The first 18 months of Vladimir Putin's presidency turned out to be a period of unprecedented activity in Russian-Ukrainian relations. A number of problems were seriously approached, among these the issue of Ukrainian gas debts. At the same time, it remains unclear whether the new cooperative dynamics will prevail or whether the conflictual legacy of the 1990s will become an insurmountable impediment to further improvement. This article attempts to analyse the factors which determined the ongoing evolution in Russian-Ukrainian relations in order to demonstrate that the positive dynamics had to do with changes in the views of the Russian leadership and in the export strategies of Russia's big businesses, as well as the evolution of Ukraine's posture vis-à-vis Europe, rather than with the internal political situation in Ukraine in 2001. The article also examines the main remaining controversies between the two countries in the economic and humanitarian spheres and offers a view on whether reciprocally pragmatic approaches are possible.
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References
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* Dr Arkady Moshes is Head of the Security of Central Eastern Europe and the Baltic Sea Region Section at the Institute of Europe, Russian Academy of Sciences, Moscow. He has written extensively on Russian relations with Ukraine, Belarus and the Baltic States and co-authored several reports for the Council on Foreign and Defence Policy, a Russian NGO.
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1 From $100 million to less than $40 million; Kommersant, 1 August 2001.
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2 It is noteworthy that in January 2000 Yulia Timoshenko, then deputy prime minister in Ukraine, also recognized the debt as $2.8 billion, although, admittedly, Prime Minister Yushchenko always cited a figure of $1.4 billion; Nezavisimaia Gazeta, 13, 20 January 2000; 25 February 2000.
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3 Diplomatichesky Vestnik, no. 9, 2001, pp. 23-24.
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4 Alexander Moroz's Socialist Party and the Yulia Timoshenko Bloc received approximately 7% of the vote each. Although these results can be interpreted as a success for both forces in the face of the strong administrative pressure that was targeted against them, they also show that the potential for radical protest in Ukraine remains limited.
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5 For more details, see Arkady Moshes, `The Slavic Triangle: Ukraine and Belorussia in Russian Foreign Policy in the 1990s' (in Russian), Pro et Contra, vol. 6, no. 1-2, Winter-Spring 2001, pp. 107-121.
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6 See http://rferl.org/pbureport/2001/07/29-310701.html.
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7 `GUUAM: Realities and Prospects', UCEPS Analytical Report, National Security & Defence, no. 7, 2001, pp. 2-45.
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8 The figure is taken from Russian sources; Nezavisimaia Gazeta, 20 October 2000. Gazprom claimed that, in winter 1999-2000, Ukraine was siphoning 100-120 million cubic metres of gas daily; Segodnya, 15 April 2000. In June 2000, Leonid Kuchma admitted `unauthorized use' of 13 billion cubic metres in just the first half of the year; Nezavisimaia Gazeta, 15 June 2000.
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9 `Ukraine and Russia: Current State and Prospects of Relations' (in Russian), UCEPS Analytical Report, Politia, no. 1, 2001, pp. 69-70.
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10 See, for example, the article by Andrei Derkach, a well-known Ukrainian oligarch and son of the former head of the Ukraine's security service, entitled `Mutual Enrichment Instead of Isolation', Nezavisimaia Gazeta, 2 December 2000.
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11 Mikhail Pashkov & Valerii Chalyi, `Ukrainian-Russian Relations: View from Ukraine' (in Russian), Politia, no. 1, 2001, pp. 13, 23.
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12 Nezavisimaia Gazeta, 12 October 2001.
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13 See http://www.pravda.com.ua/ru/?10824-1.
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14 One should not forget that the Ukrainian economy has a GDP of $30-35 billion, and its budget is around $7-9 billion. In relation to this, Russian state credits in the first half of the 1990s (some $3 billion), preferential gas prices ($35-40 per thousand cubic metres compared to world prices of $80-100), restructured gas debts (twice — in 1995 and 2000 — at about $1.5 billion dollars each time) as well as deliveries of electricity and fuel for nuclear stations with payments long overdue constitute clear examples of strong subsidies.
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15 Zerkalo Nedeli, 20-26 October 2001.
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16 Currently, Russia pays Ukraine with 30 billion cubic metres of gas, nominally priced at $80 for 1,000 cubic metres, totalling $2.4 billion dollars, while world prices are at least 20-25% higher. The introduction of money payments would be extremely beneficial for Russia, since calculations that use the official transit fee of $1.09 for 1,000 cubic metres per 100 kilometres and current volumes of transit give a figure of about $1.5 billion dollars. See Petra Opitz & Christian von Hirshchausen, `Ukraine as the Gas Bridge to Europe?', in Lutz Hoffmann & Felicitas Moellers, eds, Ukraine on the Road to Europe (Heidelberg & New York: Physica-Verlag, 2001), pp.149-165, on p. 155.
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17 Kommersant, 15 May 2001.
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18 Nezavisimaia Gazeta, 12 September 2001.
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19 See http://rferl.org/newsline/2001/10/111001/html.
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20 The best example was metal pipes, 800 thousand metric tons of which Ukraine exported to Russia in 2000. A good deal of this business is thought to be controlled by Viktor Pinchuk, Kuchma's son-in-law. Russia found evidence of dumping and threatened Ukraine with high countervailing duties. Finally, Ukraine agreed to restrict its own exports to within 620,000 metric tons.
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21 There was no shortage of rhetoric on the matter during the Yeltsin era, but very little was done in practice. Under Putin, specific statements criticizing Ukraine for its policy in the language sphere were made by Russian Human Rights Commissioner Oleg Mironov, the Foreign Ministry and the Russian ambassador to Ukraine Ivan Aboimov, while the State Duma adopted a resolution that blamed Ukraine for violating the `big' political treaty of 1997 in this respect. With the change of government in Ukraine in May 2001, Russian criticism subsided, which was probably connected with the fact that the most notorious figures, from the Russian point of view — such as Deputy Prime Minister Nikolai Zhulinsky — were not included into the new cabinet. Still, Moscow continued to watch the situation attentively, and when in January 2002 unknown extremists attacked the headquarters of the so-called Russian Bloc — a marginal election grouping running on an ethnic platform — the Russian Foreign Ministry voiced its concerns and urged Ukraine to respond to this and similar actions in a serious fashion.
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22 For details, see the statement of the Ukrainian Foreign Ministry of 12 February 2000, published in Russian—Ukrainian Bulletin, no. 5, Moscow, 2000, p. 20.
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23 Sodruzhestvo NG, a supplement to Nezavisimaia Gazeta, no. 5, 1999.
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24 Pashkov & Chalyi (note 11 above), p. 17.
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25 In October 2001, a Ukrainian missile launched from a test site in Crimea downed a Russian civilian plane 200 kilometres away, which demonstrated the degree to which the state of the Ukrainian military had deteriorated. The incident did not have a political impact on relations between the two countries.
