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Ukraine Between East and West - How to move out of the grey zone? Olga Shumylo-Tapiola 09 July 2012

By James Kilcourse

Olga Shumylo-Tapiola of Carnegie Europe briefed the IIEA on domestic developments in Ukraine over the past two years, Ukrainian foreign policy and the mood in Ukraine prior to parliamentary elections in October 2012.

Domestic Developments

Ms. Shumylo-Tapiola discussed developments in Ukraine over the past two years and explained why these developments have contributed to the country remaining a part of the “grey zone”. When Victor Yanukovych became President in 2010 in a free and fair election, he promised stability and progress for Ukraine. Unfortunately, she said, Ukraine very quickly started going in the wrong direction. Ukraine is now scoring very badly in international ratings such as the World Bank Ease of Doing Business report and the Transparency International Corruption Perceptions Index, which both place Ukraine in 152nd position out of 183 countries. According to Ms. Shumylo-Tapiola, the local elections in autumn 2010 were not compliant with international norms and the overhaul of the constitution that gave greater powers to the President in 2010 was carried out through the constitutional court, which is under the control of the President. She noted that, for the first time since the Orange Revolution, self-censorship is again taking place in the media due to fears of prosecution by the administration. Finally, she pointed out that Ukraine was among the worst hit economies of the crisis in 2008-2009. The economy has recovered slowly with the assistance of the IMF and government reforms. However, she argued that government reforms have mainly benefitted the oligarchs close to the President and his own family, rather than ordinary people. Although these developments are worrying, she argued that Ukraine is not on a similar trajectory as Belarus.

Foreign Policy

When Yanukovych came to power, he promised that foreign policy would be pragmatic, in the national interest and would not concern European dreams, but building Europe at home. In reality, Ms. Shumylo-Tapiola argued, foreign policy has been about corporate interests, which means the interests of the oligarchs close to the President and, increasingly, the interests of his family. Foreign policy

 

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in the “grey zone” is reactionary and it is primarily concerned with three partners. Firstly, the United States is perhaps the most important foreign policy partner and the most respected by the Ukrainian administration. According to Ms. Shumylo-Tapiola, the belief in Kyiv is that the US will overlook the problems of democracy in Ukraine if the authorities simply give the US what it wants. For this reason, the administration has given up all enriched uranium, participated in NATO operations and recently given US companies access to the extraction of gas on Ukrainian territory.

The second partner is Russia, which is also a competitor with which Ukraine has a long and difficult history. Ms. Shumylo-Tapiola suggested that Russia is the partner that the administration most fears. When Yanukovych became President, his aim was to get cheaper gas for Ukraine by changing the gas contract signed with Russia in 2009. The talks have continued for two years with very little progress, even though the Ukrainian administration has tried to give concessions to Russia, like declaring Ukraine a non-bloc country and extending the lease of the Black Sea fleet. Ms. Shumylo-Tapiola does not believe that the Ukrainian government will agree to the bigger demands of the Russian administration, for example that Ukraine become a member of the Russian-led Customs Union. In the short run, this would not be economically beneficial for the oligarchs and the President’s family and, in the long run, it would not be politically beneficial for the President and his family. For this reason, she is not afraid of losing Ukraine to Russia and stated that she is more concerned about losing Ukraine to the “grey zone”.

The third important partner is the European Union, with which Ukraine started negotiations on an Association Agreement and a Deep and Comprehensive Free Trade Agreement (DCFTA) five years ago. These negotiations were difficult for both sides. For the EU, it was the first time that such a broad and comprehensive agreement was negotiated with a third country. For Ukrainians, the signing and implementing of the agreement would have entailed the adoption of a lot of EU acquis. Ukraine would be politically associated and economically integrated with the EU and this would have required the free movement of goods, services, capital and, to a lesser extent, people. However, the agreement has now been put on hold because of political developments in Ukraine. The EU has reacted strongly against the imprisonment of opposition leaders on political grounds in Ukraine. The EU has requested that the Ukrainian administration release these prisoners, hold a free and fair parliamentary election in October and carry out judicial and constitutional reform. Ms. Shumylo-Tapiola argued that opposition leaders will probably not be released because such a move would be costly for the government at the domestic level. She stated that the EU will more than likely have to revise its policy on Ukraine because EU policy is currently based on the assumption that Ukraine is like Poland and that it wants to integrate. This, according to Ms. Shumylo-Tapiola, is not true. The people of Ukraine may want

 

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democracy and closer relations with the EU, but the political elite, she said, do not want to give up their benefits so that the country can integrate with the EU.

Parliamentary Elections, October 2012

Ms. Shumylo-Tapiola noted two positive developments concerning the upcoming parliamentary elections. Firstly, the law that will regulate the conduct of the elections was changed a year in advance, rather than one or two weeks before the election as happened before the local elections in 2010. Secondly, OSCE observers have already been invited. Nevertheless, there are a number of problems that are causing concern, not least the return to a mixed electoral system. In October, 50% of the parliament will be elected from closed party lists and the remaining 50% from single-member constituencies. Ms. Shumylo-Tapiola warned that the country’s experience of this system in the 1990s demonstrated that it is open to manipulation and the rigging of elections. Moreover, she said that the way in which the single-member districts were created did not correspond with international norms and raised many questions among domestic and international observers. Another problem, according to Ms. Shumylo-Tapiola, is that the opposition is very weak in terms of the alternatives it has to offer to the current administration and its connection with the public. So, although Ukrainians in both the East and the West of the country disapprove of the government’s actions, at the same time they dislike the opposition. This may result in a low turnout in the parliamentary election. Finally, Ms. Shumylo-Tapiola stated that it is too early to determine if the elections will be conducted in a free and fair manner, but she asked if the elections can be considered free and fair if the key opposition leaders remain in prison.

Ms. Shumylo-Tapiola concluded by noting that Ukraine will take over the Chairmanship of the OSCE next year from Ireland and she expressed the hope that Ireland’s example will be good for Ukraine.