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SUKHOI TO BUILD REGIONAL JET
Rosaviakosmos announced on 12 March that aircraft manufacturer Sukhoi, famed for its fighter jets, will lead a consortium to produce Russia's new regional airliner, "Kommersant" reported the next day. Together with U.S.-based Boeing and Russian design offices Ilyushin and Yakovlev, Sukhoi will offset the $600 million cost of designing, producing, and testing the Russian Regional Jet (RRJ) with $120 million from the Russian budget. The Sukhoi-led consortium beat out competitors Tupolev and Myasishchev for the honor of replacing the venerable TU-134 on domestic routes. Slated for production by 2007, Sukhoi hopes to sell hundreds of the new jets at a price between $10 million and $20 million, "The Moscow Times" reported on 13 March, noting that Air France has also expressed an interest in the jets. Sukhoi plans to offer 60-, 75-, and 95-seat models of the plane. According to "Kommersant," the only cloud on the horizon comes in the form of Ukraine's AN-148, a similar aircraft that could reach markets in 2005, two years earlier than the RRJ. DK

MTS GEARS UP FOR EASTERN EXPANSION
Moscow-based cellular operator Mobile TeleSystems (MTS) hopes to expand beyond the bounds of the former USSR to such countries as India, Iran, Pakistan, and Lebanon, "Vedomosti" reported on 11 March. According to the newspaper, the company has already created analytical groups to develop strategies for entering these distant new markets. Vladimir Evtushenkov, who heads MTS's top shareholder AFK Sistema, recently visited India to conduct on-the-ground research. Sources in the embassies of India, Iran, and Pakistan confirmed to the newspaper that they are aware of MTS's plans. Analysts told "Vedomosti" that, cultural differences aside, MTS will find its homegrown Russian experience useful as it expands eastward. Deutsche Bank analyst Yulii Matevosov explained, "The situation in India is similar to Russia: lots of ground, poor population." MTS's most recent expansion was into Ukraine, where the company acquired a 57.7 stake in Ukrainian Mobile Communications, the country's second-largest cellular operator, for $194.2 million. Ukrainian authorities registered the deal, which was sealed in February, on 4 March, MTS reported in a 7 March press release. DK

RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC

A Survey of Developments in Poland, Belarus, and Ukraine by the Regional Specialists of RFE/RL's Newsline Team

UKRAINE

EU PROPOSALS FOR FUTURE TIES SPARK DISAPPOINTMENT. Last week, the European Union mapped out plans for future relations with the countries that will be its neighbors once it expands in 2004 (see "RFE/RL Poland, Belarus, and Ukraine Report," 11 February 2003). The plans, contained in a document titled "Wider Europe -- Neighborhoods: A New Framework for Relations With Our Eastern and Southern Neighbors," were presented by the European Commission to the European Parliament on 11 March. The proposals are expected to be made official policy following an EU summit in June.

The document says the EU should offer Russia, Ukraine, and Moldova, among others, closer economic integration and enhanced political cooperation in exchange for political, economic, and institutional reform based on "shared values."

Norbert Jousten, the EU's ambassador to Ukraine, Belarus, and Moldova, said the proposals, which are meant to cover the coming five to 10 years, include preferential trade terms; expanded transport, energy, and telecommunication links; and the possibility of visa-free travel to the EU. The document also appears to leave open the possibility of eastern neighbors eventually joining the EU. Jousten called the proposals "a very ambitious offer" and a solid opportunity for Kyiv.

But Ukrainian officials are less enthusiastic. A Ukrainian Foreign Ministry spokesman, Markiyan Lubkivskyy, criticized the proposals, saying they do not fully meet Ukraine's "aspirations" for becoming a full-fledged EU member.

Oleksandr Sushko, the director of Ukraine's Center for Peace, Conversion, and Foreign Policy, told RFE/RL that Ukraine is unlikely to accept the proposal in its current form. "It is natural that the Foreign Ministry reacted in such a way. Any long-term EU strategy regarding Ukraine that does not recognize the prospects for Ukraine's possible membership in this organization will not be well accepted in Ukraine, not by the Foreign Ministry or other institutions, or experts, or anybody," Sushko said.

Steffen Skovmand heads the political division of the European Commission's delegation to Ukraine, Moldova, and Belarus. He told RFE/RL that, contrary to remarks by critics, the proposals do not actually preclude Ukraine's eventual membership in the EU. "We are not talking about accession now. We are neither including it nor excluding it. What we are talking about is a new framework for a closer integration of Ukraine into the EU, and it is a very concrete proposal. It basically says: 'Get yourself ready to join our single market. Align your legislation. Let's work together. We'll support you. We'll draw up action plans together with you about what needs to be done. We'll have annual reviews about how you make this progress and what progress is made, and we will have money,'" Skovmand said.

Skovmand also said Ukraine's official goal of becoming a candidate country in a decade is in line with the EU proposals.

Stuart Hensel, a Ukraine analyst at the Economist Intelligence Unit in London, said the country has been offered the best deal it can reasonably expect. "It doesn't offer any prospects for any sort of immediate membership, in fact. It suggests that over the next 10 years the EU is not interested in looking at new members and that the most this deal offers Ukraine is access to the internal markets. That means perhaps greater concessions on trade terms, greater access for Ukrainian goods to get into the EU, greater access perhaps for Ukrainians to enter into the EU without visas, but that's about it," Hensel said.

Sushko said the proposals put Ukraine in a league with countries that will never be accepted into the EU, such as the North African states, which are also discussed in the "neighborhood" proposals. "Ukraine is put in the same league not only with Belarus and Moldova but also with Africa. Even taking into consideration all the advantages that North African countries enjoy in their relations with the EU, such an African option for Ukraine, on an emotional level, provokes misunderstanding," Sushko said.

Sushko said the document implies that Ukraine might never be accepted into the EU. "We have a suspicion that these [North African] countries are put into a single package with Eastern European countries in order to confer upon two groups a single status. This single status may mean a single prospect: exclusion from the possibility of integration, possible membership," Sushko said.

Sushko said Brussels is setting a double standard for EU neighbor countries. He said the situation in Ukraine is no worse than in Albania or Macedonia, whose future candidacy has already been declared by Brussels.

He said Balkan countries like Albania, Macedonia, and Serbia are also far from meeting the Copenhagen criteria -- the economic and political conditions for candidate countries set by the EU in 1993. But the EU is clear in its strategy toward them. "The EU has an aim to fully integrate those countries," he said. "It may happen in the distant future -- the precise dates have not been given -- but the [political] will in Brussels is clear."

Hensel said Ukraine itself lacks political will and has been slow with reform progress. "I think the main problem is a lack of willingness on the part of [Ukraine's] political class to embrace the sort of reforms that it knows the EU is looking for, and more technically, the incapacity of the administration in Ukraine to fulfill the sort of reforms required," Hensel said.

Hensel said Ukraine's foreign policy is fuzzy. Ukraine seeks closer economic ties with Russia on the one hand and with the EU on the other. He noted that last month, leaders from Ukraine, Russia, Belarus, and Kazakhstan signed a joint declaration stating their intention to create a free-trade zone.

"RFE/RL Poland, Belarus, and Ukraine Report" is prepared by Jan Maksymiuk on the basis of a variety of sources including reporting by "RFE/RL Newsline" and RFE/RL's broadcast services. It is distributed every Tuesday.

UKRAINE PRESENTS 'MOST PROMISING' WEAPONS AT MILITARY EXHIBITION. Ukraine has put on view a wide selection of its "most promising" contemporary weapons and military equipment at the 6th International Defense Exhibition that opened in Abu Dhabi, United Arab Emirates, on 16 March, Interfax reported. An estimated 40 Ukrainian companies from the defense industry are presenting armored vehicles, missiles, radars, aircraft engineering, and shipbuilding products. Ukraine's exhibits include the Kolchuga radar system, produced by the Topaz factory in Donetsk, and the Nozh tank-defense system, among others. AM

GLOBAL WATCHDOG CALLS ON UKRAINIAN PRESIDENT TO HALT CENSORSHIP. New York-based Human Rights Watch on 17 March urged President Leonid Kuchma's administration to stop its informal censorship of televised news reports, AP reported. In a report released the same day, the group said media outlets that criticize government officials have faced "arbitrary tax inspections, denial and revocation of licenses on technicalities, and crippling libel suits." Journalists and opposition lawmakers have accused Kuchma's administration of sending weekly memos to senior news editors for the past several months, telling them what events to report and how. The chief of the presidential administration's information-policy department, Serhiy Vasilyev, denied the accusations. The office distributes only press releases intended to advise journalists about events in which government officials will participate, Vasilyev said. Human Rights Watch called on the Ukrainian government to invite a UN commission to look into the protection of media freedoms. AM