Is Ukrainian President Yanukovich really a Russian puppet?
After the 2010 presidential elections Yanukovich rose to power in Ukraine. He and his Party of Regions are regarded in the west as pro-Russian. Observers also feared Ukraine might end up as a full-blown Russian ally. Six months after the establishment of the ‘coalition agreement for stability and reform’ an evaluation is due. Has Ukraine really made a shift toward the Russian camp?
Summary
After the Orange revolution ties between Russia and Ukraine diminished, the election of Yanukovich brought fears to the west of a Ukrainian return to the Russian sphere of influence. Although Yanukovich originally made a series of compromised to Russia it seems that in fact he is guided by an economical pragmatism and the desire to balance Russian influence and European influence to help Ukraine maintain a neutral course. The Ukrainian energy supply network is of course the most important asset at stake in this powerplay and so far Yanukovich has been able to keep it out of Russian hands and, while working on alternatives, has also been able to expand the potential trade partners that could help Ukraine invest in its gas infrastructure which will help secure Ukraine’s important position.
After the Orange revolution the relations between Russia and Ukraine suffered gravely. Gas crises, potential membership of NATO, support to Georgia during the armed conflict between Russia and Georgia in August 2008 and the possible removal of the Black Sea fleet from its base in Sevastopol are merely a few illustrations of this. It was expected that Yanukovich would soon undertake attempts to regain positive relations with Russia.
During his maiden speech the president announced Ukraine would be faring a neutral course concerning the membership of collective security organizations. This meant specifically that Ukraine would not become a member of NATO, or the Russian-led CSTO for that matter. This was then legally established in a new law; ‘the Fundamentals of domestic and foreign policy’, voted on July 1st of 2010. Cooperation with NATO, however, continues as part of the Ukraine-NATO partnership program, which are aimed mostly at internal defense reforms. Another important compromise made by Ukraine to Russia concerns the Black Sea fleet. This fleet is of strategic importance to Russia, as it allows Russia to project its influence in the Caucas region among other things. Russia used the harbor of Sevastopol during the Russian-Georgian conflict during which the Black Sea fleet allowed Russia to gain sea control in the Black Sea and thus deny Georgia the use of its naval assets. In the future the importance of this harbor may even grow in case Russia takes delivery of the French Mistral class ships. With this added capacity it would be possible for Russia to exercise Maritime Power Projection all around the Black Sea. On the 21st of April Yanukovich and Medvedev signed a contract to continue the lease of the Sevastopol naval base up to 2042. As a counter offer the Kharkiv-agreement allowed Ukraine to buy gas at a cheaper rate; 230 USD instead of 330 USD per 1000 m³. The full amount of this reduction, spread out between now and 2019, amounts to around 40 billion USD.
These important compromises suggested that Ukraine would already quickly find its place back in the Russian camp, and that western fears turned out to be valid. There are however several examples that show Ukraine isn’t exactly a Russian vassal. Such an illustration was visible for example when Putin proposed a merger between Gazprom and Naftogaz, putting the whole gas network under Russian control. This idea was, however, shot down by Prime Minister Azarov due to the limited economical benefit to Ukraine. Ukraine does remain open to investment and (necessary) modernization propositions of its gas infrastructure, which may also appeal to different players such as the European Union for example. Another point of dispute is the South Stream project. Russia attempted to go around Ukraine as transit nation of its Siberian gas with this project, forcing Ukraine to the help of other powers to counter the Russian influence.
As the gas crises have shown, Ukraine is of vital importance to the European energy supply. In order to ensure the import of gas, the European Union attempts to achieve a further integration of the Ukrainian gas infrastructure into the existing European network. As such it also becomes obvious that there are two powerful competitors trying to gain influence and control over the Ukrainian gas infrastructure.
The signing of the Energy Community Accession Protocol on the 24th of September was a small victory for the European Union. This protocol forces Ukraine to adapt to the “Aqcuis Communautaire” concerning energy and thus develop a transparent market structure. By making these arrangements, Ukraine hopes to attract European investments. The direct investments of EU countries in Ukraine currently amount to 39,906.3 million USD (as reported by the Ukrainian Statistics Committee). The desire to integrate the energy market further into the European Union was confirmed by Prime Minister Azarov during a conference at the Egmont Institute in Brussels on the 13th of October. The Ukrainian government is sending an obvious signal to the European Union.
Ukraine also attempts to diversify the energy sector by means of alternative energy and nuclear energy. New projects are also being started, the construction of an LNG-terminal in the harbor city Odessa for example. The construction of this terminal has been planned between 2011 and 2015 and is part of the larger AGRI-project. This project is an initiative by Azerbaijan, Georgia and Romania to install a new deliver route to Europe in the southern gas corridor with the support of the European Union. The LNG-terminal in Odessa can be tapped into this network, making Ukraine less dependent of Russia. The terminal has a planned capacity of 5 billion m³ gas in a first phase. In a second phase the capacity would be doubled to 10 billion m³. The total price tag amounts to 3 billion USD of which Ukraine is only required to invest 1 billion. The European Union and private investors would finance the rest of the project. With this project Ukraine sends a clear signal to Gazprom that it still has alternatives.
The above mentioned cases illustrate how Yanukovich has taken some very important decisions during the last six months. The Russian-Ukrainian relations have returned back to normal due to some compromises made by Yanukovich to Medvedev. This however does not rule out the possibility of good relations between Ukraine and the European Union. The role of NATO has been limited and a possible membership wiped off the table. Both NATO; with Germany and France as the main actors, and Ukraine realize that a membership is not an option at this point in time if all of them also wish to maintain friendly relations with Russia. A new phenomenon is that Ukraine now also searches partners outside of Europe and Russia. The State Development Bank of China, for example, recently signed a deal with the Ukrainian coal industry. Countries like Vietnam, Brazil, Kazakhstan and Venezuela now also become possible trade partners to Ukraine.
It is obvious that Yanukovich has taken economical pragmatism to be the corner stone of his foreign policy. This creates a plethora of opportunities, both for Russia and the European Union and even the less conventional partners such as China or Brazil. The main point to remember is that the energy market, and more specifically the Ukrainian gas infrastructure, is open to long needed investments. In the future the two main powers, Russia and the European Union, will either have to compete in this field, or achieve some type of modus vivendi.
by Jonathan Debilde
source:
http://gcreport.com/index.php/analysis/175-is-ukrainian-president-yanukovich-really-a-russian-puppet
Summary
After the Orange revolution ties between Russia and Ukraine diminished, the election of Yanukovich brought fears to the west of a Ukrainian return to the Russian sphere of influence. Although Yanukovich originally made a series of compromised to Russia it seems that in fact he is guided by an economical pragmatism and the desire to balance Russian influence and European influence to help Ukraine maintain a neutral course. The Ukrainian energy supply network is of course the most important asset at stake in this powerplay and so far Yanukovich has been able to keep it out of Russian hands and, while working on alternatives, has also been able to expand the potential trade partners that could help Ukraine invest in its gas infrastructure which will help secure Ukraine’s important position.
After the Orange revolution the relations between Russia and Ukraine suffered gravely. Gas crises, potential membership of NATO, support to Georgia during the armed conflict between Russia and Georgia in August 2008 and the possible removal of the Black Sea fleet from its base in Sevastopol are merely a few illustrations of this. It was expected that Yanukovich would soon undertake attempts to regain positive relations with Russia.
During his maiden speech the president announced Ukraine would be faring a neutral course concerning the membership of collective security organizations. This meant specifically that Ukraine would not become a member of NATO, or the Russian-led CSTO for that matter. This was then legally established in a new law; ‘the Fundamentals of domestic and foreign policy’, voted on July 1st of 2010. Cooperation with NATO, however, continues as part of the Ukraine-NATO partnership program, which are aimed mostly at internal defense reforms. Another important compromise made by Ukraine to Russia concerns the Black Sea fleet. This fleet is of strategic importance to Russia, as it allows Russia to project its influence in the Caucas region among other things. Russia used the harbor of Sevastopol during the Russian-Georgian conflict during which the Black Sea fleet allowed Russia to gain sea control in the Black Sea and thus deny Georgia the use of its naval assets. In the future the importance of this harbor may even grow in case Russia takes delivery of the French Mistral class ships. With this added capacity it would be possible for Russia to exercise Maritime Power Projection all around the Black Sea. On the 21st of April Yanukovich and Medvedev signed a contract to continue the lease of the Sevastopol naval base up to 2042. As a counter offer the Kharkiv-agreement allowed Ukraine to buy gas at a cheaper rate; 230 USD instead of 330 USD per 1000 m³. The full amount of this reduction, spread out between now and 2019, amounts to around 40 billion USD.
These important compromises suggested that Ukraine would already quickly find its place back in the Russian camp, and that western fears turned out to be valid. There are however several examples that show Ukraine isn’t exactly a Russian vassal. Such an illustration was visible for example when Putin proposed a merger between Gazprom and Naftogaz, putting the whole gas network under Russian control. This idea was, however, shot down by Prime Minister Azarov due to the limited economical benefit to Ukraine. Ukraine does remain open to investment and (necessary) modernization propositions of its gas infrastructure, which may also appeal to different players such as the European Union for example. Another point of dispute is the South Stream project. Russia attempted to go around Ukraine as transit nation of its Siberian gas with this project, forcing Ukraine to the help of other powers to counter the Russian influence.
As the gas crises have shown, Ukraine is of vital importance to the European energy supply. In order to ensure the import of gas, the European Union attempts to achieve a further integration of the Ukrainian gas infrastructure into the existing European network. As such it also becomes obvious that there are two powerful competitors trying to gain influence and control over the Ukrainian gas infrastructure.
The signing of the Energy Community Accession Protocol on the 24th of September was a small victory for the European Union. This protocol forces Ukraine to adapt to the “Aqcuis Communautaire” concerning energy and thus develop a transparent market structure. By making these arrangements, Ukraine hopes to attract European investments. The direct investments of EU countries in Ukraine currently amount to 39,906.3 million USD (as reported by the Ukrainian Statistics Committee). The desire to integrate the energy market further into the European Union was confirmed by Prime Minister Azarov during a conference at the Egmont Institute in Brussels on the 13th of October. The Ukrainian government is sending an obvious signal to the European Union.
Ukraine also attempts to diversify the energy sector by means of alternative energy and nuclear energy. New projects are also being started, the construction of an LNG-terminal in the harbor city Odessa for example. The construction of this terminal has been planned between 2011 and 2015 and is part of the larger AGRI-project. This project is an initiative by Azerbaijan, Georgia and Romania to install a new deliver route to Europe in the southern gas corridor with the support of the European Union. The LNG-terminal in Odessa can be tapped into this network, making Ukraine less dependent of Russia. The terminal has a planned capacity of 5 billion m³ gas in a first phase. In a second phase the capacity would be doubled to 10 billion m³. The total price tag amounts to 3 billion USD of which Ukraine is only required to invest 1 billion. The European Union and private investors would finance the rest of the project. With this project Ukraine sends a clear signal to Gazprom that it still has alternatives.
The above mentioned cases illustrate how Yanukovich has taken some very important decisions during the last six months. The Russian-Ukrainian relations have returned back to normal due to some compromises made by Yanukovich to Medvedev. This however does not rule out the possibility of good relations between Ukraine and the European Union. The role of NATO has been limited and a possible membership wiped off the table. Both NATO; with Germany and France as the main actors, and Ukraine realize that a membership is not an option at this point in time if all of them also wish to maintain friendly relations with Russia. A new phenomenon is that Ukraine now also searches partners outside of Europe and Russia. The State Development Bank of China, for example, recently signed a deal with the Ukrainian coal industry. Countries like Vietnam, Brazil, Kazakhstan and Venezuela now also become possible trade partners to Ukraine.
It is obvious that Yanukovich has taken economical pragmatism to be the corner stone of his foreign policy. This creates a plethora of opportunities, both for Russia and the European Union and even the less conventional partners such as China or Brazil. The main point to remember is that the energy market, and more specifically the Ukrainian gas infrastructure, is open to long needed investments. In the future the two main powers, Russia and the European Union, will either have to compete in this field, or achieve some type of modus vivendi.
by Jonathan Debilde
source:
http://gcreport.com/index.php/analysis/175-is-ukrainian-president-yanukovich-really-a-russian-puppet
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