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08/23/08

Ukraine Business News Briefs

Ukraine Business News Summary for 4-17 August 2008

Compiled by Katya Shtamburg, Nova Mova staff writer, from Internet news sources.

Ukraine experiencing record harvest in 2008

Ukraine’s agricultural harvest for 2008 is setting records, and is a welcome economic relief after the disastrous harvest of 2007. In July alone, Ukraine exported almost 600,000 tonnes of wheat, which was 24 percent more than in June and six times greater than July 2007, according to government figures. Ukrainian wheat is being exported primarily to Spain, Tunisia, Israel, Jordan, Pakistan and Turkey

Ukraine has already harvested 33.5 million tonnes of grain from 75 percent of its agricultural areas. The government stated that this is the best harvest since Ukraine became an independent nation in 1991. Overall, Ukraine is expected to harvest 21.8 million tonnes of wheat, 9.9 million tonnes of barley, and 8.5 million tonnes of corn.

Cadogan Petroleum continues exploration drilling

Cadogan Petruleum Plc. is continuing its exploration drilling operations on six target wells in the Poltava region as issues regarding its licenses are being resolved in Ukrainian courts. Licenses for the company’s Pirkovskoe and Zagoryanska operations were called into question by the Ukrainian ministry of environmental protection, which had issued an order in favor of Poltavanaftogazgeology, a unit of NJSC Nadra Ukraine. However, the Poltava district administrative court issued an injunction that prevents Cadogan’s licenses from being nullified until the case can be resolved.

Majority of Ukraine shipyard sold to Russian firm

Norwegian shipbuilder Aker Yards sold 70 percent of its shipyard in Mykolaev, Ukraine, as well as two German shipyards to Russian investment firm FLC Westfor. The shipyards build merchant vessels.

The sale of the stake in the three yards in Ukraine and Germany was valued at 248.9 million euros (US$392 million), which is down significantly from the announced price of 291.9 million euros in March. Aker Yards will retain a 30-percent stake in Aker Yards Ukraine Holding AS, which will own 100 percent of the yards; however, the companies did agree on an option for FLC West to acquire the remaining shares in the future.

Ukraine Cabinet of Ministers will increase the tax on tobacco

The Cabinet of Ministers intends to collect 3.3 billion hryvnas (approximately US$709 million) to the state budget by increasing excise duties on tobacco products. According to government sources, the additional revenue will be used to help the victims of the floods in western Ukraine. The governmental draft law proposes to increase the excise duties on tobacco products from 12.5 to 20 percent. Also there is a draft law that proposes to raise prices on alcohol.

The chief of Ukraine’s Committee for Finance and Banking Activities informed the cabinet that the committee agreed to the tax increase. Ukrainian President Viktor Yushenko, however, has stated that he is opposed to this tax increase

New Ukrainian Consulate office in Italy

A newUkrainianConsulateofficewasopenedinNaples, Italy,onJuly 25, 2008. The Minister of Foreign Affairs of Ukraine said that this consulate office will not only represent Ukraine in southern Italy, but will also become a source of assistance for all citizens of Ukraine who work temporarily in Italy.

According to unofficial data thousands of people from western Ukraine live and work in Italy and neighboring countries. Many of them come to work on farms during the hot summer season when the region lacks sufficient local workers. The more consulates and embassies there are in Italy, the safer Ukrainian people feel in the country, the minister said.

EURO-2012: Territory of Hopes and Controversies

A large delegation of the Union of European Football Associations (UEFA) inspectors, headed by its president, Michel Platini, arrived in Kyiv to meet and talk with top leaders of the 2012 UEFA European Football Championship host countries and to review the progress that Ukraine and Poland have achieved in making the necessary preparations for the tournament.

Euro-2012 is considered to be the third most significant event in football, surpassed only by the Olympic Games and World Football Cup. For this reason there is sharp attention to the Euro 2012 project, which for the first time in the history of the competition will take place in Eastern Europe.

Many things have to be done before 2012. Among them are fundamental reconstruction of infrastructure, as well as building new stadiums, hotels and accommodations. Three dozen modern training complexes could be licensed by UEFA, which will accredit about half of them for housing the 16 national teams that qualify for the final round. Ukraine is also supposed to provide myriads of hotel rooms and other places to accommodate hundreds of thousands of visiting fans, as well as journalists, service employees and VIPs.

The European football officials understand the situation in Ukraine. They acknowledge that a major part of the existing infrastructure consists of remnants from the Soviet times. UEFA doesn’t require new districts to be built up in host cities, but it urges the authorities to launch strategic planning to remove part of the accommodation load from host cities through construction of accommodations in other regions of the country.

At the same time, UEFA advised the Ukrainian government to organize national promotional campaigns to popularize its image as a tourist attraction, simultaneously expanding its domestic market by providing support for national tour operators, building networks of information centers, and improving the quality of roads.

The country’s top leaders once again reiterated during talks with the distinguished visitors that for Ukraine to organize the EURO 2012 tournament at the highest possible level is a matter of national dignity.

However UEFA officials are already making contingency plans to move the tournament from Ukraine if work cannot be completed in time. The official reasons are the delays in stadium construction and doubts about the transport infrastructure. They admit the political situation in Ukraine, where presidential elections will take place next year, low economy and the highest inflation in Europe. All these have impacted the preparations, which are behind schedule.

The week before the Kyiv visit, the UEFA officials spoke to the German Football Association about playing a minor co-hosting role with Poland, the preparations for which impressed inspectors. Berlin and Leipzig are possible venues.

Ukrainian gymnastic champions at the Beijing Olympics

The Olympic Games will take place in Beijing, China, in August. After the final preparations, all the countries sent their athletes. The Chinese men’s team eyes most of the gymnastics medals at the Olympics, but Ukraine has also sent its Olympic and European champions to Beijing, and they will be worthy adversaries for the Chinese.

Igor Korobchynsky, the head coach of the Ukrainian men’s team, four-time world gold champion, and the bronze medalist at the Barcelona Olympics, accompanied his two-member men’s team to Beijing. Korobchynsky said that Chinese gymnasts have an excellent chance to take golden medals because they are strong and will be playing on their home territory.

"The crowd of Chinese fans will give them encouragement and support,” he said. “But the Ukrainian gymnasts take the Beijing Games very seriously and are also well prepared. Here is the Olympic champion and here the European champion," he added, pointing to Valeriy Goncharov, the parallel bars gold medalist in Athens, and Oleksandr Vorobjov, the world cup champion on rings. “We pin our hopes that they will bring Ukraine honor and awards.”

Korobchynsky said he is satisfied with the training place and the work of the Beijing Olympic organizing committee. All of Ukraine will be waiting for the competition.

Natural Disaster in Western Ukraine

Storms and floods in Western Ukraine in late July killed 26 people, caused the evacuation of many thousands, and damaged scores of bridges, houses and communications. Officials said that the disaster could have been avoided if the construction and repair of dikes and channels had been better financed in previous years.

According to the official media more than 40,000 houses and 35,000 hectares of farmland remained partially flooded as of Monday, July 28, while more than 900 bridges and hundreds miles of roads were damaged. More than a hundred villages were without electricity, and all of them have lost the harvest of corps.

The Minister of Emergency Situations said that 15 people were killed in the Ivano-Frankivsk Oblast while seven people were killed in Chernivtsy Oblast. Rescuers evacuated more than 20,000 people from their homes that were surrounded by water because of the severe storms and floods.

The natural disaster has also touched neighboring countries. In Romania, the death toll following five days of flooding in the north rose to four on July 28 with the discovery of the body of a teenager carried away by the floodwaters. Around 12,000 Romanians had been evacuated from their homes in the north, the authorities said.

Another wave of floods was forecast to hit Odessa Oblast, in the delta of the river Dnestr. Local authorities took measures to avoid damage and destruction of the territory, promising that floods and storms will not affect the region. However hundreds of tourists that come to this oblast to rest on the seaside decided to return home.

Orthodox Christianity in Ukraine for 1020 years

The celebration of the 1,020th anniversary of the Orthodox Christian Church in Ukraine was held on July 25 in Kyiv. The state of Kyivska Rus was baptized in 988 on the bank of the Dnipro River by Prince Volodymyr the Great. This country comprised the territory of Ukraine, Russia and Belarus with the capital in Kyiv. That’s why this holiday was solemnly celebrated in all three countries. The biggest celebration took place in Kyiv, where all the patriarchs and Orthodox Church leaders were present.

The president of Ukraine has tried to boost the event's profile by focusing on the visit by Constantinople Patriarch Bartholomew, worldwide leader of more than 225 million believers in the Orthodox Church, formed after the 1054 schism with Rome.

Constantinople Patriarch Bartholomew was met by president Yushchenko at Kyiv Boryspil airport with honors and ceremonies, including a military honor guard and playing of the Ukrainian national anthem.

Tens of thousands of guests held a Saturday church service near the 11th century St. Sofia Cathedral and a service by the Dnipro River, where the first baptism was held.

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