Ukraine, not just democracy but also a geopolitical battle

Ukraine, not just democracy but also a geopolitical battle

I was deeply saddened by the bloody scenes at Maidan Nezalezhnosti - the traditional place for large-scale political protest rallies – including the 1989 student “Revolution on Granite”, the 2001 “Ukraine without Kuchma,” the 2004 “Orange Revolution,” and the ongoing “Euromaidan.”
My first visit to this city straddling the Dnieper River to the north of Ukraine, was back in 2000 on a special mission to help step up the economic reform process when the then Ukrainian President Leonid Kuchma and Prime Minister Anatoly Kinach had asked support from the OECD.

Russia was not particularly happy about our engagement in Ukraine, for reasons which are no different from what we have experienced over the past few months – whether it will stay in Moscow’s orbit or tilt towards the west?

No matter who comes to power next in Ukraine, the current crisis is far from over and will not be so in the foreseeable future; simply because what’s going on isn’t just a clash of democracy versus dictatorship. It is, fundamentally, a struggle for power not only within Ukraine but also between Russia and the West.

Ukraine is geographically split. The initial protesters live mainly in the western part of the country, which does have European leanings as well as borders. The eastern and southern parts of the country have deep roots in Russia, dating back not just to the Soviet times but also to Peter the Great.

It was Yanukovych’s decision in November 2013 to back out of a thickening association with the EU and instead get back in bed with Russia, lured by Putin’s offer of a $15 billion bailout and 33 percent discount in gas prices. The first protesters came to Independence Square because they wanted to become Europeans, and not just economically; they were protesting their president’s retreat from the Western future to the Eastern past.

It is extremely unlikely that Putin will shrug his shoulders and let Ukraine go west. Ukraine is an existential matter for many Russians, especially for Putin, who has described the Soviet Union’s collapse as “the greatest geopolitical catastrophe” of the 20th century” and has announced plans to create a Eurasian Union, consisting of Russia, Ukraine, Belarus, and Kazakhstan.

Yet, this geopolitical battle is an uneven one. Russia cares more about losing Ukraine than Europe and the West care about gaining it. The EU does not see Ukraine in the same geopolitical terms as Russia. The EU’s decision not to get into a bidding war with Russia was defensible in view of the fact that Yanukovych presided over a near-bankrupt kleptocracy that he has refused to reform. 

As for the U.S. it has let the EU take the lead on engaging Ukraine, given Washington’s full foreign policy in-box and Ukraine’s desire to draw closer to the Union. President Obama said that his approach was “not to see this as some Cold War chessboard in which we are in competition with Russia,” but rather to ensure that the Ukrainian people can “make decisions for themselves about their future.” Putin, well-schooled in the “Great Game” of his ancestors, certainly sees the battle for influence in Ukraine as a chessboard. 

Ukraine’s economy is in a mess. Its main economic headache is the fall in commodity prices: metal exports account for some 60 percent of export revenue. Last June, Fitch revised Ukraine’s outlook to negative. The country’s credit rating has moved deeper into junk in September 2013 due to a “very high default risk.” The country’s debt is 80.5 percent of GDP – compare this with Turkey’s total external debt at roughly 44 percent and 229 percent for Greece. 

In December, Transparency International slammed Ukraine as the “most corrupt country in Europe” in its annual corruption perception index. Kiev also slumped in the World Economic Forum’s global competitiveness index released in September, at 84th out of 143 countries, and 112th in the World Bank’s 2014 Ease of Doing Business Report. 

The apparent toppling of the pro-Russian leader after bloodshed in Kiev that saw more than 100 people killed and the center of the capital transformed into a blazing inferno looks likely to pull Ukraine away from Moscow’s orbit and closer to Europe. But this is likely to be temporary.

Tymoshenko, who walked free from the jail, was the Prime Minister in 2005, and again from 2007 to 2010. If she will assume power again, we should not expect much change under her reign. We saw what her performance was like.

We should consider this ongoing fight to be essentially about the sovereign right of independent states to define their own destiny. Hundreds of thousands of ordinary Ukrainians, who took enormous risks to their lives, understand that greater integration with Europe – regardless of whether it ends with EU membership – has more to offer them than Russia’s hug. 

Ukraine should be allowed to blossom, independently of Russia, the EU and the U.S., so that we have a stable, secure and prospering neighbor to the north. But there is a long way to travel before that happens in the wake of a domestic reconciliation, geopolitical equilibrium and economic reforms.