aaus-list @ ukrainianstudies.org -- [aaus-list] UKRAINE: Kyiv warms to Russia, cools towards West

[Taras Kuzio <t.kuzio@utoronto.ca>]

OXFORD ANALYTICA, EAST EUROPE DAILY BRIEF
(Taras Kuzio)

   UKRAINE: Kyiv warms to Russia, cools towards West
   26 September 2002

EVENT: On September 24, the United States suspended 54 million dollars in
annual aid to Kyiv, after concluding that a tape implicating the president
in the sale of radars to Iraq was authentic.

SIGNIFICANCE: Ukraine has been a leading recipient of US aid, but Western
influence has declined in recent years, since its foreign policy began to
reorient to the East. The administration no longer includes any pro-Western
figures. 


ANALYSIS: Leonid Kuchma was elected president of Ukraine in July 1994, on a
platform of reorienting towards Russia and 'normalising' bilateral
relations. Russia's refusal to recognise the border with Ukraine until
1997-99 inclined Kuchma temporarily towards the West in order to obtain
security assurances from NATO in the dispute with Russia. With Ukraine's
borders secured, Kuchma had no more need for a counter-weight to an
unfriendly Russia (see EEDB, December 20, 2000, I ). He was able to return
to his 1994 election platform, popular in eastern Ukraine, of a
Russian-Ukrainian strategic alliance. This tendency was accelerated in
November 2000 by the 'Kuchmagate' crisis, which damaged Kuchma's reputation
in the West (see EEDB, February 6, 2001, II ). In February 2001, during the
height of the crisis, Russian President Vladimir Putin made a deliberate
show of support for Kuchma by visiting Ukraine. In 2001, Kuchma and Putin
held eight summits. In 2002, by September, there had already been five.

Strategic partnership. Putin is pursuing a tougher and more pragmatic policy
towards Ukraine and the CIS than his predecessor, Boris Yeltsin. During the
Yeltsin era, the Russian-Ukrainian 'strategic partnership' was devoid of
substance, as both sides acknowledged. Putin has developed a closer
bilateral relationship that better serves Russia's interests. Unlike
Yeltsin, Putin is not allowing Ukraine to play off Russia against the West.
Such a policy became more difficult for Ukraine after the September 2001
terrorist attacks on the United States, which changed the nature of the
US-Russian relationship. Ukraine's main reason for opting to begin the
process of seeking NATO membership in May (see EEDB, June 21, 2002, II ),
was fear of being sidelined by the new US-Russian anti-terrorist coalition.

Isolation from the West. The West was already beginning to lose interest in
Ukraine before September 2001. Relations soon soured after Kuchma was
re-elected in November 1999. Pro-Western Foreign Minister Borys Tarasiuk was
replaced in October 2000, something that Putin had lobbied for. The
Kuchmagate scandal erupted a month later. Kuchma has not been invited on a
diplomatic visit by a Western government since it broke, and last year for
the first time there was no US-Ukrainian presidential summit. The United
States has ruled out any high-level meeting until Ukraine solves the murder
of opposition journalist Giorgii Gongadze, which sparked Kuchmagate.

Economic factors. Unlike Yeltsin, Putin has not been willing to allow
Ukraine to build up large debts for gas, or to ignore Ukrainian officials
and oligarchs stealing Russian gas transiting Ukraine. He has threatened to
re-route gas deliveries to Western Europe through Belarus by building
alternative pipelines. This would have removed Ukraine's main source of
control over Russian exports. In May, Ukraine and Russia signed an agreement
to create a gas consortium which provides Russia with leverage over
Ukrainian pipelines (although Ukraine has insisted that it will maintain at
least 51% control).

While continuing Yeltsin's refusal to ratify a bilateral free-trade zone,
Putin has put pressure on Ukraine to come into the Eurasian Economic
Community (EEC), which Kuchma agreed to join as an observer in April. After
the July EU-Ukraine summit in Copenhagen rejected an association agreement
with the EU -- the first step towards future membership -- Kuchma agreed to
upgrade Ukraine's observer status in the EEC into full membership.

With little foreign direct investment (FDI) entering Ukraine (see EEDB,
March 4, 2002, I ), Kuchma has encouraged Russian investors to take part in
the privatisation of lucrative Ukrainian enterprises. Much FDI comes via
offshore funds in Cyprus, which is the third largest investor in Ukraine.

Arms trade. In the 1990s, Ukraine and Russia competed aggressively on the
international arms market. Putin has offered to coordinate Ukrainian-Russian
arms exports and to develop joint projects between their military-industrial
complexes, proposals that Kuchma has warmed to. Kuchma's closest ally,
Volodymyr Horbulin, was moved in 1999 from the National Security and Defence
Council to head the State Commission on the Military-Industrial Complex.
Horbulin supports closer cooperation between the two countries' defence
industries. 

In September, the United States satisfied itself that Ukraine had exported
the sophisticated Kolchuga anti-aircraft radar system to Iraq in 2001, via
either Jordan or Ethiopia (see EEDB, May 16, 2002, II ), prompting the
suspension of part of the United States' aid to Ukraine.

Political links. Russia has encouraged conspiracy theories accusing Western
intelligence services of being behind Kuchmagate, particularly after Mykola
Melnychenko, the presidential guard who taped conversations in Kuchma's
office, was granted asylum in the United States in April 2001. Russian image
makers close to Putin are working closely with Kuchma's oligarchic allies to
develop strategies to deal with the opposition and ensure a loyal successor
to Kuchma (see EEDB, September 3, 2002, I ), intervening in Ukraine's
domestic politics in support of the current government. At the time of the
March parliamentary elections, the Russian media and Russian officials
attacked Viktor Yushchenko's Our Ukraine as 'anti-Russian'. The Russian
media, which still have influence in eastern Ukraine, have backed
alternative candidates to Yushchenko as Ukraine's next president, when
Kuchma steps down in October 2004.

Security. Ukraine's policies towards NATO and the EU have increasingly been
coordinated with Russia's, in line with the new unofficial foreign policy
doctrine favoured by Ukraine's oligarchs -- 'To Europe with Russia!'. Russia
has continually pushed for the coordination of both countries' security
policies and a 'joint parrying against foreign threats'. In August, the
commander-in-chief of the Ukrainian navy, Admiral Mykhaylo Yezhel, said that
he saw no alternative to cooperation with the Russian navy in the protection
of both countries' southern borders. Yezhel called for a treaty to be signed
putting this into effect. Such a close military defensive relationship has
been a Russian goal since 1994.

Military cooperation has been expanded. In 2000-01, Ukraine increased the
participation of its security forces in the CIS anti-terrorism centre and
air defence agreement (see EEDB, July 30, 2002, II ). Ukrainian officials
have also increased their attendance at CIS security functions, particularly
after September 2001. In December 2000, at the CIS defence ministers'
meeting in Moscow, Ukraine agreed to 52 military cooperation projects with
Russia in 2001, compared with 28 in 1998. The following month, Russia and
Ukraine signed their first military cooperation programme.

NATO membership. Although Ukraine now seeks NATO membership, it does not
have elite consensus on this question. Viktor Medvedchuk, the head of the
presidential administration and oligarchic leader of the United Social
Democrats, is opposed to Ukraine joining NATO. The resolution of border
issues is a prerequisite for NATO membership, which helps to explain why
Russia continues to refuse to demarcate its border with Ukraine.


CONCLUSION: Kuchma has presided over a cooling of relations with the West,
coinciding with a warming with Russia, that is likely to endure while the
current administration is in power.



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TOPICS: aid, arms control, foreign policy, international relations,
security, summit, corruption, defence, government, opposition, economy,
politics

COUNTRIES: Russia, Ukraine, NATO, Iraq, United States, EE


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