22 20 26 Mykolaiv officers who raped and brutally beat 29-year has failed to unite these fragmented bachnyk from his position of Mini er of Education old Iryna Krashkova. The mo proaive villagers 7 march to Kyiv yet widespread movements into one. and Science Odesa 19 Still, statistics prove that, with April 2011 - presen* Kherson 27 2 Mass prote s mo ly involving foot- 17 proper coordination, Ukraine is July 8, 2013 May 2010 ball fans again the imprisonment 15 22 September 17, 2012 Local residents block a potholed road, demanding prepared for mass protests. Environmental prote s in Kharkiv again the mass of Dmytro and Serhiy Pavlychenko, NGOs rally in front of the parliament’s approval com- that authorities see to its repair cutting of trees in Gorky Park. There are clashes with charged with murder of Kyiv 14 15 15 16 judge Serhiy Zubkov mittee to prevent the notorious draft law No. 2450, the police On the Procedure for the Organization and Conduc- 1 14 15 16 1 ting of Peaceful Events 3,636 3 May – September 2010* 8 Simferopol No to Police State! prote s again police willfulness Augu 2011 - present * 18 Seva opol RECORDED PROTESTS after the beating death of udent Ihor Indylo while Prote s again the arre and imprisonment Oober 1, 2012 We ern Ukraine in police cu ody of Yulia Tymoshenko Journali s and NGOs prote again the new law IN UKRAINE 15 on libel Central Ukraine 4 9 12 Southern Ukraine 2,305 O ober 12, 2010 – present* Augu 24, 2011 19 2,277 A public campaign Again Retrograde Education On the 20th anniversary of Ukraine’s independence, November 29, 2011 Ea ern Ukraine to op the adoption of the Laws On Education, supporters of opposition parties from the Resi ance A rally again the murder of peaceful prote ers Oober – November 2012 Nos. 7486-1, 9655 and 1187. In June 2013, prote s to Diatorship Committee prote again the Party at a rally in memory of Hennadiy Konopliov, a par- Environmental prote s to curb the emissions begin again draft law No. 2060a to prote exter- of Regions’ policy and the decline of democratic fre ticipant of the Chornobyl liquidators’ prote , who of Azov al and Illich MMK eel plants owned * National prote 2010 2011 2012 nal independent te ing (ZNO) which prevents cor- edoms in Ukraine. The police disrupt the peaceful was killed during the disruption of prote ers’ tents by Rinat Akhmetov’s MetInve Holding ruption in secondary and tertiary education march for no valid reason in Donetsk Source: Society Research Centre № 13 (55) July 2013|the ukrainian week|7 Focus|Protest sentiments liquidators and Ukrainian-language advocates demanded the protection of rights. These upris- ings left most Ukrainians sympa- thetic yet uninvolved: they were Will Ukraine not ready to actively support the interests of others. According to sociologists, this allowed those in power to quash such movements and neutralize the highly fragmented protest sentiments even if Rebel? most Ukrainians shared them (one third of Ukrainians claim to be ready to participate in rallies). Local protests may escalate to a nationwide In this respect, Ukraine is differ- movement against the Yanukovych regime well ent from Bulgaria, Turkey, Brazil and Egypt, which responded to before the 2015 presidential election similar factors with massive upris- ings. The government may see this Authors: fter nearly three and a half they gradually generated political as a reason to ignore social frustra- Andriy years under the Yanu- demands. The protests were usu- tion. However, while it has man- Skumin, kovych regime, public pro- ally localized in certain territories aged to abate the fragmented pro- Bohdan Atests are becoming increas- or within specific social groups tests of social groups and individ- Butkevych ingly widespread and radical. whose interests had been violated. ual towns in one way or another, it There were 2,305 protest actions The most recent actions showed a has never addressed the causes of in 2010; by 2012, that number had common resistance against ap- discontent. Thus, many sociolo- grown to 3,636. While the pur- palling injustices as witnessed in gists believe that certain circum- poses of these protests were var- Vradiyivka, Semypolky and Myko- stances can cause a simmering ied, most had one thing in com- layiv. Other protests such as those conflict to escalate to a national ex- mon: although initially apolitical, carried out by former Chernobyl plosion that will speed up legitimate change within the government, as was the case in Egypt, for ON ONE LIST: Activists walk to the instance. Factors that may drive Presidential Administration on July 9, Viktor Yanukovych’s birthday, wearing protests range from economic masks of dictators Hussein, Qaddafi shock, a sense of possible victory, and Stalin the feeling of irreversibility with a lost chance to replace the government, or a new leader who will offer a reasonable alternative to the regime and will be ready to head a protest movement. Currently, sociologists claim that a critical mass of the discontented is accumulat- ing and new fractures between the regime and society are surfacing. “Declaratively, we have high protest readiness,” says Yevhen Holovakha, a top Ukrainian soci- ologist and Deputy Director at the Sociology Institute, National Acad- emy of Sciences. “But Ukrainians are not used to protesting without very weighty reasons which they can’t just overlook. What happened in Vradiyivka was largely caused by people’s wish to survive. They realized that they will be next unless they stop the bandits. Ukrainians tend to stay passive until there is clear injustice or a goal – preferably pointed out by someone they respect. A very clear line between good and bad like the one in Vradiyivka or before the Or- ange Revolution is necessary to

Photo: UNIAN Photo: push Ukrainians to rise.” 8|the ukrainian week|№ 13 (55) July 2013 Protest sentiments|Focus “The thing is that Ukrainians file a no-confidence motion against streets just for something material are probably the most patient na- police chiefs in a specific town, file – their wallets,” says political ana- tion in the world, you can see that lawsuits and more. In a Vradiy- lyst Serhiy Taran. “Just think of in history,” comments social psy- ivka-type situation, the citizens of any massive protests – for inde- chologist Oleh Pokalchuk. “Virtu- “old democracies” do not have to pendence, the Orange Revolution ally the only thing that can easily take to the streets. In Ukraine, and the like. They were all driven sting our people is wounded pride, none of these options are available. by motives higher than money. like with a teenager—which Appealing to an oblast police de- Ukrainians are much more likely Ukraine actually is. Ukrainians partment makes no sense because to support an organization or a have inflated egos, idealistic it will be headed by the wrongdo- person that offers them an ideol- worldviews and ambitions in- er’s godfather who may well turn ogy, foundation, or alternative. spired by books – all of this occurs out to be equally corrupt. Turning Overall, the fact that people here already in puberty.” to the prosecutor’s office will be Over the past three are ready to publicly protest for fruitless because of its ties with top and a half years something more than money is a under the FROM QUANTITY TO QUALITY police officials and the Family on Yanukovych regime, positive thing. Revolutions for ma- The riots in Vradiyivka, Ly- the top level and profound nepo- the number of terial reasons often aggravate the tism on the lower level. Vradiyivka protests has grown situation rather than make things sychansk, Pervomaisk and other from places proved that Ukrainian soci- confirmed this: the county prose- better, such as the October Revolu- ety is electrified and ready for real cutor was protecting police officers 2,305 tion where the main goal was re- activity in the streets. This readi- who had violently raped a local in 2010 distribution of wealth. If Ukraini- ness is indicated by the respon- woman and left her for dead. The to 3,636 ans rebelled for bread alone, they dents’ answers to “Are you ready to prosecutor ignored obvious facts in 2013 would be very easy to hush up with join a rally?”, as much as it is by of the crime and evidence from the bread. Ukrainians are more willing the lack of any real alternative fo- victim for several days. This leaves to rally for high ideals, which rum in which people can express street protests as the only way to means that society is gradually their dissent. Developed democra- solve the problems of individuals, maturing and beginning to under- cies have several options for public community and society. Hence, stand that it must be built on a reaction to violent episodes like the growing number – and radical- foundation of law and human that in Vradiyivka. Citizens can ap- ism – of local protests. rights.” peal to a superior law enforcement “Our whole history shows that Unlike other countries where authority or a police supervisor, Ukrainians will not take to the equal protest readiness swiftly es-

№ 13 (55) July 2013|the ukrainian week|9 Focus|Protest sentiments calated into massive rallies, look the fact that hundreds of hiy Taran. “The first is public trust Ukraine’s localized and spontane- thousands begin with hundreds for politicians [following the dis- ous actions have remained just and thousands. As a result, when- appointment with Orange leaders that. Social rejection of the Yanu- ever opposition parties took the – Ed.] or any organized political kovych regime (measuring at lead in a local protest, they would rallies. This total distrust, a trauma least 60% according to various swiftly abandon the original goal essentially, prevents people from surveys) is not escalating into a of the action, downgrading it to a uniting around a common goal. pan-Ukrainian movement, for small rally where most protesters The second important factor is the which many experts have pointed were paid to stand with posters management of these rallies. out socio-psychological and polit- and greet one opposition leader Someone has to seriously work on ical reasons. “Better organization that on a daily basis, build net- of protests would make a works and supervise them. No- 2004-style scenario possible The conduct of current body is doing that in Ukraine right now,” Yevhen Holovakha com- opposition leaders reveals now.” ments. “Otherwise, there will be The conduct of current opposi- nothing but a blind riot.” The op- that they are afraid of tion leaders reveals that they are position – in parliament or be- heading a real protest afraid of heading a real protest yond – could take the lead. But movement. After Tymoshenko Ukrainian politicians are spoilt movement was put in jail, Ukraine was left and distant from the population, without an equivalent to Russia’s whom they view simply as a or another. This has discouraged Alexey Navalny, who refuses to crowd that can bring them to proactive people from supporting abandon his goal of replacing the power. Opposition leaders are political demands “without Putin regime comprised of “for- still guided by political strategies money”, as in Rise Ukraine! mer Komsomol members and and attracted by numbers no less “Two things are lacking in or- bandits” despite huge pressure than “hundreds of thousands”. der for a real national protest to from the Russian state machine. Meanwhile, they seem to over- start,” notes political analyst Ser- Nor does Ukraine have its own The protests around the world

© 2013 The Economist The March of Protest Newspaper Limited. All A wave of anger is sweeping the cities of the world. rights reserved Politicians beware familiar face appeared in many of the Nobody can know how 2013 will change Protests are no longer organised by unions protests taking place in scores of cities the world—if at all. In 1989 the Soviet empire or other lobbies, as they once were. Some are on three continents this week: a Guy teetered and fell. But Marx’s belief that 1848 initiated by small groups of purposeful peo- AFawkes mask with a roguish smile and was the first wave of a proletarian revolution ple—like those who stood against the fare -in a pencil-thin moustache. The mask belongs to was confounded by decades of flourishing capi- creases in São Paulo—but news gets about so “V”, a character in a graphic novel from the talism and 1968, which felt so pleasurably radi- fast that the organising core tends to get 1980s who became the symbol for a group of cal at the time, did more to change sex than swamped. Spontaneity gives the protests an in- computer hackers called Anonymous. His con- politics. Even now, though, the inchoate signifi- toxicating sense of possibility. But, inevitably, tempt for government resonates with people cance of 2013 is discernible. And for politicians the absence of organisation also blurs the all over the world. who want to peddle the same old stuff, the agenda. Brazil’s fare protest became a condem- The protests have many different origins. In news is not good. nation of everything from corruption to public Brazil people rose up against bus fares, in Tur- services. In Bulgaria the government gave in to key against a building project. Indonesians Online and into the streets the crowd’s demand to ditch the newly ap- have rejected higher fuel prices, Bulgarians the The rhythm of protests has been accelerated government’s cronyism. In the euro zone they by technology. V’s face turns up in both São march against austerity, and the Arab spring Paulo and Istanbul because protest is organ- has become a perma-protest against pretty ised through social networks, which spread much everything. Each angry demonstration is information, encourage imitation and make angry in its own way. causes fashionable. Everyone with a smart- Yet just as in 1848, 1968 and 1989, when phone spreads stories, though not always re- people also found a collective voice, the dem- liable ones. When the police set fire to the onstrators have much in common. Over the encampment in Gezi Park in Istanbul on May past few weeks, in one country after another, 31st, the event appeared instantly on Twitter. protesters have risen up with bewildering After Turks took to the streets to express their speed. They have been more active in democra- outrage, the flames were fanned by stories cies than dictatorships. They tend to be ordi- that protesters had died because of the po- nary, middle-class people, not lobbies with lists lice’s brutal treatment. Even though those of demands. Their mix of revelry and rage con- first stories turned out to be wrong, it had al- demns the corruption, inefficiency and arro- ready become the popular thing to demon- gance of the folk in charge. strate. 10|the ukrainian week|№ 13 (55) July 2013 Protest sentiments|Focus Zoran Đinđić, who headed the foundly change the current system than do today. Eventually, how- overthrow of President Milosevic in the interests of the Ukrainian ever, it swelled into a national and his mafia system in the Ser- majority. movement when society felt that bian Bulldozer Revolution despite things would become fatally irre- the fact that his own party was in WHEN THE TIME COMES versible unless the government the minority. Another important The current scale of resistance was held accountable for ignoring lesson from Đinđić’s experience or does not bother the Yanukovych the opposition and the interests of the latest developments in Egypt regime much. “The government is the majority of voters. This sug- is that sometimes even a minority openly ignoring civil forms of pro- gests that today, voters heated by can take power in its hands if it of- test while accepting radical ones. a slew of fragmented local con- fers society a reasonable alterna- Put simply, it turns a blind eye to flicts and causes that the Yanu- tive. Both Navalny and Đinđić journalists and human rights ac- kovych regime does not – and will struggled to profoundly change tivists, but when people start burn- not – eliminate, may well respond the systems that were leading ing down local police offices, it to a spontaneous mobilization their countries to collapse. Unlike uses different tactics to solve the that the government will be un- them, most Ukrainian opposition problem.” able to predict or resist. Perhaps leaders do not have such a goal, However, the regime is taking by then a political force or a leader therefore they cannot – or do not a risk in assuming that a society (preferably not from the current want to – lead a real resistance. deprived of leaders and viable al- political elite) will emerge that will “There are very few passionate ternatives will never rise up in offer society an alternative sce- people in Ukrainian society today. widespread revolt. In the early nario and head the protest move- This is a result of the turmoil of 2000s that ended with the Orange ment that will bring about legiti- the 20th-century,” Yevhen Holo- Revolution, 20,000 people at mate regime change. This may vakha comments. However, the most joined the “Ukraine Without happen well before the 2015 presi- only question here is when the Kuchma” campaign and far fewer dential race if the Yanukovych re- leader or political party will respondents claimed ready to par- gime continues to infuriate voters emerge that will be ready to pro- ticipate in a revolution in Kyiv at the current pace. The protests around the world pointed head of state security. But by then the ing economies rapid real growth has led people The continent’s politicians have got off lightly so crowd had stopped listening. to expect continuing improvements in their stan- far (the biggest demonstrations in Paris, for -in This ready supply of broad, fair-weather ac- dard of living. This prosperity has paid for services stance, were when “Frigide Barjot” led French tivism may vanish as fast as it appeared. That and, in an unequal society like Brazil, narrowed Catholics in a bid to stop gay marriage). Yet so- was the fate of the Occupy protesters, who the gap between rich and poor. But it is under cial instability is twice as common when public pitched camp in Western cities in 2011. This time, threat. In Brazil GDP growth slowed from 7.5% in spending falls by at least 5% of GDP as when it however, the protests are fed by deep discon- 2010 to only 0.9% last year. In Indonesia, where is growing. At some point European leaders tent. Egypt is suffering from the disastrous failure GDP is still below $5,000 a head, ordinary fami- must curb the chronic overspending on social of government at every level. Protest there has lies will keenly feel the loss of fuel subsidies. welfare and grapple with the euro’s institu- become a substitute for opposition. In Europe More potent still in the emerging world are tional weakness—and unrest will follow. the fight is over how to shrink the state. Each the political expectations of a rapidly growing Happily, democracies are good at adapt- time the cuts reach a new target—most recently, middle class. At the end of last year young edu- ing. When politicians accept that the people ex- Greece’s national broadcaster—they trigger an- cated Indians took to the streets of several cities pect better—and that votes lie in satisfying other protest. Sometimes, as in the riots of after the gang rape of a 23-year-old medical stu- them—things can change. India’s anti-corrup- young immigrants in Sweden’s suburbs in May dent, to protest at the lack of protection that the tion protests did not lead to immediate change, and of British youths in 2011, entire groups feel state affords women. Even bigger protests had but they raised graft up the national agenda, excluded from the prosperity around them. Swe- swept the country in 2011, as the middle class with the promise of gradual reform. To her den has the highest ratio of youth unemploy- rose up against the corruption that infests - al credit, Brazil’s president, Dilma Rousseff, wants ment to general unemployment in the OECD. most every encounter with government officials. a national debate on renewing politics. This will Too many young Britons suffer from poor educa- In Turkey the number of students graduating be neither easy nor quick. But protest could yet tion and have prospects to match. In the emerg- from university has increased by 8% a year since improve democracy in emerging countries— 1995. The young middle class this has created and even eventually the EU. chafes against the religious conservatism of the Democrats may envy the ability of dictators prime minister, Recep Tayyip Erdogan, who to shut down demonstrations. China has suc- wants large families and controls on alcohol. The ceeded in preventing its many local protests 40m Brazilians who clambered out of poverty in from cohering into a national movement. Saudi the past eight years are able for the first time to Arabia has bribed its dissidents to be quiet; Rus- scrutinise the society that their taxes finance. sia has bullied them with the threats of fines They want decent public services, and get over- and prison. But in the long run, the autocrats priced sports stadiums instead. may pay a higher price. Using force to drive people off the streets can weaken governments Trouble in Brussels and Beijing fatally, as Sultan Erdogan may yet find; and as How will this year of protest unfold? One dark the Arab governments discovered two years conclusion is that democracy has become ago, dictatorships lack the institutions through harder: allocating resources between compet- which to channel protesters’ anger. As they ing interest groups is tougher if millions can watch democracies struggle in 2013, the lead- turn out on the streets in days. That implies that ers in Beijing, Moscow and Riyadh should be the euro zone’s summer will surely get hotter. feeling uncomfortable. № 13 (55) July 2013|the ukrainian week|11 focus|protest sentiments No Holds Barred

Author: ervomaisk, a regional centre date, over the local Party of Re- ment candidates – everyone wants Valeria in Mykolayiv Oblast, is a gions’ candidate Vitaliy Travianko to get closer to the trough.” Burlakova, place where masters change with a margin of more than 4,000 Today, Mykhailo Sokolov is the Kyiv- Pall the time. It is a merger of votes in a town of 66,000 in the only one who seems to be openly Pervomaisk three towns, ruled by different 2012 parliamentary election. 24 campaigning for the re-election. states in the past. It was here that hours later this changed in favour Billboards with the former opposi- the borders of Poland, Russia and of Travianko. tion MP who has headed Bat- Turkey met in the 17th century. The locals arose in protest to kivshchyna’s Mykolayiv Oblast orga- Holta, a district in Pervomaisk, protect their votes. Those in power nization since April 2013 are on vir- was once a town that was part of used the Berkut special-security po- tually every street in town. Zaporizhzhian Sich. Another, Bo- lice to hush up the dissent. The town So far, he has been promoting gopil, was the customs point of the eventually became one of the five himself as an “advocate” rather than Polish-Lithuanian Common- first-past-the-post districts in which a candidate, advertising his assis- wealth. Olviopol was the domain the Central Election Commission tance hotline. His other pre-election of the Russian Empire. There is designated a re-election. However, tricks include newspapers and greet- hardly anything in today’s Pervo- this did not soothe the political con- ing cards for his “dear compatriots” maisk with its Soviet Street, gran- frontation that continues to this day. although he himself comes from ite Lenin monument in the middle Dnipropetrovsk Oblast. This surge of a flowerbed, and old khrush- The battle for power of activity may signal that Bat- chyovkas that is reminiscent of Despair and indifference are the kivshchyna is ready to nominate those times. Its Soviet nature has main factors that determine the so- him instead of Kornatskyi. However, been cemented in every election cio-political environment in Pervo- local party representatives deny this. where the counting rather than maisk. “I have no idea who will run. It appears that the campaign is voting mattered. It was here that It’s so confusing,” Natalia shrugs. Sokolov’s personal initiative. This the Central Election Commission “But they’re all the same, no matter has happened in Ukrainian politics confirmed the victory of Arkadiy whom you choose!” Dmytro shares before: the official opposition candi- Kornatskyi, an opposition candi- her opinion: “Opposition or govern- date, journalist Kostiantyn Usov, 12|the ukrainian week|№ 13 (55) July 2013 protest sentiments|focus didate who lost the election last Oc- WHY IS MYKOLAYIV police officers that raped the woman REBELLING? tober. Mykolayiv Oblast has in Vradiyivka are all members of the constantly been in the same gang. They have been racke- news lately: Oksana The police and bandits, Makar was raped and teering on markets in Mykolayiv hand-in-hand burned alive; those in Oblast, including those in the Pervo- power acted like ban- The locals barely know Mykhailo So- dits in the Pervomaisk maisk Region. Rumour has it that No Holds Barred kolov. Unlike him, Arkadiy Kor- district 132 in the part of the income goes to the head natskyi is a well-known business- 2012 parliamentary of the Oblast State Administration election and a riot fol- Frustration with man in the region. Opinions on his lowed; then and chiefs of the prosecutor’s office, political activity vary. “Some praise Chausove-2 with the police and tax authorities. The rest is raider attack on the the government, him, others curse him,” says Ivan, farm of a former op- used to maintain the gang. one of the locals. “But he’s a good position candidate, the attacks of employer.” “His employees are and a woman gang- The political component raped and almost professionally happy,” Dmytro confirms. “He of- killed by two police of- The notorious bandit attack was not fers good terms and salaries.” This ficers in Vradiyivka. the only incident on the farm. “It’s These have all trig- trained thugs and means a lot to the locals. Here, in the gered public protests. hard for me to single out one incident rural south, people are glad to have There are several rea- because we’ve been under perma- the lawlessness of sons for such resis- any job at all. According to the State tance. Firstly, the nent pressure for a while now,” the police are the Statistics Committee, the average oblast has a strong Arkadiy Kornatskyi comments for wage in Mykolayiv Oblast was UAH and clear hierarchy, The Ukrainian Week. “There is current reality in headed by two or 2,800-3,000 in 2013. Kornatskyi three families. As a re- not a single government authority in pays unskilled workers UAH 4,000- sult of the omnipo- the Mykolayiv Oblast that does not rebellious tent domination of 4,500, while skilled workers earn one political force – exert pressure on my farm. They all Pervomaisk UAH 5,000 to 15,000. previously the Com- do, including the Oblast State Ad- This was the first reason why vil- munist Party, and ministration headed by Kruglov, Per- now the Party of Re- lagers were pushed to protect the gions – actually, not vomaisk and Kryvoozersk Country farm when it was attacked by thugs. the parties as such, State Administrations, the prosecu- but one and the same Even gunshots didn’t scare them masters of the oblast, tor’s office, the police, tax authorities away. The conduct of the police the situation there and courts – with no exceptions.” He has barely changed (which supported the bandits) since the collapse of refers to the oblast authorities as a shocked witnesses. They claim that the USSR. This leads “true organized crime group.” the police were involved in the pro- to the impudence and After June 18, the epicentre impunity of those in cess from the very beginning. Not power at all levels. So shifted from Chausove-2, the village only did they ignore the villagers’ de- the exceptional impu- where the farm is located, to the dence of the Myko- mands to intervene, but made a cor- layiv Oblast authori- neighbouring Kamiana Balka. Next ridor for the armed thugs to pass ties stems from the to it are the fields where Ahrofirma through safely. Now, the farm’s em- lack of normal politi- Kornatskykh (Kornatskyi’s Farm) cal competition over ployees are ready to give evidence on many years, which works legitimately, based on nearly the criminal inactivity of the police. has allowed its long- 500 state registered lease contracts time masters to ce- Locals finally fought off the raid- ment special rules with the villagers who own the land. ran alongside Hennadiy Chekita, ers without the help of the police. and caused officials to Last fall it sowed winter crops there. feel that they can do the head of Batkivshchyna faction “You should have seen how people anything and not be Now, it’s harvest time but the for- in the Odesa City Council, in the kicked their asses,” says an em- liable for their actions. mer opposition candidate’s farm is parliamentary election in Odesa. ployee. “Even women, some of them Secondly, local mas- not allowed to gather the wheat. ters prefer to use anti- With diluted votes for the opposi- old, chased them off. People chased Ukrainian rhetoric to Some villagers have received faux tion, the Party of Regions’ Serhiy them on horseback in the field, like aggravate tension in land certificates. Based on these, the oblast populated Hrynevetskyi won with 32% against rabbits. They would have crippled or by 81.9% of Ukraini- they are signing new contracts with the combined 48% for Chekita and killed those bandits if they had not ans and 14.1% of Rus- Yuriy Khanahian, a businessman Usov. Given this scenario, Sokolov been aware that they have to abide sians. Thirdly, this ter- from the neighbouring region who is ritory, especially is essentially acting as a technical by the law. But we controlled our- northern agrarian re- closely tied to the Party of Regions. candidate of the party in power. selves and chased them to Velyka gions, is seeing a Arkadiy Kornatskyi believes that steep fall in economic Arkadiy Kornatskyi claims that Mechetnia, a village 10km away indices, which affects the pressure on his farm is an at- this is the case. Meanwhile, his from here.” the welfare of its tempt to eliminate him as a political many citizens. All of “party colleague” Sokolov com- The thugs, almost a hundred of this has made Roman opponent and his farm that operates mented that the notorious attack by them, included “athletes” from Kyiv, Zabzaliuk, former on a legitimate basis. “This has noth- thugs on Kornatskyi’s farm, which Bila Tserkva and elsewhere. Some of head of the local ing to do with the economy,” he branch of Bat- Kornatskyi himself sees as a purely them were locals – the local unit of kivshchyna, claim that claims. “The farm’s assets that they political act, was merely a “distribu- bandits known as “Kruglov’s eagles” if Ukraine ever sees grab after they ruin it will just be a mass protests again, tion of the harvest” between com- in this region. These guys have been they will definitely reward for the bandits who attack it. peting farms, recommends that Kor- known since 2010 when they first kick off in the South. Also, they are trying to seize the natskyi sues them and is offering his smashed the Drive night club in Per- farm as an example to others of help in negotiations between Kor- vomaisk. Back then, a criminal case what will happen to them if they natskyi and Mykola Kruhlov, Head was opened against them under don’t pay bribes, share their busi- of Mykolayiv Oblast State Adminis- public pressure but was later closed. nesses or give kickbacks. The local tration. The latter wouldn’t mind No one was arrested after the authorities are performing their key running in the district instead of June 18 attack on the farm. Locals function – sending corrupt money Travianko, the pro-government can- claim that Kruglov’s eagles and the to the top, to Kyiv.” № 13 (55) July 2013|the ukrainian week|13 Society|Regions The Looming Revolt in Lysychansk The decline of the city in Luhansk Oblast shows how hopeless the current oligarch-controlled economy is as it rules out free entrepreneurship and competition Author: trial rubber plant; the Proletar Denys Kazansky, glassworks; the LYNIK oil refinery; Lysychansk-Donetsk a caustic soda factory; and a thermal power plant. They all survived ysychansk is a monotown of the turbulent 1990s and the “Or- 100,000 in Luhansk Oblast. Its ange chaos” but, for some reason, THE GIANT’S parliament. Sources claim that he major plants have been closing are grinding to a halt in the era of CARCASS: forced the plants’ administration to one by one, leaving virtually all “stability”. Today, local industry is Until recently, buy overpriced gas from his Fond L LysSoda was the locals jobless. The climax came under threat of complete destruc- CJSC, thus pushing them into debt. when LYNIK, the local oil refinery tion. For the locals, this is a matter the second To cover them, their most liquid as- biggest and the monotown’s core plant, of survival, since the big industry- producer of sets were confiscated while the rest came to a complete halt this spring. oriented monotown has no SMEs as caustic soda went bankrupt and used for scrap. The locals requested authorities to an alternative, hence the hopeless in Ukraine This is a typical Donbas business change the situation on numerous situation – something that is typical scheme that has been imposed on occasions, but no specific actions for most Donbas towns (see The the entire country since 2010, have been taken. Eventually, on Ghosts of the Industrial Past at whereby an intermediary pops up June 4, a group of activists occupied ukrainianweek.com). The situa- between a state-owned enterprise, the small session room of the city tion in Lysychansk has once more say a thermal power station, and a council, demanding an extraordi- proved the inefficiency of the oli- supplier, say a coal mine, and accu- nary session and the resignation of garch-controlled economy in this mulates most profits in this chain. Lysychansk’s top officials. They only industrial region, inevitably leading The Lysychansk Rubber Prod- left the premises after the authori- to stagnation, the deterioration of ucts Plant faced its death sentence ties promised them that a session the infrastructure and depopula- in 2000 when Fond CJSC, linked to would be held on June 18. Protest- tion. Oleksandr Kyseliov, ex-MP repre- ers stormed this one as well, de- Today, only mines operate in senting SDPU(o) who ran Gas of manding either the return of jobs at what used to be a relatively big Ukraine state-owned enterprise un- the plants or the resignation of the chemical industrial centre, although der the presidency of Leonid local authorities. Eventually, the lat- their coal mostly ends up in ware- Kuchma, and Oleksandr Yefremov, ter accepted a number of applica- houses. The local industrial giants took its most liquid assets to cover tions to the central government, re- plunged into losses then stopped, its debts. These included workshops questing support for the revival of one by one, announcing massive 2 and 6 that produced mine con- industry in the town. lay-offs and a halt of production. veyor belts, and workshop 1 that The first one to go was the Ly- 50% produced rubber compounds. Ly- A CHRONICLE sychansk Rubber Products Plant. of residents in sychansk Industrial Rubber Plant OF DEGRADATION However, this was a murder rather Eastern Ukraine LLC was established on the basis of support the return In Soviet times, Lysychansk was than death from natural causes. The of command these three units, but this was obvi- among the biggest industrial cen- locals believe that, just like a dozen economy and only ously not enough for the gas trad- tres in Luhansk Oblast. This status other plants in the oblast, the pro- 31% ers. In 2002, Fond CJSC initiated remained long after Ukraine gained cess involved Oleksandr Yefremov, support the bankruptcy proceedings against the independence in 1991. The local one-time Head of Luhansk Oblast development of a plant for its UAH 1.4mn debt. The market economy economy was based on several in- State Administration and now head Source: Rating case dragged on for a few years until dustrial giants, including an indus- of the Party of Regions faction in sociological group rehabilitation was launched in 2005 14|the ukrainian week|№ 13 (55) July 2013 Regions |Society If the presidential election took place at ably in the strategic industries of the end of May 2013, Luhansk Oblast: LuhanskTeploVoz (the Luhansk locomotive plant) vir- 25.7% of Eastern Ukrainians tually stopped operation; LysSoda would vote against was laid to waste, and operations at all and the Lysychansk oil refinery were 15.9% halted. would not go to polling stations at all. This is the highest The government’s number in Ukraine rose-tinted glasses proving how frustrated the Party Until recently, Proletar glassworks, of Regions’ core the only producer of float glass in electorate is with its Ukraine, was one of the last survi- policy Source: KMIS vors. In winter, however, it ground to a halt as well. Molten glass froze in one of the furnaces. This means that it will not work again without costly repairs. 850 employees have already been laid off, and another 1,500 are to follow. The administration declared that the factory stopped because gas is too expen- sive and is demanding help from the government. “I’m turning 50 this year,” says Tetiana, an ex-employee at Proletar. “I won’t get a job here. All the enterprises have been shut down. The town is dying out. Our children have li s i ch an sk. in . ua from htt p :// hoto. Photo no future. We’ve written letters and and a tender to find an investor was tion. He clearly realized that it was appealed to Dunayev (the ex-mayor, announced, although ultimately, no high time to leave the drained town. known to be the plant owner – investors were found. In 2011, Lu- He got his MP mandate and left for Ed.), so what? He promised us hansk Oblast Commercial Court de- Kyiv. His plan, perhaps, was to im- mountains of gold, but there is no clared the plant’s bankruptcy and plement the Lysychansk experience result.” Hardly any of the all locals launched its liquidation. throughout Ukraine. we talked to have jobs, or money for Another giant, LysSoda (Ly- The destruction of LysSoda that matter. sychansk caustic soda factory) was shocked the locals. Normal practice the next to fall victim to this busi- in selling big enterprises that feed Today, only mines operate ness model. Until recently the sec- the towns built around them is to ond largest caustic soda producer in discuss the investor’s commitments in Lysychansk, although Ukraine, the plant has the biggest before the deal. If the investor fails their coal mostly ends up industrial cableway and chemical to meet them, the government has sumps in Ukraine. Its difficulties the right to return the facility to in warehouses began in 2008 when it was bought state ownership and find another by BINBANK owned by Chechen manager for it. For some reason, Meanwhile, the government is billionaire Mikail Shyshkhanov. A however, Ukrainian officials have pretending that Lunask Oblast has year later, the plant stopped pro- sold the plant for scrap, and nobody no problems at all. So claims duction altogether and went bank- is being held responsible. Volodymyr Prystiuk, current Head rupt. In 2010, the administration Experts expect a similar fate for of Luhansk Oblast State Adminis- began to slowly dismantle it for the Russian-owned LYNIK oil refin- tration and Head of the Party of Re- scrap. Its employees tried to protest, ery. Last year, the plant was sold to gions’ oblast branch. “Luhansk but with little success. Today, all RosNeft. The owner was expected to Oblast rose from 14th in 2012 to 5th that’s left of LysSoda is its giant car- supply it with crude oil but reality in Q1’2013 in the socio-economic cass. The main premises were proved the opposite. This March, development rating of Ukraine’s re- blown up this spring. Bulldozers RosNeft closed down LYNIK alto- gions compiled by the Cabinet of will demolish the last buildings on gether, ostensibly because of the Ministers,” the local Party of Re- the territory by the end of this sum- losses it generated. Vice Premier gions’ website states proudly. What mer. All scrap, including the unique Yuriy Boyko pledged to persuade drove the rise is unclear, but pro- 16.5km long cableway, was removed the owner to upgrade the plant’s tests may erupt very soon unless at last year. When the workshop build- equipment and re-launch it in the least some of the plants resume op- ings were blown up and their metal fall of 2013. However, according to erations in Lysychansk. The govern- parts loaded on trains and taken Luhansk Audit Chamber experts, ment is obviously not about to take away, the then Lysychansk Mayor, the refinery will re-start operations off its rose-tinted glasses. Mean- Party of Regions’ Serhiy Dunayev, in summer 2014 at the earliest,. while, Donbas residents are strug- was running as a first-past-the-post Never is the other plausible option. gling to survive its widely-adver- candidate in the parliamentary elec- Russian investors act very predict- tised “stability”. № 13 (55) July 2013|the ukrainian week|15 Politics|Government Operation “Premier Yanukovych” Planned amendments to the Constitution could give the Yanukovych premiership extensive powers, should he lose the 2015 race

Authors: hortly before June 28, Con- would be to make decisions passed Andriy stitution Day, Maryna in national referendums manda- Skumin, Stavniychuk, Secretary of tory, not requiring any approval Andriy Sthe Constitutional Assem- from other government bodies or Kovalenko bly, announced that the latter had officials. finalized draft amendments to the At first glance, the amend- Constitution, which would reform ments suggest that their authors the system of governance in prefer the European political sys- Ukraine. They entail the weaken- tem. This is obviously necessary to ing of the president and reinforce- gain positive – or moderate – re- ment of parliament and the Cabi- action from the West, including net of Ministers. If adopted, the the Venice Commission to the Verkhovna Rada will appoint and constitutional amendments. How- dismiss the Cabinet based on the ever, the fact that the model of president’s recommendations. governance set forth in the Consti- The same procedure will be used tutional Assembly’s draft amend- for the Prosecutor General, SBU ments is completely out of charac- chiefs, Antimonopoly Committee, ter for the Donetsk elites gives rise State Property Fund and the Na- to suspicion. Given the experience tional Bank of Ukraine. The presi- of the past three years, including dent will retain the right to ap- that in legislation, they have been discussion”, which will last until point and dismiss judges and dis- re-designing the political system September 1 in an as yet unknown solve parliament if the latter fails following the pattern of authori- format. Then, according to Yuriy to provide a quorum to appoint tarian regimes. However, every- Miroshnychenko, the president’s the Cabinet. These aspects make thing falls into place when one representative in parliament, fin- the draft amendments similar to considers that, firstly, Yanukovych ishing touches will be made to the the Law on Amendments to the retains his right to revise draft draft. It will take nearly a year to Constitution of Ukraine No 2222 amendments. Leonid Kravchuk, prepare the text; through late dated December 8, 2004, enacted the first president of the indepen- 2014 or early 2015. Thus, the from 2006 through 2010, better dent Ukraine and Chairman of the changes are likely to take the cur- known as the political reform, and Constitutional Assembly, once rent political situation from the the draft law to amend the Consti- commented that he could guaran- perspective of Viktor Yanu- tution developed by the National tee the quality of the document kovych’s personal potential posi- Constitutional Council under Vik- but couldn’t say how it would look tion into account rather than tor Yushchenko. In addition to the once it leaves the Presidential Ad- Ukraine’s strategic interests. This redistribution of power, the new ministration. Secondly, the desire follows the “if I can’t have it, nei- draft amendments proposed by to “democratize” the political sys- ther can anyone else” principle, the Constitutional Assembly entail tem may well be dictated by cold when considering the vast powers the “improvement of direct demo- political calculation, should the that the current president gained cratic procedures” through the in- Yanukovych team lose the 2015 as a result of the 2010-2011 troduction of public legislative ini- election. The amendments pro- amendments to the Constitution. tiative and public veto. Another posed by the Constitutional As- The current Constitutional component to the improvement sembly will be “put up for national Assembly has a similar status to 16|the ukrainian week|№ 13 (55) July 2013 Government|Politics Council in the form of the Consti- amending the Constitution to re- tutional Assembly. He clearly ex- strict the president’s powers pected it to become an effective while extending the premier’s tool to legitimize the regime’s po- authority. Under the new system litical initiatives in the eyes of the of power that has been further Western community, or in the elaborated by the version of the eyes of local voters. The fact that Constitution drafted by the Con- the Venice Commission wel- stitutional Assembly and “final- comed the Assembly and called ized” by the Presidential Admin- on the Ukrainian opposition to istration, Yanukovych as premier engage in it is notable. could end up with the power of However, the passing of the the key person in the state. Vlad- anti-constitutional Law on the all- imir Putin did this in 2008-2012. Ukrainian Referendum in Novem- Moreover, this scenario has been ber 2012 crystallized the role of used in post-Soviet states and the Assembly as a tool to legiti- largely tested in 2006-2010 in mize the new version of the Con- Ukraine when the 2004 political stitution as a document drafted by reform was in force. Mikheil Saa- “authoritative experts” rather than kashvili’s team tried to enact a the Presidential Administration similar scenario in Georgia. through a referendum. On June Since one person could not be 19, the Venice Commission pro- elected president for three con- mulgated its opinion on the new secutive terms under the Consti- law stating that it carried a high tution, Saakashvili’s circle tried risk of the usurpation of power to push through the Law on and “could result in the politically Amendments to the Constitution motivated manipulation of the ref- of Georgia whereby the centre of erendum, notably, in changing the executive power in the state Constitution”. Thus, the Venice shifted from president to prime Commission considered that the minister, restricting the presi- possibility of amendments to the dent’s powers while expanding Constitution which bypass parlia- those of the prime minister and ment is unconstitutional. Mean- parliament. This scenario failed while, Oleksandr Yefremov, Head when Saakashvili’s party lost the of the Party of Regions faction in parliamentary election: his team parliament, stated that “MPs will needed a parliamentary majority take decisions in the session hall to pass the law. as they see fit”, essentially making If the Yanukovych regime it clear that the Venice Commis- tries to implement this scenario, sion’s opinion did not please those it has to hold an early first-past- in power much, and that changes the-post parliamentary election are being planned to the constitu- before 2015. Embarking on this

tch by Ihor L u k ian ch en ko by S k e tch tional order of the state to con- risky political undertaking with form to the interests of the ruling the shaky majority it now has in the National Constitutional regime through national referen- parliament would not be wise. Council established by Viktor dums. For the Premier Yanukovych Yushchenko in 2007. Maryna If the current regime realizes project to succeed, the parlia- Stavniychuk was then Deputy that an opposition candidate will mentary majority must be very Chief of Staff for President Yush- disciplined, dependent on the chenko and contributed signifi- Amendments to the leader, and made up of at least cantly to the National Constitu- 270-280 MPs of the current 450. tional Council, as she does now to Constitution will This scenario may be imple- the Constitutional Assembly. likely be driven by Viktor mented either independently, or Back then, the National Constitu- with the weakening of the central tional Council drafted a new Con- Yanukovych’s personal executive branch and the transfer stitution that was supposed to in- potential position rather of power from local state admin- troduce a parliamentary system. istrations to executive bodies of When the current regime came to than Ukraine’s strategic local governments. power in 2010, it did not find this interests Of course, a new president change beneficial to it and abol- could try to overturn amend- ished the National Constitutional inevitably win the 2015 presi- ments to the Constitution, as Ya- Council, embarking on changing dential election (despite all of nukovych has already done. But the Constitution the way it saw the Party of Regions’ administra- will anyone from the current op- fit, i.e. aiming to reinforce the tive leverage, election rigging position risk taking this step – role of the president. Two years and other tools), it is likely to anti-European in its essence – later, Yanukovych essentially re- implement operation “Premier should they win the 2015 presi- vived the National Constitutional Yanukovych” by once again dential race? № 13 (55) July 2013|the ukrainian week|17 neighbours|PACE Abuse of Power The PACE Resolution on keeping political and criminal responsibility separate provides the legal foundation for prevention of political vendettas in the future, despite the fact that it does not mention Ukraine

t would be wrong to assume Author: Hence the asymmetry. Voters remove any mention of Ukraine, that the Palace of Europe suf- Alla Lazareva, will not necessarily notice suc- as well as Iceland which, by the fers from lobbyist schemes Strasbourg cess in Sträsbourg but a serious way, did not request anything, Iless than say, the Ukrainian or loss often ruins political careers. from the PACE Resolution on Armenian parliament does. Both Christoph Strasser, a German keeping political and criminal East and West are equally prone Socialist MEP, was down in the responsibility separate. “There to temptation. Elections of lead- dumps after his report on the was obviously a threat that the ers at various levels are where monitoring of the political pris- report would be shot down just state or private interests clash, oner situation in Azerbaijan as the report on Azerbaijan’s po- while the texts of resolutions and failed. The international organi- litical prisoners was”, a repre- reports hide personal and party zation had spent three years on sentative of PACE’s legal service ambitions. At the same time that determining the term “political commented. “In January, the innovations in international law prisoner”. When the report was consequences were not long in are being drafted in a PACE unexpectedly voted down in Jan- coming, with a new wave of ar- meeting room, MEPs get text uary, Strasbourg old-timers said: rests in Baku. Aliyev celebrated messages with requests from the “Now go find someone brave victory over democratic stan- Azerbaijani President to support enough to take on Ukraine, who dards.” a specific candidate for a specific will risk his career to battle Thus, Pieter Omtzigt was top position in a PACE faction. against your Yanukovych!” cautious. “Opponents insisted Although Ukrainian issues But Pieter Omtzigt had no that the resolution should be a were not officially on the June choice. His work on the report legislative document,” he ex- session agenda, Ukraine was still started almost two years ago, plained in an interview with The mentioned several times: in a and its format was determined Ukrainian Week. “As a rap- discussion on the corruption re- back then: he was supposed to porteur, I agreed because the de- port, debates on freedom of as- research the situation in Ukraine cision of the European Court of sembly, and especially on the and Iceland, where the former Human Rights regarding Yulia last session day when the report The Party premier was also under investi- Tymoshenko stated clearly that of Regions gation although he remained she was imprisoned for political and Resolution on keeping polit- MPs who ical and criminal responsibility unanimously free. reasons. The most important separate were approved. supported Obviously, Christoph Sträss- thing, in my opinion, is that the It was no coincidence that Pieter Omtzigt’s er’s bitter experience was one of resolution retains the demand voting on the report on “Keeping report that the reasons that made the author for countries, whose legislation political and criminal responsi- classifies of the report that was fairly criti- allows the practice of the abuse bility separate” by Pieter Om- Tymoshenko cal of the Ukrainian government of imprisonment disguised as a tzigt, a Dutch Christian MEP, as a political was scheduled for Friday. “They prisoner, left were counting on most MPs to for Kyiv with a sense of have left,” a Council of Europe happy victory. apparatus employee says off-re- According to cord. “This is a sensitive issue Head of the and the opponents’ lobbyists are Ukrainian very active.” When asked why delegation, the advocates of transparent Ivan Popescu rules in politics are not equally (photo), “the proactive, the employee com- report is a ments: “Democrats, just like au- subjective tocrats, are interested in con- document that reflects tinuing to hold office. Their con- the author’s stituencies don’t give them “a stance”, while it plus” for their work at the Coun- is the resolution cil of Europe. Activity in Stras- that carries bourg does not mean reelection actual legal in their constituency.” weight 18|the ukrainian week|№ 13 (55) July 2013 PACE|neighbours struggle against the abuse of of- Meanwhile, Omtzigt stresses government changes, there can- fice, to change this legislation. that “If the report’s recommen- not be politically motivated per- Another achievement, in my dations are not taken into ac- secution against opponents. opinion, is that the report was count, the case could end up un- There must be political responsi- approved without amendments. der the consideration of the bility for political decisions. We It contains a very harsh criticism Council of Europe’s Committee have elections and impeachment of the Ukrainian judiciary. Since of Ministers, which will imple- for this. Anything else is an at- representatives of the ruling ment a monitoring procedure. party in Ukraine voted for it, I This will mean that the country conclude that my criticism is is not complying with the com- OIL MONEY, THE COWARDICE OF considered justified. The report mitments undertaken when it THE WESTERN POLITICAL CLASS also determines Mrs. Tymosh- joined the Council of Europe, enko as a political prisoner un- and that its political practices do AND THE AMBITIONS OF der the norm approved by PACE not meet European standards. POWER-HUNGRY LEADERS in October last year. This mo- My powers as a rapporteur are in ment is very important for effect for a year after the report FROM THE EAST STAND IN THE Ukraine, which hopes to sign the is approved. I will watch the situ- WAY OF EUROPEAN SOLIDARY Association Agreement with the ation in Ukraine very closely all EU soon. According to the Co- this time to see if the legislation penhagen Accord, countries in is amended.” tempt to take revenge. It’s a good close partnership with the EU Ukrainian opposition mem- thing that the resolution was ad- and hoping to become candi- bers vary in their opinions on the opted as a normative document. dates in the future cannot have Strasbourg voting. “I’m some- Every week there are new reports political prisoners. The resolu- what disappointed by the fact about political persecution – in tion contains legal mechanisms that Omtzigt did not fight for the Ukraine, Russia and Georgia. To- that may help solve the problem initial version of the resolution day, opposition politicians from of both Tymoshenko, and Lut- that mentioned Ukraine,” all countries can use the resolu- senko. The pardon for ex-Inte- UDAR’s MP Iryna Herashchenko tion to exert pressure on their rior Minister does not stand for commented for The Ukrainian governments and force them to the complete reinstatement of Week. “In the current situation, abide by the law.” his rights as a citizen. He was not this is the best possible result,” Omtzigt’s concerns are con- deemed to be not guilty.” said Batkivshchyna’s Serhiy So- firmed by the election of the new In fact, the Party of Regions bolev, Deputy Head of the Ukrai- head of the EPP faction in PACE MPs who unanimously sup- nian delegation. that saw pressure from the so- ported Pieter Omtzigt’s report “Thank God they approved it, called “oil group”, i.e. Russian, that classifies Tymoshenko as a we feared the worse,” said Bat- Azerbaijani, Turkish and other political prisoner, left for Kyiv kivshchyna’s Lesia Orobets. politicians who are concerned with a sense of happy victory. “There are forces in the Assem- Dutch MEP with their own interests in power According to the Head of the bly that are able to collect votes, Pieter Omtzigt rather than human rights. Ukrainian delegation, Ivan one way or another, to reject the feels that that Baku representatives actively Popescu, “the report is a subjec- resolution and send the report his report On promoted the new head, Spanish for revision. But there was no keeping politi- MEP Pedro Agramunt. He is the tive document that reflects the cal and criminal author’s stance”, while it is the one in the room who would rise responsibility CoE’s rapporteur on Azerbaijan. resolution that carries actual le- and say that he/she supports separate with His strange friendship with the gal weight. Popescu doesn’t men- medieval tools of revenge against harsh criticism country, where the opposition tion its demand to amend the political opponents. The resolu- of Ukrainian ju- has become history, appears “abuse of office” part of the legis- tion is a normative document diciary was ad- more than controversial. The lation. Why upset himself? that states clearly: every time the opted without EPP had long been the CoE’s lo- amendments is comotive of sorts in the struggle a great accom- with authoritarian regimes. The plishment: “The new head of the faction is likely most important to make this task more challeng- thing, in my opinion, is that ing. the resolution “Many Western politicians retains the have values for domestic use, but demand for lack the conviction to protect de- the countries, clared principles outside their whose legisla- country,” notes the CoE appara- tion allows tus employee, who has worked the practice of there for almost 20 years. Euro- the abuse of pean solidarity is still more of a imprisonment disguised as a dream than a reality. Big oil struggle against money, the cowardice of the the abuse of of- Western political class and the fice, to change unrestrained ambition of power- this legisla- hungry leaders from the East tion.” stand in its way. № 13 (55) July 2013|the ukrainian week|19 economics|public finance crisis WHERE’S THE MONEY? The plight of local communities whose funding has been blocked by the State Treasury reveals a dire public finance crisis that shows no sign of improving

arlier, regional communities any funding blockages have oc- the shrinking economy are creating often complained of a lack of curred. In response, several re- more risks for ordinary people. funding provided by the gions launched campaigns dis- Hospitals, schools and roads that Ecentral government for the playing billboards that say “Trea- need fixing are already underfi- functions delegated to them. To- sury, give our money back”. nanced. In September and Octo- day, these communities appear to In fact, though, the Treasury is ber, we may see massive payment have no funding at all. Local gov- not the main troublemaker; it is delays or barter payments reminis- ernments in Western Ukraine – merely a central executive body cent of the 1990s. There is virtually many in opposition to the govern- whose work is supervised by the no other way for enterprises to pay ment – were the first to publicly Family’s Finance Minister Yuriy their employees’ salaries if they re- report that the State Treasury had Kolobov. The problem of blocked ceive their VAT refunds from the blocked allocations for them, local government accounts actually state in treasury notes rather than while other cities and towns kept stems from a Budget Law passed cash. quiet and waited patiently. How- hastily and without due discussion The government has main- ever, The Ukrainian Week’s by the previous parliament on its tained a consistent course to this sources claim that the practice of final day. In addition to being present situation ever since Yanu- patching holes in the central bud- passed via a violation of parliamen- get at the expense of local needs tary procedure, the law also carries While Kyiv’s top officials has been in place for some time a number of important amend- under Yanukovych’s presidency, ments that only a well-trained pup- under the right and escalated after the Family’s pet legislature would support. The protectorate feed on the Serhiy Arbuzov and Yuriy Kolo- Budget Law entailed growth of bov took over the finance and 3.4% of GDP in 2013 despite cir- budget, and schemes to economy ministries. cumstances that clearly indicated pump money out swell in Recently, though, even the an inevitable decline in GDP – the Party of Regions’ “core” south- question was how low it would scale and impudence, eastern regional communities plunge. As a result, the consoli- budget troubles are likely have broken their silence about dated budget deficit over the first the milking of local budgets by four months of 2013 hit UAH to exacerbate the Azarov-Arbuzov Cabinet that 18.9bn or three times that period in has mounted to an unprece- 2012. According to the latest data, kovych came to power. It was his dented scale as the regime has budget revenues in June 2013 were government that submitted an un- failed to push through laws to 7.5% below the June 2012 revenues realistic draft budget last year which band-aid the budget (see while the Budget Law entailed an the pro-presidential parliamentary Patchwork Solution). Opposi- increase of those. majority passed without due discus- tion MPs claim that 70% of city Local governments’ public pro- sion under pressure from the Presi- and town mayors reported con- tests against being milked by the dential Administration. stant delays in allocations from central government are simply a Meanwhile, as towns report the State Treasury, while 60% symptom of an increasingly devas- the blocking of tens of millions al- said that this was a systemic tating cash deficiency. Indeed, it Consolidated budget located to them, the Family’s deficit hit UAH practice and delays of up to 30 seems that the legislature pushed Prosecutor General has recently days have been a norm. through the Law on Treasury Notes 18.9bn been allocated UAH 113.9mn for over January-April Instead of trying to remedy the to cover up this disastrous deficit. 2013, growing luxurious renovations of its office situation or explain what is going Meanwhile, the looming underper- threefold compared at Moskovska Str. in Kyiv – an on, the Treasury has denied that formance of the 2013 budget and to Jan-Apr 2012 outrageous amount to fix a public 20|the ukrainian week|№ 13 (55) July 2013 public finance crisis|economics building that may signal corrup- most public procurements secret. budget deficit issue. None of these tion with future subcontractors. According to Nashi Hroshi (Our measures can fully offset the dam- Regular renovations of the Prose- Money), a website investigating age already done by the govern- cutor General’s other offices in fraud in public procurements, the ment through its leeching of local Kyiv will cost the taxpayers an- law helped the government hide other UAH 10mn. The Family-su- over UAH 175mn from public pervised National Bank of Ukraine oversight in the first six months of The looming (NBU) will reconstruct its office in 2013 alone. underperformance of Chernivtsi Oblast for UAH 32mn. While Kyiv’s top officials un- It has also concluded a contract to der the right protectorate feed on the 2013 budget and the buy goods (at overblown prices) the budget, and schemes to pump shrinking economy are worth UAH 10.69mn, including money out of the state swell in computer mice worth UAH 400 scale and impudence, budget trou- creating more risks for (USD 50) each, headphones worth bles are likely to exacerbate. The ordinary people UAH 480 (USD 60) per set, and government may try to solve these more. This list may grow longer problems at the expense of local budgets and embezzlement and even though the pro-presidential authorities, businesses that are abuse of revenues. Nor will they majority pushed through amend- not linked to the regime and pub- help to stimulate the country’s ments to tender laws – again in lic sector employees. However, business activity, which has been violation of procedure – that made this will obviously not solve the shrinking since August 2012.

The Red Card % of respondents for Corruption 88% 84% 83% 80% 43% 4% According to the late Global Corruption say that corruption believe that the government believe that it’s believe that believe that say the government’s Barometer by Transparency International and is a serious problem is run by a few big entities important the government’s corruption anti-corruption or a problem in a ing in their to have personal anti-corruption has increased a lot a ions are effe ive Gallup International Association, every third the public own be interes entirely conta s to solve issues a ions are ineffe ive Ukrainian is ready to take it to the reet to se or of Ukraine or to a large extent in the public se or or very ineffe ive fight bribery.

Every fourth citizen in 107 countries is involved Bribery rates in bribery. Meanwhile, nine out of ten people on the planet are willing to take a ion to around the eliminate it. Ukrainians are among those who world believe the lea that they can eliminate (the survey covers bribery: only 29% of them believe that 36% 30% 19% 14% 107 countries) ordinary people can make a diﬀerence in the 54% will join will spread will join will pay more % of respondents 100% ﬁght again corruption. will sign a petition a peaceful the word about an organization to buy from who reported to the government anti-corruption corruption through a corruption-free is high having paid of Ukraine prote social media company corruption a bribe The mo corrupt in itutions in Ukraine Respondents who paid bribes

Judiciary 66% 49% Police Liberia 75 Police 64% 41% Medical and Mozambique 62 health services Libya 62 Zimbabwe 62 Civil servants 56% 33% Education Mongolia 45 The mo popular Medical and Land services Algeria 41 health services 54% cause of a bribe 25% Regi ration Ukraine 37 Parliament 53% 22% and permit Egypt 36 services Kazakh an 34 Political parties 45% 21% Courts To get a service Finland 1 A ge ure of gratitude Education 43% cheaper 18% Tax revenue Denmark 1 6% 33% Au ralia 1 0% is low Business 28% Japan 1 36% 33% 6% Utilities corruption

Military 28% Impossible to get the To speed up the process service otherwise % of respondents Media 22% do not report Religious bodies corruption 21% 35% 53% 74% are afraid of consequences 24% of respondents admitted refused NGOs 20% to having been demanded a bribe to give one believe that this will not change anything 63%

№ 13 (55) July 2013|the ukrainian week|21 economics|Public finance crisis Patchwork Solution Cash needed to avert Ukraine’s public finance disaster will be pumped out of non-oligarch businesses

Author: n July 4, the Verkhovna Zhanna Rada adopted a number of Bezpiatchuk laws that, when enacted, Owill have a huge impact on businesses that are not controlled by the Family or its close circle of oligarchs. The legislature has introduced treasury notes to cover the government’s debt on VAT repayable to entrepreneurs as well as on other public spending. Control over transfer pricing will now allow fiscal services to reveal transactions where products are “sold” to associated companies at below-market mine budget articles where debts principal amount of the notes to prices in order to minimize taxes. will be repaid with this quasi- these banks. Experts project that Apart from that, the Rada ratified a money. The government thus ex- “pocket banks” or banks and com- Ukraine-Cyprus government con- pects to cover VAT repayable to en- panies close to the government will vention to prevent double taxation terprises with the newly introduced repurchase the notes with huge dis- and income tax evasion. This step treasury notes. The vague law only counts ranging from 30% to 50%. reveals the instruments with which specifies that the notes have a 5% This scheme essentially legalizes the government will avert a poten- yield and five-year maturity, with massive kickbacks from VAT reim- tial budget disaster prior to the 2015 January 1, 2013 as the date from bursements to entrepreneurs, al- presidential election and temporar- which debt is repayable with them. lowing the government to use entre- ily save the economy with zero This gives the government almost preneurs to cover its debts indi- growth rates (see Where’s the unlimited power to decide which rectly. Experts suggest that initial Money and The Red Card for payables, when and to whom will be discounts on VAT-reimbursement Corruption). settled. Manual issuance of treasury notes may exceed 50%. Given the The newly introduced treasury notes runs counter to the Constitu- current system, this “business” is notes, control over transfer pricing, tion: Art. 92.2.1 requires that the hardly surprising. and the government convention procedure for the issuance and cir- Meanwhile, the government in- with Cyprus are perfectly reason- culation of securities shall be estab- sists that the scheme will bring liable instruments that have been lished by Ukrainian law, not by First quidity into the economy. In prac- used effectively in developed econo- Vice Premier Serhiy Arbuzov or tice, however, things may turn out mies. However, to understand how other ministers. quite the opposite if the worst-case these instruments will function in a However, faced with the pros- scenario unfolds. If entrepreneurs Ukrainian context, it is important to pects of either receiving nothing at accept treasury notes instead of take into account the proposed pro- all or receiving treasury notes that cash as reimbursement from the cedure for their application and the can hypothetically be converted into government, they are likely to end extent to which the country’s econ- cash at a discount through an inter- up with too little cash available to omy is controlled by oligarchs mediary, entrepreneurs are likely to pay their suppliers and service pro- whose nepotism automatically dis- choose the second option. Previous viders. This will cause a liquidity torts any good intentions. experience suggests that they will be crunch in some supply-chain opera- “advised” on which banks they tions and even whole sectors of MURKY TREASURY NOTES should use to convert their notes economy. Thus, Ukraine will tum- The Cabinet of Ministers will deter- into cash. The owners of these ble back into the 1990s with the re- mine the procedure for the issu- banks may turn out to be close to vival of barter schemes, cross-can- ance, circulation and redemption of the ruling party, which guarantees cellation of debts, payment of sala- treasury notes. It will also deter- the government’s redemption of the ries with the employer’s products 22|the ukrainian week|№ 13 (55) July 2013 Public finance crisis|economics can only have maximum benefit when applied transparently and equally to all enterprises and sectors of economy. But the current government cannot and will not ensure this. A TRANSFER HOLIDAY FOR OLIGARCHS The law on transfer pricing that, coupled with treasury notes, is supposed to rescue the budget from a collapse has two curious aspects. First, it entails tax control over pricing in export-oriented transactions and in the companies’ internal transactions. Tax authorities are granted vast powers in setting the value-linked (adequate) prices that should comply with market prices. Second, the law will not fully apply to agricultural, coal, oil, gas, chemical and steel enterprises – the core of oligarch business in Ukraine - until January 1, 2018. They will enjoy 5% variations on standard market prices. Meanwhile, the law will fully apply to all transactions by other large companies with associated residents, i.e. legally and commer- tch by Ihor L u k ian ch en ko by S k e tch cially “friendly” counterparties lo- rather than money, and a massive tural changes. “Budget policy, espe- cated in territories and states where default crisis. This almost drove cially public spending, should be re- the corporate tax rate is at least 5% Ukraine’s electricity supply sector to vised,” says Ihor Burakovskyi. “Fi- below that of Ukraine. With the collapse in 1999, then escalated into nally, sequestration should be abovementioned a debt crisis when Ukraine failed to considered. It’s unpopular but there “exceptions to the rules”, the tax service its external debt and its is no other way with a cash-starved authorities are likely to focus on business climate and competitive- budget. Funds from international companies producing more techno- ness ratings plummeted. borrowers, including the IMF, are logical and innovative products The only way to avoid all this is now critical for Ukraine.” first, despite the fact that technol- for the government to redeem trea- The instruments offered by ogy and innovation rather than coal sury notes diligently and transpar- Azarov’s Cabinet (treasury notes and minerals are major (if not the ently. “The question is the scale at and control over transfer pricing) only) drivers of long-term economic which the notes will be used,” com- The Cyprus saga growth. Given the current global ments Ihor Burakovskyi, Chairman The saviours of public finance came up with a third seg- crisis, it is important to struggle for of the Institute for Economic Re- ment of their multi-part solution: a government Conven- economic growth worth one tenth search and Policy Consulting. “If tion with Cyprus to prevent double taxation and income of the current GDP because this will they replace cash, it will deplete in tax evasion through Cypriot companies. The Convention transform into 0.5-1% of GDP the economy at some point, and the will replace a 1982 agreement between Cyprus and the within ten years. Otherwise, economy can’t operate without former USSR that prevents double taxation and entails a Ukraine could be thrown into pov- 0% tax rate for any income earned on the territory of ei- cash. Massive circulation of trea- ther country and transferred from one country to an- erty for decades to come. sury notes will signal troubles in other. Under the new convention, dividends will be sub- Today, resources that should be Ukraine’s financial system.” ject to a 5-15% tax. The 0% rate will be replaced by a channelled to support companies The budget deficit in January- 10% or 5% royalty tax and a 2% tax on debt income. In- engaged in technological innovation April 2013 grew 3.6 times compared come from real estate disposal may be taxed in compli- are being gobbled up by companies to the same period in 2012. Reve- ance with the jurisdiction of a party to the deal. How- producing raw materials and semi- nues increased by 2.4% compared ever, this Cyprus saga lasted so long that everyone, es- finished goods, thanks in part to to the planned 9.2%. Meanwhile, pecially Ukraine’s oligarchs, had plenty of time to government favouritism. government debt servicing planned withdraw their tax-sensitive assets from Cyprus, which The combination of vulnerable for 2013 is 18% higher than that of was gradually losing its tax-free charm. Today, Cyprus is public finance, growing tax pressure no longer the offshore haven that it was in 2003. Since 2012. This means that the govern- the country joined the EU, requirements for transaction on non-oligarch businesses and the ment’s debt liabilities are growing transparency have grown tougher while its fiscal system potential for a liquidity crunch if faster than its revenues. has become less convenient for entrepreneurs. In 2013, treasury notes are used non-trans- European recipes for long-term Cyprus introduced a tax on bank deposits. Meanwhile, parently on a massive scale may and systemic solutions entail public businesses still have a wide choice of alternative tax ha- well return Ukraine’s economy to a spending cuts and parallel struc- vens beyond Cyprus. state reminiscent of the 1990s. № 13 (55) July 2013|the ukrainian week|23 economics|Opinion Cure for Poverty Polish reformer Leszek Balcerowicz on how Ukraine can embark on market reforms eszek Balcerowicz is well- Interviewer: Ukraine’s energy dependence on not helping them. If you look at known among professional Lyubomyr fuels imported from Russia. This the statistics, you will see a huge economists and beyond that Shavalyuk is a bad economic policy by itself current account deficit. It is clear Lcircle. As Poland’s Vice further aggravated by the politi- that this policy is not sustainable Prime Minister and Finance Min- cians’ attempts to get conces- or consistent. On the one hand, ister in 1989-1991, he imple- sions from Russia. the stable exchange rate of hryv- mented a programme of eco- These subsidies make no eco- nia to US dollar is very popular nomic reforms, so-called shock nomic or political sense. A better as far as I understand. But you therapy, within a short stretch of option is to launch innovations can’t have this policy if you want time that transformed the coun- when they help you save some- to maintain the stable exchange try’s comand economy into the thing even if you pay more for rate. Sooner or later, it will lead market economy and set up solid gas. Apart from subsidies, private to negative consequences. foundation for growth for many business environment is heavily years to come. In 2001-2007, affected by corruption. With UW: How damaging are the Balcerowicz chaired Poland’s Na- massive, uneven and unpredict- instruments used to support tional Bank and, again, con- able corruption, you can’t expect fixed exchange rate? firmed his reputation of a bril- much honest investment. And I want to say that I do not liant economist as the National without investment, the economy recommend it for Ukraine. I Bank’s monetary policy kept the will not grow fast. But corrup- agree with the IMF that a transi- country from the downfall of the tion can shrink when the sources tion to the floating exchange rate 2008-2009 crisis. Given the lack of it are removed. One source is and inflation targeting like we of positive changes and economic did in Poland in 2000 would be growth in Ukraine, The Ukrai- A million private better and safer for Ukraine. This nian Week asks Prof. Balcerow- means that the NBU has to prom- icz for his advice on reform. businessmen with strong ise to keep inflation at, say, 2-3% incentives will invent much and try to keep it that way. But, if UW: What keeps Ukraine from the fixed rate is popular for some realizing its economic potential more than a hundred reason and the government un- and spurring GDP growth? people at the top. This is the dertakes to maintain it, the cur- Bad private investment and rent fiscal policy is undermining business environment. If a coun- essence of free economy to this. Its negative effect is only try’s population is as educated as a matter of time. Ukraine’s yet its economy does excessive regulation which harms not grow consistently, bad envi- the business. So, massive deregu- UW: The great weight of the ronment for economic activity is lation and a switch to new regu- foreign sector, i.e. exports and always the main reason. lations are needed. imports, in Ukraine’s economy Ukraine’s problem despite its is one of the arguments in considerable progress has been UW: The advocates of favour of the fixed exchange its expansionary fiscal policy with unchanging gas prices and rate. Some worry that floating excessive spending and huge sub- transfers for individual exchange rate will result in sidies which leads to high taxes, consumers claim that a higher strong exchange rate shadow economy and budget def- gas price will drive the icit. From time to time, it leads to population into poverty. This crises. can lead to a social collapse. This should be removed. In How would you comment on what way? That’s not philosophy. this? If spending is as high as it is in The same was said in Poland, Ukraine, it should be reduced. Czech Republic, Hungary, Latvia Ukraine spends a huge amount of and Estonia twenty years ago, money to subsidize gas, heat and but we still did it and are now do- the like. This should have been ing better than Ukraine. The ad- stopped twenty years ago, like in vocates of fixed gas prices are Poland. Subsidies for cheap gas rather afraid and pretending to lead to two kinds of damages. care about the population. How- One is fiscal pressure on the bud- ever, by preserving the situation get. The other is preserving as it is they are harming people, 24|the ukrainian week|№ 13 (55) July 2013 Opinion|economics fluctuations and all the sector. When you destroy the pri- weakened and this helped sup- negative consequences of this. vate sector by crushing profits, port our exports. In Poland, exports are diver- you block the development of the sified more, and it has floating middle class. The middle class UW: Until 2008, metallurgy was exchange rate. There are finan- are not people who are officials. the driver of economic growth in cial instruments that help you They do not depend on the gov- Ukraine. After the crisis, many cope with these fluctuations. ernment and work in private or- efforts are directed towards the What I’m saying is that fixed ex- ganizations. And private organi- development of agriculture. Is change rate is not really bad. A zations grow when there is pri- this good policy or is it better to country may have it but it has to vate investment. diversify sources of economic meet certain conditions to pre- growth? serve it, and these are not met in UW: Ukrainian economy has not This is not normal. It was the Ukraine. Bulgaria, for instance, yet recovered from the 2008- practice of command economy has a stronger peg to the euro su- 2009 crisis downfall. Poland, on with the centre giving instruc- pervised by the Currency Board. the contrary, had slower GDP tions on which sectors should be But when it faced the downfall af- growth but no recession. How developed as a priority. It’s differ- ter the lending boom, they cut did you manage to avoid one? ent in Poland. We made a free government spending signifi- Indeed, Ukraine had the sec- economy where there are people cantly to preserve stability, and ond deepest GDP decline in with different ideas. As a result, they did. So, fixed exchange rate 2009, following Latvia. This was the sectors develop that the cen- takes more fiscal discipline than largely caused by the previous tre would never think of develop- the floating one, while Ukraine credit and fiscal boom. When ing. A million private busi- has weaker fiscal discipline. This you spend too much, a nessmen with strong in- is the problem. collapse follows. centives will invent First of all, Ukraine has huge That’s why I’m as- much more than a government spending: it has one tonished when I hundred people of the highest government spend- look at figures at the top. This ing to GDP ratios in Europe, the here. We did not is the essence of second highest after Belarus. It is have the boom in free economy. prematurely high because Poland. I was the Create a better Ukraine still has low per capita governor of the e n v i r o n m e n t income. A country that is still central bank at for private poor but has high government that point and we businessmen, spending cannot grow fast. With kept fairly high better incen- the policy Ukraine currently has, interest rates, so tives for activ- it risks facing regular crises and lending did not ity – free and slow growth. grow too fast there. fair competition I was surprised to see that That was the first in the first place real wages grew 15% over the reason. The second – and you will get past year in the statistics on reason was that we a surprising result, Ukraine. It was unbelievable! If have floating ex- not only in metal- you ask anybody, how to ruin change rate. This lurgy or agriculture. economic growth, you will hear means that zloty just that - increasing government spending and real wages, while A n dr i y Lom a k in Photo: destroying profits and undermining stability. UW: There is a concept in Ukraine that economic development requires a strong middle class. Is it really necessary? What is Poland’s experience in establishing one? The middle class is a result of the growing private

№ 13 (55) July 2013|the ukrainian week|25 History|Memory Politics You Have the Right to Know Bulgaria recently published a list of former KGB agents in the country and reveals the hidden impact of its totalitarian past on the nation’s current life Author: ccording to the law that Bolshevik and the first leader of Court. The old-new Bulgarian Vitaliy qualifies the communist re- communist Bulgaria. This took elites watched closely to prevent Ohiyenko gime in Bulgaria as crimi- longer – and gained more publicity anything that could fuel doubts as Anal and is one of the found- – than they expected though, be- to their power. ing acts of the new state, “the cause the marble construction NGOs and investigative jour- Communist Party is responsible turned out to be too solid. Other nalists fueled interest in the atti- for the governance of the country initiatives included the celebration tude towards the totalitarian past from September 9, 1944, through of liberation from the Ottoman from time to time, mostly focusing November 10, 1989, which led to a yoke, which replaced the Day of on archives and the disclosure of national catastrophe.” Art. 2 adds Liberation of Bulgaria from the Na- the secret files of the DS, the state that it “completely destroyed the zis by the Soviet Army on March 3; security service – the Bulgarian traditional values of European civ- and laws on the amnesty and reha- KGB. Historic confrontation thus ilization” as well as nine more bilitation of people imprisoned un- gradually shifted to the issue of ar- Nearly similar sins. der the communist regime, al- chives and transformed into frag- 45% However, such documents ad- though this was more of a ritual. mented and sporadic discoveries of of 462 former and current opted in the euphoria of velvet rev- The Bulgarian government did cooperation with the DS in the bi- Bulgarian diplomats olutions subsequently remained not commit to reevaluation of its to- ographies of different people. were communist empty and declarative. Bulgarians talitarian past while trying to dis- special service agents realized this, and the 2004 parlia- tance itself from the process. In The archive revolution mentary declaration on the 60th part, this stems from the strong po- Until recently, Bulgaria had sev- anniversary of the establishment of sition of Communism’s successor, eral keepers of secret service the communist regime in Bulgaria the Socialist Party, in Bulgarian pol- funds. These included the Interior noted that the search for those itics. It has always had its own fac- Ministry, Justice Ministry and the guilty of illegal violence in the post- tion in parliament and its members Central State Archive. Some of the war period was of a moral rather headed the government twice, in documents, 144,255 personal files, than a legal nature. 1995-1997 and 2005-2009.The were destroyed in 1990 on the or- party leader, Georgi Parvanov – or der of the then Interior Minister Superficial Gotse as the communist special ser- Semerdzhiyev. In 2002, he was de-communization vices agent – was Bulgaria’s presi- sentenced to four and a half years For a long time, Bulgaria had no dent for two terms in 2002-2012. in prison for this, although the memorial institution, examining Apparently, Bulgaria never saw case was sent for further investi- its relations with the past. The en- overcoming its past as a matter of gation in 2003. tire burden of de-communization principle. The issue of lustration Over the 1990s, a series of laws was undertaken by NGOs. And the was hardly ever raised. In fact, Bul- was adopted that simplified access Virtually one in ten old-new elites did not waste the garia had long been the only Cen- to communist security service ar- Bulgarian citizens was involved in chance to rid themselves of com- tral European state that did not chives. Potentially, they opened the cooperation with munist symbols that were inconve- have lustration mechanisms, un- way to even persecute former spe- communist special nient reminders for them. They less dismissals in law enforcement cial service employees but all this services to some extent. The were always ready to support su- authorities in the early 1990s qual- stayed on paper, as there were no proportion is similar perficial changes, such as the ini- ify as such. Other attempts to initi- specific mechanisms to enact the among top officials and company tiative to dismantle the mausoleum ate lustration were blocked by par- laws. An important 1997 law en- executives of Georgi Dimitrov, a well-known liament or the Constitutional tailed the transfer of all security 26|the ukrainian week|№ 13 (55) July 2013 Memory Politics|History to demand the exposure of the truth about DS agents and their ac- tivities. Journalist investigations began to surface, exposing the mass involvement of Bulgarians in secret security operations and the positions these people hold in modern-day Bulgaria. 2006 was the turning point in the process: the legislature adopted the Law on the Disclosure of Docu- ments and Exposure of the Involve- ment of Bulgarian Citizens in the Investigative Agencies of the State Security Service and Bulgarian Peo- ple’s Army. Surprisingly, it was supported by most votes of the ruling coalition that included the Socialist Party, and the then opposition, comprised of centrist and right- wing parties. However, it was more a result of EU pressure rather than an internal compromise between

hoto: r eu t e rs p hoto: the country’s political forces, al- HAND IN HAND though pro-government socialists service archives to the Central WITH TIME: Still, the law made it possible to ex- opposed it. State Archive but this was not done In June 2011, pose nearly 150 communist special Under the new law, all secret either. Currently, the archive only the statues of service agents, including 14 who service files were supposed to be contains the papers of the Commu- Soviet soldiers were members of parliament at transferred to a commission with nist Party Central Committee and were painted that time. the same name as the law, while re- as figures searchers and the public got free part of the cases of those impris- from American Just as in other FSU countries, oned by it. The only thing allowed, comics – the disclosure of information about access to them. Under the new law, was for victims of repressions to Superman, the the secret collaborators of the com- top politicians and officials, includ- view their cases on the premises of Joker and Santa munist regime sparked huge inter- ing the president, prime-minister, the Interior Ministry’s archive. Clause est in society. Public opinion began ministers and their deputies, most History|Memory Politics employees of the justice system, including judges of all special higher institutions, heads of central and local governments, mass media executives, top officials of the Bulgar- ian Academy of Sciences and more, were subject to the DS cooperation check. Over the next 18 months, the government succeeded in blocking the work of the commission: it could not find any premises for all the archive materials. Thus, these former archives remained where they were – at the Interior Minis- try, special services and Justice Ministry. These problems were later solved – the resounding victory of democratic forces over the socialists in the 2009 parliamentary election that gave them 117 seats out of 250 facilitated this. The commission has been operating for six years now. Its official website posts declassified documents and details of people whose cooperation with the DS was ex- OOPS! It Romania. In practice, however, the emerged president, prime-ministers, leaders posed. Organizations and institu- that Georgi of parliamentary parties, a state ra- exposure is sometimes sufficient tions are usually subject to exami- Parvanov, dio executive, a former chief editor grounds for voluntary resignation nation. By mid-June, the website president in of Playboy and the entire board of or dismissal, following European offered details about UniCredit 2002-2012, UniCredit’s Bulgarian subsidiary. bureaucratic standards. And of board members and top managers, was a secret Then more interesting details: 11 of course, the person’s reputation is as well as the officials of the Veliko agent for the 15 metropolitans of the Bulgarian tarnished. Metropolitan Nicholas of Tarnovo city council and munici- communist Orthodox Church, two of the na- Plovdiv, one of the few top hierarchs pality, who used to work for the special services, tion’s chief muftis and a respected of the Bulgarian Orthodox Church communist special service. It also as exposed figure of the Catholic Church also who was not nailed in cooperation in recently has the archive of the commission’s declassified secretly cooperated with the DS, as with the DS, even said that he re- decisions and a search by name, documents. He did 45 current ambassadors and fused to attend assemblies of the birthplace and institution where denies this counsels. Education had the most Holy Synod but later changed his the former DS employee or agent former communist agents. The mind. works. The information is dis- check revealed that 40 of the 400 Clearly, the names listed so far closed under a unified system that people in senior positions at the are not exhaustive but the overall includes 1) details on the name, top three universities had once picture is pretty clear. Over the date and place of the person’s worked for the DS. All parliamen- past five years, the commission has birth; 2) name of the agent who re- tary candidates underwent the examined the files of 113,000 peo- cruited the person and the place of check, too. It turned out that the ple and found that 6,377 were recruitment; 3) the name of the linked to the DS. person’s supervisor within the spe- THE BULGARIAN GOVERNMENT It has emerged that even 25 cial service hierarchy; 4) position years after the collapse of the com- and status of the person in the se- DID NOT COMMIT TO THE munist system, dependence on the cret service, for instance, agent or REEVALUATION OF THE totalitarian past continues to be secret employee; 5) references to very significant. It’s not only in archive documents; 6) date when COMMUNIST PAST. INSTEAD, people’s minds but in more trivial the person was removed from the IT TRIED TO DISTANCE ITSELF things, such as in the fact that peo- register; and 7) his or her current ple who had once been the founda- position. FROM THE PROCESS tion of the communist regime now control the most important top po- What was discovered? party of Bulgarian Turks had the sitions, business assets and spheres The recently published results of Over the past five most former agents, followed by of life in modern Bulgaria. several years of investigations even years, the the Socialist Party, centrist and The motto of the commission commission in shocked the apathetic Bulgarian Bulgaria has even radical right-wing parties. exposing files and the involvement society. It emerged that DS agents investigated the files The commission’s operation of Bulgarian citizens in investiga- included some of Bulgaria’s top of can hardly be called lustration be- tion services and the Bulgarian people – businessmen, bankers, 113,000 cause it does not entail any penal- People’s Army is that “you have the media moguls, civil servants, MPs, people and found ties for cooperation with the DS, right to know, and we provide you that 6,377 were publishers, writers and so on. The linked to communist other than moral judgment, unlike with maximum information. It’s up disclosed list included a former special services similar bodies in, say, Hungary or to you to draw conclusions.” 28|the ukrainian week|№ 13 (55) July 2013 Opinion|History The Other Side of History

he 70th anniversary of the Volyn tragedy was They never mention the proactive colonization marked by the historically one-sided resolu- policy of Rzeczpospolita in Western Ukraine and tions of the Polish Senate and Sejm; the re- Western Belarus; the attempts of the Polish Tquest of Group of 148 that scorns anything government in exile to hold on to the territo- Ukrainian (148 MPs from the Party of Regions and ries where ethnic Ukrainians made up 70- the Communist Party wrote an official letter to the 95% of the population during WWII, or the Polish Sejm, the lower house of the Polish Parlia- acts of Armia Krajowa and other military ment, requesting it to recognize the Volyn tragedy organizations of this government – under as a genocide of the Polish people – Ed.); and a Nazi occupation! – to implement Poland’s surprising symbiosis of the Communist Party, ag- colonial policy. Few recall that according to gressive advocates of the Russian World in Ukraine different estimates, Armia Krajowa units and radical right-wing forces in Poland on the one killed hundreds – or even thousands of Ukrai- hand, and the feeble stance of most of the Ukrai- nians in 1942 while fulfilling their commanders’ Аuthor: nian intelligentsia regarding this issue on the other. orders and “instilling order” in the Chełm and Serhiy The question is not whether the latter should con- Berestia provinces adjacent to Volyn. This is over- Hrabovskiy demn the crimes committed by Ukrainians in Volyn looked when, according to the official Polish ver- in 1943 or not – they are undeniable and absolutely sion, July 11, 1943 is taken as the starting point of deserve condemnation, while attempts to justify the conflict. Similarly, the USSR overlooked the them in one way or an- Molotov-Ribbentrop other would be amoral. Today, repentance should Pact of August 23, 1939, The question is why be honest and mutual: when it talked of June many Ukrainian intel- 22, 1941 as the begin- lectuals readily accept Poland’s for ning of WWII. the dominating Polish the long-lasting violent Indeed, for the most paradigm of the Volyn part, Polish colonialism massacre. colonization and Ukraine’s was much softer than It is based on a few pil- for bloody anti-colonial the Russo-Soviet one, lars. One is the singling but it was colonialism out of crimes of the sum- actions nevertheless. This On July 12, members mer of 1943 in Volyn as ended with the Volyn of the Polish Sejm a stand-alone phenomenon overlooking other massacre because colonial and anti-colonial adopted a resolution qualifying the Polish- episodes of Ukrainian-Polish relations in that wars go beyond limits – always and every- Ukrainian conflict of time and place. The other is that the strategic where. Wouldn’t Poland benefit from an objec- the 1940s as “ethnic cleansing with intentions of General Sikorski’s government in ex- tive evaluation of it as well? elements of ile were overlooked. Finally, the dates and number None of the above justifies the culprits of the Volyn genocide” and the of victims and killers listed in official Polish docu- tragedy, however it explains the genesis and scale Organization of Ukrainian ments and studies by leading historians are viewed of it. Moreover, overlooking the mass of Ukrainian Nationalists, OUN, as the ultimate truth. As a result, Ukrainian nation- victims of that bloody confrontation, not to men- and Ukrainian Insurgent Army, UPA, alists are blamed for an unprovoked mass attack on tion those that went before and after, is a betrayal as the perpetrators Polish villages and the mass killing of civilians. of their memory. of this massacre. Well-known Ukrainian publications echo this as Ten years ago, I signed the letter of Ukrainian intel- Poland’s Senate passed the relevant they write about “simultaneous attack on 100 Pol- lectuals regarding the Volyn tragedy that was based resolution ish villages in July 1943” and “the deaths of tens of on the “we forgive and we ask for forgiveness” for- on June 20 thousands of Poles on the night of July 11-12”. mula. Back then, the impression was that this However, it is not necessary to have a college de- bloody page of history was turned and that we had gree in history to realize that a massacre of that duly learned our lesson. Now, we see that the domi- scale requires at least ten thousand well-trained nating part of the Polish elite has revived old grand 1Settlers or soldiers and the support of many villagers with state insecurities, rolled up in a “humanistic” wrap- colonists in Polish, axes to encircle villages, towns and colonies of per. So once more, we will have to talk about events osadniky were osadniky1, neutralize their armed defenders and that are painful for both nations, and once more veterans of the Polish Army that carry out such destruction. Surely the opposite dot the i’s. Today, repentance should be honest and received land in the party and the German occupation authorities would mutual: Poland’s for the long-lasting violent colo- Kresy, currently have found out about the campaign several days in nization and Ukraine’s for bloody anti-colonial ac- parts of Western advance if tens of thousands of armed people were tions. But how is this possible with the pro-Russian Belarus and Ukraine, ceded to preparing for it? and communist Group of 148 and the barren – or Poland under the Meanwhile, Ukrainian intellectuals revert to polit- capitulating – stance of part of the Ukrainian intel- 1921 Polish-Soviet ical correctness and avoid calling a spade a spade. ligentsia? Riga Peace Treaty № 13 (55) July 2013|the ukrainian week|29

Culture & Arts|Films

10 feature films here and coming soon

Gamer Directed by Oleh Sentsov Released two years ago, this film has only just now been officially completed. As it often the case with Hollywood movies, Gamer came out in 2011 slightly unfin- ished. Now, the movie about cy- ber sport and a gamer boy has completed soundtracks, is dubbed in Ukrainian and all The Shadows of Unforgotten Ancestors (Tini nezabutykh rights are settled with the copyright owners. This is definitely an extra bonus for predkiv) the movie that already enjoyed a warm welcome from audiences at festivals. Directed by Liubomyr Levytskyi Oleh Sentsov is a former businessman, a fan of video games, and an amateur This is one of the few independent film projects in Ukraine -to director with no professional education in cinematography. day. Its director is known for Shtolnia (Tunnel), his debut and Date of release: unknown the first Ukrainian thriller — but one that did not claim much success — attracted private investment for his second film- af ter previous attempts to get state funding for his first movie. A Strong Ivan (Ivan Syla) promoter of popular cinematography, Liubomyr wanted to Directed by Viktor Andriy- work in the most popular genres – youth thriller and mystic enko film – focusing on Hollywood product and style. So he invited a This film about Ukrainian Hollywood cinematographer Mark Eberle to work on his Shad- strongman Ivan Syla – Strong ows, and involved mystery, beautiful girls and suspense. The Ivan – is for children. A cast cast involves young unknown actors from all over Ukraine. The of brilliant Ukrainian actors main actor, however, is Carpathian mysteries. including Oleh Primohenov, Release on September 19 Borys Barskyi, Olha Sumska, Bohdan Beniuk and Les Zad- niprovskyi was joined by The Guide (Povodyr) Vasyl Virastiuk and Dmytro Khaladzhi, two Ukrainian stars of power lifting. Directed by OlesS anin The production involved a complete digital storyboard. The budget was only Started back in the 2000s, this project involved a script rewrit- UAH 15.5 million, so the 20th century film was created mostly digitally. ten over and over again, new actors, an unplanned budget in- Date of release: unknown crease and chal- lenging shooting, but the result was Paradzhanov worth it. The trailer Directed byS erge Avedikian and Olena Fetisova recently posted on- This ambitious co-production went through fire and water before it collected the line reveals brilliant funding from Ukrainian, French and Ar- camerawork by menian investors. Now, it is seeking Serhiy Mykhalchuk, promotion in the West. One of its pri- while colour correc- orities is to get Ukraine noticed: first, tion and sound per- Paradzhanov is a well-known Ukrainian fectly backed by the in the West. Second, director and actor 100%-right choice Serge Avedikian is a French citizen and of Jamala’s voice the winner of the Cannes Festival prize and personality un- in 2010. He knew Serhiy Paradzhanov expectedly put the film about yet another dreadful page in personally, so he portrays the re- Ukraine’s history — the extermination of kobzars in 1943 — nowned director on the screen from on the list of potential blockbusters. first-hand experience. Released in spring 2014 Released on October 3

30|the ukrainian week|№ 13 (55) July 2013 Films|Culture & Arts

A Cursed City (Prokliate misto) Directed by Vitaliy Potrukh The story of three people played by Serhiy Romaniuk, Iryna Novak and Andriy Dzhedzhula is a psychological drama with elements of fantasy. The dramatic component bares relations while fantasy shows a non-existing city which looks painfully familiar though. It is Prypiat, now better known as Chornobyl. The trio of the characters – the nuclear plant director, a woman who lost her family in the foreclosed area, and an adventure seeker – reminds one of Tarkovsky’s Stalker. But that’s the only thing the two films have in common. The script by Marko Hres is about coinci- dences, encounters and incidents that are not incidental. A Cursed City with a budget of UAH 6 million is Potrukh’s debut in feature films. Date of release: unknown

Lombard (Pawn Shop) Directed by Liubomyr Levytskyi Another film by Levytskyi and his most difficult child: he started the shooting in the late 2000s, funding his work with his own money. When he ran out of cash, the project was frozen and only resumed after the state stepped in with aid. Lombard is a thriller about a rob- bery. A fair amount of slang in the script makes it a re- flection of the modern-day young semi-criminal environment – a know-how in Ukrainian cinematography. The film is a direct analogy to Guy Richie’s films with cash, big wins and smoking guns. Lehka mov piryinka (Light as a Feather) Date of release: unknown Directed by Andriy Rozhen The film was shot in 2011 for the Ukrainian and African markets, especially Nigeria which is the second biggest film producer in the world. The cast in- Kredens (Cupboard) cludes Nigerian actors – Omoni Oboli and Ostin Eboka – and Andriy Rozhen Directed by Valentyn Vasianovych from Ukraine. Light as a Feather was the only Ukrainian film presented in full After Vasianovych’s first film Zvychaina sprava (Ordi- in this year’s Cannes Festival. It’s a music melodrama based on a universal nary Business) which was a flop, Kredens somehow storyline with the relationship of a Nigerian woman and a Ukrainian man as managed to get 50% of its funding from the state. The the central dramatic component. script’s benefit was its focus on the prose of life. Being Released in fall 2013 very close to reality, the film conveys an obvious social

Liuby mene (Love Me) Directed by Maryna Horbach A Ukrainian-Turkish co-production, the film was one of the first state-funded projects started in 2011 and funded by the Turkish Culture Ministry earlier. The shooting kicked off in winter 2012 with the date of release planned for June-July 2013. The film is about an affair between a Ukrainian woman and a Turk- ish man, about two people “lost in translation” and national and ethnic discrepancies. The film may well be based on the director’s personal experience: she studied in Kyiv, then message without being too complicated to understand. moved to Istanbul where her It tells the story of a Lviv-based cellist struggling with Turkish husband lived — problems at work and at home. The director saw it as a Mehmet Bahadir Er, who wrote combination of static scenes with dynamic episodes the script for the film. The two shot with a hand camera. The shooting is already com- have already shot a feature film pleted and the production is scheduled to end in Sep- called Black Dogs Barking. tember. Date of release: unknown Date of release: unknown

№ 13 (55) July 2013|the ukrainian week|31 Culture & Arts|visual arts Racing With Time

he National Art Museum has welcomed vented them from following the guest contemporary art projects on many process in the West. Still, some Toccasions. This time, it is hosting Racing managed to catch glimpses of West- With Time (Perehony z chasom): contempo- ern art. Karlo Zvirynskyi somehow rary artists will now be displayed here on a learned about Jackson Pollock and permanent basis. The art of the 20th century took an interest in non-art materi- takes up the entire first floor. Its three galler- als: his artwork is now exhibited at ies display Ukrainian paintings from the 1960- the museum. Pre-perestroika art 2000s that were previously kept in storage. used shape and traditions to con- All the paintings in this collection are owned front the system.T he gallery for this by the museum, reflecting its unique vision of epoch in Ukrainian art displays contemporary art. “Nobody has seen this side some of the top artists. Ivan of the 20th century in our museum before,” Marchuk’s portrait of Bohdan says Maryna Skyrda, Deputy Director General Stupka is considered to be the best of the museum. piece of the collection. The first “new” gallery presents dissident Previously, the exhibition underground artists who have never been ex- stopped at the most interesting hibited before. Soviet art was occupied by so- point – the early 1980s. It was af- cial realism for almost half a century but the ter this that Ukraine saw an actual urge to be modern overrode it during the artistic explosion. The second gal- thaw. It was then that interest in 1920s avant- lery – the postmodernism territory garde art was revived, resulting in the odd – puts the spotlight on the art of a spark of experimentation among the preva- group referred to as Art Reserve lent amateur grayness. They were more like which first became known in the 1990s. Ti- riot to the surface. In this gallery, an ironic an experimental laboratory because the gen- beriy Silvashi, Anatoliy Kryvolap, Mykola look at totalitarianism from the Kharkiv- eration of artists who created avant-garde art Kryvenko, the Zhyvotkov brothers and based conceptual artist Vahrich Bakhcha- had been wiped out, and the iron curtain pre- Marko Heiko brought their underground nian is displayed alongside the neo-baroque

Events 17-26 July, 12p.m. 12 - 28 July, 10 a.m. – 7 p.m. 18 July – 1 September Life in Movement Lavish Home LvivKlezFest Ukrainian Culture and Art Art Vertep art centre Lviv Philharmonic, PICASSO Centre (11, vul. Chervona, night club and other locations (19v, vul. Khoryva, Kyiv) Dnipropetrovsk) (7, vul. Tchaikovskoho; 88, vul. Zelena, Lviv) A series of photographs taken at Ihor Bezhko, a Dnipropetrovsk-based different times and places pictures collector, has carefully searched The aim of the fifth international movement as the symbol and and restored antique rural interior festival of Jewish music is not only the flow of life. The photographs elements from the early 20th to revive the lost music culture, but have no titles or descriptions. century. The collection on display is to bring back an integral part of Lviv Photographer Oleksiy Plysko wants mostly comprised of rural household life – the history of the Jewish quarter. the viewers to contemplate on elements from the 1920s and 1930s Klezmer players from all over the what they think is happening on the found in Zakarpattia and Hutsul world, including Poland, Germany, picture, imagine a story behind it, villages. Visitors can buy the items Israel, Russia, Ukraine and the USA, and give their own name to what they like the most. This could be will perform on the festival stage. they see. Oleksiy began his career anything, from a multicolour vine Gastronomes will have the opportunity as a photographer spontaneously jar of the Rzeczpospolita epoch, a to taste the best of the Jewish cuisine, after many years in business special honey jar from the Austro- while tourists will see how much fun administration. Hungarian Empire, was to be had at true Now, he is capturing or a hundred-year Jewish weddings the spontaneity old wheel, yokes in Halychyna. of a running girl, and Hutsul horse Staroyevreyska – the laughing newly-weds bells which will add Old Jewish Street – and curious toddlers a sense of legend to will once again be on film, putting any home interior. filled with inspiring together the puzzle masterpieces from pieces of everyday craftsmen and the life around us into a joyful laughter of the complete picture. guests.

32|the ukrainian week|№ 13 (55) July 2013 Films|Culture & Arts sen Savadov and Andriy Sahaida- kivskyi develop the themes of memory, identity, social and cul- tural responsibility. In addition to paintings and photography, the gallery features the media art projects recently displayed at the museum itself: a video recording of Sleeping Beauty, a perfor- mance by Taras Polataiko that the museum hosted last year; and a special art project by Ivan Svitlychnyi that shows visitors the life of the museum from outside in real time. Oksana Barshynova, the exhibition curator and head of the 20th Century Art Department, de- scribes Racing With Time as a project of generational significance. The basic concept behind the entire exhibition is the display of how complementary the rational and irrational are – how the search for absolute harmony inter- twines with unbounded energy and spontaneity in Ukrainians. Ukrainian art has always balanced meditation of Pavlo Makov and modernistic The third gallery displays the latest art between these poles, and contemporary art- plastics from OleksandrS ukholit. All this art- that the museum has only recently started to work continues this tradition. This is how cura- work expresses the desire of Ukrainians to collect. Oleksandr Hnylytskyi, Oleh Holosiy, tors emphsise that the museum collection is a join the global art context. Viktor Marushchenko, Oleksandr Roitburd, Ar- classic one, which is constantly updated.

18 July – 1 September 19 – 21 July 23 – 28 July From 25 July Pidkamin Wiz-Art 2013 FUTURE SHORTS: Pidkamin village Lviv Philharmonic, Communa SUMMER 2013 (Brody Region, Lviv Oblast) anti-café, Palace of Arts and Kyiv movie theatre other locations (19, vul. Velyka Vasylkivska, The seventh annual festival, just (7, vul. Tchaikovskoho; 32, vul. Kyiv) like all the previous ones, focuses Murovana; 1, vul. Halytska, public attention on architectural Lviv) FUTURE SHORTS is a summer sites and promoting Ukrainian folk collection of the best short films music, dance, clothes and more. The motto of this year’s short film from all over the world. This year’s This year’s programme features festival speaks for itself: The Universe programme features 6 films with some of the top Ukrainian bands, is not made of atoms; it’s made of different genres and storylines. including Tartak, Komu Vnyz, OtVinta, short stories. Overall, the audience 38-39°C is the graduation film of KoraLLit, LosColorados and many will watch 110 films from 39 countries a South Korean animator. A fusion more. SvjataVatra will come all the during the festival. The programme of of puppets, cardboard walls and way from Estonia to present their screenings that do not take part in the watercolours, the animation reveals traditional music. In addition to competition called Goodbye to Vinyl the depth of relations between three days of gigs, the festival offers is a pleasant surprise. It will present father and son. American film workshops, art events and sports nostalgic films by young Ukrainian Chair is a mysterious and murky competitions. directors. Another story about an Afterwards, equally interesting explosion, a boy guests can take programme will and a chair. And a trip around present Ukrainian the wonderful the oblast to see cinematography. life story of a more neglected Special guests this 100-year old yet charming year include film woman in the architectural artists from the documentary masterpieces. UK, Switzerland, entitled Germany, Lithuania Mickybader. and Austria.

№ 13 (55) July 2013|the ukrainian week|33 Navigator|Odesa

CROWNING THE OPERA HOUSE is the sculpture over the main entrance

BETWEEN HEAVEN AND EARTH

The chtonic world: Tunnels and pipes in underground Odesa

34|the ukrainian week|№ 13 (55) July 2013 Odesa|Navigator Author: Vladyslav Vozniuk

stereotypic set of Odesa’s tourist attractions that includes sun, sea, beach, A beer and jokes is small enough to fit into the tiniest lug- gage of memories of any traveler. In addition to this, the port city has a different side that few locals, let alone tourists, know about. Underneath Odesa, there is a, for the most part, manmade labyrinth – the biggest in the world, twisted, confusing, and absolutely chaotic. Underground corridors extend for an unthink- able 3,000km. Abandoned lime- BROKEN BARRELS stone mines alternate with for- in the abandoned cellars of a ruined mer bomb shelters, vast under- cognac factory ground rooms, drainage galleries and natural caves that are millions of years old. Rumour has it NO CLAUSTROPHOBIA: that these served as shelters for th An underground urban smugglers in the early 20 cen- explorers’ camp tury and guerillas during World War II. Odesa’s diverse underground world seems like another city. But be careful: a walk through the labyrinths without an experienced guide could be fatal, because there is no uniform system of tunnels. Getting a bird’s- eye view of Odesa is quite a chal- lenge as well, but urban explorers don’t mind: they often travel here to crawl along the underground tunnels or roofs and take pictures. This opens the popular holiday destination from a totally new and different perspective.

A MASSIVE OBSTACLE: ANGELS ABOVE THE CITY: A broken mine cart in the Odesa from the roof of the drainage system near the Opera House Langeron beach

№ 13 (55) July 2013|the ukrainian week|35 B OOKST ORES KYIV 3, vul. Lysenka tel: (044) 235-88-54; 5,vul. Spaska tel: (044) 351-13-38, 33/2, Povitroflotskiy Prospekt tel: (044) 275-67-42 LVIV 7, Prospekt Svobody tel: (032) 235-73-68 VINNYTSIA 89, Soborna tel: (0432) 52-9341 TERNOPIL 7-9, vul. Valova tel: (0352) 25-4459 KHARKIV 3, vul. Sumska tel: (057) 731-5949 IVANO-FRANKIVSK 31, vul. Nezalezhnosti tel: (0342) 72-2502 VOLODYMYR-VOLYNSKIY 6, vul. Kovelska tel: (03342) 2-1957 www.book-ye.com.ua

ONLINE BOOKSHOP WWW.BOOK-YE.COM.UA/SHOP