The so-called Kharkiv accords concluded last month by Yanukovych and Medvedev may influence Ukraine’s Eurointegration course. What price will our state pay for non-alignment?
The head of the Russia and Eurasia Programme at the British Royal Institute of International Affairs (Chatham House) James SHERR shared his contemplations on this matter in an interview for The Day.
“The outside world expected Yanukovych would take measures resolutely reverse to the more controversial policies of Yushchenko. To any halfway informed person it is not clear that he has done something else beyond this. The law of March 9, which enabled the Party of Regions to go into coalition with old and hitherto declining political forces, changed everything.
The Kharkiv accords and subsequent agreements amount to a fundamental revision of the entire course that Ukraine has pursued since 1991. It was not Yushchenko who insisted that Black Sea Fleet should leave in 2017. It was Kuchma and the Ukrainian defence establishment of that time. In the 1990s, the goal of the defence and armed forces leadership was to realise at much integration with NATO as possible short of membership.
Kuchma’s multi-vector policy was designed to balance good relations with Russia with a steady, step-by-step incorporation course of bringing Ukraine into the entire eEuro-aAtlantic system.
Even leaving aside additional agreements concluded during Medvedev’s 17 May visit, which are still under discussion, Yanikovych has already surrendered many of principal gains achieved by three previous Ukrainian presidents. Ukraine has also abandoned the principal cards that allow it to resist Russian pressure. The result, as we see now, is that further Russian pressure is inevitable.
Yet deputies from the Party of Regions argue that due to the improvement of political relations with Russia, Ukraine has already secured economic dividends – cheaper gas prices. What can you say about this?
“Even in the short term, these dividends are questionable. First, the agreement preserves absolutely unrealistic ally and high quotas of gas imports by Ukraine that one hardly can afford. In 2009, Ukraine imported 26.6 bn cubic metres (bcm) of Russian gas. In the period between 2011 and 2019 Ukraine will be obliged to import 52 bcm with a cushion of 20 percent. Of course, these quotas were set under the January 2009 accords concluded by Tymoshenko’s government, but despite Yanukovych’s pledge to annul that agreement, this stipulation remains.
“Second, the new price structure allows for discount only the first 80 percent of these imports, thereby ruling out the re-export of gas at a profitable mark-up for Ukraine. In practice, Ukraine will seek to import less than it is supposed to, and it will also seek to re-export what it cannot consume. But its ability to do either of these things will depend on the good will of Moscow, in short, on further Ukrainian concessions. The latest concessions demanded are already threatening what Yanukovych is still determined to protect: retention of at least partial Ukrainian control of gas transit and the interests of businesses that now support the Party of Regions.
“Third, Russia has categorically rejected the further Ukrainian requirement: a minimum quota on its own trans-shipment of gas across Ukraine. Thus, Russia preserves the option of shipping gas across other pipeline routes to Europe if and when they are built. Fourth, the 60 percent rise in transit fees secured by Tymoshenko has, by virtue of the discount, been annulled. Finally, Russia has flatly refused to give ground regarding one of Yanukovych’s core aims: its abandonment of the South Stream project. On every one of these points, Kyiv has conceded and Moscow has refused to budge one iota.
“The long-term calculations are also faulty. As oil prices rise in 2011 and possibly beyond, the gains secured by the new pricing formula will be washed away. Further leniency by Moscow will be needed, and it will come at a price. The root cause of this sorry state of affairs is not, as Yanukovych supposes, high energy prices, but the grotesquely unreformed condition of Ukraine: its inordinately wasteful consumption of energy, its failure to attract investment in new energy resources, its barriers to genuine market relations and its failure to stimulate honest entrepreneurship in the country. As early as the mid-1990s, Western energy companies presented Kyiv with proposals that would progressively — and substantially — diminish Ukraine’s inordinate dependency on Russia. Yet Kuchma (in practice, Lazarenko and Tymoshenko) rejected these proposals for the same reason that Yanukovych, Azarov, Boiko and Liovochkin reject them now. The reforms required would break the link between money and power. What is more affordable for Ukraine: discounts on 52bcm of Russian gas or a diversified and competitive economy paying European prices on 26bcm of Russian gas? The question answers itself.”
Who can force the people mentioned by you to reform? Can the West provide incentives to pursue these reforms?
“The new authorities seem to expect that the EU will, in accordance with the 2009 initiatives, provide finance for the modernization of Ukraine’s gas transit system. Why? The premise of that initiative was further steps by Ukraine to eliminate subsidy and bring Ukraine’s energy market into accordance with EU standards. Without any consultation with the EU, Ukraine has now moved in a diametrically opposite direction. It has presented us with a fait accompli. What obligation do we have now? What interest do we have now? Why should the EU taxpayers finance economic malpractice in Ukraine or subsidise Russia? Ukraine is a sovereign country, and its new authorities had every right to act as they did. But the EU is a collection of sovereign states with their own interests, their own economic priorities and their own taxpayers to answer to. Given the scale of the emergency we now face in Greece, I find it absolutely fanciful that the EU would decide to uphold its side of the 2009 initiative after Ukraine has walked away from it. And if, by some series of mishaps, we did grant money for modernisation, we would merely persuade the new leadership that it had no standards to uphold, no conditions to meet and no choices to make.”
Some may suppose that the new government has done a clever thing as they succeeded in getting money from Russia for leasing Black Sea Fleet before 2017…
“There is no cleverness here. What cleverness do you have in mind? The energy discount is not a grant gift from Russia. It is calculated as a Ukrainian state debt, to be offset from the Black Sea Fleet’s rent of facilities in Crimea. So a bad financial deal for Ukraine in energy terms now becomes bad in defence terms. The most lamentable aspect of the fleet accords is not the length of time extension to 2042, bad unfortunate as it is. And it is quite possible that Yulia Tymoshenko would have agreed to the same or even to even a longer term of lease if certain rumors are correct. The most lamentable aspect of this lamentable thing is that all of the basic deficiencies and unresolved issues inherent in the accords of 1997 remain intact, whereas the conditions in the Black Sea region have changed dramatically since then, they are far more worrying for Ukraine and surrounding countries than they were 13 years ago. In 2008, the Black Sea Fleet played a significant role in a war against Georgia, a country that was Ukraine’s de facto ally. With the fleet’s presence legitimized by agreement until 2017, Ukraine could honourably claim to be a reluctant bystander. Now Ukraine’s authorities can make no such claim. Knowing that the fleet can be and might in future be used for a similar purpose to them as act of national policy extended for 25 years set Ukraine on a course which is inconsistent with friendship with Georgia and own fundamental national security interests. In a future conflict, Ukraine can no longer claim to be a bystander. It will become an accomplice—or so, at least, the Georgians will see it. And that is exactly what Russia wants. So whether or not Russia finds the resources to modernize the fleet, it has already secured a strategic triumph. So Ukraine has already by taking this step endangered security of what until recently was a significant neighbor and neighbor which until recently was a significant ally of Ukraine.
The Russians of course are limited in their resources but they make no secret of their aspiration to modernize the fleet. Yet the most worrying aspect of the agreement is its impact on Ukraine’s sovereignty. The fleet’s naval/military significance has always been secondary to its ability, by economic, political and intelligence means, to weaken Ukraine’s hold on the Crimea and its sovereignty in general. As soon as the ink on the Kharkiv accords was dry, Medvedev instructed Serdyukov, Russia’s Minister of Defence, to draw up a plan with the Sevastopol authorities for modernization of the base and the development of surrounding facilities. This will not only strengthen the positions of Russia and Russian business interest in Sevastopol. By these means and others, he clearly hopes to secure the de-facto integration of the Crimea into the economy of Russia. By authorising the return of military counter-intelligence, subordinate to the FSB to the Crimea, Kyiv’s new authorities have effectively given them license to do what they did before: undermine those who draw a distinction between Ukraine’s sovereignty and Russian influence. The brusque termination of NATO-Ukraine intelligence cooperation, the revival of former patterns of SBU-SVR (Russian Foreign Intelligence) collaboration and the possible future expansion of GRU (Russian Military Intelligence) activity in Ukraine are intended by Moscow to consolidate a fundamental shift in Ukraine’s geopolitical direction. In my view, the geopolitical objectives of Yanukovych and his government are less radical than this. But they have opened a door that will be very difficult for them to close. They will very possibly insure de-facto loss of sovereignty by Ukraine in Crimea. And finally these accords now allow for unrestrictible expansion of the Russian intelligence presence not only in Crimea but throughout Ukraine. When you add to this the changes we have seen either in the SBU and in the armed forces you can see then that in the most critical area of security both for Ukraine and its Western partners a major shift of direction has taken place.”
Mr. Sherr, in your opinion, was this shift of direction inevitable? Was it connected with some arrangements between Obama and Medvedev?
“There have been no deals between Obama and Medvedev at Ukraine’s expense, and I don’t believe there will be any. But you have put the question the wrong way around. It is not up to the United States to define Ukraine’s national interests. It is not up to the EU do so. The EU and United States can not be expected to care more for a national interest of Ukraine than Ukrainian. It is up to the Ukrainian state leadership to articulate clearly what their national interest is, take concrete measures to advance it and then secure support abroad. That is what the Poles, Czechs and Baltic states did before joining the EU, and had they not done this — and backed words with deeds — they would still be outsiders. The EU and United States cannot be expected to care more for the national interests of Ukraine than Ukrainians.
“All this said, the post-Cold War generation of Western leaders has left the scene, and the new generation is neither as worldly nor as impressive. Washington’s horizons are both more global and more narrow than they were in the 1990s. Despite some sterling exceptions, the Obama administration has shown a tin ear towards East-Central Europe — indeed, to the entire region stretching from the Neisse to the Caspian — and this is felt as much in Warsaw and Baku as it is in Kyiv. Today, the EU has very little vision of itself beyond recovery from the financial crisis. Its overwhelming interest in the former Soviet Union is ‘stability’, i.e., peace and quiet, even if it isn’t very peaceful or very nice. Ukraine is not helped by the weakness of its friends in the West, and the West is not helped by the weakness of its friends in Ukraine.”
Recently the Director of the Carnegie Center in Moscow, Dmitry Trenin, said that Ukraine is not in Russia’s sphere of influence but, like Germany, belongs to Russia’s sphere of interest. What can you say about this?
“Dmitry is doing what he does best very well – playing with words. The distinction is sophisticated but irrelevant. Ukraine is not Germany. Germany is Russia’s equal — at least! Ukraine is not. Russia regards Germany’s independence as indestructible. Russia regards Ukraine’s independence as an historical aberration.Intellectuals like Dmitry are not making Russian policy. And these distinctions are mostly unhelpful and quite unrelevant when it comes to such Russia is pursuing fundamental goals inimical to Ukraine’s independence: as acquiring control of Ukraine’s energy system, acquiring permanent rights to the unrestricted basing of the Black Sea Fleet and operation of Russian intelligence services in Ukraine a welcome mat for Russian business, carte blanche for Russian intelligence services, acquiring de-facto control of the Crimea and, by these means and others, through this of course turning the transformation of Ukraine’s sovereignty into a purely decorative term. And let us not forget, please, that Prime Minister Putin says on every occasion that at the end of all this is an expectation that Ukraine would join the Russia-Belarus-Kazakhstan customs union. That is what Moscow seeks to do and is, to a worrying extent, doing. It is irrelevant what you wish to call it.”
What political or geopolitical price will Ukraine pay for pursuing the policy of non-alignment?
“Non-alignment is not the issue. Ukraine, de jure, has been a non-aligned state under three presidents. The issue is Ukraine’s orientation. Ukraine’s orientation is profoundly unclear. Ukraine has to choose. It cannot be part of two contradictory schemes of integration at the same time, neither in the economic nor in the security sphere. It cannot stand alone. It is neither Switzerland (in Kuchma’s choice phrase), nor is it China. It can orientate itself to the West without losing any independence it does not wish to lose. Indeed, by meeting the conditions of the West, Ukraine will acquire more capacity to do things for itself. But it cannot orientate itself to Russia and remain independent. These are historical realities, and they will remain political realities as long as Russia continues to define its interests and identity in the way that it does. If Ukraine loses the West and the West abandons Ukraine, its independence will shrink—in some spheres, rapidly. The paradox is that if Ukraine wants to re-engage the West, it will have to do something for itself. The only non-alignment Ukraine will preserve if it carries on this way is the right not to participate the next time Russia is at war with one of its neighbors or in assisting Russia in its own internal war against separatists, bandits, Islamic extremists and others. In every other respect, whenever and whatever you call it, the Ukrainian new authorities have already taken steps that risk nullifying Ukrainian role in international affairs.”
After the first round of the presidential election we published an interview with Liovochkin, where he said that Ukraine has forgotten that it is a strong country and can dictate its own conditions. In your opinion, how can Ukraine regain its former strength after all that has happened in the past weeks?
“I would have thought that Ukraine needs to overcome its condition before it can ‘dictate’ it. How can it do so after all that has happened? That is the question I ask myself.”
