Ukraine and his powerful eastern neighbor Russia are again in a midst of a natural gas war; Moscow is again diminishing the volumes of gas delivered to Kiev; Kiev threatens again with retaliation of cutting delivering to Europe; and Europe delivers angry speeches, everybody knowing that at the end the two neighbors will sit down and settle this issue until the next 'war'. At the time when some are showing their 'weaponry' to intimidate the other side, the businesspersons are putting money into another giant real estate development project in Ukraine, 'Kiev-City'.

Ukraine and Russia are again in a midst of a natural gas war, which by coincidence happens on the wake of the Russian presidential election, which by coincidence was won by a person with former ties, actually managing director's ties, with the Russian gas export monopoly Gasprom. Since the 'orange' revolution in Ukraine this is the third big standoff between Moscow and Kiev. The arguments look suspiciously similar; every time Moscow complains for the lack of respect on the contracts and threatens then cuts the supplies of gas. Kiev every time threatens then cuts supplies to Europe; Ukraine is the biggest transit point of Russian gas to Europe. At the end, every time Russia and Ukraine sit down and settle down the issue for both sides' satisfaction. This 'war of attrition' will last until Russia builds two gas projects bypassing Ukraine from north and south (Northern stream and Southern stream).

Ukraine is paying for his political choice, which is being away from Russia, without necessarily falling in love with all western international organizations, especially with NATO. What Russia does is a classic example of influence by all means short of military invasion; the strongest card that Moscow can play with is the energy, so we shouldn't be surprised to see it playing with it any time Kiev is showing some political independence vis-à-vis its former imperial master. Unless the West shows some sort of unified position that defends the interest of Ukraine, Kiev has no good chances to withstand the Russian pressure. This pressure contrasts with the official regime of preferences given to the neighboring Belarus.

Quite surprisingly, however, is that at this time of 'war', Russian and Ukrainian businesspersons are developing common projects, among which the giant 'Kiev-City', in the capital city of Ukraine. In total, the project will cover a territory of 400 acres; until 2012 six skyscrapers of up to 68 floors will provide more than 10 million sq.ft. of office space. In addition to this, a couple of large residential projects in Kiev with Russian participation will provide millions of sq.ft for the highest segment of buyers. It seems so far that nothing coming from the natural gas high politics is really making these projects less likely.

Ukraine country profile:

• Area: 603,700 sq km
• Population: 46.3 million (July 2007 est.)
• Life expectancy at birth: 67.8 years
• Main ethnic groups: Ukrainian 77.8%, Russian 17.3% (2001 census)
• Religions: Religions: 4 Orthodox groups (Moscow Patriarchate, Kiev Patriarchate, Autocephalous, and with no particular jurisdiction), Ukrainian Catholic (Uniate), Protestant, Jewish.
• Languages: Ukrainian (official), Russian, Romanian, Polish, and Hungarian.
• GDP per capita: purchasing power parity $8,600 (2007 est.)
• Population below poverty line: 29% (2003 est.)
• Main trading partners: Russia, some EU countries, Turkey, and the United States.
• Internet users: 5.5 million (2006)

(Source: CIA World Factbook 2008; Reuters)

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See also the directory of companies providing real estate services in, and general real estate information of Ukraine.