Ukraine seeks revenue amid chaos

Thursday, December 16, 2004

KIEV, Ukraine -- Strapped for cash because of weeks of political chaos, Ukraine's government on Wednesday sought to increase transit fees for Russian oil, a move designed to generate revenue without risking a public backlash ahead of a Dec. 26 presidential revote.

The proposal to boost tariffs by 30 percent is likely to infuriate the Kremlin -- a key player in Ukraine's political crisis. All but one of Russia's major export lines to Europe pass through Ukraine.

Ukraine's economy is desperate for extra revenue. Amid weeks of political unrest stemming from a disputed Nov. 21 runoff for the presidency, the state budget has fallen about $216 million short of expected revenue.

A rate increase could risk retaliatory measures from Moscow, which could cut back on oil exports to Ukraine and disrupt the country's economy.

The Kremlin has backed Prime Minister Viktor Yanukovych in the upcoming rerun of the November runoff that was ruled fraudulent by the Supreme Court.

Yanukovych rallied support Tuesday in the Crimean city of Sevastopol, where nearly 90 percent of voters supported him in the runoff.

"I will not let you down and will do my best so that Ukraine would be strong and prosperous," Yanukovych was quoted as saying by the ITAR-Tass news agency.

Yushchenko's supporters, meanwhile, took the so-called "Orange Revolution" on the road, targeting provinces outside the capital where support for Yanukovych has been strong.

Cars and buses adorned with orange and packed with supporters reached east-central Ukraine Wednesday as part of the caravan dubbed the "friendship journey." The convoy reached the city of Kirovohrad, some 185 miles east of Kiev, said Vakhtang Kipiani, the anchor of a private television station who is traveling with the group.

Participants plan to visit 14 regions, including Yanukovych's hometown of Donetsk, which only recently canceled a referendum on self-rule planned for early January. The referendum plans had stoked fears that the country of 48 million would break up.

Compelled by Yushchenko's appeal to abandon street protests that began after the November runoff and take up the election campaign, many artists, businessmen and filmmakers said the "friendship journey" was necessary because state-run media had blocked news of the revolt from the rest of this former Soviet republic.

The campaign was the latest event in an election roiled by explosive revelations, including the poisoning of Yushchenko.

Prosecutors and a parliamentary committee quickly set up investigations -- the second time each has examined the poisoning.

Security agencies have offered to take part, but Yushchenko has insisted the investigations should wait until after the vote -- in hopes that the race won't be influenced.

Lawmakers from Yushchenko's party have said the Austrian clinic's findings confirmed that his opponents wanted to assassinate or sideline him rather than take a risk on the election.

The illness has dramatically disfigured Yushchenko. Experts say he has probably experienced the worst effects already and should gradually recover, with no impairment to his working ability.


Associated Press Medical Writer Emma Ross contributed to this story from London.

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