The Ukraine Pointed East and West: Shaping Its Future

2012-10-30 by Richard Weitz

Ukraine is at the vortex of East and West.  The Russian connection has been definitional, historically and moving forward.  The EU relationship has been about joining a broader cause, the building of Europe.  And the Americans are a useful counter with the Russians and viewed by the US as a key partner in execution of a nuclear non-proliferation strategy.

But blending these different strands into a unique national identity remains challenging.

The Russian Lynchpin

The linguistic, cultural, ethnic, and historical ties between Russia and Ukraine have played a major role in Ukrainian foreign policy.

For most of its post-1991 history, Ukraine has pursued a policy of maintaining tight ties with Russia while at the same time pursuing closer relations with the West, particularly the European Union. Former President Yushchenko’s brief foray into trying to move Ukraine considerably closer to the West while antagonizing Moscow proved a failure that is unlikely to soon be repeated.

Current President Yanukovich has reverted to past posture and sought to deepen ties with the West without taking measures—such as seeking near-term membership in NATO—that could alarm Russia. As a step in this direction, Yanukovich ordered the removal of material from the president’s official website that depicts the mass famine of the 1930s, known as Holodomor, which Yushchenko had emphasized as an act of genocide against the Ukrainian people by the former Soviet government.

One of Yanukovich’s first and most controversial moves was his grant to Russia of a 25-year extension on its lease’ of a naval base for the Black Sea Fleet on the Crimean Peninsula.

http://rt.com/news/sevastopol-russian-black-sea/

The peninsula and its main city, Sevastopol, due to its status as a special administrative territory directly subordinate to federal government, was among the regions that former Soviet leader Nikita Khrushchev had moved to Ukraine in 1954. That year, to mark the 300th anniversary of the unification of Russia and Ukraine into a single country, Khrushchev transferred the Crimea from the Russian Soviet Socialist Republic to the Ukrainian Soviet Socialist Republic.

At the time, the shift was an empty gesture given the centralized nature of the Soviet regime, which severely limited the autonomy of its constituent republics. However, the USSR’s 1991 disintegration resulted in the almost overnight transformation of these insignificant administrative boundaries into genuine international frontiers. The Crimea is now became an autonomous region within Ukraine whose two million inhabitants are predominately ethnic Russians.

Issues relating to Sevastopol have long troubled Russian-Ukrainian relations.

Ukrainian nationalists, viewing the Russian military presence on the peninsula as an encroachment on sovereign Ukrainian territory, complain about Russian interference in local affairs. Crimean nationalists, believing that Ukrainian leaders pay insufficient heed to the distinct needs of their population, such as adequate Russian language schools and socioeconomic opportunities, lobby Moscow to allow the primarily ethnic Russian territory to rejoin Russia.

In 1997, Russia and Ukraine agreed to divide the Soviet-era Black Sea Fleet.

Even so, Kiev has been trying to increase the rent Russia must pay to continue to use the former Soviet military facilities in and around Sevastopol, which house approximately 14,000 Russian Navy personnel. Moscow annually writes off almost $100 million of Ukraine’s debt—largely incurred for energy supplies—to Russia in compensation for the base. Ukrainian authorities have refused Moscow’s request to increase the number of Russian diesel submarines based in the Crimea from two to at least a dozen. The two countries also dispute ownership of several offshore lighthouses.

In April 2010, Ukrainian legislators ratified the controversial Russian-Ukraine port agreement.

According to its provisions, the Russian Navy could remain at its Sevastopol base in the Crimea for another 25 years after the current lease expires in 2017. The tradeoff was that Ukraine receives a 30 percent discount on natural gas over the next decade.

 

Ukraine is positioned at the East-West vortex. Its relationship with Russia is definitional and its military and energy relationships significant. The EU has worked with Ukraine to make them more “European” and the United States has seen Ukraine as a key to its non-proliferation policies. Credit Image: Bigstock 

The Ukrainian parliament was split over this agreement; opponents claimed that the government was “selling out the country’s sovereignty.”

The 30 percent discount on natural gas has been touted as producing $40 billion in savings over the 10-year term of the agreement, but critics complain the deal is not especially generous. Opponents attacked Yanukovych for allegedly “trading sovereignty for gas.” The arrangement with Ukraine could cost Russia as much as $40 billion in lost revenue. If the opposition wins a future Ukrainian election, they might annul the agreement and renew Ukraine’s membership aspirations—causing Russia to have lost the billions of dollars it sacrificed by subsidizing Ukraine’s gas imports.

The debate is shrouded in uncertainty since Ukraine’s highly subsidized national energy system, decaying transit infrastructure, widespread corruption, and lack of transparency make it hard to really understand who benefits the most.

The deal with Russia diverts attention from another problem, that Ukraine’s industrial sector is the least energy efficient in Europe and one of the most inefficient in the world. If gas prices were raised to market levels, Ukrainian industries would become uncompetitive in global markets. Efforts should have been directed toward innovative projects, pursuing alternative energy options, and updating deteriorating infrastructure.

Some Russian energy managers would like to exert greater influence over Ukraine’s pipeline infrastructure to have greater control over the transit issues, which would grant Russia control over energy security for Ukraine and Europe.

With control of transit infrastructure, Russia could also use these gas deliveries as a more effective political lever against regional states. The EU has been investing in Ukraine’s energy infrastructure to prevent this as well as to gain greater transparency in such an important process for the member states. Another way both Russia and the EU are seeking to lessen these problems is by constructing alternative energy pipelines whose routes do not traverse Ukrainian territory.

The EU Dynamic

Since his election in 2010, Yanukovich has pledged to work toward integration with the EU.

Since the late 1990s, the EU has concluded ten partnership and cooperation agreements (PCA). The objective of PCAs is to strengthen democracies and aid the development of prosperous economies through political dialogue. A PCA has guided Ukraine’s relations with the EU since 1998.The European Union launched the Eastern Partnership Initiative in May 2009 to aid Ukraine, Belarus, Moldova, Georgia, Azerbaijan and Armenia as the countries undertake political and economic reforms, and to bring them closer to the EU. On March 30, the EU initiated the text of the Association Agreement between the EU and Ukraine. It did the same on July 19 with a Deep and Comprehensive Free Trade Area agreement.

The EU has indicated that it will neither sign nor ratify these agreements until political circumstances are more appropriate. The continued imprisoned of two opposition leaders – former Prime Minister Tymoshenko and former Interior Minister Lutsenko—remain a sore spot in bilateral relations.

The American Factor

The U.S. government has been equally concerned with Ukraine’s transition to a secure, democratic society with a prosperous market-based economy, transparent government, strong rule of law, protection of freedom of speech and media, comprehensive judicial reform, and combating corruption.

The United States has provided more than $4 billion in assistance since Ukraine acquired independence. 

This money has been provided to promote energy independence, democracy and human rights, the interoperability of the Ukrainian military with NATO, WMD nonproliferation, and political and economic reform as to provide humanitarian aid.

The assistance has been provided primarily through the Freedom for Russia and Emerging Eurasian Democracies and Open Markets (FREEDOM) Support Act (FSA) enacted in October 1992. U.S. officials eagerly assisted with institutional and legal reforms such as establishing a new criminal procedure code, a new electoral code, and anti-corruption laws that meet international standards.

The Orange Revolution led to closer cooperation and increased open dialogue between the U.S. and Ukraine.

In March 2006, the United States provided Ukraine permanent normal trade relations status by terminating application to Ukraine of the Jackson-Vanik amendment to the Trade Act of 1974, which aimed to pressure the Soviet republics to reduce restrictions on emigration, especially for religious minorities, by denying most-favored nation status to countries with non-market economies that restricted emigration. On April 1, 2008, the United States and Ukraine signed a new Trade and Investment Cooperation Agreement, which established a forum for discussion of bilateral trade and investment relations, to advance commercial ties.

The U.S.-Ukraine Charter on our Strategic Partnership was also signed in 2008. The first session occurred the following July in Kyiv, with follow-on meetings in Kyiv and Washington. The topics addressed in the meetings include non-proliferation, energy security, economic reform, and advancement of democracy and human rights. In July 2010, the two countries established a Political Dialogue and Rule of Law Working Group. This body provides a platform through which nongovernmental organizations can exchange views on democratic, legal, and political reforms. It also seeks to further the development of Ukraine’s civil society sector.

Although clearly more comfortable working with Russia, Yanukovich does stress his commitment to benign neutrality within Europe and has sought to meet some important U.S. goals such as those relating to nuclear nonproliferation.

In accord with his commitments at the 2010 nuclear security summit, he transferred Ukraine’s stockpile of highly enriched uranium, which can be used to make nuclear weapons, to secure storage in Russia by 2012 and used the low-enriched uranium to power its nuclear reactors. Ukraine has also supported U.S. and NATO peacekeeping and security operations in Iraq, Afghanistan, and Kosovo.

"If everyone is thinking alike, someone isn’t thinking."

—General George Patton Jr.

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