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END NOTE: UKRAINIAN PRIME MINISTER APPEARS TO BREAK ICE IN MINSK xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

BELARUSIAN PRESIDENT UPBEAT ON RELATIONS WITH UKRAINE. President Alyaksandr Lukashenka told visiting Ukrainian Prime Minister Yuriy Yekhanurov in Minsk on 18 October that he is satisfied with the "current trend" in relations between Belarus and Ukraine, Belarusian and Ukrainian media reported. "Taking into account the proximity of our countries and peoples, we have always made and will continue to make some concessions for the sake of the future, and we are ready to resolve problems on mutually beneficial terms," Lukashenka added. Yekhanurov also met with Belarusian Prime Minister Syarhey Sikorski, with whom he discussed outstanding debt to Belarus dating back to the early 1990s. The two sides signed four cooperation accords, including on joint research and design projects regarding weaponry and military equipment. JM

TRANSPARENCY INTERNATIONAL CONSIDERS BELARUS, UKRAINE CORRUPT COUNTRIES. The global anticorruption watchdog Transparency International on 18 October published its "Corruption Perceptions Index 2005," an annual study analyzing "perceptions of corruption" based on a number of surveys held among business leaders, analysts, and economic experts around the world. Countries are ranked on a scale of one to 10, with 10 signifying the country is "highly clean" in terms of perceived corruption. Belarus and Ukraine were jointly ranked 107th among 158 countries, with ratings of 2.6. JM

UKRAINIAN PRESIDENT VOWS TO PROCEED WITH KRYVORIZHSTAL SALE. President Viktor Yushchenko told journalists in London on 18 October that the government will go ahead with the planned sale of the country's largest steel mill, Kryvorizhstal, despite the Verkhovna Rada's two votes earlier the same day to block the privatization (see "RFE/RL Newsline," 18 October 2005), the "Financial Times" reported. "Yes, of course, this is a bad signal [to investors]. But it has a purely political meaning, nothing more," Yushchenko said of the parliament's decision. Meanwhile, Ukraine's State Property Fund revealed the same day that three bidders have provided $200 million deposits to participate in the Kryvorizhstal auction that is to be resolved on 24 October: Mittal Steel, the world's largest steel group; the Luxembourg-based Arcelor, bidding jointly with the Industrial Union of Donbas; and the Russian-Ukrainian LCC Smart Group. JM

OSCE HEAD VISITS CHISINAU. Slovenian Foreign Minister and OSCE Chairman in Office Dimitrij Rupel met with Moldovan President Vladimir Voronin and Moldovan Foreign Minister Andrei Stratan in Chisinau on 18 October, Moldovan news agencies reported, citing official sources. Their talks focused on Moldova's cooperation with the OSCE and that organization's role in the resolution of the Transdniester conflict. Voronin and Stratan told Rupel that they want the planned OSCE ministerial summit in Ljubljana on 5-6 December to record the need for a Transdniester settlement and for the pullout of Russian troops from the separatist region in the summit's concluding documents. Rupel -- whose trip to Chisinau was part of his ongoing tour of Russia, Moldova, and Ukraine -- traveled to Tiraspol later the same day. JM


Ukrainian Prime Minister Yuriy Yekhanurov on 18 October paid an official visit to Minsk, where he held talks with Belarusian President Alyaksandr Lukashenka and Belarusian Prime Minister Syarhey Sidorski. The visit suggests that Ukrainian-Belarusian relations, which soured after President Viktor Yushchenko came to power in the Orange Revolution, are warming up.

Lukashenka could not have been pleased by Yushchenko's presidential victory. Like Russian President Vladimir Putin, Lukashenka congratulated Ukrainian Prime Minister Viktor Yanukovych on having won the presidential runoff with Yushchenko in November despite the lack of a final tally in that vote. The ensuing mass protests in Ukraine and Yushchenko's triumph in the repeat runoff in December no doubt came as a nasty surprise to Lukashenka -- who had only recently staged a dubious referendum that allows him to run for a third term as president in 2006. The Orange Revolution in Ukraine has inevitably kindled hopes that deposing Lukashenka through a similar, popular revolt in Belarus is not out of the question.

By January, before Yushchenko was even inaugurated, Lukashenka had publicly announced that "there will be no pink, orange, or banana revolutions in Belarus." Lukashenka's irritation with Yushchenko in particular, and the Orange Revolution in general, was evidently increased by a statement that the latter signed in early April with U.S. President George W. Bush, pledging "to support the advance of freedom in countries such as Belarus and Cuba." Delivering his annual address to the Belarusian legislature later the same month, Lukashenka slammed Ukraine for allegedly "forming camps" that were intended to train "revolutionaries" for Belarus.

A brief diplomatic squabble between Kyiv and Minsk followed in May, after Belarusian police arrested five young Ukrainians and 14 Russian youths who had come to Minsk to support their Belarusian colleagues during an antigovernment rally. Minsk granted early release to the Russians, while the Ukrainians had to serve jail terms of 10-15 days in full and were subsequently deported and banned from re-entering Belarus for five years. Yushchenko accused the Belarusian authorities of applying double standards to the Russian and Ukrainian demonstrators.

But afterward, the official Kyiv toned down its public statements noticeably regarding Belarus. Before the political crisis caused by the dismissal of Yuliya Tymoshenko's cabinet in September, Ukraine experienced a distressing gasoline crisis. Kyiv appealed for help in dealing with its gasoline shortage over the summer to Belarusian oil refineries. The issue of advancing freedom in Belarus appears to have lost its priority status for Yushchenko; realpolitik appears to have gained the upper hand in Kyiv's relations with Minsk.

Ukraine is an important trade partner for Belarus. Both Yekhanurov and Sidorski have declared that they intend to increase bilateral trade turnover to $2 billion this year, which would represent a 50 percent increase on 2004. Ukraine absorbed some 4 percent of Belarus's exports last year.

However, there is a lingering problem of an economic nature in relations between Minsk and Kyiv. Their governments cannot agree on the topic of Ukrainian debts to Belarus that date back to 1992. Ukraine (or Ukrainian entities) reportedly failed to pay for Belarusian commodities imported by Ukrainian firms in the early 1990s. Belarus subsequently made the ratification of a border treaty with Ukraine conditional on the repayment of those obligations.

Sidorski recalled during his meeting with Yekhanurov that both sides signed an official protocol in 2003, fixing the outstanding debt figure at $134 million. Sidorski proposed that Kyiv repay the obligations through supplies of goods and electricity, while Yekhanurov called the proposal interesting but remained noncommittal on any promises. The Ukrainian prime minister stressed, however, that the debts were incurred by Ukrainian enterprises and cannot be regarded as a liability of the Ukrainian state.

Nevertheless, the Belarusian president was conspicuously pleased during his meeting with the Ukrainian premier. "I am ready to conduct a dialogue [with Ukraine] proceeding from what interests us," Lukashenka told Yekhanurov. "Taking into account the proximity of our countries and peoples, we have always made and will continue to make some concessions for the sake of the future, and we are ready to resolve problems on mutually beneficial terms."

Lukashenka's contentment is understandable. Yekhanurov's 18 October trip was only the second such senior official visit in Belarus this year. (Russian Prime Minister Mikhail Fradkov visited Minsk in September.) Lukashenka is a pariah in the international arena and only rarely travels abroad or receives foreign officials in Belarus. His international contacts are largely limited to receiving Russian governors in Minsk -- no big deal for someone who dreamed of taking the helm of a united Russian and Belarusian state during the era of Russian President Boris Yeltsin. This time, however, Lukashenka was doubly lucky: Yekhanurov brought along an invitation for Lukashenka to meet with President Yushchenko in Kyiv.