Habibe Ozdal USAK Center for Eurasian Studies printable version send your friend

Saturday, 1 May 2010

Gaining independence in 1991, Ukraine is still a matter of concern - not with its own issues but with the big powers struggling over its geography. The process that began with the 2004 elections and continued with the repeatedelections in January 2005, called the Orange Revolution, meant more than the transformation of power in this country. The Orange Revolution was considered only one of the many democratic movements in different areas of the world. The 2010 Presidential elections of Ukraine draw special attention in terms of Ukraine’s new foreign policy preferences.

Victor Yanukovich was elected as the new President of Ukraine in January 2010. Eventhough Yanukovich was presented as pro Russian, he insisted that Ukraine would carry out relations with the EU, US and Russia. In that sense his foreign policy can be best described as one of balance between the West and Russia. However, the main question here was the feasibility of this desired balance.

Since Russia and Ukraine share very important historical and cultural values, analyzing only economic or political issues would not be enough to understand what Ukraine means for Russia. On the other hand, Ukraine has struggled with both economic and political problems since its independence. Although Ukraine was one of the highly industrialized countries in comparison with the other newly independent countries in 1991, as a result of the same capacity it remained strongly dependent on Russia for energy. Ukraine is one of the most gas-thirsty places on earth. Indeed, it consumes about $900m worth of gas a month in winter, when demand is at its highest - three times as much as neighboring Poland, another former communist country of comparable size.[1]

On the other hand, as a result of its own history, Ukraine is divided by the Dnieper River. This division also means a split on ethnic and linguistic manners, and is also reflected in Ukraine’s foreign policy tendencies. Therefore, since 1991 all presidents have aimed to unify the country. Even during the last election process, the main request was the unity and integrity of Ukraine.

Analysis on Ukraine after the election that brought Yanukovich to the Presidency focused on Ukraine’s foreign policy by predicting that Ukraine would get closer to Russia. From this stand point, energy relations between Russia and Ukraine, and the future of the Russia’s Black Sea Fleet came to the fore. While Ukraine’s multi-vectored foreign policy discourse was under examination, last week Russian news agencies reported that the presidents of Ukraine and Russia have agreed to extend the stay of Russia’s Black Sea Fleet in Sevastopol beyond the lease expiry in 2017. In exchange, Russia has promised to provide discounted gas to the tune of up to $40 billion over the next decade. The move is among the first concrete signs of the significant warming in relations between Moscow and Kiev since Yanukovych took power in Ukraine in February.[2] The Ukrainian Parliament yesterday ratified an agreement to extend the Russian navy’s lease on the port of Sevastopol until 2042.

Ukraine’s foreign policy surely has some milestones, among which Ukraine’s experiences during the last five years are worth mentioning. Ukraine’s government after the Orange Revolution made it clear that its foreign policy direction would be in line with the Europe. EU and NATO membership was the priority of the new government’s agenda. However, the indecisive and ineffective politics of the EU were far from Ukraine’s European vision. In other words, the EU was not successful inintegrating Ukraine into ’Europe’. Here comes the problematic issue: "which Europe we are talking about?" As with other foreign policy issues, the EU could not carry out a single foreign policy understanding towards Ukraine. The EU’s evaluation of Ukraine in terms of the ’EU Neighborhood Policy’ created deep disappointment in the country. This is especially important for western Ukraine since they see themselves as a European country, but not as a neighbor to Europe.

The Orange Revolution government failed to maintain economic growth. Aluminum and steel production, which are the engines of the Ukraine’s industry, lost their competitive capability as a result of increasing energy prices. Ukraine’s economy is in deep trouble (it contracted by 12 percent in 2009), and Kiev’s policy of subsidizing domestic gas sales is breaking the treasury. Moreover, Ukraine’s economy shrank by 15 % last year. Numbers show the gravity of economic situation of Ukraine.

Consequently, it seems that Ukraine is renouncing a balanced foreign policy for economic relief. However, the newly-elected President’s decision is the consequence of the last five years’ developments. To the contrary of many analysts’ predictions, the latest elections are not the sign of a democratic Ukraine. Implementing an independent foreign policy requires sovereignty, and sovereignty requires a developed economy. In the frame of this argument, Ukraine is just another example.

Since the recent agreement between Russia and Ukraine is mainly serving to relieve Ukraine’s economy, it is still very early to say that the foreign policy of Ukraine from now on will continue in one direction. Thus Serhiy Tihipko, Ukraine’s new vice prime minister for economy, said he was personally not happy with the secretive way the Russian deal had been negotiated, but said the payoff -- an estimated $4 billion cut next year in fuel bills for oil and natural gas imports from Russia -- will be immediately beneficial to the economy and the country’s finances.[3]

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[1]Tomas Valasek, "A bad deal for Ukraine and Yanukovich" , Financial Times, http://www.ft.com/cms/s/0/13417b16-5156-11df-bed9-00144feab49a.html.
[2]26.04.2010, http://www.kommersant.ru/doc.aspx?DocsID=1358141.
[3]David R. Sands, "Ukraine Sees Payoff to Russia Fleet Deal", Washington Times, http://www.washingtontimes.com/news/2010/apr/23/ukraine-sees-payoff-russia-fleet-deal/.