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Tuesday, January 31, 2006

Trade War or Is There More?

A justified move by Russia to shield its market against doubtful quality imports from Ukraine, as it might have appeared initially, may escalate into a trade war between the two countries. Kyiv asserts it has done its homework, having acted rapidly to right the wrongs cited by Moscow. Yet appeals to lift the ban have had limited success. So far, sea food remains the only item Moscow has agreed to pardon. Despite claims by Moscow that officials responsible for the negotiations are out on business trips or sick leaves, a team of Ukrainian negotiators has left for that city.

With the Russian market sealed, Ukrainian farmers are losing millions of dollars on a daily basis, analysts believe. Agriculture Minister Baranivsky made it clear that Kyiv may retaliate if Moscow keeps the ban. Trade wars can hardly be won. They leave deep scars on both sides. It makes little sense to assume that the lesson of the Great Depression eludes Kremlin economists. This leads some analysts to believe that the Kremlin is up to something more than a trade war.

Caper after caper, gremlins from the Kremlin have been exploring Ukraine's political playground quite enthusiastically. Playing with gas is one. Fooling the farmers may be another one. What needs to be done? Shut them off and frame the orange administration for it. Call it "failure to keep friendly ties with 'beloved neighbor' Russia." Alas, a few extra farmer votes are yours for the taking. Siphon them to a tried and trusted candidate who will pay you off handsomely. Unless the Kremlin changes its behavioral patterns, this interpretation will not go away.

Saturday, January 28, 2006

Russia Bans Ukrainian Meat and Diary Imports: What’s the Beef?

Russia’s ban on meat and diary imports from Ukraine has experts split over motives. Some argue Ukraine has itself to blame. Ukrainian authorities have already admitted to a series of missteps, such as allowing passage of Indian-made meat to Russia while marked as Ukrainian-made. In today’s epidemic-infested world, as countries struggle to protect themselves from false identity food products, it appears that Russia did what it had to do. Ukraine should behave, or face the consequences.

However, others argue that Russia overreacted, with the punishment blown out of proportion to the crime. Acting on an isolated incident, Russia did what it wanted to do, they say. Now that the recent gas and beacon episodes have contributed to the Kremlin’s trigger happy condition, it has jumped at the opportunity to pull the trigger.

Anyway, Ukraine has pledged to correct the situation and put an end to the practice of reexporting third country meat products. Ukraine should follow through immediately: The beef-for-beacon row could cost an estimated $30-50 m in lost earnings for the industry. It takes two to trade. May neither one break the golden rule.

Sunday, January 22, 2006

Road Rage: President Plans Plebiscite, Tymo Explores Ufology, Yanuk Hires GOP Talent
Parliamentary Race Keeps Busy As Contenders Step on Gas and Forge Ahead

Following the controversial vote by the anti-orange majority in the Verkhovna Rada to fire the Cabinet, ostensibly for entering into a bad bargain with Russia, President Yushchenko has outlined his coping strategy. He has repeatedly declared the vote unconstitutional and thus non-binding. Legal experts point out that the vote contravenes the established parliamentary procedure. They also believe that, according to the newly-amended Constitution, the existing Cabinet stays in office until the parliamentary election.

Secure in this knowledge, President Yushchenko has called on the Rada to revoke its decision, or face possible disbandment. He has also withdrawn from the reconciliation pact signed with Yanukovych last year, known as the memorandum. By voting yes, the President said, Yanukovych breached the agreement in a way that destabilized the country. Harshly criticized, from day one, by Yushchenko supporters as an act of appeasement, the memorandum’s demise has produced no signs of mourning in Yanukovych. Performing a verbal autopsy, the leader of the Regions Party said that the deal’s useful life had long expired, due to, what he called, failure to abide by the terms on the part of the President.

To discuss the current state of affairs, President Yushchenko convened a national security council meeting. Meanwhile, in a bid to project the image of responsibility, the anti-orange majority abandoned its all-out ambition in favor of surgical strikes. The highlanders of the legislative branch trimmed their hit list down to several figures, on a floating basis: Naftogaz CEO Ivchenko, Energy Minister Plachkov, and Justice Minister Holovaty. They also resorted to stonewalling the appointment of Constitutional Court Justices needed to fill the vacant benches. President Yushchenko intends to seek the Court’s opinion on the vote.

The communists had their share of roof raising in the Rada: When in the Rada, do as the Russians do. Staying true to their tacit tradition, the communists had lashed out at Foreign Minister Tarasiuk and Defense Minister Hrytsenko, calling their conduct detrimental to relations with Russia and vehemently demanding their resignation. A major stress episode overwhelmed Lenin’s disciples when the recent “Battle of the Beacon” between Ukraine and Russia broke out. Ukraine has been trying to regain a set of coastline navigation facilities currently occupied by the Russian Black Sea Fleet, headquartered in Sevastopol under a leasing agreement. According to Ukraine’s Foreign Ministry, the leasing agreement signed in 1997 does not include the beacons. Russia’s Foreign Ministry and the spokesman for the Russian Fleet argue quite the opposite. Unwilling to sit idly by, until Kyiv and Moscow finally come to terms, Ukrainian youth activists have long assumed a role in the effort, staging pickets and attempting entry. In the recent “Battle of the Beacon,” which kicked up a storm of publicity, the Russian marines reinforced the facility with an armored personnel carrier, but later withdrew it. Ministers Tarasiuk and Hrytsenko, who came under attack afterwards, have been openly pro-NATO, a four-letter word in the communists’ vocabulary. They even went as far as to advocate the notion of reciprocity in relations between Ukraine and Russia: Should market forces prevail, an increase in gas prices should be matched with a corresponding increase in rent paid by Russia for using the Crimea naval base. They have asserted that any troop movements by the Russian forces outside the military base must be discussed in advance with Ukrainian authorities. Traumatized by Ukraine’s patriotic policy, the Communists decried what must have looked to them like a stream “diplomatic atrocities” committed by these Ministers. Moscow’s best friends have been paying lip service to Ukraine, the country in whose parliament they hold seats, while serving Russia, the country whose parliament, in 1993, resolved that the Crimea is part of its territory. If Russia nuked Ukraine, the comrades would probably fire Foreign Minister for appealing to the UN Security Council and Defense Minister for passing out hazmat suits in the Rada. As long as Moscow remains the patron, Ukraine’s brand of communism will blend Marxism-Leninism with masochism, to suit Moscow’s taste.
It's a small world: In fact, Leopold von Sacher Masoch was Marx' contemporary. Born in Lemberg, Austria-Hungary (now Lviv, Ukraine), Masoch would owe a certain amount of his material to the melancholic theme in Ukrainian folklore that he had steeped himself in as a child. The Ukrainian communists would leave Masoch's gender masterpieces far behind in their genocidal acts, as Stalin's marionettes.

Despite the Rada’s rampage, the Cabinet continues working as normal. After an extra week in session to bring the pressure to bear on the President, the Rada went on recess this Friday. On Vodokhreshcha, Jan. 19, (Epiphany Day), the President and his entourage went ice cold swimming, an old-time ritual commemorating the baptism of Christ in the Jordan River. May the President recharge his batteries for the tough times ahead.

In an effort to defuse speculations of her anti-orange orientation following what many perceived as a telltale vote, Yuliya Tymoshenko employed humor. “Our merger with the Regions Party will only be possible if aliens take me onboard the flying saucer and perform illegal tests on me, depriving me of my memory and mental faculties. Short of this, no conditions for such a merger exist,” she quipped. Hilarious! Of course, her supporters would hate to believe such a thing could ever happen. But if Fox Mulder still “wants to believe,” he probably should consider an assignment to Ukraine. His “UFO skills” may prove indispensable in putting the Orange Revolution back together. Background: In December 2004, The X-Files star David Duchovny, along with Jack Palance, Robert Wise — a total of 130 Hollywood talent — had signed a petition in support of the Orange Revolution.

Far from toning down her criticism of the gas deal, Yuliya has been on the lookout for opportunities to burnish her orange record. An occasion presented itself on Den Sobornosti, Jan. 22, (Unification Day), a patriotic holiday celebrated in honor of the 1919 reunion between Ukrainian sister states — the Western Ukrainian National Republic, with the capital in Ivano Frankivsk, and the Ukrainian National Republic, with the capital in Kyiv. Known by their Ukrainian acronyms as ZUNR and UNR these states were soon overtaken by Poland and Soviet Russia, respectively. Now hear this! In the spirit of the holiday, Yuliya’s Party issued a statement urging the Regions Party to remove its leader, Yanukovych, and a number of top running mates from the ticket for organizing a breakaway witchfest in Sivero Donetsk. The statement obviously referred to the November 2004 “emergency” convention, where pro-Yanukovych extremists had championed the idea of an autonomous republic to be created in southeastern Ukraine. This ill-fated publicity stunt aimed at putting the brakes on Maidan had violated Ukraine’s Constitution and, following Yushchenko’s inauguration, had became the subject of an inquiry by the Prosecutor General, but had led to no indictments, so far.

Unbelievable. Never in their wildest dreams would Yanukovych supporters imagine their idol shopping for American talent. But that’s what “hired guns” are for: You pay, they play. In fact, Yanukovych strategists have increasingly drawn on the immortal Clintonesque theme “It’s the economy, stupid.” coined by Clinton strategist James Carville. Moreover, according to The Wall Street Journal, Paul Manafort — the man who helped conservative Bob Dole run for president in 1996, and worked for a score of African regimes — is bringing his bag of tricks to Ukraine. Paul, sorry for not wishing you good luck.

Addressing the nation on Jan. 23, a day that marked the first anniversary of his inauguration, President Yushchenko said he did accept the politreforma, the new constitutional amendment transferring core authority functions to the Parliament. Still, the President voiced concerns about the manner in which the politreforma had been passed, adding that “society should have a say.”

Saturday, January 14, 2006

Great Actress Gone Bad: “Erin Brockovich” on the Wrong Side of the Vote
All Is Fai®lure in Love, War, and Elections

Last Tuesday, many observers believe, ought to be a date which will live in infamy for Ukraine's most famous woman. Yuliya Tymoshenko joined forces with the enemies of the Orange Revolution on a vote to sack the Yekhanurov government, linking the decision to the government's failure to resolve the gas dispute in Ukraine's best interests. Mrs. Tymoshenko, who argued her case with the passion of Erin Brokovich, the Oscar-winning movie character played by Julia Roberts, may now have to wear an egg-proof vest, should her campaign tour include western Ukraine. Many Ukrainians still recall presidential candidate Victor Yanukovych, who became the victim of an egg attack masterminded by a freshman college student in the western Ukrainian city of Ivano Frankivsk, a region known for its strong patriotic sentiment.

In stark comparison to the fall 2004 campaign, when they had stood on different sides of the barricade, this year parties led by Yanukovych and Tymoshenko formed the backbone of the anti-orange alliance in the Ukrainian parliament. In fact, the stakes are just as high in the upcoming parliamentary election as they were in fall 2004. The so-called politychna reforma (political reform) effective Jan. 1, 2006, shifts power from the president to the prime minister, whose cabinet will be formed based on the results of the March 2006 parliamentary election. The almighty Russian lobby, which at the onset of the crisis held that Russia had a right to demand a higher price for gas, was uniform claiming that the newly negotiated price would be the kiss of death to Ukraine's industry. Their solution: Chum up with the Kremlin, earn a price cut. And no NATO, please. In other words, the best preventive for Russia's gasmanship is Ukraine's full and unconditional yesmanship.

Such chameleon behavior injects a masquerade dimension into the election, as parties scramble to position themselves in sexy political lingerie to attract voters with unmet erotic needs. Now that the orange guys have “screwed up” Ukraine so bad it has a sluggish economy, Russia tops the exhibitionist charts.

In this noisy publicity jungle — with mating season in full progress, presenting spectacular scenes — the 'helicopter mom” of Ukraine's democracy veered off course and made a crash landing. Her political compass betrayed her, and she now has to cope with the surrounding fauna and flora. She hit the danger zone, and it's unclear whether her PR consultants' "search-and-rescue” teams will reach her before her rating gets cannibalized any more than it already has.

What happened? To add insight to injury, excellence took a back seat to ego. By letting her steam off on a vote of no consequence, she marginalized herself in her electoral base. Most legal experts believe that the Yekhanurov government will be here to stay until the election. It means that Tymo has gained little from her demarche, but lost a lot.

At Maidan's first anniversary celebration, many, if not most, folks chanted her name, embracing the “orange queen” as the bolder alternative to Yushchenko, who had floundered in a series of cronyism scandals. Some of those folks may now have second thoughts about her. She lost her colors at a time when Yushchenko has made a good faith effort to contain Moscow’s gasmanship. Forums that once praised Yuliya as a talented troubleshooter now lambaste her as a treacherous troublemaker — a prodigal sister with her own agenda, who consorted with the local bad boys and subscribed to Putin's “pipe dream.” Themed “hall of shame” posters have already decorated the streets.

To fare well in this election, Yuliya needs to repent and reposition. She needs to restore her unique selling proposition — and she better start right away.

Thursday, January 12, 2006

'Cause This Is Thriller: “GI Julia” Persona Grata on Channel 5
Makeup Gasfest Dispels Fears of Big Brother

A specter is haunting Channel 5 — the specter of censorship. Or is it? On balance, it’s now more likely that fans of Yuliya Tymoshenko and media activists may heave a sigh of relief. The sort of terror with which they digested Ukraine’s No 1 open-minded news channel last Sunday may safely be shelved.

The bitter “flashback” pill presented itself last Sunday night when Yuliya Tymoshenko didn’t make it to the Chas Pik (Rush Hour) talk show on Channel 5 as announced. Regardless of the incident’s root cause, among many viewers it did evoke not-too-distant memories of a sheepish media community in the heyday of the Kuchma regime, when the notorious temnyku ruled supreme. On a night which concluded a week of holidays in Ukraine, Tymoshenko’s appearance promised to gather a wide audience: Few would want to miss the Lady of Maidan in a rhetorically rich ritual of torching Naftogaz for the deal it has signed with Gazprom to end the pricing dispute. Expecting to gain a few extra rating points, the channel had hyped the show all through the day, running alerts in its text line. But when, as the superhit of the 80s has it, “Darkness falls across the land, the midnight hour is close at hand,” something else actually happens. Tymo shows up at the door only to be told that the show is off the air. “‘Cause this is thriller, thriller night,” Jacko would sing.

Following the incident, Yuliya Tymoshenko issued a statement describing it as an act of censorship. She also expressed empathy for the talent, who, she noted, had no say in the decision. Channel 5, the glorious icebreaker of the Orange Revolution — in what had been a North Pole’s worth of Big Brother-style propaganda — responded with a press release of its own. Clinging to its Kanal Chesnykh Novyn (News You Can Trust) brand, Channel 5 took pains to redeem its image and discount Yuliya’s side of the story. The statement cited “matchmaking” failure as the cause. According to Channel 5, within minutes of the show’s airing, no counterpart could be found for Yuliya to comply with the show’s one host/two guests format. Not the strongest of arguments, if you apply a healthy degree of skepticism to it. Aren’t they supposed to have a backup counterpart should any such contingency arise? In fact, they had one at the ready: Naftogaz CEO Ivchenko, who had represented Ukraine in the negotiations. But the problem was, he could only be reached by phone, which would have created an unfair publicity advantage for Tymoshenko had the program been aired, the press release warns This would have put Channel 5 out of tune with its policy and in conflict with a recent piece of election legislation. Nevertheless, struggling to build goodwill, Channel 5 reissued its invitation to Yuliya Tymoshenko, welcoming her as early as Monday. That says it all. Or does it?

Just a few more thought-provoking facts, figures, and speculations. Few observers believe that no link exists between Channel 5 and Petro Poroshenko. (He has repeatedly denied ownership.) Poro and Tymo, then-NSC chief and then-PM, respectively, clashed in breathtaking turf battles, multiplying the cabinet's economic policy flaws. Ultimately, a toplevel whistleblowing act set off in the “orange big bang,” — when Yu the umpire exercised the “all out” option, firing the cabinet last September. Poro’s status as a key figure in Yushchenko’s inner circle and a major campaign contributor made cronyism the talk of the town, costing the Yushchenko administration dearly in terms of approval ratings. (The court has found no evidence of corruption.) However, at the Nasha Ukraina (NU) convention last November, a group of party members acutely aware of his political karma made an attempt to purge him, without gaining enough support, though. Poroshenko entered an emotional “not guilty” plea with the convention and vigorously set out to reinvent his image. With no love lost between former allies and a perilous parliamentary campaign approaching, Yuliya Tymoshenko's archrival called for reunion. Perhaps a mixture of regret and common sense, he launched a series of serenades but failed to captivate the audience. By and large, the electoral benefits of reunion were lost on both sides of the “orange curtain,” for the road from family to factionalism was paved with unbridled ego. The unshed blood of Maidan turned out no thicker than the upcoming vote, and the heroes went their separate ways.

Meanwhile, the enemies of Maidan have been getting together, inspired by the refreshening swing of Ukraine's pendulum of public opinion. Santa (Moscow, Russia) smiled on the bad boys, “You guys did a fantastic job writing letters. I'm cutting off those gas supplies now. So when your chimneys freeze over, it means I'm coming to your town. Ho-ho-ho!”

The gas impasse and its resolution presented a publicity windfall for all interest groups out there who had been scanning the political horizon for campaign fodder. Once the details of the deal surfaced, Yuliya Tymoshenko mounted a vicious attack on Naftogaz. “GI Julia” — as she may be called based on GI Jane, a blockbuster starring Demi Moore — fired sound bites round after round, blasting the deal as “betrayal of Ukraine's interests” made evident by its grossly unfair terms: (1) failure to secure a decent long-term price, while locking into a long-term transit fee; (2) lack of transparency in RosUkrEnergo’s credentials, and (3) the agreement's monopoly effect. Her retrospective solution: Stand tall, sue the bastards. Given Yuliya's “energy empress” background and her “intra-orange opposition” experience, Channel 5 — whose freedom-of-speech record is unmatched by any other media outlet — could hardly resist her charms and brilliance. Her watchdog agenda has magnetized Maidaners who became alienated and disenchanted by a firestorm of scandals engulfing Yushchenko’s inner circle. Building on this “orange blues” movement, she has blossomed into a force to be reckoned with and a barometer to be looked at. Having her weigh in on the issue in a live broadcast would score a hit. That said, her grasp of energy issues, amplified by the artistic and militant quality of her discourse, posed quite a bit of challenge to a man’s world, threatening to unleash an Armageddon on Naftogaz CEO Ivchenko, who trumpeted the deal as a coup.

Beauty is in the eye of the beholder. In Ukraine, beauty is also a well-recognized acronym that aptly mimics the word beauty — Blok Yuliyi Tymoshenko. In the eyes of discerning viewers, Yuliya’s “armed and dangerous” persona carried the risk of a credibility blow to the Nasha Ukraina campaign. Therefore, the Sunday incident may have raised suspicions of an attempt by Channel 5 management to blacklist her. A case for a conflict of interest between her newsworthiness and “welcomeness” on Channel 5 could be made, should the party affiliation of the presumptive owner be taken into account.
Anyway, the cold breeze of Big Brother's reincarnation on Channel 5 has now subsided. With a makeup “gasfest” show aired on Monday night, the whole thing turned out to be a false alarm, or, at worst, a calculated misstep with a 24-hour expiration period.

As expected, the show pitted the “unemployed” PM, live in the studio, against Naftogaz “loyalist” CEO Ivchenko, speaking on the phone, in a heated debate on how the Yushchenko administration had handled the gas dispute.

The show kicks off with a surprise: NU Member of Parliament Kseniya Lyapina, who heads the Cabinet Council on Entrepreneurship, joins the show in videoconference mode. And here comes the funny part: Actually, Kseniya hails from an adjacent studio! Roman Skrypin, the cool, calm, and collected host of the show, explained that she had been scheduled to appear on Monday and Channel 5 simply kept the promise. However, he did not hesitate to mention that it was an aide toYuliya's who had stated that she would only share the studio with the highest ranking official in the gas talks. (One queen, one castle.)

For a moment, the smell of disaster filled the air. Just a little trick by the host, and there she was: in a nasty ego trap, getting herself painted as a narcissistic prima donna. Yuliya made a faint attempt to regain her composure, saying that she valued Kseniya's contribution to small business development in Ukraine, but in order to have a real discussion of the gas issue she would prefer key figures involved. Anyway, “GI Julia” swallowed the bullet, and it showed.

But it didn't take long for her to recover. Being a skilled and seasoned fighter, she dusted herself off and staged a counteroffensive. She scalped the agreement's Byzantine wording and tackled the crux of the matter. Paraphrased, her arsenal of arguments appeared as follows:

1. The deal stipulates that the $95/230 per 1000 cubic meters rate paid by Ukraine can only be changed subject to mutual agreement. However, it also makes clear that the $95/230 rate holds for a mere 6 months in the year 2006, set to fluctuate later on based on market conditions. This caveat translates into a time bomb of sorts. Should gas prices rise in summer, Russia has the full right to drag Ukraine back to the negotiation table. (What a hot July!) At the same time, Ukraine has kindly agreed that the transit fee will be $1.6 per 100 km, effective until 2011. No caveats here.
Bottom line: Rip-off. Russia has upward potential, Ukraine doesn’t.

2. Domiciled in Switzerland, RosUkrEnergo, the intermediary company responsible for producing the “cocktail” rate, fuels transparency concerns. Observers have long referred to it as a secret old boys’ club, in which the Kremlin and members of Ukraine’s former administration have a stake. Some even trace it to Semion Mogilevich, a mystery of a man wanted by the FBI for racketeering, securities fraud, and money laundering. Legend has it he made his fortune as a Soviet mafia boss of global scope. After the Orange Revolution, the Ukrainian intelligence service thoroughly probed RosUkrEnergo. Then-SBU Director Oleksander Turchynov, a Tymoshenko confidant, briefed the President on the probe, but the President chose no specific course of action. Back in the late 90s, Bill Gates proclaimed, “If you’re not on the Internet, you don’t exist.” As of today, Google yields no immediate web site results for RosUkrEnergo. (Welcome to a billion-dollar company that doesn’t have a corporate web site.)
Bottom line: Rejoice! If you're not on the Internet, you still can make a few bucks and get away with it.

3. According to the deal, Russia effectively absorbs Ukraine’s contract with Turkmenistan as well as would-be contracts with Uzbekistan and Kazakhstan, establishing itself as a monopoly in the Ukrainian market. In what looks like a déjà vu of the roaring 90s, the feeding tube of Ukraine’s economy is left at Russia’s mercy. The matrix reloads.
Bottom line: Way too heavy a price to pay for compromise.

Among viewers who have been following Yuliya chapter and verse, these gloomy conclusions clearly earned Naftogaz a black eye. Circling around the RosUkrEnergo issue, she emphasized that energy contractors should be selected in open tender bids, not backstage arrangements.

In his retaliatory remarks, Naftogaz CEO Ivchenko emphasized the “mutual agreement” clause, saying it was the best deal Ukraine could get. He then proceeded to rain on Yuliya’s parade, accusing her of lobbyism for Itera, the energy intermediary Ukraine had worked with a few years ago. Displaying signs of unease, Yuliya chose not comment on the double standard charge. (Interestingly enough, Itera’s web site does exist on the Internet.) Instead, she reiterated that as Prime Minister she had been committed to the open tender principle in awarding energy contracts. Following her cabinet’s dismissal, she has publicly agonized over a presidential directive that, as she said, tied her hands with regard to the energy sector.

Somewhere in that nuclear duel, Roman, the agent provocateur host of the show, took Yuliya on by asking her upfront whether she had a political axe to grind in the gas dispute. That question obviously caught her off guard. The shock and awe that crossed Yuliya’s face for a split second indicated that Roman hit the right chord.

Yuliya switched gears and made Stockholm her destination. She maintained that Ukraine had a valid contract with Russia set to expire in 2009, and should Ukraine sue for breach of contract, it stood every chance to win. Her parting shot for Ivchenko, whose Congress of Ukrainian Nationalists Party had been headed by the late Yaroslava Stetsko, the widow of the legendary commander of the Ukrainian Insurgent Army: If that wise lady were alive today, she would be very upset by his betrayal of Ukraine’s interests in the gas talks. (The Congress of Ukrainian Nationalists Party has allied itself with Nasha Ukraina.)

As the show was nearing the end, Kseniya Lyapina, who had maintained a low profile, confined to her “separate but equal” videoconference mode, spoke up. She apparently thrived on her “second-class” studio citizenship, unwilling to get into a fish fight with star performer Yuliya Tymoshenko. Kseniya assumed a positive thinker role, praising Yuliya's “barter buster” record and claiming that the deal did just that — put the barter scheme of all times out of business. When Yuliya asked Kseniya if she considered RosUkrEnergo a transparent business, Kseniya had a hard time trying to find a politically correct answer.

All in all, the show was fun. The bedrock of democracy is an informed citizenry. And the more diverse the points of view, the broader the vision. Many would agree that the deal Ukraine has signed offers a mixed blessing. Besides the already mentioned faults, it has a dangerous loophole, which entails a change of venue from Stockholm to Moscow, a number of legal experts maintain. Because no court of arbitration was spelled out, should any disputes arise, by default, they will be litigated in Moscow, hardly an impartial jurisdiction.

Still, it's not the worst of deals. When Russia picks its battles in winter, it rarely loses any. Faced with sharp supply shortages, the initially empathetic Europe would have probably turned a cold shoulder on Ukraine, had its government engaged in a protracted court battle with an uncertain outcome. What could be a better prize for the Kremlin than having Ukraine worsen its relations with the EU amid parliamentary elections? The wake up call has arrived: Ukraine must pay its way and modernize. As the Ukrainians hear both sides of the story and read between the lines, they will get it right.

Friday, January 06, 2006

After-Action Review: Condi Blasts Puttie Put on Gasmanship

Following the deal between Ukraine and Russia to end the gas dispute, Secretary of State Condoleezza Rice has criticized the Kremlin's role in geopolitical terms. An longtime authority on Russia, Rice deplored the lack of responsibility in Russia's hardline act at a time when this country assumes leadership of the G8.As long as oil and gas remain the lifeblood of Putin's matrix — perforated as it is with the Ukrainian pipelines — there's hope of a balance of power of sorts in Europe's energy equation. Keeping an eye on Russia and framing a hands-on energy policy provide the best deterrent to gasmanship.

Thursday, January 05, 2006

Gas Impasse Resolved, Yu May Kiss the Bride

Do you believe in market-based miracles? It's about time. You pay $95, she gets $230. What remains to be seen, though, is how long the honeymoon will last. Hopefully, the Kremlin's gas injection will spur Ukraine to waste no time in modernizing its energy guzzling industry. In the meantime, diversification is back on the table in the EU, a burning issue propelled by the "energy empire's" evil conduct.

Geopolitical Calculator: Gas-to-Democracy Ratio
Tip of the Day

How do you calculate the residual value of the Orange Revolution?

Step 1: Accept the Russian media at face value.
Step 2: Discount it at rates found in the Western media.
Step 3: Praise Ukraine’s democracy by learning that Russia’s doesn’t exist.

Now don't it always seem to go
That you don't know what you got till it's gone?

— Counting Crows "Big Yellow Taxi"

Surf Russian. Savor Ukrainian.