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UKRAINE


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 49,537 41,380 37,600 55
         
GNI per capita
 US $ 970 770 720 137
Ranking is given out of 208 nations - (data from the World Bank)

Books on Ukraine




Update No: 354 - (27/06/10)

Ukraine at the crossroads
The Ukrainians are not sure where they go next. The Rose Revolution of October, 2004 did not work out. They  believed the Western neoliberal voices that encouraged them to 'smash the state – and the market will sort everything out.'

It hasn't worked in the West, as the recent crisis in its economies has shown. It didn't in Russia or Ukraine. The Russians and the Ukrainians made the mistake of supposing that the people, politicians and economists, in charge of the West at the time, understood why it has been such a phenomenal success over several centuries. They didn't even begin to. They were benighted ideologues, virtually all, as misled by 'verities' of the Cold War as the myopic Soviets.

If the Western world is still functioning it is by ignoring their advice and having the state pour billions into the banks to save them. Keynes recidivus. Such a ready response is not likely to work in the aftermath of a collapsed socialist economy, as Keynes would be the first to acknowledge. It is going to take generations to rebuild a viable civil society and market economy, which go hand in hand.

Yanukovich recidivus - and Russia too?
President Viktor Yanukovych came to power earlier this year. He was premier before the Rose Revolution.

Yanukovych, who ended a five-year pro-Western period under Yushchenko, during which Ukraine attempted to move closer to the West, came to power on a pro-Russian ticket, pledging to restore closer relations with Moscow.

So far, Mr Yanukovych has honoured his commitment. In just four months, the Russian and Ukrainian governments have signed agreements in the economic, military, aviation and nuclear spheres. On top of that, the Ukrainian leader has made it clear that his country has no interest in joining NATO, reversing a policy pursued by his predecessor, Mr Yushchenko.

Gas merger proposed by Putin
Suddenly Moscow in April upped the stakes in dramatic fashion.
Vladimir Putin, the Russian Prime Minister, has proposed a merger between Russia’s state run gas company, Gazprom, and its Ukrainian counterpart, Naftogaz.

At a time when the Ukrainian government agreed to extend the lease of the Russian Black Sea fleet in the Crimea for a further three years, following a deal done between Moscow and Kiev, Mr Putin’s suggestion demonstrates the extent to which relations between Russia and Ukraine have been repaired since Ukrainian President Yushchenko was around.

Speaking about the proposal, Dmitri Peskov, Mr Putin’s spokesman, said the idea to merge Gazprom and Naftogaz had been “thoroughly thought through” by the Kremlin and was a reflection of how “Russia is ready to integrate with Kiev”. Russia’s first deputy prime minister, Igor Shuvalov, has now been given the task of overseeing greater integration between the two former Soviet republics in the field of gas.

The suggestion is of course an enormous one. It would in effect shackle Ukraine to Russia once again – and forever.

Energy is the life-blood of any nation, never more so than a northern one prone to the coldest of winters. It could economically pay off. But is that a price when is prepared to pay for losing one's independence?

Hedging one's debts
During a televised address to the Ukrainian nation, President Yanukovych sought to assure his people of the merits of his foreign policy towards Russia, although he did not explicitly refer to the proposed gas merger with Ukraine’s giant neighbour. He said: “Soon, you will be convinced that we are moving in the right direction. I promise you that Ukraine will be a strong and blooming country.”

Commenting on the prospect of a gas merger between Moscow and Kiev, Mr Yushchenko warned: “Together with Gazprom’s engineers and technicians, Russian garrisons will come to the enterprises of the gas transportation system throughout Ukraine for the so called protection of Russian citizens and property on the Ukrainian territory. This potential scenario fully complies with the logic of the modern Russian military doctrine and poses a threat to the existence of the Ukrainian state.”

Stunned out of existence
Russian Prime Minister, Vladimir Putin’s, April 30 proposal to “merge” Ukraine’s national energy company Naftohaz with Gazprom has stunned the new Ukrainian authorities.

During an entire week after the proposal’s airing President, Viktor Yanukovych, and Prime Minister, Nikolai Azarov, have arrogated to themselves alone the right of reply on the authorities’ behalf, silencing other officials and ignoring the experts. This instinctively authoritarian reaction reflects the new authorities’ attempts to introduce a “pyramid of power” in Ukraine.

At the same time Yanukovych and Azarov seem deeply uncomfortable and even anguished over Putin’s proposal. The European Union and the United States can still make a difference in terms of forestalling Ukraine’s “integration” by Russia.

But Brussels has no official position and no clear policy. The Russian proposal is a bilateral Russian-Ukrainian issue, the EU Energy Commissioner’s office said on May 3, has become the new EU policy. Washington’s response also trails behind the rapidly moving events in Ukraine.

US Secretary of State, Hillary Clinton, has characterized the Ukrainian authorities’ policy as “an effort by Ukraine's new president, Viktor Yanukovych, to improve ties with both Russia and the United States in a balancing act, a hard one that makes sense to us" (The Washington Post, April 28). This assessment reflects initial expectations that the new authorities in Kyiv would pursue a two-vector policy between Russia and the West. The developments in the last few months, however, have invalidated that assessment.

The new Ukrainian authorities’ policy has turned out to be heavily oriented toward Russia. The last few months have witnessed parallel processes: state capture by the new authorities in Ukraine, coupled with a Moscow-initiated process of satellizing Ukraine. The two mutually sustaining processes are advancing and creating a fait accompli. They move faster, apparently, than the Western capitals’ capacity or will to react.

Yet the Ukrainian government’s willingness to sacrifice Ukrainian national interests and assets cannot be unlimited. Responding to Putin’s latest proposal in two separate news conferences, Yanukovych and Azarov have revealed some of those limits. Ukrainian authorities could become more outspoken in that regard if they perceived some Western support. The absence of this factor, however, undermines Kyiv’s position from the outset.

“We do not hear the European Union’s position. This would be very important,” Yanukovych told a news conference on May 5 in Kiev. Expressing willingness to enter into talks on Putin’s proposal, Yanukovych called for the EU to be included “at some stage” in the Russia-Ukraine negotiations. Yanukovych asserted that he envisages “cooperation” (evidently alluding to his “consortium” proposal) as distinct from an outright merger between Naftohaz Ukrainy and Gazprom.

He is quite rightly still hedging his bets.

 


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