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This Week

AN ACUTE OVERDOSE OF HOLIDAYS

The President recently proposed that parliament forego its annual winter holidays and work on throughout January. While the move is unlikely to be popular with politicians, it would certainly be a step in the right direction More

A SOLUTION TO THE SOVIET BANK SCANDAL?

The new government began the New Year attempting to implement its campaign pledge to return the Soviet-era savings which Ukrainians lost after the 1991 collapse, but will its efforts prove enough to appease voters and silence the many detractors who labelled the proposition wholly unrealistic? More

ENTER THE ICONS

Can the return of Yulia Tymoshenko to government in Kyiv pave the way for better relations with Russia, or will the two countries’ iconic political leaders clash once more? More

2007’S WINNERS AND LOSERS

“Dear fellow Ukrainians,” began President Viktor Yushchenko in his New Year address to the nation. “We have a hard year behind us. We have lived through much – highs and lows, dramas and happiness.” This was something of an understatement, given Ukraine’s mercurial journey through 2007. What lies ahead for the coming year? More
 

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ENTER THE ICONS

Can the return of Yulia Tymoshenko to government in Kyiv pave the way for better relations with Russia, or will the two countries’ iconic political leaders clash once more?

While international policy remains very much the domain of President Viktor Yushchenko, there is little doubt that the appearance of a new Yulia Tymoshenko-led government will impact upon bilateral relations between Russia and Ukraine. It remains to be seen whether the resurgence of outspoken Kremlin critic Tymoshenko will lead to a new cold front or signal the dawn of a new chapter in relations between the two former Soviet republics.


The stage of history


Time magazine recently named Russia’s Vladimir Putin as its Person of the Year for 2007, but in twelve months’ time that particular accolade might well come to be viewed as having been exactly one year premature. The Russian leader is facing enormous challenges in 2008 that will see him negotiate a path through the minefield of constitutional barriers in order to retain ultimate power once his second term as president ends this spring. If he is successful, Putin will have effectively revolutionised the Russian political landscape and will be in position to dominate for the foreseeable future as de facto national leader.

Few commentators expect Putin to give up his dominant role in Russian politics and the most likely scenario would be for him to remain the country’s most powerful official by moving to the prime minister’s office while placing loyal lieutenant Dmitri Medvedev in the president’s chair.

2008 is also a crucial year for Yulia Tymoshenko, who will be looking to put the disappointments of her brief 2005 spell in the prime minister’s office behind her and cement her position as the country’s leading political figure. Thanks to the constitutional changes brought into force in 2006 Tymoshenko is now in a less vulnerable position as PM than before and despite her paper-thin parliamentary majority, she is securely entrenched in a position which should act as a springboard for her possible ambitions in the 2009 presidential elections.


Policies and personalities


There is a strong personal element to relations between the two political leaders. Tymoshenko made her fortune in the shady energy sector via deals with Russian partners in the 1990s before reinventing herself as a moral crusader intent on wiping out corruption in regional energy markets. This earned her the ire of the Kremlin, which had the Ukrainian politician placed on an Interpol wanted list for alleged bribery, a stain on her reputation that was only removed six months after she was named PM in 2005.

Tymoshenko has remained unrepentant, consistently attacking Russian energy deals as corrupt betrayals of Ukraine’s national interest, while also penning an outspoken assault on the Putin regime entitled Containing Russia in a spring 2007 issue of the influential periodical Foreign Affairs. That article is said to have provoked a furious response from the Kremlin and signalled Tymoshenko’s willingness to forego the route of compromise in dealing with Ukraine’s strategic northern neighbour.


Orange wounds still fresh


Putin’s comments in the interview accompanying his Time Person of the Year award provided ample evidence that the wounds he sustained during the Orange winter of 2004 have yet to heal. The Russian president used the opportunity of the interview to write off the growth of democracy in Ukraine, which he labelled as anti-constitutional before going on to make the counterfactual claim that almost 100% of Ukrainians are native Russian speakers.

It is not hard to imagine why the subject of Ukraine should remain so problematic for the Kremlin strongman. Putin’s Orange Revolution humiliation was his greatest international defeat in seven years of relatively triumphant rule and the memory remains all the more painful thanks to the knowledge that he has only himself to blame. The Russian leader’s very public backing of Kuchma regime candidate Viktor Yanukovych, which included a state visit three days prior to the first round of voting, backfired disastrously and was one of the key factors leading to the Orange Revolution itself.

This hard lesson has led to the emergence what on the surface appears to be a far less interventionist Russian policy towards Ukraine, but Putin’s recent comments in Time, coupled with a December letter to Yushchenko threatening a deterioration in relations and accusing Ukraine of fostering anti-Russian sentiment, demonstrate the extent to which relations remain troubled.

However, Tymoshenko has not been a leading advocate of the Ukrainian reassessment of Soviet history which has so angered the Kremlin. While Yushchenko has consistently sought to readdress issues such as the Holodomor terror famine of the 1930s and the role of Ukrainian nationalist insurgents during WWII, these topics have not been a focus of Tymoshenko’s policy towards Russia, which may present opportunities for a more pragmatic approach away from the Cold War-style sabre-rattling of recent years.

Energy issues look set to continue to dominate dialogue between Kyiv and Moscow, with WTO membership and relations with NATO and the EU also set to play key roles in determining the nature of the two countries’ ties in 2008. Opinion among Ukrainian analysts remains divided over the impact this will have on Ukraine.


Popular leaders and pragmatism


Political analyst Volodymyr Polokhalo sees pragmatism as the key to interaction between Putin and Tymoshenko. “Both are equally strong leaders with huge resources of public support to call upon in their respective countries. Strong leaders prefer to look for compromises instead of seeking confrontation. Both Tymoshenko and Putin are known for their post-modern pragmatic approach, which could be an important factor towards improving relations between Russia and Ukraine. They both are interested in a serious and constructive dialogue. They understand each other’s positions perfectly well and as political leaders are able to brush aside non-essential issues.

“As Russia’s informal leader, Putin will be looking to secure both Russia’s strategic interests and his personal vision of his place in Russian history. Tymoshenko is widely regarded as a European-minded politician and not an American-oriented figure, which could also play a very important role in improving bilateral ties since it removes many of the artificial contradictions between the two countries.”

Polokhalo also views the new Putin-Tymoshenko dialogue as a chance to back away from the abyss of confrontation and hostile policy. “Russia and Ukraine have exhausted every avenue to damage bilateral ties and they have also done very little to improve them. The two countries have reached a critical point, beyond which a new Cold War could erupt. With Putin now likely to be named Russia’s next prime minister, new possibilities will emerge for a direct dialogue on a new, pragmatic level.”


The energy independence question


Democracy Institute Sergiy Taran does not attach such importance to the return to government of Tymoshenko, which he believes will not make a huge difference to Russia’s broader policy towards Ukraine.

“Russia’s concept of bilateral relations has been too pragmatic over the past few years. The Kremlin does not support any individual person or party any more, as it did in 2004 and beyond. Instead, Russia is looking to support specific institutional projects such as the creation of a parliamentary republic in Ukraine, which would be very vulnerable to outside influence. Economically, Russia continues to dream about penetration into Ukraine’s gas transport system, or even its partial purchase. Relations between the two prospective PMs will not be key.

“The question is whether Tymoshenko will support Russia’s projects. At present it does not look likely, as both politically and economically Tymoshenko has opposed Russia’s position. She stands for strong government in Kyiv and advocates Ukrainian energy independence, which might serve to make bilateral relations more complicated.”


Constitutional conundrums


Foreign relations specialist Valeriy Chaly of the Razumkov Centre anticipates that bilateral relations could be coloured by an early focus on the 2009 Ukrainian presidential elections and also sees scope for clashes between Tymoshenko and Yushchenko over the direction of Ukraine’s foreign policy. “According to the Ukrainian constitution, foreign policy is guided by the president, as is the case in Russia. However, it is the prime minister who heads the economic committee within the state commission which, in turn, is headed by the president. This might create certain tensions between the offices of the president and prime minister. As a result, in 2008 we expect to see an order saying that the president alone should issue directives and co-ordinate Ukraine’s foreign policy.

“With one eye already on the 2009 presidential vote, Russian campaigners will begin to play with humanitarian issues such as those of language and respect for the two countries’ shared history, as mentioned in the Russian foreign ministry’s strange recent statement. Taken together these issues suggest that Ukraine is facing a difficult stage in bilateral relations.”


Popular perceptions


Oleksiy Holubutskiy of the Kyiv-based Situational Models analytical agency sees this new stage in bilateral relations as offering little in the way of a departure from the troubled ties of the past few years. “Any position which is not pro-Russian frustrates Russia. Tymoshenko is seen as a politician who doesn’t fit in with the Putin system or adhere to proper opinions, which inevitably leads to negative assessment. It is important to remember that her popular image in the Russian media is quite different to that which she enjoys in Ukraine. Tymoshenko is portrayed in Russia as the worst type of nationalist.”

Holubutskiy also regards the need for Russia to be seen to assert itself as the regional superpower as a stumbling block to improved relations. “Ukraine remains very important for Russia in order to allow it to demonstrate its influence,” he reasons, adding optimistically: “I remain convinced that the questions currently plaguing bilateral relations are at root caused by problems associated with the process of state-building in both countries. As soon as the new Russian and Ukrainian states are consolidated these problems will disappear.”


Deals struck behind closed doors?


Vitaliy Kulik of Kyiv’s Research Centre for Civil Society anticipates renewed scope for pragmatic agreements behind closed doors, but remains sceptical that we will witness an end to the rhetoric of confrontation. “It will be very difficult for Tymoshenko to find a common language with Putin, but she can make a number of concessions but private...She has announced that she is looking for a strong, healthy relationship with Putin and at the same time she congratulates Saakashvili on being reelected president of Georgia. I think that most contacts will be at the ministerial level and, following the presidential election in Russia, bilateral ties will be the reserve of Yushchenko and Medvedev.”


Economics over icons


Katya Malofeeva of Moscow’s Renaissance Capital does not expect the Putin-Tymoshenko relationship to dominate relations in 2008, but sees potential for growth in the development of an investment-friendly economic policy in Ukraine. “Tymoshenko has traditionally been viewed as a difficult figure among the Russian political elite, and the Kremlin has recently become even more outspoken in suggesting that Tymoshenko as PM would be detrimental to bilateral relations. Having said that, relationships between individual politicians do not generally determine the full scope of bilateral relations between countries, particularly as both in Russia and Ukraine large private sectors and are economically interlinked.

“In my view the key to increasing Ukraine’s attractiveness in the eyes of Russian investors would be the introduction by the Ukrainian government of clear, transparent and predictable economic policy, based on common rules rather than relying on personal trust between the top officials of the two countries.”

Pavlo Frolov of Kyiv’s Institute of Social and Political Psychology is expecting Putin and Tymoshenko to engage in a political battle of wits, with each looking to outmaneouvre their opponent. “Both politicians will wait for concessions from their opponent. This is a typical strategy for Putin. Tymoshenko has a larger and more varied arsenal of political weaponry than Putin, but the question is whether she will be able to use them? I think with her talents she will find the right tactics to get along with Putin, but it looks likely that she will be the one making the concessions. Their first meeting, I think, will be on neutral territory, because an official state visit to either capital would attract too much attention.”

Anna Melnichuk and Oksana Bondarchuk
Business Ukraine
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