UKRAINIANS PREFER STRONG LEADERS

David Marples

Two recent opinion polls by the Research and Branding Institute in Kyiv provide some startling revelations about political opinions in Ukraine, just as Parliament has approved new presidential elections on January 17.

A June 2009 poll with over 2,000 respondents from all regions of Ukraine is declared to have a margin of error of 2.2%. It provides a plethora of data about the leading candidates for president. Former Prime Minister Viktor Yanukovych, who lost in the 2004 elections to current president Viktor Yushchenko, leads with the support of 26.8% of respondents, followed by Prime Minister Yulia Tymoshenko at 15.8%, and former Foreign Minister and chairman of parliament Arsenii Yatsenyuk, 12.3%. President Yushchenko is backed by a meager 2.1%.

If the election, as seems likely, requires a second round, then Yanukovych would triumph over either of his main challengers: against Tymoshenko by 38.8 to 28.8%; and against Yatsenyuk by 36.7 to 30.8%. If the second round were between Yatsenyuk and Tymoshenko, the former would eke out a narrow victory.

The emergence of Yatsenyuk as a serious contender is a recent phenomenon. A former protégé of President Yushchenko, he reportedly has financial backing from two controversial figures: Dmitrii Firtash, a leading stockholder in the RosUkrEnergo company that mediated in the dispute over the price for the sale of Russian gas to Ukraine; and Viktor Pinchuk, the son-in-law of former President Leonid Kuchma, who owns four Ukrainian TV channels. A native of Chernivtsi, Yatsenyuk is of Jewish origin and turned 35 on May 22, the minimum age at which one can run for the post of president.

At present, 51.2% of those polled will definitely participate in the elections, while 24% may exercise their right to vote. As there is speculation that parliamentary elections may take place simultaneously, the standing of the major political parties is also of relevance: the Regions Party leads among respondents with 29.3%, followed by the Yulia Tymoshenko Bloc with 15.5%, and the Yatsenyuk Bloc with 10.6%.

Recently, a move to form a coalition between the two largest blocs (Regions and Tymoshenko) failed after Yanukovych ultimately rejected the idea. At one point the Regions leader had suggested changing the minimum age to run for president to 50, which would have removed Tymoshenko and Yatsenyuk from the contest.

A poll conduced by the same organization in May focused on attitudes of residents of Ukraine to other countries and blocs. These results are perhaps even more enlightening, given the general synopsis in Western media that Ukraine is Western leaning or pro-Europe.

Over 35% of those polled would prefer to see Ukraine join a Union with Russia, Belarus, and Kazakhstan; 20% would like Ukraine to join a United Europe (European Union); and 23% want the country to remain independent without joining any such formation. Incidentally, support for joining the EU is much higher in Belarus than in Ukraine.

In terms of attitudes to leaders of former Soviet republics, 58% hold a positive attitude toward Russian Prime Minister Vladimir Putin, 56% feel the same way about hard-line Belarusian president Alyaksandr Lukashenka, and 55% have a favorable attitude toward Russian president Dmitry Medvedev. By contrast only 11% feel positive about Georgian president Mikeil Saakashvili.

Western leaders are considerably less popular. The highest rated is US President Barack Obama (31%), followed by Angela Merkel of Germany (29%), and Frances’ Nicolas Sarkozy and Poland’s Lech Kaczynski (tied at 22%). Notably, however, both Obama and Merkel received higher totals than Ukraine’s leading candidate Yanukovych.

Lastly, looking at attitudes toward other countries, the results were as follows: 57% of respondents feel positively toward Russia, 45% toward Belarus, and 20% toward Germany. Only 3% feel positively about Georgia, which was supported firmly by President Yushchenko during its August 2008 war with Russia.

Some deductions can be made from these results, which are consistent with findings of Western researchers such as Stephen White at the University of Glasgow.

First, the economic downturn has not affected significantly the political attitudes of Ukrainian residents. Ukrainian citizens appear to favor strong leaders over weak, albeit more democratic–leaning statespersons. They are generally pro-Russian and skeptical toward both the United States and the EU.

Second, the chances of success of Prime Minister Tymoshenko in the January 2010 elections are slim. Her popularity has fallen in recent months after the seemingly endless squabbles with the president and what is perceived as her single-minded pursuit of the highest office. At one point she clearly intended to push through a constitutional change to elect the next president through the parliament, but such a maneuver today would only work in favor of Yanukovych.

Third, regionally there is a marked contrast between attitudes in western regions and the rest of Ukraine. Western Ukraine is more pro-Europe and anti-Russian, with political support divided between Tymoshenko (23.4%) and Yatsenyuk (23.2%). However, Western Ukrainians make up only one-fifth of Ukraine’s population.

Fourth, Ukrainians are deeply unhappy with the current president, an increasingly isolated figure who seems incapable of communicating in any meaningful way with his electorate. A realist might opt not to run and campaign for newcomer Yatsenyuk, notwithstanding the credibility of some of his financial backers. But Yushchenko seems intent on running again, even though every indicator suggests that he is unelectable.

This article appeared originally in the EDMONTON JOURNAL on 27 June 2009.

Russian Duma’s Discussion of Second World War Revisionism in the Near Abroad States

By Ilya Khineiko

In Russia as well in other post-Soviet states, history, particularly the history of the Second World War, is not merely a matter of academic debate. Politicians from the highest echelons of power often find it instrumental to dwell on controversial historical issues. Last October, in a letter sent to the Ukrainian President Viktor Yushchenko, his Russian counterpart Dmitry Medvedev weighed in on the proper interpretation of the Ukrainian Famine, the Holodomor. In December 2008, the Russian parliament decided to move in a similar direction, creating a working group to draft a new law against the rehabilitation of Nazism and Nazi collaborators in the post-Soviet states. Chaired by deputy head of the Duma’s Committee for CIS Affairs, Konstantin Zatulin, the group produced a legislative draft proposal with a lengthy title “On the countermeasures against the rehabilitation of Nazi criminals and their facilitators in the new independent states on the territory of the former Soviet Union.” It was published by the pro-government news agency Regnum on 20 April 2009 (full Russian text is available here: http://www.regnum.ru/news/1153517.html).

Probably the most striking feature of the bill is the issue of jurisdiction as it explicitly targets Russia’s neighbors. While the notion of universal jurisdiction has gained ground in the past decade, an attempt to direct domestic legislation against a specific set of countries represents a novel approach to international law. Furthermore, according to a Russian legal expert quoted in the Moscow Times, the proposed legislation would violate the Russian Criminal Code as it “only allows penalties for crimes committed in Russia.”

However, even the stated intention to focus on all former Soviet republics is somewhat misleading. In an interview with Radio Liberty, Konstantin Zatulin singled out Latvia, Estonia, and Ukraine where “the attempts to rehabilitate Nazi criminals and their facilitators… have become a matter of state policy”. He admitted that any similar actions in other, more remote, countries, such as Australia for example, would be of no concern to the bill’s authors. According to Radio Liberty, many Verkhovna Rada deputies are convinced that the bill is directed primarily against Ukraine. This comes as no surprise as Zatulin’s troubled relationship with Ukrainian authorities is well known. In July 2008 he was denied entry into Ukraine. Ukrainian Security Chief Valentyn Nalyvaychenko later explained that Zatulin had violated a Ukrainian law on the status of a foreigner during a previous visit to Ukraine when he made statements regarding the country’s territorial integrity.

The reaction of Ukrainian parliamentarians has been uniformly negative. Yuri Kostenko from Our Ukraine sharply criticized the bill, saying that it would turn Russia into a new “gendarme of Europe.” Even members of the ostensibly pro-Russian Party of Regions were not impressed. According to Valery Konovalyuk, as far as the international law is concerned, such legislative initiative does not represent a sound approach. In the context of Russian-Ukrainian relations, the bill can be considered a response to the draft law against Holodomor denial that President Viktor Yushchenko submitted to the Verkhovna Rada in December 2008. Although the Ukrainian bill does not attempt to prosecute people outside Ukraine, it proposes to imprison those who deny the genocidal character of the Holodomor against the Ukrainian people, an interpretation vigorously contested by Russia’s authorities and most Russian historians.

Perhaps the most ambiguous and controversial aspect of the new legislation is its definition of what constitutes a rehabilitation of Nazism and who should be deemed Nazi facilitators. The draft states that a Nazi facilitator (posobnik) is someone who served in or collaborated with the German occupation administration on the territory of the USSR voluntarily or as a result of mobilization (sic! – I.Kh.). Rehabilitation of Nazism is defined as “any actions aimed at… the reinstatement of rights, glorification, [as well as any attempts] to restore reputation of Nazi criminals and facilitators and their organizations by bestowing them with benefits, state or societal awards and to deny Nazi genocide and crimes against humanity”. This incredibly vague definition leaves a lot of room for interpretation, and obfuscates the true intentions of the bill’s authors, namely to criminalize any opinion that questions the role of the USSR in the Second World War. According to Konstantin Zatulin, “There were no third forces in the Second World War. The logic of war compelled people either to side with Nazi Germany and then start shooting at Soviet soldiers or to choose the side of the anti-Hitler coalition.” Zatulin’s definition does not differ substantially from the old Soviet line that equated anti-Soviet resistance with Nazi collaborationism. That the struggle against alleged ‘rehabilitation of Nazism’ is being used to defend the Soviet past and its remaining symbols is revealed in Zatulin’s statement made in early April. In an interview with the Russian news agency RIA-Novosti, he called the dismantling of the statue of the Soviet Soldier in the city of Stryj in Lviv oblast an outrageous act and promised to accelerate work on the appropriate legislation.

While the draft bill purports to target equally Russian citizens and citizens of other post-Soviet states, it is unlikely that the legislation would be ever applied against the rise of pro-Nazi sentiment in Russia itself. In an ironic twist of events, a few days after the bill’s publication, fans of the Russian soccer club Spartak Moscow unveiled a banner commemorating the anniversary of Hitler’s birthday during a game in the Russian Premier League. Understandably, such an act caused outrage among the Russian public and was roundly condemned. However, a Duma representative, Gennady Gudkov, stated that the perpetrators could only be fined under the current legislation, being seemingly unaware of the proposed bill that seeks to criminalize precisely such actions. Indeed, should this bill be adopted, its main brunt will likely be directed not at individuals but at ‘hostile’ states. As such it will just serve as another weapon in the growing conflict between Russia and Ukraine, in which history is just another battlefield.

Stasiuk-Cambridge Lecture 2009

четвер, 05 березня 2009 p., 15:53 GMT 17:53 за Києвом

Світлана Пиркало
Бі-Бі-Сі, Кембридж

ЄС, Україна, Росія і політ-ігрища: О. Пристайко
В славетному британському університеті Кембридж пройшла щорічна лекція імені Стасюка, присвячена Україні.

Це вже всьоме викладачі, студенти й експерти збираються, щоб послухати доповідь про сучасну Україну та її місце в світі.

Ці лекції організовує відділення українських студій, яке також пропонує студентам і викладачам уроки української мови, перегляд українських фільмів і взагалі знайомство з українською культурою.

Цього разу доповідачем на лекції Стасюка була Олена Пристайко, дослідниця брюссельського центру “ЄС-Росія”.

Пані Пристайко, яка займається питаннями спільної політики ЄС і Росії відносно їхніх сусідів, включаючи Україну, а також питаннями взаємин ЄС з Росією, заторкнула ці проблеми і намагалася спрогнозувати подальші стосунки в цьому трикутнику, і згодом повторила для Бі-Бі-Сі основні тези своєї доповіді.

Бі-Бі-Сі: Ви прочитали щорічну лекцію на тему стосунків Росії та ЄС і їхнього майбутнього. Як ви бачите ці стосунки?

Олена Пристайко: Під час своєї доповіді я намагалася намалювати картину того, де ці сторони знаходяться. Звичайно, події 2008-2009 року негативно вплинули на ці відносини. І події в Грузії, і “газова війна”, а також важкі наслідки для економіки України і Росії, фінансова криза не роблять відносини у цьому трикутнику більш позитивними.

Бі-Бі-Сі: Тобто попри підписані угоди між Україною та ЄС і попри декларації гарних намірів протягом останніх кількох років стосунки у цьому трикутнику погіршуються?

Олена Пристайко: Вони стають складнішими, оці події останнього року руйнують довіру один до одного. А довіра в сучасному світі, напевно, важливіша, ніж усі підписані папери. Саме в цьому проблема. І Україна, і Росія зараз у процесі переговорів з ЄС. Події 2008 року не роблять ці переговори легшими. Чи погіршуються стосунки в трикутнику? Я б не сказала. Але вони ускладнюються. Все більше факторів впливають на ці відносини. Щоб виправити цю ситуацію, напевно, усі три сторони мають зробити кроки.

Бі-Бі-Сі: Що робити Україні?

Олена Пристайко: Перш за все, завдання для України – це внутрішня стабілізація, знаходження внутрішнього консенсусу з тих питань, з яких зараз є розходження. Треба розпочинати реформи. Можливо, криза і є тим моментом, коли треба розпочинати ці реформи. Я думаю, завдання України – перш за все внутрішня робота, реформування і подолання внутрішніх розбіжностей, які насправді не такі вже й великі, щоб так сильно боротися один з одним. Можливо, там і розбіжностей особливих немає. В цьому поблема українського політичного середовища – там насправді немає серйозних політичних розбіжностей. Проблеми НАТО, мови, на мій погляд, роздуті. Це не ті проблеми, на яких потрібно зараз сфокусовуватися суспільству, яке за останні 2 місяці вже втратило 30-40% своєї економіки. Основною темою, на якій мають сфокусуватися не лише політики, а й суспільство – це подолання оцих внутрішніх криз, пов’язаних і з економікою, і з перебудовою. Адже Україна і досі у процесі побудови політичної системи, конституційний процес незавершений, і саме на цьому, а не на персональних чварах, суспільство має консолідуватися.

Бі-Бі-Сі: То чи можна на оцьому зруйнованому кризою просторі побудувати щось нове?

Олена Пристайко: Ящо не зараз, то коли? Я думаю, що вже настав цей момент. Інша річ – українське суспільство втратило довіру до своїх керманичів. Це справді велика проблема. Поки що важко сказати, якими будуть результати президентських виборів 2010 року. Можливо, цей період кризи знищить рейтинг теперішніх сил, вони вже втрачають. Я знаю, що Тимошенко за останній місяць втратила 15% довіри населення. Можливо, це і є шанс для того, щоб з’явилися нові обличчя і нова надія.

Бі-Бі-Сі: У своїй доповіді ви поклали відповідальність за те, що немає нових українських облич, на пропорційну систему виборів. Ви вважаєте, що повернення до змішаної системи виборів, коли половина парламенту обиратиметься за партійною приналежністю, а інша половина за мажоритарним принципом, могла б стати виходом?

Олена Пристайко: Це обговорюється в українському суспільстві лише як один з варіантів виходу. Але пропорційна система виборів в Україні зараз недобудована, оскільки списки політичних партій, які йдуть у парламент є закритими. Тому громадяни голосують всліпу, вони бачать лише лідера цієї партії. Ми вже зараз є свідками того, що в парламент прийшли люди, які не заслуговують довіри, однак через вади виборчої системи вони туди проходять. Україна має зробити свій вибір – чи буде це повернення до змішаної системи, чи щось інше, але потрібно зробити таку виборчу систему, яка б відповідала не інтересам політичних партій, а інтересам громадян, які мають знати, за кого вони голосують, щоб знати потім з кого спитати. Тобто має бути побудований нормальний двосторонній зв’язок, щоб політичні сили відповідали за свої дії.

Бі-Бі-Сі: Ви вважаєте, що чисто президентська форма правління в Україні вже відійшла у минуле?

Олена Пристайко: Немає чітко встановлених аксіом, які б казали, що ця ситема гарна для України, а інша – ні. У відході від президентської системи бачили запобіжний засіб, але це не означає, що президентська система погана як така. Є ж країни у світі, де вона працює. Але потрібні запобіжні механізми, які б захищали цю систему від еволюції до більш авторитарних форм.

Бі-Бі-Сі: Тобто як у США, де є конгрес і сенат, які можуть поставити питання про відповідальність президента?

Олена Пристайко: Звичайно. У світі не існує ідеальної політичної ситеми. Кожна країна проходить свій шлях, щоб знайти ту політичну систему, яка є оптимальною для цієї країни. На жаль, і Україна має пройти через це, і саме у період економічної кризи.

Бі-Бі-Сі: Ви говорили про те, що Росія діє всупереч своїм власним інтересам. Чому так, і що це означає для України?

Олена Пристайко: Це не означає нічого гарного не лише для України, а перш за все для стабільності на європейському континенті. Росія не демонструє приклад поведінки міжнародного актора, який відповідає за свої вчинки. Вона так діяла і у війні в Грузії, і у “газовій війні”, коли Росія перш за все діяла проти власних інтересів. У Грузії вона втратила обличчя держави…

Бі-Бі-Сі: Не тільки обличчя, але й гроші, оскільки акції російських компаній попадали, кредитні рейтинги Росії також були знижені. Чому ж було прийнято таке рішення?

Олена Пристайко: Я не знаю, чи сама Росія може відповісти на це питання. Чому вони діють проти власних інтересів? Можливо, річ у політичній системі Росії, у втраті політичного зв’язку з громадянами, іншими ланками суспільства, включаючи бізнес, неурядовий сектор. Можливо, влада надто зосереджена в одних руках в Росії. І немає сил, які можуть спитати у центру влади, чому він діє проти інтересів країни. Тому, можливо, що і для Росії криза є рушієм до політичної трансформації.

Бі-Бі-Сі: Коли в Україні почала поширюватися інформація про політичну структуру Заходу, про вільний ринок під час горбачовських реформ, була дуже сильна думка суспільства, що ринок сам себе виправить, що ринок – найкраща відповідь для всього. Зараз у світі величезна фінансова криза, і багато-хто запитує, чи цей ринок такий вже саморегульований? Чи у цьому регіоні ринок насправді грає роль, чи політичні й економічні труднощі пояснюються зовсім іншими чинниками?

Олена Пристайко: Зараз експерти запитують себе: чи це провина вільного ринку, тобто системи як такої, чи це провина людей, які керували системою? Чи потрібно нам через цю кризу відмовлятися від ринкових мехінізмів і принципів? Я так не думаю. Це буде найгіршим виходом. Людям дійсно потрібно провести роботу над помилками, і розібратися, чому це сталося. Я думаю, це все ж людський фактор. Дійсно, криза показала вади ринкової економіки.

Бі-Бі-Сі: Здавалося б, між Україною і Росією багато торгівельних зв’язків, їм вигідніше було б і далі торгувати, але ми цього не бачимо. Українська економіка дуже залежить від експорту до Росії. Чому замість того, щоб взаємовигідно торгувати, між Україною і Росією виникають такі конфлікти, які шкодять обом країнам?

Олена Пристайко: Все ж основним торгівельним партнером України є Європейський Союз, який в економічних стосутках виступає як єдине ціле. Ситуація з Росією дійсно прикра. Ми бачимо надмірну залежність економічних зв’язків від політичної ситуації і політичних ігрищ між Україною та Росією. Я думаю, здоровий глузд і намагання вижити у сучасних складних умовах переможуть політичні негаразди.

Бі-Бі-Сі: Яка угода з тих, що існують між Україною і ЄС, на вашу думку, дала б більше стимулів Україні для розвитку і водночас заспокоїла ЄС, який досі нервує після останнього розширення і не певен, що йому робити далі?

Олена Пристайко: Питання перспективи членства в ЄС насправді є ключовим у стосунках ЄС і України. На сьогодні сторони у цьому процесі переговорів прийшли до висновку, що вони будуть укладати угоду про асоціацію. Однак ця угода не означає, що Україні буде надана перспектива членства. Проте вона і не заперечує цієї можливості. Сьогодні справді, обидві сторони мають свої проблеми у питанні інтеграції України до ЄС. ЄС просто не готовий до прийняття України, а Україна не готова до інтегрування до ЄС через внутрішні негаразди. Угода, що найбільше б відповідала національним інтересам, – це угода, яка б найбільше допомагала Україні у внутрішній трансформації. Як вона буде називатися – вже питання другорядне.

THE NEW GAS DEAL: THREATS AND RISKS FOR UKRAINE

Katja Malyhina

The harshest dispute in the history of the “gas wars” between Russia and Ukraine is over. On January 19, in Moscow, the Ukrainian energy supplier “Naftogaz Ukrainy” and its Russian counterpart “Gazprom” signed a new gas deal for 2009-2019. According to the agreement, Ukraine received a 20% discount on the negotiated gas price in 2009, which corresponds to the average European level. The fee for gas transit paid by Russia remained, however, unchanged from 2008 at US $1.7 cubic meters per 100 kilometers.

Introduction

Are there really any winners in this war? Ukraine’s sagging economy has become even more weakened due to the gas dispute with its neighbor. A number of large industrial companies, including the Odessa port plant and the chemical group “Stirol”, were shut down because Russia suspended its gas supplies to Ukraine. However, Russia has also suffered some damages. According to some estimates, Gazprom has endured financial losses of up to $1.5-2 billion. Limitation of Gazprom’s foreign exchange gains has strengthened devaluation tendencies in Russia. On January 20, the Russian ruble dropped to its lowest value in a decade (RUR32.2 to US$1). A number of European gas companies are seeking reimbursements from Gazprom for the halt in gas supplies. The most important consequence, however, is that the gas conflict essentially undermined the images of both Russia and Ukraine in the eyes of the European community. The President of the EU Commission Jose Manuel Barroso recently questioned the reliability of the both countries as energy suppliers to the EU.

Because of huge financial losses and Ukraine’s lack of compliance Moscow took a very tough position concerning future gas relations with Ukraine. The signed agreement has already tightened the prolonged political conflict in Kiev. President Viktor Yushchenko heavily criticized the contracts that were negotiated by Premier Minister Yulia Tymoshenko. Meanwhile, Tymoshenko called the conditions “unique.” But what makes new agreements really “unique”, and what impact will they have on Ukraine?

“Unique” Conditions

According to Tymoshenko, the gas contracts are unique because for the first time they were signed directly between the energy companies Gazprom and Naftogaz without any intermediary. Also, another precedent, the gas deal will regulate gas relations between Russia and Ukraine for the long term instead of annual negotiations. Finally, the gas prices for Ukraine are now tied to oil prices, following the example of European countries. Undoubtedly, the elimination of the dubious intermediary “RosUkrEnergo” (RUE) from the gas trade is a positive result for Ukraine. However, the result should not be solely attributed to the active endeavors of Tymoshenko. Gazprom was also interested in this decision. With the aim to reduce the profitability of the Nabucco project, Russia increased prices for gas from Central Asia, which made any intermediary services unprofitable.

The removal of the intermediary seems to be the only positive outcome for Ukraine from the new gas deal. The increase of gas prices to market levels from 1 January 2009 is a very unfavorable result. The gas price will be calculated quarterly according to a formula with the basic price of $450 per 1,000 cubic meters. Tymoshenko assured the public that the base price corresponds to the average European gas price for the first quarter of 2009. But if one compares quarterly prices for Ukraine announced recently by Naftogaz with the would-be European quarter average (that is without the 20% discount), then the annual average price for Europe would amount to $316 per 1,000 cubic meters. Gazprom, however, declared recently, that the average gas price for its European customers in 2009 would be $280. As a result, natural gas for Ukraine will be even more expensive than in Europe in the future. Moreover, with the high base price of $450 for Ukraine, Russia can offset the costs of expensive Central Asian gas and profitably sell it to Ukraine. In any case, Russia has done everything to get the utmost benefits from the negotiations.

Nevertheless, Prime Minister Tymoshenko did succeed in obtaining relatively low gas prices for the current year. According to Tymoshenko, the annual average price for Ukraine would be $228.8 per 1,000 cubic meters in 2009. The 20% discount granted by Gazprom will not be the only source of low average gas prices for this year. Naftogaz Ukrainy announced that it would buy the lowest amount of gas in the first quarter of 2009, when the gas price for Ukraine will be the highest (only 5 billion cubic meters at a price of $360 per 1,000 cubic meters). Naftogaz also lays claim to 11 bcm of RUE gas stored in Ukraine. RUE owed $1.7 billion to Gazprom for this gas, which was paid off by a complex maneuver: Gazprom made an advance payment for the same amount in lieu of transit fees, which Naftogaz then returned to pay off RUE’s debts. However, the Ukrainian energy company has faced problems with the transfer of ownership rights from RUE in its own country. If the transaction is successfully completed, the price for 11 billion cubic meters of gas would be only $154 per 1,000 cubic meters, which is $25 less than last year.

With all the discounts added together, Ukraine will pay about $9 billion for imported gas this year, while it will get only about $0.6 billion from Russia for gas transit through its territory. The actual amount of about $2.3 billion should be reduced by the aforementioned $1.7 billion, which Gazprom “paid” Naftogaz via RUE’s debt assignment. Leaving the transit rates at the same level as in 2008 and switching to the gas prices formula re-calculation illustrate the asymmetry of the contracts. It turns out that a 20% discount on gas prices comes together with a discount in around 60% on transit fees. Such a discrepancy will also remain over the next year, when the transit rate will be calculated according to the aforementioned formula. Gazprom has already announced that the price for transit will be about $2.66 per 1,000 cubic meters per 100 kilometers in 2010. For comparison, the average transit fees in Europe are around $4. According to the Ukrainian experts’ estimates, transit rates should be increased to US $5.11, in order to cover costs of the pipeline system. As a result, Ukraine subsidizes the transit of Russian gas.

The asymmetry of the contracts has also been emphasized by the Secretariat of the President. On the one hand, Ukraine is obliged to continue the transit of Russian gas even in the case of bilateral dispute, while Russia has the right to stop its supplies if needed. On the other hand, Ukraine will cooperate with Russia on the principle “take-or-pay”. This means that Ukraine is obliged to pay for the entire amount of gas specified in the contract, regardless of the amount actually consumed. At the same time, Russia may alter the volumes of gas transit and, consequently, their payment as it wishes. So another principle works here: “We pay only for actually transited gas”. Another positive development for Russia is the increased presence of Gazprom at the Ukrainian gas market. Founded in the spring of 2008, a subsidiary of Gazprom, “Gazprom sbyt Ukraina”, will get 25% of the Ukrainian gas market, equivalent to about 13.5 billion cubic meters. In 2008 the company was allowed to sell only 7.5 billion cubic meters of natural gas.

If Ukraine fails to pay on time, it will be immediately transferred to a 100% advance payment. According to the Secretariat of the President, Russia has developed such a scheme especially for Ukraine, as there is no other European country where such a clause exists. Overall, the asymmetry in the contracts shows that the political component still plays an important role in gas relations between Russia and Ukraine. Relations between two business parties are built according to the mutually beneficial conditions.

Impact on the Economy

Ukraine has thus signed long-term contracts on very disadvantageous conditions, which will adversely affect the already deplorable state of the Ukrainian economy. Taking into account the increased prices for imported gas, Naftogaz Ukrainy will have to increase prices for all consumer groups in the domestic market. Ukrainian industrial companies already paid a price of $300-330 per 1,000 cubic meters of natural gas in 2008, owing to various surcharges. However, 2008 was also a record year in terms of prices on Ukrainian products. Ukrainian companies, after all, were able to pay high gas prices and even get profits. But if gas prices for this year stay at least at the level of the previous year, the Ukrainian economy might encounter enormous problems of maintaining competitiveness. To prevent this scenario, Ukrainian politicians will need to continue subsidizing Naftogaz Ukrainy from the state budget. The budget for 2009 provides support for Naftogaz in the amount of about $0.9 billion in comparison with more than $1 billion used for this purpose in 2008. Under changing circumstances, this amount is likely to be increased again. The amount of state subsidy to Naftogaz will increase alone due to the fact that consumer gas prices were tied to the official exchange rate by the end of the year. While Naftogaz buys gas from Russia in U.S. dollars, it sells the fuel in Ukrainian hryvnya (UAH) on the domestic market. Devaluation of the UAH consequently leads to a further increase in subsidies. All this will provide an additional fiscal burden.

In future, it will be very difficult for Ukraine to pay for the imported gas on time. Last year Naftogaz was able to pay back its debt to Gazprom only because the company received loans from state-owned banks. The exchange rate broke down the day after Naftogaz bought in one transaction almost $1 billion from the National Bank of Ukraine at the end of 2008. Thus, if such practices are repeated, the further devaluation of the UAH and rising debt of the public funds are not excluded. Moreover, a threat of advance payment means that Ukraine would have to provide a significant part of its state budget for the payments to Gazprom, before it is taken up by taxes and customs.

The difficult financial situation of Naftogaz also complicates the problem of timely payment for gas bills. Naftogaz has been constantly on the verge of bankruptcy in recent years. The hope to improve the financial situation of the company by eliminating the intermediary is not justified. Even after the exclusion of RUE, Naftogaz may increase its presence on the gas market in the best case from 50% to 75% (25% is reserved for “Gazprom Sbyt Ukrainy”) and thus its revenue would be increased only by a quarter. But even this modest increase in revenue could be relinquished by decreasing demand for gas from industrial enterprises, which plan to buy only 24 billion cubic meters of natural gas instead of the usual 30 billion. It therefore seems quite unlikely that Naftogaz will be able to raise its income above last year’s $7 billion. In addition, many non-industrial consumers pay their gas bills with delays. Their common obligations to Naftogaz for the years 1998 – 2008 amount to approximately $0.8 billion. The debt of Naftogaz itself amounts to $9 billion, while about $2 billion has to be repaid this year. That is why one might expect a huge budget deficit of Naftogaz by the end of the year.

The one positive note for the economy of Ukraine might be the following. Because of the high gas prices, Ukraine will likely be forced to take appropriate energy saving measures. The Ukrainian economy is in general 2-2.5 times more energy-intensive than industries in Europe. In response to the crisis, some steel companies have already begun to replace natural gas with coke in their production. If Ukraine manages to reduce its energy needs, it could sell its own produced gas to Europe. Russian gas does not come into question because the re-export of this gas is prohibited. All these trends confirm the gloomy forecasts for the economic situation in Ukraine, which leads the world in the fall of industrial production, inflation, devaluation of national currency, and the decline of stock indices. Therefore, there is a high probability of default in Ukraine, according to the new UN report on the global economic situation.

New Gas Conflict Possible

A possible reason why the gas war between Ukraine and Russia was so intense in January 2009 is that Russia tried to realize the so-called “Belarusian scenario” in Ukraine. Two years ago, Belarus and Russia signed a five-year contract for the supply and transit of gas. Under the agreement Belarus switches to EU pricing levels in 2011. Until that time a discount system operates. In return for price concessions, Gazprom acquires a 50% share of the Belarusian pipeline system “Beltransgaz” by the 2010. Currently, Gazprom owns 25% of this company.

For Ukraine, too, a gradual transition to European gas prices within three years was initially foreseen. This was reflected in the memorandum signed in October 2008 between Putin and Tymoshenko. It is not excluded that Putin once again called for the Ukrainian pipeline system to be privatized or rent for a long term during the negotiations on the new gas contract this winter. However, according to Ukrainian legislation, the privatization of the pipeline system is prohibited. In addition, the system has great significance for national security of Ukraine. Indeed, Gazprom could become a monopolist over gas supply to Europe in every respect with the Ukrainian pipelines as Gazprom controls, or will control in the near future, all other transit routes of Russian gas to the EU. That is why Ukraine wants neither to sell nor to rent Russia its pipelines. Even the gas war at the beginning of this year did not force the Ukrainian authorities to surrender to Gazprom. Although Putin again appealed to the Europeans for an international gas consortium on common control of Ukraine’s pipeline system, Ukraine refused this proposal.

It is possible that, unlike Belarus, Ukraine agreed to the accelerated transition to the European market prices precisely for these reasons. Thus, “the Belarusian scenario” lost its relevance and the Kremlin has now to search for a new strategy. But what the “energy weapon” could not achieve could be perhaps attained through Ukraine’s falling deep into debt. The world economic crisis arrived just at the right time for the application of this tactic.

Disadvantageous conditions resulting from new gas contracts and the threat of economic collapse of Ukraine increase the likelihood of a renewed gas dispute. This could happen in two different ways.

1) Under the terms of the treaty, Russia has the right to halt its gas supplies to Ukraine if the latter does not pay on time. This step, however, could lead to technical problems with gas transit to Europe. In that case, the events at the beginning of 2009 would be repeated. The only difference would be that all the blame for delivery failure and responsibility for the resulting problems would be laid on Ukraine. In this way, Ukraine gets entrapped by the signed contract.

2) Russia would not halt gas supplies, but rather allow debts and fines to accumulate. Then Ukraine would probably be unable to refinance its gas debts. At some point Gazprom would try to acquire the Ukrainian pipeline system in exchange for debt forgiveness. There is already such a precedent: in the late 1990s Russia exchanged Ukraine’s gas debt for the long-term lease of Sevastopol naval base to the Russian Black Sea Fleet. To avoid such pressure from the Russian side, Ukraine could declare default. However, together with its inability to pay back debts, Ukraine might face difficulties in meeting its obligations on gas transit to Europe. In this case, Putin would set the question of the gas consortium high on the agenda again.

In conclusion, no matter how the situation develops, Russia has gained a position of strong advantage.

First published at “Ukraine-Analysen №50″, p. 5-9.

Genocide or not, Stalin starved millions to death and Soviet regime concealed for 54 years

By David Marples

Highly politicized Holodomor doesn’t hide the fact that ethnic Ukrainian dimension was present

This month marks the 75th anniversary of the Ukrainian famine, known as the Holodomor, or death by hunger. [In Ukraine, the official annual commemoration is the fourth Saturday in November]. Many governments, including those of Canada and the United States, have recognized the famine as an act of genocide by Stalin’s regime against Ukrainians.

Ukrainian president Victor Yushchenko has issued a bill that would make it a criminal offense to deny that the famine was genocide. After 75 years, we know much about this tragedy, but the academic community has yet to reach a consensus on the issue. A majority of Western scholars — at least judging from published articles and books — denies that Stalin’s intention was to kill Ukrainians, per se, and maintains that he targeted the Soviet peasantry as a whole. Thus they deny an ethnic dimension.

For example, in his acclaimed 2007 book on life under Stalin, The Whisperers, British historian Orlando Figes writes that the Soviet regime “was undoubtedly to blame for the famine. But its policies did not amount to a campaign of ‘terror-famine,’ let alone of genocide … ” Harvard University’s Terry Martin and the University of Amsterdam’s Michael Ellman have expressed the same opinion.

We may never know how many died of starvation in 1932-33. Yushchenko and others speak of 10 million, or about a third of the population of Ukraine. However, more reliable estimates in Ukraine and elsewhere suggest that the death toll was three to five million, still a truly staggering figure.

It is problematic for scholars when issues become heavily politicized before definitive conclusions have been reached. The Soviet regime denied the existence of the famine for 54 years. Communists in Ukraine reject the notion that Moscow turned on Ukrainians, as do Russia and several western countries.

However, Yushchenko has made the Holodomor the central event in the history of modern Ukraine. It is a divisive one because of the association of the U.S.S.R. with modern Russia. Implicitly, it is alleged that Russia is responsible for the deaths of millions of Ukrainians. Russian president Dmitry Medvedev demurs, and the late Aleksandr Solzhenitsyn argued that famine occurred also in Russia as well as among ethnic Russians, Jews and Germans resident in Ukraine.

However, archival evidence suggests that the ethnic dimension of the famine was always present. Soviet Ukraine in the 1920s had been allowed to develop its own culture and institutions under a policy known as “indigenization.” By the early 1930s, the Soviet authorities were very concerned by the results. Led by the commissar of education and former colleague of Lenin, Mykola Skrypnyk, the republic was distancing itself from Russia.

National “deviationism” in Ukraine was linked by Stalin with the danger of new intervention from Poland, regarded as a hostile neighbor since the war of 1919-20. He wrote in a letter to his colleague Lazar Kaganovich, party leader of Ukraine in the 1920s, that he feared that “we might lose Ukraine” and that Polish leader Josef Pilsudski would exploit dissatisfaction in the republic.

Added to these volatile elements, the Soviet regime began rapidly to collectivize farms starting in 1929. Ukraine was among the first republics to be collectivized. In Kazakhstan, a third of the peasantry (about one million people) died by 1931. Stalin’s goal was “to liquidate the kulaks (rich peasants) as a class.” Many so designated destroyed their livestock rather than give it up to the new collective farms. The countryside became a war zone in which millions were dispossessed, with many deported to Siberia or the Far North.

After collectivization, state grain quotas were imposed on the farms. Grain was taken before the farmers could feed themselves and their families, and quotas were raised sharply in Ukraine, despite a poor harvest in 1931 in particular. Stalin, who used the grain to feed the growing urban population as well as the Red Army, appointed Extraordinary Grain Commissions in several regions. Vyacheslav Molotov led the one in Ukraine. When the grain ran out, Molotov demanded that the commissions take all food from the villages, which were stripped bare as though a plague of locusts had descended on them.

Peasants could not travel to towns or cross borders to obtain food after 1932, as they were not assigned passports like the rest of the population. In January 1933, Ukraine’s border with North Caucasus was closed. Ukraine’s leadership in Kharkiv, the capital at the time, was distraught. Most Ukrainian Communists blamed “kulaks” and nationalists for the starvation in villages. Stalin then sent his own plenipotentiary, Pavel Postyshev, to Kharkiv to purge the dithering leaders. Later all these figures either died during the purges or, like Skrypnyk, took their own lives.

The mass deaths of peasants were concealed from the public with the collusion of some western journalists and diplomats. Many prominent figures – including George Bernard Shaw, and Sidney and Beatrice Webb – reported that this ravaged land was in fact a Communist utopia. Walter Duranty of The New York Times lied systematically to Americans about the situation in the Soviet countryside.

The link between the Ukrainian famine and external events is clear. In January 1933, Hitler had come to power in Germany, adding another dire threat to Stalin’s regime. Ukrainian nationalists, Poles, Hitler and Stalin’s chief enemy, Leon Trotsky, all feature in Stalin’s correspondence and party documents as threats to Soviet security.

Whether or not this catastrophe was premeditated – and we may never find a “smoking gun’’ – Stalin, Molotov and other Soviet leaders deliberately starved their own people and then concealed this atrocity from the outside world.

(Kyiv Post, 26 November 2008)

Against the ‘nationalist’ interpretation. Russia’s response to the commemoration of the Ukrainian Holodomor

By Ilya Khineiko

For a long time, Russian political elites have been skeptical and increasingly irritated by the attempts of the Ukrainian government to raise international awareness of the 1932-1993 Great Famine in Ukraine, the Holodomor. The simmering tensions came to the fore this month when Ukraine commemorated the 75th anniversary of the Holodomor. While Europe and North America expressed their sympathy and sent official condolences, Russia has engaged in what can be called an anti-Holodomor campaign at the highest political level.

In October, the Ukrainian Foreign ministry accused Russia of using “pressure and blackmail” to prevent Ukraine from putting the issue of Holodomor for consideration by the UN General Assembly as an act of genocide against Ukraine. Russian President Dmitry Medvedev turned down Ukraine’s invitation to attend the commemorative events in Kyiv on November 22. Moreover, he weighed in on the historical discourse of the Ukrainian Famine in a letter sent to President Viktor Yushchenko a week earlier, outlining Russian objections to the Ukrainian interpretation of Holodomor. Furthermore, on November 17 and 21 two “alternative” historical conferences on Holodomor were held in Moscow and Kharkiv respectively. The Russian delegation included the noted Moscow expert, Sergey Markov, and the well known ‘anti-revisionist’ Russian historian Aleksandr Dyukov. The Ukrainian side was represented by the who’s who of the pro-Russian political camp, such as Nikolay Azarov from the Party of Regions, the controversial mayor of Kharkiv Mikhail Dobkin, and the former head of the presidential administration under Leonid Kuchma, Dmytro Tabachnik. According to the Ukrainian internet portal RUPOR, the conference was sponsored by the Russian government commission for the affairs of compatriots abroad, which in turn is believed to be connected to the Russian foreign intelligence agency.

This is a brief recap of events, and we shall now examine the substantive content of this campaign. The Russian position laid out in the aforementioned letter by President Medvedev can be summed up as follows.
- The Famine of 1932-33 did take place.
- It was caused by a combination of drought and the disastrous consequences of the policy of forcible collectivization, which was carried out throughout the Soviet Union.
- The Famine was not directed against any particular nationality
- The current Ukrainian interpretation of Holodomor is being used for political purposes and is aimed to drive a wedge between Russian and Ukrainian peoples.

A similar position was articulated during the conference in Kharkiv. Writing on his personal blog, a political scientist from Belarus, Yuri Shevtsov, who took part in the conference noted that the only two points of contention raised by the participants that differed from the official Ukrainian interpretation of the famine were the issue of recognition of Holodomor as genocide of the Ukrainian people as well as a need for a more nuanced assessment of the policy of collectivization. Interestingly, Yuri Shevtsov is the author of a book about the ideology of Holodomor. Gleb Pavlovsky, a self-aggrandizing pro-Kremlin spin-doctor, wrote a foreword to the book and, by the author’s own admission ordered and sponsored its writing and subsequent release . According to Yuri Shevtsov, current attempts by the Ukrainian government to promote the genocidal interpretation of the Famine must be viewed in a broader Eastern European context of the reassessment of the Second World War. The governments of Ukraine, the Baltic States and several other Eastern European countries have sought to rehabilitate their own Nazi collaborators by arguing a (false) moral equivalence between Nazism and Communism. (Interestingly enough, Mr. Shevtsov’s list of such collaborators includes not only the SS units from the Baltic countries but also the UPA and the Polish Home Army). He also sees the ‘ideology of Holodomor’ in socio-economic terms linking it to radical (neo-liberal) market reforms carried out in Eastern Europe after the collapse of communism with its unabashed individualism and aversion to “any form of social solidarity” that in turn can be traced to the peasant rejection of modernity. Finally, he warns that the conflict between the ‘crypto-Nazi’ East European regimes and Russia over the interpretation of the WWII and Soviet communism threatens the project of European integration because “without Russia European unity can never be stable”.

It is hardly surprising, given the circumstances of its appearance, that Yuri Shevtsov’s polemical invective avoids altogether any discussion of how the denunciation of the concept of Holodomor fits with the current trends in the post-Soviet historiography of the Soviet period, particularly the role of Stalin. In an attempt to provide a more ‘objective’ assessment of the Soviet period, unlike the excesses of the perestroika and the Yeltsin era, the Putin regime seeks to promote a wholly new vision of Stalin as an effective manager who sought to transform the USSR into an industrial society. Such a concept is presented at the web site of the Russian ministry of Education. Predictably, its authors deny the organized character of the famine and reject its characterization as deliberately directed against any ethnic or social group.

It is not hard to see that such ‘pragmatic’ rehabilitation of Stalinism, from which the rejection of the Ukrainian interpretation of Famine logically follows, serves as an implicit legitimization of the contemporary political regime in Russia. Indeed, it becomes possible to justify the creeping authoritarianism of Vladimir Putin by pointing out its effectiveness and arguing that, just like it was in Stalin’s case, under present historical circumstances there could be no alternative to the current political course. Ukraine, with its fledging but functioning democracy presents not only a subversive example of a different approach to the common Soviet past but also the way to deal with the challenges of the present. Perhaps that helps to understand the reasons why the Russian President has decided to jump into a historical debate with his Ukrainian counterpart and why the Russian state is willing to invest considerable resources to debunking the dangerous ‘myth of the Holodomor’.

ГРОШОВІ БУЛЬБАШКИ: ВПЛИВ СВІТОВОЇ ФІНАНСОВОЇ КРИЗИ НА УКРАЇНУ

Katerina Malygina
First published at «Ukraine-Analysen №46» on October 28th 2008
http://www.laender-analysen.de/ukraine/pdf/UkraineAnalysen46.pdf

Донедавна українська політична еліта була сповнена надій, що світова фінансова криза країни не торкнеться. Це аргументувалося тим, що Україна не інтегрована у світовий фінансовий простір, як інші країни, оскільки її фондовий ринок не досить розвинений і його падіння не вплине на економіку країни.

Проте, ще в травні впливове рейтингове агенство Fitch, проаналізувавши 73 країни, поставило Україну на друге місце серед держав з найбільшим ризиком макроекономічної нестабільності. А ще в червні Всесвітній Банк вніс Україну у своїй доповіді «Фінансування Глобального Розвитку 2008» разом з Росією й Казахстаном у список країн, які ризикують більше всіх постраждати від світової фінансової кризи. Тенденції, які ми спостерігаємо з осені цього року, цілком підтверджують ці невтішні прогнози. Як таке могло статися, адже ще на початку року ріст ВВП очікувався на рівні 6-6,5%?

«ГРОШОВА ГОЛКА»
Власне вплив світових фінансових турбуленцій Україна почала відчувати ще в другій половині 2007 року. Але тоді їхній вплив не був негативним. У результаті іпотечної кризи в США американські та європейські фондові ринки падали впродовж липня-вересня. Однак, український фондовий ринок зазнав лише незначного падіння.

Фінансова криза не тільки не віджахнула іноземних інвесторів, але зробила український ринок більш привабливим для інвестицій у порівнянні з розвиненими країнами. В Україну хлинув потік спекулятивного капіталу. Український індекс ПФТС продовжував зростати до кінця року й досяг свого максимуму 15 січня в 1208 пунктів. Це дозволило вивести обсяг портфельних інвестицій в 2007 році на рівень у $5,7 млрд.

В Україну зненацька прийшли великі гроші: у другому півріччі 2007 року країна залучила в півтора раза більше прямих іноземних інвестицій (ПІІ), ніж у першому ($5,57 млрд. у порівнянні з $3,6 млрд.). Для порівняння обсяг ПІІ за весь 2006 рік склав $5,7 млрд.. За підсумками 2007 року Україна ввійшла в десятку найбільших одержувачів ПІІ. Звичайно, у порівнянні з лідерами Китаєм ($84 млрд.) і Росією ($22 млрд.) обсяги українських ПІІ здаються незначними, але для України майже $10 млрд. (близько 14% від ВВП) – це досить багато. Таких грошових надходжень не очікував навіть уряд. Наприкінці року він двічі змінював прогнози номінального ВВП – у вересні з 594 млрд. грн до 679 млрд. грн і в листопаді до 708,3 млрд. грн.

На початку 2008 року, разом з обвалом світових фондових ринків став падати й український індекс ПФТС. Його падіння було одним з найбільних у світі – майже на 80%. Відтік короткострокового капіталу не став серйозною загрозою для економіки країни, тому що дірку в платіжному балансі за перше півріччя 2008 року вдалося залатати істотним нарощуванням експорту, чому сприяв світовий рост попиту на сировинні ресурси. Так, світові ціни на сталь – основну статтю українського експорту – зросли з $210 за тонну на початку року до $296 у липні. Доходи від експорту в другому кварталі 2008 р. у порівнянні з першим зросли на $5 млрд. – тобто якраз на суму відсутніх портфельних інвестицій.

У результаті всіх перерахованих вище процесів Україна була практично «підсаджена на грошову голку». З одного боку, виторг від експорту за січень-серпень 2008 р. склав рекордні $47 млрд. (за аналогічний період в 2007 р. – $31,5 млрд.). З іншого боку, продовжилося стрімке зростання ПІІ – $8 млрд. за січень-серпень 2008 р. При цьому, більша частина цих грошей (47,3%) вкладалася у фінансовий і банківський сектори, які активно розвивалися й обіцяли надприбутки.

Економіка країни виявилася ще не готовою до таких потужних грошових вливань, що призвело до невідповідності між попитом та пропозицією всередині країни й розкручуванню інфляційної спіралі. За даними Держкомстату, у травні рівень інфляції в Україні був найвищим серед країн СНД – 31%. Дії НБУ з обмеження грошової маси мали наслідком зменшення ліквідності комерційних банків і подорожчання кредитів.
Водночас збільшилися бюджетні соціальні виплати й компенсації втрачених заощаджень громадян, що зменшувало фінансові ресурси економіки країни й збільшувало споживчі настрої серед населення. Видатки населення за І півріччя 2008 року в порівнянні з аналогічним періодом попереднього року виросли на 41%.

Ріст споживчих настроїв задовольнявся різким ростом імпорту, чому сприяла девальвація долара стосовно гривні в другому кварталі 2008 року. 22 травня Національний банк України (НБУ) зміцнив гривню, встановивши офіційний курс 4,85 грн/$. Однак, незважаючи на всі дії НБУ й уряду дефіциту торгового балансу в першому півріччі 2008 р. уникнути не вдалося, він досяг $8 млрд.

Таким чином, Україна не зуміла впоратися з величезними обсягами грошей, що прийшли в економіку країни за останній рік. Українська політична еліта перебувала в стані ейфорії й продовжувала роздавати соціальні виплати. Гроші пішли не на модернізацію економіки, а на «проїдання» і кредитування імпорту. Зміна ж зовнішніх обставин у вересні цього року серйозно збільшила ризик дефолту в Україні.

«ГРОШОВА БУЛЬБАШКА»
Уразливість української економіки сьогодні обумовлена високими обсягами зовнішнього боргу, слабостями фінансової системи, залежністю від припливу іноземного капіталу й твердою прив’язкою гривні до долара.

Небезпечних розмірів досягла зовнішня заборгованість України, яка всього за рік виросла на $35 млрд. З $100 млрд. зовнішнього боргу на сьогоднішній день $30 млрд. повинні бути виплачені впродовж 2008-2009 років. Колишні плани рефінансувати короткострокові борги довгостроковими стали практично не здійсненні, оскільки світові проблеми з ліквідністю суттєво обмежують доступ українських банків до зовнішніх кредитів. Fitch Ratings вже заявило про подвійне скорочення світових темпів росту кредитування (з 16% в 2007 р. до 7%). До того ж, час «дешевих кредитів» минув. Зниження рейтингів України кількома ведучими рейтинговими агенствами (25 вересня Fitch, 21 жовтня Moody’s, 24 жовтня Standard & Poor’s) означає, що відсотки, під якими будуть видаватися позики українським банкам, суттєво зростуть. Таким чином, навіть якщо Україна візьме кредити, за них доведеться дорого сплачувати в майбутньому, а це автоматично продовжує смугу кризи для економіки України в цілому. На внутрішні джерела фінансування також не варто розраховувати, тому що довіра до банків з боку населення після накладення НБУ мораторію на дострокове зняття депозитів похитнулося. Недарма, було ухвалене рішення поповнити Фонд гарантування внесків фізичних осіб на 1 млрд грн у вигляді кредиту й підняти суму відшкодування депозитів громадянам з 50 тис грн до 100 тис грн. Але не варто розраховувати, що ці дії повернуть довіру до банків в умовах глобальної фінансової кризи.

Погашення боргу за рахунок валютних резервів НБУ теж проблематично. Резерви тануть на очах. Тільки за жовтень вони скоротилися на $3 млрд. до $34,6 млрд (для порівняння у вересні вони зменшилися на $534 млн. грн). Більша частина валютних резервів пішла в жовтні на підтримку курсу гривні. Можна припустити, що й надалі істотні видатки НБУ будуть пов’язані з антидевальваційними заходами.

Ситуація в банківському секторі ускладнюється ще тим, що майже 52% загальних кредитів і 60% роздрібних кредитів складають кредити в іноземній валюті. Останні, з одного боку, не забезпечені адекватними доходами позичальників. З іншого боку, збереження високих темпів інфляції й девальвація гривні будуть мати негативний вплив на спроможність населення виплачувати свої боргові зобов’язання. У результаті якість активів банків істотно падає. Щоб уникнути такої ситуації, НБУ вирішив заборонити банкам кредитувати населення в іноземній валюті й збільшувати кредитні портфелі.

На фоні обмеженої ліквідності також буде рости дефіцит платіжного балансу. В умовах, коли світова фінансова криза загрожує перейти в економічну, природно очікувати суттєвого вповільнення приросту іноземних інвестицій. До того ж, довіра іноземних інвесторів була підірвана численним падінням рейтингів.

Високий попит на сировинні ресурси теж виявився короткочасним. Відсутність попиту на світових ринках позначилася зниженням валютних надходжень в країну від експорту продукції. Всі металургійні підприємства України скоротили у жовтні своє виробництво в порівнянні з липнем на 67 %. Через відсутність замовлень в Україні на сьогодні з 36 працюючих домен зупинені 17.

Як це не парадоксально, але одним з головних джерел прибутків у бюджет в цьому році стала Державна митна служба: річний план був перевиконаний вже за 9 місяців, а митні збори досягли 75,6 млрд грн (для порівняння обсяг перерахувань Держмитслужби в 2006 – 37,8 млрд. грн, в 2007 – 54,1 млрд грн). Однак, доходи від мита стали знижуватися, оскільки вже в жовтні зменшився приблизно на 50% імпорт.

Реальним джерелом коштів могла б стати приватизація. Незважаючи на те, що план приватизації цього року був виконаний тільки на 4%, за розрахунками уряду вже зараз можна було б оперативно виручити 2 млрд грн в результаті продажу обленерго. Однак експерти заперечують, в період фінансової кризи, коли активи дешевшають, держава не повинна нічого приватизувати.

Таким чином, ресурсно-фінансова база економіки зменшується. У цьому році Україна була залежна від великих грошових надходжень. Однак колишні фінансові джерела на сьогоднішній день істотно поменшали. Не дивно, що зараз шукаються будь-які шляхи залучення коштів в Україну й поповнення бюджету, такі як, наприклад, кредит МВФ. Очевидно, Україні дійсно загрожує серйозна фінансова й економічна криза.

Ukraine asks for IMF help

David Marples

The Ukrainian Parliament has agreed terms with the IMF for a loan of $16.5 billion to help the country through the present economic recession. However, the bill approving the loan has yet to pass through Parliament despite an overwhelming vote in favor of 248-2 and the country is still stuck in a seemingly endless constitutional crisis.

The impasse is the result of a personal conflict between the two key figures of the 2004 Orange Revolution: President Viktor Yushchenko and Prime Minister Yulia Tymoshenko. Following the abandonment of the Orange coalition by his Our Ukraine party and its ally People’s Self-Defense, Yushchenko called for new pre-term parliamentary elections. Tymoshenko, backed by the Regions Party as well as her eponymous bloc, refused to accept that decision, arguing that it was criminal to take on the expenses of a third election in three years simply to satisfy the whims of the president.

Yushchenko, whose popular standing has reportedly reached an all-time low of 4-5% in Ukraine, believes that his Prime Minister acted treacherously by declining to back his overt support for Georgia following that country’s attack on South Ossetia and Russia’s overwhelming response in September. He is incensed that she held talks with Russian Prime Minister Vladimir Putin, and also collaborated with Regions’ leader Viktor Yanukovych to push through a parliamentary bill intended to reduce the power of the president to that of a symbolic figure.

These events coincided with the impact of the economic crisis, which has affected Ukraine in a number of ways. Imports have increased while valuable exports have declined with Ukraine’s aged steel industry an early victim. With demands for steel falling dramatically, mass layoffs are anticipated. Inflation in Ukraine is the highest in Europe. Several banks are not expected to survive the crisis, while those that will have in some cases frozen the savings of pensioners who make up nearly one-third of the Ukrainian population.

Ukraine’s currency, the hryvnia, has plunged against the dollar from around 5 to 7.2 last Wednesday. It has recovered slightly as the Bank of Ukraine has sold some $3 billion of its reserves to back the hryvnia. That policy cannot continue indefinitely. Ukraine’s total reserves are estimated at only $38 billion though the IMF loan will presumably provide some back-up. The country’s impressive growth rates of the past are also expected to decline from the 2008 total of 6% to around 2.9% in 2009.

As in other countries badly affected by the world recession, consumer lending is likely to be cut back, particularly in view of the sort of stringent terms expected from the IMF as a condition for providing the loan. Ukraine is billions of dollars in debt and costs of repayment have naturally soared with the fall of the domestic currency.

Fuel is an increasing problem. Utility bills are expected to rise by about one-third on 1 December, and Ukraine still does not know how much it will be paying for Russian gas next year. One thing is certain: that particular bill is likely to rise steeply given the political differences between the Yushchenko administration and its counterpart in Moscow. Gazprom has traditionally lowered the tariff for its friends and partners and raised those for those states that have been obstructive in their relations with Russia.

Politicians have been searching for suitable scapegoats for the dark economic news. Tymoshenko has focused on the 69-year-old Bank of Ukraine chairman Volodymyr Stelmakh, demanding his resignation. However, he can hardly be blamed for the political side of the crisis, which owes much more to disputes between the two ostensible democratic leaders, Yushchenko and Tymoshenko herself.

Tymoshenko briefly dallied with the notion of forming a working alliance with the large Regions Party—Yushchenko has also negotiated with Yanukovych in the past, appointing him Prime Minister from August 2006 to December 2007. A large majority coalition in parliament would be one way to approach economic problems.

However, neither of the two democrats seems able to overcome basic character flaws that undermine their role as statespersons. Yushchenko lacks communication skills and does not provide the impression generally of an effective leader. His integrity and sincerity seem clear, but he appears indecisive and bumbling. He has not delivered on his 2004 election promises to take Ukraine into Europe and now even the Membership Action Plan for Ukraine’s entry to NATO seems unlikely to bear fruit at the next meeting of the alliance in December, despite strong support from the United States.

Tymoshenko is talented and glamorous but completely unable to conceal a lust for power that seems to dominate her political activities. True, she is the only leader with national support. But most of her actions seem driven by her personal ambition: either to be president after 2010 or to remain Prime Minister in a much empowered parliament.

Ukraine very much resembles Russia in the early 1990s with no solution yet in sight for the constitutional crisis and excessive government spending that could presage economic collapse if it continues at the present rate. Unlike in Russia its problems will likely not be resolved by violence, but they do need to be addressed promptly and that will mean putting a stop to the interminable political bickering, fist fights in parliament, and destructive conflicts between leaders who put their own desires before those of their country.

An earlier version of this article appeared in the EDMONTON JOURNAL on 3 November 2008..

Early Elections Again

By Ivan Lozowy

THE UKRAINE INSIDER
Vol. 8, No. 3
September 23, 2008

ITEM A.: THIRD TIME THE CHARM?

The collapse of the Yushchenko-Tymoshenko coalition which became official on September 16 is the culmination of nine months of intense work by Yushchenko’s chief-of-staff, Viktor Baloha. Ever since Tymoshenko was named Prime Minister last December, Baloha has gone to great lengths to undercut her. Every action of Tymoshenko’s was countermanded or undermined by Yushchenko and publicly criticized by Baloha or his subordinates in the Presidential Secretariat.

This process has been helped along by Tymoshenko’s own charismatic chaotic and devil-may-care approach. But the bottom line has been what is, in the view of Yushchenko’s team, the need to rein in Tymoshenko. Because of his own detachment and passivity, Yushchenko’s popularity has remained in the single digits whereas presidential elections are only a year away. There was no secret as to what Tymoshenko would do once she became Prime Minister a second time. She would do what she did before, in 2005, namely, privatize and attempt to redistribute former state property through re-privatization efforts while handing out government money in populist measures aimed at increasing her poll ratings.

Accustomed in the 1990’s to running the large quasi-state energy holding United Energy Systems of Ukraine, Tymoshenko has reached new heights as Prime Minister. Now she controls a budget of hundreds of billions of hryvnia, all geared to increase her own popularity.

It was this process that Baloha’s persistent and quite successful countermeasures were designed to disrupt. Thus it was only natural that, until this summer, the bitterest conflict between Tymoshenko and Yushchenko was over the State Property Fund. Last spring, Tymoshenko used her usual heavy-handed tactics to try and install her associate, the MP Andriy Portnov, as the head of the State Property Fund. This initiative backfired when Baloha called in the heavy guns, getting the Procuratura to initiate criminal cases against officials helping Portnov.

Despite repeated efforts, Baloha was unable to dislodge Tymoshenko because the parliamentary majority underpinning her government was difficult to manipulate. Apart from Tymoshenko’s own block, BYuT, the majority was based on the Our Ukraine coalition with the National Self-Defense organization headed by Minister of Internal Affairs, Yuriy Lutsenko, who is closely allied with Tymoshenko. For its part, Our Ukraine is chaired by Vyacheslav Kyrylenko, who also heads the party’s parliamentary faction, who is not very close to Baloha and who has tried to lead an independent line.

Baloha thus created his own party in back in March, Single Center (See The Ukraine Insider, vol. 8, no. 2 from May 6, 2008). He also got two of his associates, the MPs Ihor Rybakov and Yuriy But, to leave the Yushchenko-Tymoshenko coalition. But because of parliamentary rules, these moves did not affect the governing coalition.

Following the short-lived Russian-Georgia war in August, however, Baloha seized his chance.

Tymoshenko had famously got on very well with Georgian President Mikhail Saakashvili, but she was conspicuously absent in the public sphere when Russian tanks rumbled into Georgia. Baloha’s subordinates at first spread rumors then spoke openly of an alleged agreement between Tymoshenko and Russia’s Prime Minister Vladimir Putin that she would not criticize Russia over its actions in the Caucasus. The rumors spoke of two additional points on which Tymoshenko had folded in to the Kremlin’s demands: she would leave the Russian fleet in Krym’s (the Crimea’s) Sevastopol alone and would not allow the Odesa-Brody pipeline to pump oil to Europe in detour of Russia. In return, Tymoshenko would receive Russia’s blessing and even, possibly, financial support for her presidential bid in 2009. Taking into account the Kremlin’s appetites, Tymoshenko’s own actions and the confidence with which one of Baloha’s direct subordinates has accused Tymoshenko of “treason,” this version seems likel!
y.

Accusations against Tymoshenko of treason made an impact within the Our Ukraine parliamentary faction, which includes representatives from such patriotically inclined parties as Rukh and the Ukrainian National Party. During a meeting of the Our Ukraine parliamentary faction hastily convened on the night of September 2, for the first time there was a majority against further cooperation with BYuT and the fate of the Yushchenko-Tymoshenko coalition was sealed.

The direct cause of the September 2 meeting was a series of votes cast in the Rada, or parliament, that day in which BYuT voted together with the Party of Regions. This voting constituted an end run by Tymoshenko around Yushchenko, avoiding his obstructionist methods by cooperating with his former rival for the presidency, Viktor Yanukovych, head of the Party of Regions.

Yushchenko and Baloha were aghast. They had just been declared irrelevant in parliament. But, stoking the fires of indignation at Tymoshenko’s “betrayal,” Baloha was able to achieve the collapse of the Our Ukraine – BYuT coalition. Small wonder then that, as Tymoshenko herself said, immediately after the collapse Baloha and several friends, including the MPs Rybakov and But, left Ukraine on a charter flight to celebrate in a foreign, undisclosed location.

With new elections expected by the end of December, Baloha expects his Single Center party to enter parliament, with him in the role of king-maker. Where is the President in all this? Following docilely along. Rumors of the degree to which Baloha has come to dominate Yushchenko’s actions and even thinking have reached legendary proportions. Yushchenko has only helped along such surmises, as when, in response to complaints from some MPs as to Baloha’s inordinate influence, Yushchenko responded: “I am Baloha.”

(In the following issue: Baloha’s genius of destruction)

Correspondence should be addressed via the Internet to: lozowy@i.com.ua

(c) Ivan Lozowy

Prospects for New Leadership in Ukraine

David R. Marples
for EDMONTON JOURNAL, 17 September 2008

There seems to be no immediate solution to the political crisis in Ukraine, which on September 16 brought about the final collapse of the Orange coalition established after the 2004 Orange Revolution. The electorate can hardly welcome the fall of the current parliament, leading to the third parliamentary election in only three years. But is that the only alternative? What are the causes of the crisis? Why does Ukraine seem to stutter from one bitter internal conflict to another?

One reason is a deep clash of personalities. The two key figures—President Viktor Yushchenko and Prime Minister Yulia Tymoshenko—do not get along. To listen to the president of late, an uninformed observer would gain the impression that Tymoshenko is a traitor who has sold out Ukraine to the Russians. Yushchenko has deployed his chief of staff, Viktor Baloha, a Rusyn from Transcarpathia, on a mission aimed at curtailing the career of the flamboyant Prime Minister. According to one account Baloha has forwarded documents to the Ukrainian Security Service that reportedly show Tymoshenko has committed acts of treason.

Tymoshenko is not only the most popular politician in Ukraine, she is—according to an annual ranking of the country’s most notable 100 individuals published in Korrespondent (August 22)—the most influential person as well. Lately she has made a number of maneuvers that seem contradictory: she has supported (with the backing of the Regions Party) the empowerment of parliament over the office of the president; she has expressed a wish to re-form the Orange coalition as the best way out of the current impasse; and she has approached the Regions faction with the goal of forming a new parliamentary majority coalition.

Yushchenko accuses her of joining Regions in supporting Russian actions in Georgia, undermining his own overt support for Georgian president Mikheil Saakashvili. The president believes she has taken such steps in order to acquire Russian sponsorship for her candidacy in the 2010 presidential election. However, if the Constitution is indeed amended to give more power to the legislature, then the presidency would be reduced to a ceremonial office.

The ambition of the Prime Minister has always been evident. At times there seems to be a contrast between her lifestyle and public appearance and her avowed goal to eliminate corruption or take on the oligarchs. But equally significant is her refusal to take orders from Yushchenko and become a compliant figure. Her initiatives to promote privatization and to carry out reforms through the Parliament with cooperation from various factions rankle with the conservative Yushchenko, who lacks both her drive and charisma.

Four years on from the Orange Revolution that swept him to power, the president is deeply unpopular within his own country (like Gorbachev he is much more respected outside it), and an article in Ukrains’ka pravda in early September declared him “politically dead.” He has issued a decree giving Baloha the authority to inspect internal troops that led some observers (Yuri Butuzov in Zerkalo Nedeli, for example) to suspect that he wishes to impose direct presidential rule. The Parliament has demanded (323 deputies in favor, well more than the 226 required) that the president dismiss Baloha for obstructing parliament as well as alleged illegal land dealings.

Ultimately, a president needs to reflect the sentiments of the public. Yushchenko’s avowed pro-Georgian, pro-NATO, and increasingly anti-Russian policies do not have overwhelming support in Ukraine. In fact they serve to highlight the regional divisions. On Georgia especially a consensus is plainly lacking.

Thus an August poll conducted by the Razumkov Center asked a sampling of respondents in the different regions of Ukraine which country they perceived as the aggressor in the Russian-Georgian conflict (a question that would have received a unanimous verdict in neighboring Poland). In western Ukraine, 55.2% saw Russia in this role, 15.1% both countries, and 7% Georgia. The center was evenly divided. However, Eastern Ukraine perceived Georgia as the main aggressor (37.2% to 13.8%), and in southern Ukraine almost 57% maintained the same, with only 13.8% citing Russia.

Though the same Center’s webpage does not offer a recent poll on NATO membership, a June 2008 survey indicated that 60% of respondents opposed it, with 20.9% in favor. Incidentally in June 2002, according to this same source, 32% supported accession to NATO. Thus as a policy it has lost its attraction, in part because of the war in Iraq.

Yushchenko’s policies are becoming erratic, and his public utterances, particularly about his Prime Minister increasingly far-fetched. The key question is whether a parliamentary coalition could actually work. Western analyst Taras Kuzio pointed out recently that a substantial portion of the Regions’ deputies opposed Russian actions in Georgia. There is thus no necessity to associate the entire faction with the pro-Russian stance of its leader.

If a coalition between the Tymoshenko Bloc and the Regions is possible, then Ukraine might establish the more stable leadership it requires during a time of political crisis and growing tension in its relationship with Russia.