The Post-American Ukraine

This week shows that USA gives up on Ukraine. NATO gives up on Ukraine as well. The Obama administration decided to abandon a controversial missile-defense system that the Bush administration planned to build in the Czech Republic and Poland. The infamous air-defense system always rattled Mr. Putin and Mr. Medvedev. Now they can sleep well. No defense system in Eastern Europe, no threat to Russia. But can Ukraine sleep well now? No. Ukrainian politicians just woke up in a new world to them – the post-American Ukraine. Since Ukraine's breakaway from the former Soviet Union a main objective of the Ukrainian foreign policy was to distance itself from Russia and get closer to Europe. Not anymore! Nobody needs Ukrainian democracy in EU. Nobody welcomes Ukraine to NATO. Whoever will become the next president of Ukraine, he or she will have to come up with a new foreign policy if Russia gives him or her freedom of choice.

Now let's get back to Russia. If Mr. Medvedev believes in a tit-for-tat strategy in his foreign policy, then Russia must express a gratitude to the friendly Obama administration. So what does Russia do? According to the Economist, Hugo Chavez said that Venezuela would buy 92 tanks and a missile system from Russia with a $2.2 billion loan given by Russia. Wait a sec. Russia thanks USA by selling guns to anti-American Venezuela. What does the US do? The United States expresses concern over an arms race in the South America.

What else has Russia recently done? Mr. Medvedev has sent an aggressive and insulting letter to Viktor Yushchenko, Ukraine's president. Russia's district of attorney says that it has enough evidence to prove that several Ukrainians fought on the Georgina side against the Russian troops in the 2008 Russia-Georgia war. Russia's state-owned energy company GAZPROM has already told Ukrainians that they'll have heat and electricity in their homes only if their next president is pro-Russian politician. I am also afraid that Mr. Putin hasn't forgiven his biggest political embarrassment yet. Five year ago the Orange Revolutionaries, Yulia Tymoshenko and Viktor Yushchenko, brushed Mr. Putin off after he rushed prematurely to congratulate Viktor Yanukovich as winner of the rigged presidential election. The upcoming presidential election offers Mr. Putin to get back on both Yushchenko and Tymoshenko. January's presidential election in Ukraine will become the key event in Russia's new political season.

So which presidential candidate does Russia want to see as Ukraine's next president? The first choice must be Viktor Yanukovich. However, president Yushchenko's party OUNS speculates that Mrs. Tymoshenko has already made a deal with Russia.

The Economist: Dear Viktor, You’re Dead, Love Dmitry

I've already blogged about Russia's President Medvedev's letter to Ukraine's President Yushchenko. But The Economist has a very cool piece about it "Dear Viktor, You're Dead, Love Dmitry".

Two great quotes from the Economist's article:

1. Zbigniew Brzezinski, a Polish-born American national security adviser, once wrote: "Without Ukraine, Russia ceases to be an empire, but with Ukraine, suborned and then subordinated, Russia automatically becomes empire".
   
2. At a NATO summit in Bucharest last year Mr. Putin reportedly told President George Bush: "You understand, George, that Ukraine is not even a state".
   

And related links:

1. The letter: Russia's president Medvedev's letter to Ukraine's President Yushchenko.
   
2. Medvedev's video blog message to Yushchenko aka "Relations between Russia and Ukraine: a New Era Must Begin".
   

Ukraine Celebrates Its Independence Day

It has been 18 years since Ukraine's breakaway from the former Soviet Union. Ukraine's parliament declared the independence of Ukraine on August 24^th, 1991. The former Soviet republic of Ukraine has changed a lot in the last eighteen years. The first wave of major structural changes, perestroika, was initiated in the 1980s. The second wave of market and political reforms stormed through the early 1990s when Ukraine was already a sovereign state. These political and economic changes have transformed FSU country into a modern Eastern European state with a consolidating democracy and emerging market economy.

Happy Independence Day! (ukr. Vitau s Dnem Nezalezhnosti)

 

Russia’s President Medvedev Celebrates Putin’s Decade in the Traditional Russian Style

I would not believe this if I have not read Russia's president Medvedev's letter to Ukraine's President Yushchenko (also see New York Times, Zerkalo Nedeli (ukr)). So it's only two days since Putin has officially celebrated his decade in power. I am sure that Putin received bunch of phone calls from all over the world, including Belarus, Kazakhstan, China, North Korea, Venezuela and other places from the sub-democratic climate zone. And only president Medvedev made a very unique gift to Vladimir Putin. The Russians often say that the best gift is a personally hand-made one. In this case Medvedev's letter to Yushchenko is one of a kind. This letter is so good that it's really scary to read it and think about it. But after reading Zakaria's Post-American World and witnessing a reset-button stage of American-Russian relations the context of the letter is not so surprising after all. We all asked for it. And we got it. The official Kremlin's foreign policy has been served. And Ukraine will be the next democratic state after Georgia to test drive it. It will be a bumpy ride because Ukraine will have the presidential elections less than in five months.

So let's summarize the letter. First, Russia can't forgive Ukraine's political support of Georgia during the Russian-Georgian war conflict. Second, President Medvedev accuses Ukraine's military industry for selling tanks, guns and missiles to Georgia that used Ukraine-made weapons to kill innocent Russian citizens who accidentally found themselves in the middle of the war conflict in South Ossetia's town of Tskhinvali. Medvedev writes that "those in Kiev who supplied the Georgian army with weapons and, by the way, do not intend to stop doing so, fully share with Tbilisi the responsibility for the committed crimes". Second, Russia's president does not want to see Ukraine in NATO. He writes that "ignoring the views of Ukrainian citizens as well as Russia's well-known position, the political leadership of Ukraine stubbornly continues to pursue accession to NATO". Medvedev is also very cranky about Russia's Black Sea fleet situation. Officially, the Russian fleet must leave Ukraine's Black Sea seaports by 2017. Both president Yushchenko and prime-minister Tymoshenko made it clear in their many statements that they will not renew a seaport lease with Russia. Third, Medvedev does not avoid the energy issue. He writes that "Kiev has consistently sought to sever existing economic ties with Russia, primarily in the field of energy. These actions threaten the ability of our countries to reliably use what is, in fact, a unified gas transmission system that ensures the energy security of Russia, Ukraine and many European nations". Then, Russia's president briefly mentions a discrepancy between Ukraine and Russia in their views on the unification of the Eastern Orthodox Christian Church under the umbrella of the Russian Church, reestablishment of Ukrainian's UPA-OUN warriors as WWII freedom-fighters, and finally the 1930-1933 Soviet terror-famine as an act of genocide against the Ukrainians. Finally, Medvedev makes a statement that a social capital built between Russia and Ukraine is their competitive advantage in the globalized world and cooperation between Russia and Ukraine will lead to the mutually beneficial prosperity. Oh, really?

Well, there is nothing in this letter that could really surprise me. All points have already become a cliché of the Russian-Ukrainian relations. What is interesting about this letter is that it just cries out loud about Russia's difficult economic situation. The recession hit Russia hard. The falling oil and gas prices lowered the prospects for the fast economic recovery. Moreover, constant tensions between Russia's GAZPROM and Ukraine's NAFTOGAZ just increase the transactions costs and thus decrease Russia's oil and gas revenues. What is the next big industry in Russia after the hydro-carbon one? It is the military industry. Ukraine is actually one of Russia's main rivals in the weapons business. Moreover, both Russia and Ukraine have nearly the same cluster of customers worldwide. Thus, Medvedev simply wants to lower Ukraine's competitiveness by tarnishing its reputation and calling for international regulations to reduce Ukraine's sales of weapons abroad. Finally, the whole story about the Black Sea Fleet has a very simple cost-benefit analysis explanation. It is hell expensive to replicate Sebastopol's (i.e. Ukraine's seaport) infrastructure on the Russian side of the Black Sea. And Russia is not financially ready for such a massive investment project, especially, in the light of the ongoing recession. So I guess that one of my readers is actually right when she says that both Putin and Medvedev simply care about their own pockets which are filled by the revenues from the state-owned companies such as GAZPROM or NPOMASH. In this case, Medvedev's foreign policy could be much better understood through the lenses of the political economy rather than foreign affairs.

Today Russia celebrates Putin’s decade

Now it is official that Vladimir Putin has crossed a decade of being in power. He was Russia's second president. Now he is a prime-minister. But everybody thinks that he is still in charge of Russia. He entered the executive branch of power when the former president Yeltsin appointed Putin as a prime-minister on August 9, 1999. Since then Putin has become one of the most charismatic as well as one of the most odious world leaders. He made everyone count with Russia's political and economic power. On his watch Russia became one of the BRICs. The Russians praise him for the stability that he brought to the country. An international development community ostracizes his ability to curb individual liberties and media freedom while improving Russia's living standards. The Russians have accepted a trade-off between prosperity and freedom so far. China that is another BRIC also shows that such a tradeoff works in the short-run. The main question is: how long will China and Russia be able to curb individual liberties in exchange for rising living standards?

However, Putin enjoys great public support. His record is not immaculate. A long-lasting war conflict in Chechnya and the Russian-Georgian war demonstrates Putin's imperial appetite. A constant interference in Ukraine's domestic policy is another sign of Putin's imperialism. In 2004 the Kremlin officially backed up Viktor Yanukovich, a presidential candidate from the pro-Russian Party of Regions. And then Putin was the one of the few political leaders who rushed to congratulate Yanukovich with the rigged victory in the presidential elections.

So what does Putin's decade mean for Ukraine that will have the presidential elections in January 2010? The incumbent president Viktor Yushchenko, a conservative democrat, has very low public support. So he's less likely to become a presidential candidate from OUNS party (i.e. Our Ukraine and National Self-defense). Moreover, Russia deals with the current recession better than Ukraine does (see a blog post from July 24). Russia's fall in GDP was smaller than Ukraine's. But the Ukrainians enjoy more freedom than the Russians who in return enjoy higher living standards than the Ukrainians. Let's not forget that Russia's economic growth is not a real value-added growth. It's oil-driven. Russia does what the former Soviet Union did. Russia cashes in oil and gas resources. It has very abundant natural resources and the oil-driven growth can last for a long time. However, I can assure you that a dominating majority of Russians will celebrate Putin's decade. They will toast to his health and happiness. What will Ukraine and the rest of the world do? Let's just hope that Putin's charisma will not reverse Ukraine's political and economic development.