In-Depth Ukrainian News, Analysis and Commentary
Sports, Government, and Politics, in Ukraine and Around the World
Economist Intelligence Unit Limited
Business Digest, Sofia, Bulgaria, Wednesday, August 20, 2008
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Mon, July 28, 2008
Economist Intelligence Unit Limited, New York, NY, July 2008
Cogeneration Project in Donetsk Region Taps into GE Energy’s Jenbacher Gas
Investment atmosphere in the energy trade: corruption and non-transparency
By Damien McElroy in Kiev, Telegraph, London, UK, Thursday, 21 Aug 2008
By Fedir Oryshchuk, Ukrainian daily Delo
Kyiv, Ukraine, Tuesday, August 19, 2008
Published by Kyiv Post, Kyiv, Ukraine, Thursday, Aug 21 2008
With Putin pushing a Russian Imperialist agenda, it’s crucial that former
Soviet republics strengthen their alliances with the West
Analysis & Commentary: Oleh S. Ilnytzkyj, Freelance
Edmonton Journal, Edmonton, Alberta, Canada, Wednesday, August 20, 2008
Russia’s war in Georgia troubles its western neighbours
Georgian provinces likely to join Russia
OPINION: By Eric Margolis, Winnipeg Sun
Winnipeg, Manitoba, Canada, Sunday, August 17, 2008
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1. ECONOMIC OUTLOOK: UKRAINE
Economist Intelligence Unit Limited
Raiffeisenbank Ukraine’s inflation for the full 2008 will slow down to 18.2 pct from the 26.9 pct year-on-year rate recorded in July, according to a
research by Ukrainian Raiffeisen Bank Aval.
The consumer price index (CPI) declined by 0.5 pct on the month in July and eased on an annual basis to 26.9 pct from 29.3 pct in June. The traditional
summer seasonal fall in fruit and vegetable prices decelerated the food prices growth to 39 pct year-on-year at the end of July from 50.2 pct at the
end of May.
Taking into account the extremely good harvest this year, Raiffeisen’s analysts expect another deflation month in August and a relatively low monthly inflation rate in September. Inflation pressures, however, are unlikely to subside in the face of skyrocketing production prices and expansionary fiscal policy, Raiffeisen noted.
The producer price index (PPI) picked up 3.6 pct month-on-month in July, bringing the annual growth rate up to 46.4 pct. The fastest growers, the
prices in the steel, mining and oil-processing industries, marked a rise of 65.9 pct, 46.8 pct and 41.2 pct, respectively, since the beginning of the
year.
Moreover, the authorities are reportedly considering a substantial gas tariffs hike for households by the end of the year, which could speed up
inflation to over 20 pct if its magnitude reaches 30 to 40 pct.
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3. WINNER IMPORTS UKRAINE, LTD, JOINS U.S.-UKRAINE BUSINESS
Washington, D.C., Monday, July 28, 2008
WASHINGTON, D.C. – The executive committee of the U.S.-Ukraine Business Council (USUBC), on behalf of the entire membership, is most
pleased to announce that Winner Imports Ukraine, Ltd., has been approved for USUBC membership. Winner Imports Ukraine, Ltd, is the official importer for Ford, Jaguar, Land Rover, Volvo and Porsche.
During a Wimbledon championship in 1991 one of Ford’s top managers in the United States suggested to John Hynansky, the owner of Ford dealerships in
Delaware and Pennsylvania, known under the name of Winner, that he go into a new business in Ukraine.
Mr. Hynansky had worked in the automobile industry for over 25 year at that time. He had built a vast network of automobile dealerships on the East Coast
of the United States and won several awards which highlighted his commitment both to business and to the customer.
John Hynansky, an American with Ukrainian heritage, said he was not quite interested in buying another firm but liked the idea of helping Ford start a
network of dealerships in Ukraine.
Encouraged by this idea, John Hynansky first traveled to Ukraine in 1992, shortly after the republic declared its independence. It was not long until he
came to love the country of his origin. His parents were born in Ukraine but left the country in the late 1930’s and came to the United States.
At the end of 1992, the first Winner Ford dealership was launched in Kyiv. This flagship facility was deemed as the largest facility in Ukraine and set
the benchmark for an automobile industry that was still in its infancy.
VOLVO, JAGUAR, LAND ROVER & PORSCHE
Due to it’s commitment to customer service and high level of professionalism, Winner Imports Ukraine was awarded as the official importer of Volvo cars
to Ukraine in 1999. This was a monumental step as it was a commitment from another major manufacturer to Winner Imports Ukraine.
In 2004, Winner Imports Ukraine was awarded the Jaguar, Land Rover, and Porsche franchises for Ukraine. This again, was another prize for Winner as
it showed the high level of commitment and trust from the manufacturer to the importer, as these marquee brands believed in Winner’s commitment to
provide the best automotive experience to the consumer.
In 2006, Winner Automotive, a sister company of Winner Imports Ukraine opened the largest multi-brand concept dealership in Eastern Europe. This
dealership, located in Kyiv, houses the Ford, Volvo, Jaguar, and Land Rover brands. This $10,000,000 project reconfirmed Winner’s position as the clear
leader in the Ukrainian automobile business.
35,000 VEHICLES SOLD, 50 SALES & SERVICE POINTS
Winner Imports Ukraine, during the past 16 years has sold more than 35,000 vehicles and has developed a network of more than 50 sales and service points throughout Ukraine. Winner Imports Ukraine constantly strives to optimize its processes and personnel in order for the consumer to have the best automobilepurchase and service experience possible.
Mr. Bohdan Kulchyckyj is General Director of Winner Imports Ukraine. An American with Ukrainian heritage, he has lived and worked in Ukraine for the
last 16 years.
Additional information about Winner Imports Ukraine, Ltd and Winner Automotive can be found on their website at: http://www.winner.ua/en.
“The U.S.-Ukraine Business Council (USUBC) is most pleased to have Winner Imports Ukraine, Ltd. join the rapidly expanding USUBC membership.” said Morgan Williams, SigmaBleyzer, who serves as President of USUBC. “Winner has certainly earned its place among the leading automotive companies in Ukraine.”
MEMBERSHIP IN USUBC KEEPS GROWING
Winner Imports Ukraine is the 36th new member for 2008, and the 66th new member since January of 2007. USUBC membership has quadrupled in the
past 19 months, going from 22 members in January of 2007 to 87 members in July of 2008. Membership is expected to top 100 very soon.
The other new members in 2008 are MaxWell USA, Baker and McKenzie law firm, Och-Ziff Capital Management Group, Dipol Chemical International,
MJA Asset Management, General Dynamics, Lockheed Martin, Halliburton, DLA Piper law firm, EPAM Systems, DHL International Ukraine, Air Tractor,
Inc., Magisters law firm, Ernst & Young, Umbra LLC., US PolyTech LLC, Vision TV LLC, Crumpton Group, American Express Bank, a Standard
Chartered group company, TNK-BP Commerce LLC, Rakotis, American Councils for International Education, Squire, Sanders & Dempsey LLP,
International Commerce Corporation, IMTC-MEI, Nationwide Equipment Company, First International Resources, the Doheny Global Group, Foyil
Securities, KPMG, Asters law firm, Solid Team LLC, R & J Trading International, Vasil Kisil & Partners law firm, AeroSvit Ukrainian Airlines
and ContourGlobal.
The complete USUBC membership list and other information about USUBC can be found at: http://www.usubc.org.
BUSINESS INVESTMENT DRIVES UKRAINE’S INTEGRATION
Ukraine’s Euro-Atlantic integration is first and foremost today being driven by the private business community in Ukraine, Europe, and the United States.
“Ukraine’s aspirations for Euro-Atlantic integration, to be a major member of the world’s community of strong, democratic, independent, prosperous,
private business sector driven nations, will be realized largely through the present leadership and investments from the business community and then
hopefully with some real support later from the politicians and government leaders,” wrote Morgan Williams, SigmaBleyzer, who serves as President
of USUBC, in a recent article published by the “Welcome to Ukraine” magazine.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
4. UKRAINE: COMING CRISIS GAS PRICE COULD DOUBLE NEXT YEAR
Economist Intelligence Unit Limited, New York, NY, July 2008
The gas price for Ukraine could double next year, threatening both economic meltdown and gas transit to Europe.
Ukraine is facing the threat of the its imported gas price soaring in 2009. Potentially this would be ruinous for Ukraine, thus putting Russian gas supplies to Europe into doubt again. It is not clear whether Ukraine has the means to negotiate with Russia a more gradual transition to EU prices; if it does, the political price is likely to be high.
The price that Ukraine pays for imported gas could double next year, Gazprom CEO Alexei Miller told Russian prime minister Vladimir Putin in a meeting on July 8th. Mr Miller had previously remarked that the price paid by Ukraine could rise from US$179.50/1,000 cu metres this year to US$400 in 2009. Mr Miller’s latest comment is noteworthy because it underlines the Russian state-run gas monopoly’s insistence on a higher price.
Speaking after a meeting on June 28th with Ukrainian prime minister Yuliya Tymoshenko, Mr Putin said that the price paid by Ukraine would rise gradually to market levels. He did not specify a time period, nor indicate how high prices might rise in 2009. Moreover, he noted that the Central Asian states were eager to achieve a “European price” from the start of 2009.
A day later Ms Tymoshenko claimed that the outcome of the meeting was for prices to rise to a Euro-pean level over a period of three-four years. Ukraine’s fuel and energy minister, Yuri Prodan, claimed in an interview published with newspaper Delo on July 9th that Ukraine had an outline agreement to avoid a sharp price rise in 2009. However there is no corroboration of this from any Russian official.
Ukraine has contracted to buy 55bn cu metres of gas each year from Central Asia, via the intermediary RosUkrEnergo. This accounts for the lion’s share
of the country’s consumption, which is high by European standards. BP data show that Ukraine produced 19bn cu metres of gas and consumed 64.6bn cu
metres in 2007.
Ukraine has tried unsuccessfully to re-establish direct contact with the Central Asian gas producers. In mid-March, following a meeting with them,
Gazprom announced that from 2009 the Central Asians would receive a European price for their gas.
crude and oil products. Recently the price has been around US$335/1,000 cu metres, according to World Gas Intelligence, but the same source has
predicted that prices could soon rise to nearly US$400/1,000 cu metres.
If the import price did rise to this level it would represent an eightfold increase on the price Ukraine paid throughout 2005. The current import price
of just under US$180 per 1,000 cu metres equates to a domestic retail price of around US$240, to cover internal transit costs, a supplier margin and
value-added tax (VAT). So if import prices were to double, the price for end-users would be close to US$500 per 1,000 cu metres.
Apocalypse soon?
The imposition of such a high gas price on Ukraine would have direct and potentially devastating effects.
Metallurgy enterprises began investment programmes several years ago to introduce more advanced energy-saving equipment into their plants, but a
number of these programmes are two years away from completion and may not in any case have been predicated on such high gas prices.
Ukrainian industry is dominated by metallurgy and chemicals. Base metals and products accounted for 42% of goods exports in 2007, and chemicals a further 8%. It is believed that fertiliser producers would struggle to turn a profit if the gas price rose above US$300/1,000 cu metres.
[2] Second, it would impact on the current-account balance, which has already deteriorated from a peak surplus equivalent of over 10% of GDP in 2004 to a deficit of 4% of GDP in 2007 under the weight of strong domestic demand and several years of steep rises in energy import costs. The deficit is heading for a further widening to well over 5% of GDP in 2008.
To date, the deficit has been comfortably covered by rising inflows of foreign direct investment (FDI) and external borrowing by the Ukrainian
banking sector and corporates, with the result that the domestic currency, the hryvnya, has remained under upward pressure (this led the central bank
to revalue the official exchange rate against the US dollar by 4% in May).
However, concerns over whether Ukraine can continue to finance its current-account deficit in 2009 are intensifying. If gas import volumes remained unchanged and the gas price rose to US$400, the import bill would increase by US$8bn or 4% of GDP, to 7.3% of GDP.
[3] Third, it would place a huge strain on Ukrainian households and public institutions, which combined consume around 25bn cu metres of gas annually.
wholesale price. Losses have been directed onto municipal budgets and the state gas utility Naftohaz. This situation could not continue were gas
prices to double.
Fourth, given the centrality of gas to Ukraine’s economy, it would deliver a huge boost to inflation directly and through second-round effects. Consumer
prices rose by an average of 22% in the first quarter of this year, and over 30% in the second quarter. Although price-growth may now have peaked, a
doubling or more of gas prices would throw that deceleration into reverse.
Taken together, these effects would inflict ruinous damage right across the economy. In such a situation it is not certain whether Ukraine could be
relied upon to deliver the sizeable gas volumes that Russia ships to Western markets via Ukrainian territory.
Some 80% of Russian gas exports to the EU, approximately 120bn cu metres, cross Ukraine. This year the figure may be even higher: in the first half of
the year, according to Ukraine’s fuel and energy ministry, transit volumes rose by 23% to an all-time high of 65.3bn cu metres.
Unattractive options
Facing these problems, Ukraine’s government has several options.
[1] First, it could raise transit fees for Russian gas. The current rate of US$1.70/1,000 cu metres per 100 km is low by European standards; Poland applies a tariff of approximately euro2.50. However, even increasing transit fees to US$3.50/1,000 cu metres per 100 km would not do much to offset the shock of such a rise in the gas import price.
Data on Ukrainian receipts for gas transit are not readily available, but on the basis of a transit fee of US$1.70 and volumes of 120bn cu metres per year it could be approximately US$2.25bn. It follows that by increasing the transit fee to US$3.50 per 1,000 cu metres, receipts to Ukraine would increase by no more than US$2.4bn. This increase pales in comparison with the prospective US$8bn increase in the import bill. However, it would go some way to meeting the increased cost of gas for households and public institutions.
[2] Second, the government could reduce the end-user price by cutting or abolishing VAT, which is currently levied at a rate of 20%. This would offer
limited help to Ukrainian consumers, but at the same time it would reduce the government’s financial possibilities to help cushion the impact of higher prices. Nor would it sit well with the task of narrowing the budget deficit, which is already difficult because of Ms Tymoshenko’s populist
spending programmes.
[2] Third, the government could choose to decapitalise Naftohaz as a partial solution to its problems. However the scope for doing so is limited, given
Naftohaz’s already parlous financial state and the existence of a sovereign guarantee to the company. Moreover, there is a high human and political cost
to decapitalisation; in 2007, 52 people died in Dnipropetrovsk when their apartment building exploded because equipment to regulate gas pressure was
not installed.
Putin’s ponderables
For Russia’s government, a gas-price shock for Ukraine would be a mixed blessing. On one hand, it would have certain advantages. By damaging Ukraine’s
economy, it would undermine the legitimacy of the government that emerged as a result of the 2004 Orange Revolution that Russia opposed.
Ukraine currently represents the greatest challenge to the political and economic development model that Russia champions; its failure would increase
the sense of security felt by Russia’s own elite, which has been anxious to prevent what it terms the “Orange virus” spreading to Russia.
On the other hand, severe socioeconomic instability in Ukraine is not in Russia’s interest, given the strong political, economic, military and human ties between the two countries.
The Russian calculation with regard to Ukrainian gas prices is also affected by the position of the Central Asian countries. Russia cannot simply dictate
terms to the Central Asians, as the gas price has risen so far and now the EU and especially China have emerged as rival customers for the region’s
hydrocarbons.
It is conceivable that Mr Putin and president Dmitry Medvedev could persuade Turkmenistan, Uzbekistan and Kazakhstan to accept a graduated shift to
European prices, over a period of perhaps two-three years, but the Russian leadership would have to spend significant political capital to achieve this.
For Gazprom’s EU customers, the struggle over Ukrainian gas-pricing next year should be a source of enormous concern. About 80% of the Russian gas
they receive comes via Ukraine; there is little scope for increasing deliveries via Belarus, which may itself soon be in conflict with Russia over the gas trade terms for 2009. The mooted Ukrainian bypass routes Nord Stream and South Stream are years away from completion.
The prospect for gas cut-offs because of disagreements on price or transit fees, or because of theft from the pipeline, is considerable. Ukraine’s government has stressed in the past two years that it is a reliable transit partner and would not take any such steps lightly. But when gas for the population and swathe of industry becomes unaffordable, desperate measures should probably be expected. SOURCE: Business Eastern Europe
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5. UKRAINE’S COAL MINE INDUSTRY CONTINUES WORK TO REDUCE
Cogeneration Project in Donetsk Region Taps into GE Energy’s Jenbacher Gas
GE 28.75, +0.10, +0.4%) is a diversified global infrastructure, finance and media company that is built to meet essential world needs. From energy, water, transportation and health to access to money and information, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. GE is Imagination at Work. For more information, visit the company’s Web site at http://www.ge.com.
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6. CORRUPTION, NOT DEPENDENCY IS THE RISK TO
INVESTMENT ATMOSPHERE IN THE ENERGY TRADE:
The growing dependency in Europe on non-transparent financial transfers in the energy trade is as great a danger to Europe as is the increasing dependency on Russia as the primary energy source. Non-transparent and corrupt business practices can have a corrosive effect on European governments, and especially on the new EU member states of East Central Europe.
Dubious or outright corrupt business practices are distorting the energy decision-making processes in both consumer and supplier countries. According to Russian economists, the business climate within the Russian energy sector has become even less transparent and more corrupt in recent years.
Corruption and re-nationalization has also weakened the bargaining position of Western firms using best practices when engaging in East-West energy trading. The increasing dominance of Russian state-controlled energy companies has also led to a marked reduction of alternative investment possibilities for Western companies.
Predictability in making business decisions is already difficult for Western energy firms. This is more the result of the increased danger of intervention at any point by elite cartels who dominate the energy trade, particularly in Russia and Central Asia.
Polling among Russian business leaders indicates that corruption has significantly increased in the past six to eight years. Why should we in the West assume that the increase in business corruption in Russia has not already spilled over into the activities of these same state-directed firms when they operate in the EU, or even in the U.S.?
However, Browder asks a good question, one that any Western firm dealing with Gazprom or any other state-controlled Russian company should consider before increasing its financial exposure in the energy sector. Some Western energy companies attempting to negotiate joint ventures with Russian state firms have called off talks with potential Eastern partners rather than agree to funnel profits through off-shore accounts or to intermediary firms that bring no added value to the venture.
The highly-publicized asset losses and contractual problems of Shell, BP, Exxon, Matsui and Mitsubishi in Russia are only the most highly publicized cases of contracts being arbitrary changed. It seems that when doing business in Russia, a contract is not a contract – even if there are solid international arbitration clauses written in to the original agreement. The recent legal troubles of TNK/BP should be closely studied by Western companies contemplating new energy ventures in Russia.
Western firms are rarely in a position to bid on projects where there is a transparent well-supervised tender. Too often, in Russia, Ukraine and in Central Asia, taking in a “local partner” who is a member of one or another elite oligarchic group is the admission ticket. Paying the admission fee, however, often leads to a watering down of the Western partner’s assets or ultimately to a complete takeover by the local “investor.”
The feeble reaction of Western governments and the EU to non-transparent actions by Moscow only encourages the Kremlin to believe in the effectiveness of its aggressive energy policies. As evidence of the West’s weak reaction we could point to their willingness to ignore politically motivated energy disruptions in East Central Europe by Transneft or Gazprom, and to the acceptance by Europe of monopoly and anti-trust practices on the part of Russian companies. These anti-trust and anti-competition practices are a clear violation of Article 82 of the EC Treaty and of Article 45 of the Energy Charter Treaty
.
There continues to be reluctance on the part of Western governments to investigate and enforce EU and OECD anti-bribery laws and regulations. The lack of a common EU approach to Russia and Central European energy policies allows Moscow to carry out a “divide and conquer” strategy that plays to the particular vulnerabilities of each European state.
Market liberalization and the privatization of energy assets in European states with weak judiciaries or anti-trust enforcement has been an advantage for Russian state companies competing with Western firms – especially when the latter adhere to the OECD convention on anti-bribery of foreign officials. There is a danger that this may lead, or may have already led, to the enrichment of some well-positioned individuals in European member states.
The new democratic governments of Central Europe have been relatively passive in dealing with transparency and anti-corruption issues. This may be a result of the large number of political and economic leaders who are holdovers from the communist period.
The weak state of transparency in Central Europe facilitates the formation of new alliances between East European elites and the former communist/intelligence elite in Russia who dominate the major energy companies. This puts Western firms at a clear disadvantage when negotiating for facilities acquisition or pipeline construction. With the re-nationalization of Russian energy assets, more of the negotiations with the West are carried out by top governmental officials.
In addition, Western firms that attempt to carry out due diligence on prospective partners or on government ministries and regulatory agencies are often frustrated by either a lack of information or the reliability of the data fed back to them. I
RECOMMENDATIONS:
[1] The EU Commission and Council should push for full implementation of the Parliament’s September 26, 2007 resolution that called for a “common European foreign policy on energy.” Carrying out the Parliament’s recommendations would help “level the playing field” for Western investors, reduce opportunities to engage in non-transparent or corrupt business practices in the East-West energy business and decrease the large profit that stems from monopoly control of piped natural gas exports from the Caspian Sea countries and Russia to Europe.
[2] Western firms should petition the EU, DG COMP and national governments to enforce more vigorously existing anti-trust and competition policy, particularly in regards to Russian state companies. Greater import competition would lower prices for consumers and for Western power and refinery operators.
[3] The Council and Parliament should consider establishing an independent regulatory agency with the authority to monitor (but not approve or disapprove) all major energy agreements between EU and non-EU companies. It would report to the Commission regarding the likely effect of the proposed agreement on the broader EU energy market.
[4] Require all member governments to notify the Commission at the start of negotiations with foreign entities regarding the construction of new energy pipelines, the offering of tenders for energy contracts and when conducting talks for the sale of existing facilities within their border. This might counteract the “divide and conquer” activities of Russian state-owned energy firms, thereby leading to greater cooperation by EU states.
[5] Western energy companies would benefit from a uniform reporting requirement that applied to domestic and foreign firms doing business within the EU; one that mandates revenue transparency reporting for their operations at home and abroad. This would weaken the present advantage held by firms from countries with high levels of business corruption and an unwillingness or inability to enforce existing contracts.
[6] Firms should be barred from including confidentiality clauses that hide revenue transparency in contracts with foreign energy companies.
[7] The EU Commission should be more active in defending member states against politically-motivated disruptions in energy flows from Russia, such as occurred in Lithuania and Latvia. An unwillingness to defend EU members from this kind of disruption only disadvantages the energy firms and the state interests targeted by Moscow. It also further encourages those elements in Russia who oppose domestic reform and enforcement of the rule of law.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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Russian debt and equity markets have also suffered sharp falls since the conflict began on August 8, with yields on domestic rouble bonds increasing by up to 150 basis points in the last month.
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NOTE: Send in a letter-to-the-editor today. Let us hear from you.
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8. THE OLIGARCHS COULD BE RUSSIA’S BEST BET
One of the great debates about Russia is now over. We no longer need to argue about whether Russian leader Vladimir Putin’s reassertion of state power is good for the economy and thus essentially benign.
emergency summit in Brussels this week. Mr Putin’s neo-authoritarian regime – and it is clearly his state and his fight, no matter that we now call him “prime minister” – is a country with which, as the Nato summit concluded, we cannot continue “business as usual”.
that the new Russia is nasty – and not just to its own journalists or human rights activists – western leaders are also coming to the view that it may be hard to influence, let alone contain.
financing in the 1990s to the swaggering holder of more than $581bn in central bank international reserves it is today.
the world’s tough guys with relish. They have had all the best lines of the conflict, with even the small and scholarly-looking Mr Medvedev growling
that “if anyone thinks they can kill our citizens . . . we will come out with a crushing response”.
http://www.ft.com/cms/s/0/aee68316-6faf-11dd-986f-0000779fd18c.html
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
9. THE GEORGIAN CONFLICT’S IMPACT ON UKRAINIAN POLITICS, ENERGY & INVESTMENT
Although she did send her Deputy Prime Minister, Grigory Nemirya, to Georgia last week, it is surprising that Prime Minister Tymoshenko, who has made criticism of Gazprom a central theme of her administration, has not commented in public on Russia’s incursion into Georgia.
Since the conflict started, pundits have commented on what the current crisis means for Ukraine’s NATO accession. Predictions have ranged from accelerated NATO membership due to the threat posed by Russia to an indefinite delay in any Ukraine-NATO interaction. Russian leaders have been clear in asserting that Ukrainian membership in NATO is something that they cannot accept.
Turning to the issue of energy security, the recent conflict in Georgia resulted in the shutdown of the Supsa oil pipeline, following the earlier shutdown of the Baku-Tbilisi-Ceyhan (BTC) pipeline due to a fire not related to the Georgia-Russia conflict. While the Supsa pipeline remains closed, British Petroleum announced that BTC would reopen the week of August 25.
Georgia, of course, will face a terribly difficult challenge in maintaining economic growth, even though several NATO countries have vowed to assist in rebuilding that country’s infrastructure.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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10. UKRAINE FEARS IT MAY BE THE NEXT TARGET FOR RUSSIA
KIEV – Ukraine fears it could be the next target of Russia’s campaign to reassert influence over countries it long dominated in the Soviet Union, with Moscow well placed to foment separatist feelings in its Russian-speaking regions.
Ukraine stood by Georgia in its war with Russia over the region of South Ossetia. President Viktor Yushchenko traveled to Georgia to show his support and announced tougher rules on Russian naval movements from a base in Ukraine.
And in a departure from his usual careful balancing act between Russian and Western interests, Yushchenko attacked Russia over South Ossetia in a way more akin to Georgian President Mikheil Saakashvili.
Some political analysts say that could heighten the risk. “When Ukraine prioritizes its national interests, it goes against Russia’s interests and, of course, there will be conflict,” said Viktor Chumak, an analyst for Ukraine’s International Centre for Policy Studies.
“And Russia has broken through a psychological barrier to start this kind of war on former Soviet territory … Georgia had created itself in the shape of an enemy of Russia, and many in Russia already see us in the same way … We probably rank third in the list of Russia’s leading enemies.”
Both born out of bloodless revolutions, one orange and one rose, Yushchenko and Saakashvili’s administrations want to join NATO, the European Union and secure close ties with the United States.
Like Georgia, Ukraine was not put on the fast-track to NATO membership at the alliance’s summit last April, but was promised it would be allowed in one day. All of this has angered Russia which is fearful of having the Western military alliance on its doorstep.
Other former Soviet republics have also been considering their rankings. Moldova, whose Communist government has courted the West rather than traditional ally Russia, fears it has taken the same path as Georgia and has Russian peacekeepers patrolling in its separatist Transdniestria region.
Even Belarus’s leader, Alexander Lukashenko, initially distanced himself from the war, which was criticized in the West. But subsequently, at Moscow’s prompting, he praised Russia’s “wisdom” in the way it handled the crisis.
CRIMEA
Analysts say the Crimea region in southern Ukraine could be used by Russia to destabilize Ukraine. It hosts Russia’s Black Sea fleet in Sevastopol and the majority of people living there are ethnic Russians. Russian-speaking eastern Ukraine could also provide fertile ground, the analysts say.
Chumak said Russia could take advantage if Ukrainian politicians failed to resolve their differences and continued to let legislation slide. Yushchenko and his prime minister, Yulia Tymoshenko, have sparred over almost all policy decisions since she came to power in December.
“In that situation then Russia will start playing games, start provoking Ukraine, especially with Crimea,” he said.
Yushchenko was quick to call on the West to protect Georgia’s territorial integrity. When we think about our position on Georgia, I have no doubts … The loss of sovereignty, putting into doubt the territorial integrity of Georgia — this means revising the sovereignty of all,” Yushchenko, swept to power by the 2004 “Orange revolution”, said in a statement.
Most analysts cautioned against scare-mongering and said Ukraine could avoid confrontation by taking a pragmatic stance first and then reforming its economy in the long-term.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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http://www.telegraph.co.uk:80/news/worldnews/europe/ukraine/2596872/Ukraine-leaders-divided-over-Russian-threat.html
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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12. UKRAINE TO BEEF UP MILITARY POTENTIAL IN AREAS AT RISK FROM RUSSIA
By Fedir Oryshchuk, Ukrainian daily Delo
Kyiv, Ukraine, Tuesday, August 19, 2008
Published by Kyiv Post, Kyiv, Ukraine, Thursday, Aug 21 2008
The events in Georgia are making the Ukrainian leadership rethink the country’s military doctrine, a daily has written. Quoting a high-ranking source at the Ukrainian Defence Ministry it said that more attention is going to be paid to protecting national interests in Crimea and Ukraine’s eastern regions bordering Russia. This will be accomplished by deploying new air defence units there.
The following is the text of the article by Fedir Oryshchuk, entitled: Ukraine pointing missiles eastwards published in the Ukrainian daily Delo on 19 August; subheadings are as published:
The war in Georgia is changing the concept of Ukraine’s national security. The military are starting to strengthen defence in the country’s south-east. The Georgian-Russian military conflict is forcing the leadership of Ukraine to step up the state’s defence capability. As early as this autumn the Defence Ministry will demand that parliament increase funding for the army.
Previously the ministry had planned to allocate an additional 2bn hryvnyas, but now the requests of the military will grow significantly. It is planned to spend the extra funds on the formation of new subunits and weapons upgrading in existing army units in the south and east of the country.
In the words of a high-ranking source in the Defence Ministry, the relevant conversation has already been held with the president [Viktor Yushchenko].
The head of state has given preliminary agreement to the proposal of the military.
Newspaper headlines like Crimea will be next did not passed unnoticed for the Ukrainian authorities. Assumptions that Ukraine might become the next
object for Russian aggression are forcing our military to take unprecedented steps.
Starting as early as this year, the state is planning to allocate additional funds for the defence of Crimea and the east of the country from a potential
attack. As the high-ranking source in the Defence Ministry told Delo, the strengthening is due to affect air defence units first of all.
According to the deputy chief of General Staff of the Defence Ministry, Ihor Romanenko, a new air defence anti-aircraft missile regiment was already
formed last year in the east of Ukraine. Its task is to provide a defence umbrella over Donetsk and Luhansk regions.
We are not standing still, but are improving ourselves in accordance with the challenges that are appearing in the world, is how he commented on the
need to create the new regiments on the left bank of the Dnieper.
Apart from that, starting from this year, the Defence Ministry will be focusing on the defence of the state’s southern regions, in particular Crimea. It may be a matter of a numerical increase in air defence forces, redeploying anti-aircraft missile complexes and fighter planes from other regions and upgrading existing missiles and anti-aircraft missile complexes (AMC).
Missiles already being tested
Apart from that, active funding of our own multi-functional missile complex is continuing at the present time. Work on its development has been carried
out for several years, and especially intensively over the past three years. The main designer is the Dnipropetrovsk-based Pivdenmash missile plant. In
the words of Lt-Gen Romanenko, the complex offers the unified use of air defence missiles for infantry and aviation troops, as well as for naval forces.
The same basic missile will be used in the ground to air, ground to ground, shore to ship, ship to shore and ship to air schemes, the General Staff deputy chief says. Testing of individual elements of the multi-functional complex will start after 2010, he said. The new air defence system will be of entirely Ukrainian manufacture, with the exception of an insignificant number of parts.
In the framework of increased funding, in the words of the Defence Ministry source, it is intended to raise in parliament this autumn the question of
allocating additional funds to conduct exercises of air defence subunits. This question, according to Delo’s information, has already been discussed with the president. Yushchenko assured the military that the funds will most probably be allocated.
At the present time firing training from AMCs is being conducted at the only test site in Ukraine, Chauda, near Feodosiya. At the same time, at exercises
here in Ukraine, Ukrainians can use only AMCs like Buk, S-300 and Osa.
In Romanenko’s words, depending on the location of the test site, Ukraine pays Russia from one to two million dollars a year for this service. Incidentally, it is not ruled out that following the statements by Russian Federation representatives about the participation of Ukrainian air defence specialists in combat actions on the side of Georgia, the question may arise of a ban on Ukraine carrying out such measures on Russian territory, in spite of the fact that Ukraine has officially denied the participation of its military specialists in the Caucasus war.
Replacement for nuclear weapons
In the words of a former adviser to the president on military questions, Maj-Gen Vadym Hrechaninov (retired), the Defence Ministry raised the question of strengthening the defence capability of Ukraine’s eastern and southern regions back in the early 1990s. After the collapse of the USSR, the army was concentrated primarily on the territory of the western regions of Ukraine.
However, in the 1990s it was difficult to finance the redeployment of troops to the south and east. Apart from that, it was virtually impossible from the
political point of view. For that reason, the reorganization was deferred. But today Russia is strengthening its grouping in the North Caucasus, and this means Krasnodar Territory, our neighbours, and we need to think about this (strengthening the defence of south-eastern Ukraine – Delo), the major-general says.
In Hrechaninov’s words, after renouncing nuclear weapons, Ukraine was forced to look for new means of preventing war. In place of nuclear weapons, a
strong air force and powerful ground-based missiles complexes may serve as such a means for Ukraine.
In any case, the military conflict in South Ossetia gave a chance to the Ukrainian army to draw the attention of the authorities to itself. It is not ruled out that thanks to the new argument – the Russo-Georgian war – the Defence Ministry will succeed in gaining appropriate funding for the army at a level of 2 per cent of GDP. This year, the ministry’s budget amounted to about 10bn hryvnyas, which is only 1 per cent of the country’s GDP.
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13. UKRAINE: RUSSIA AT THE GATES AGAIN
Russification: the gift that keeps giving
http://network.nationalpost.com/np/blogs/francis/archive/2008/08/21/ukraine-the-next-georgia.aspx
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14. THE GEORGIA-UKRAINE ANALOGY: WHAT’S THE REAL LESSON?
With Putin pushing a Russian Imperialist agenda, it’s crucial that
ANALYSIS & COMMENTARY: Oleh S. Ilnytzkyj, Freelance
Edmonton Journal, Edmonton, Alberta, Canada, Wednesday, August 20, 2008
A truer understanding would be to realize that Russia is resorting to an old imperial mindset in a futile — yes, futile — attempt to re-establish an outdated sense of greatness that can only lead to a pan-European disaster. Vladimir Putin has been laying the groundwork for this outdated national ideology since the day he came to power, by crushing Chechnya and embracing the symbolism of the former empire and Soviet Union.
If the brutal invasion of tiny Georgia is a warning to Ukraine about its European orientation, then it is also a pathetic attempt to resurrect a model of “Russian” nationality and identity that subsumes Ukrainians and Belarusans under Moscow’s rule as “fraternal” East Slavic people, a strategy that stopped working around the Age of Romanticism.
MOSCOW’S SPIN DOCTORS
To rebuild a national identity on imperial foundations, the Russians must first colonize the mind of the west, which remains a semi-hostage to Russia’s historical spin and is not entirely prepared to admit the unnaturalness of its ambitions in Eastern Europe and the near abroad.
The post-Soviet era may have been marked by a liberation from some of the worst ideological propaganda that justified Russia’s hegemony in central and eastern Europe, but recognizing the national pathology that is driving Russia to misguided “greatness” in Georgia, and now potentially in Ukraine, is far from complete. There still remains a big temptation to believe Russians when they conceptualize the history of the East Slavic world as their own national space, depriving Ukrainians and Belarusans of history, culture and statehood.
Many western journalists and historians still represent Russia as a 1,000-year-old state, with its first seat of power in Kyiv, thereby falsely conflating the immense influence of the Kyivan state on Russia with Russia itself. Of course, if so-called “Russians” ruled in Ukraine in the 10th century, then why not today?
Putin relies on such deceptive wisdom to disarm the west. At the NATO summit last April, Putin asked U.S. President George W. Bush: “Do you
understand, George, that Ukraine is not even a state?” insisting that most of Ukraine’s territory was “given away” by Russia.
Typically, Russia never admits that much of so-called Russian territory is the result of imperial conquest and the suppression of indigenous populations. Russian propaganda instead creates “fake” countries, questioning the legitimacy of Ukraine and Georgia, in order to dismember them in the name of a “real” Russia.
Russia’s manipulation of cultural and historical issues for its own grandiose purposes is a dangerous game in which only the naïve can believe.
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NOTE: Oleh S. Ilnytzkyj is a professor in the department of modern languages and cultural studies at the University of Alberta and editor of Canadian
Slavonic Papers
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http://www.canada.com/edmontonjournal/news/ideas/story.html?id=b046cb06-0492-4afd-9eb8-2165fa3980d3&p=2
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The Caucasus conflict should not be used as an excuse to keep Ukraine out of the North Atlantic alliance.
The Georgian-Russian war has resurrected the debate about NATO’s enlargement eastward and specifically Ukraine’s future, if any, in the North Atlantic alliance.
Sharp divisions within the 26-member bloc led to a scuttling of the U.S.-backed plan earlier this year to extend a so-called membership action plan to Georgia and Ukraine, with the Bush administration arguing that closer ties with NATO would strengthen democracy in both countries and reward their contributions to alliance-led operations.
Unfortunately, rather than encouraging dialogue, the Caucasus war has only reinforced each camp’s original position.
Georgia now represents a particularly difficult challenge for NATO, but in the case of Ukraine, there are two pressing reasons to continue with the integration process: regional security and strengthening democratic norms.
REGIONAL SECURITY
Kowtowing to Moscow’s demands by leaving Ukraine and Georgia outside the North Atlantic area is a dangerous signal in an international system that will be interpreted in the Kremlin as yielding to its view of post-Cold War spheres of influence.
Ambiguity on which country is “in” and which is “out” has grave historical precedents. The failure to approve a membership action plan, or MAP, for Georgia has, arguably, emboldened Russian intentions in the Caucasus. Some fear that Ukraine could be next.
Aside from maintaining territorial integrity, further integration with NATO will aid Ukraine in achieving its long-term goal of membership in the European Union. That the road to the EU lies first through membership in NATO is not lost on policymakers in Kyiv.
Of course, this is not a one-way street. Over the years, Ukraine’s troops have actively participated in NATO operations. Today, it contributes to NATO missions in Kosovo and Afghanistan, and has participated in Operation Active Endeavor, an antiterrorism campaign in the Mediterranean Sea. It also has 37 officers and NCOs serving in the U.S.-led operations in Iraq.
STRENGTHENING DEMOCRACY
Ukraine’s 2004 Orange Revolution ushered in a new chapter of that country’s history marked by reinvigorated civic engagement, freedom of the press, and competitive elections, even as corruption and regular power struggles are still very much a problem. The membership action plan and active engagement with other NATO members would help strengthen Ukraine’s European norms and values, and professionalize its military.
Membership action plans have helped other former communist states consolidate their democracies in a cost-efficient manner and to prepare them for full membership. As a vehicle of Euro-Atlantic integration, NATO works by facilitating the transfer of rules and norms of behavior common to all its members.
And yet, the argument for Ukraine’s membership is not immune from criticism.
[1] First, some analysts argue that offering a MAP to Ukraine would overburden NATO and put it in direct conflict with Moscow, which has warned it would not sit idly by as the alliance grew.
[2 ]Another argument voiced against Ukraine’s integration with NATO is that this would intrude on what the Kremlin still views as its sphere of influence. Which begs the question, when will Moscow not view Ukraine as part of its blizhneye zarubezhye? its Indeed, geographic and historical factors ensure that Moscow will always feel that Ukraine is part of its “near abroad,” but it does not have a monopoly.
[3] A third argument against membership is the public’s tepid support for it. According to a survey conducted in June by the Kyiv-based Sofia think tank, 40 percent of Ukrainians thought that the government should abandon plans to join NATO; 31 percent wanted a solution mutually agreeable to both Moscow and Kyiv; 17 percent wanted unabated progress toward the alliance regardless of pressure from Russia.
Although the survey suggests that the public is far from overjoyed about joining NATO, this ought to be expected after decades under Soviet propaganda and more lately the Kremlin’s warnings about extending the alliance ever closer to Moscow.
Putting Ukraine on the path to membership will undoubtedly promote a broader public debate about NATO and the country’s role in the organization. That debate would be healthy for a nation divided between its pro-Russian east and pro-European west, and it would also show skeptics in the EU that Ukraine is serious about its commitment to democracy and healing its internal rifts.
If Ukraine gets the green light to eventually join NATO, it would be a crucial first step in ensuring the country’s ultimate integration with the rest of Europe. Alliance leaders should take that first step when they meet in December.
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NOTE: Vitaliy Voznyak is a doctoral student specializing in Ukrainian politics and U.S.-Russia relations at the University of Illinois in Chicago. He runs a blog on corruption, democracy, and Eastern European politics. (http://www.tol.cz/)
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16. POLAND, UKRAINE AND THE BALTICS, NERVOUS NEIGHBORS
Russia’s war in Georgia troubles its western neighbours
NOBODY has watched the war in Georgia more anxiously than Russia’s western neighbours. Recently the Russians have been bellicose towards Ukraine, the three Baltic states and Poland. It was no surprise when leaders from the other four flew with the Polish president to Tbilisi to express solidarity with Georgia’s Mikheil Saakashvili.
The Americans are to modernise Poland’s military defences. The two countries have also agreed to co-operate more closely if faced with external threats. This was a coup, as America tried to convince Poland that NATO membership was enough of a guarantee.
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17. RUSSIAN EFFORTS AT REGIME CHANGE
Truth is not arrived at by a majority vote. As a general rule, a country should seek support for its foreign policy in multi-national institutions such as the United Nations or the Organization for Security and Cooperation in Europe before taking unilateral action. The rules of both organizations are such that the likelihood of achieving a unanimous position on a particular issue is almost zero, but at least the world’s governments are given an opportunity to focus on a potential threat to peace.
This raises the question what should be done if collective action is not possible. Who gets to decide questions of war and peace? The answer unfortunately is whatever state’s government is willing to use force when it is confident it will succeed, even if the objective is the overthrow of another country’s elected leader. Nonetheless, this does not mean that if a state is successful in the short-term, the same will occur when one takes a long-term perspective.
The Bush Administration may have learned this lesson from its experience in Iraq with respect to Iran (Senators McCain and Obama appear to have learned of the importance of multilateral action when carrying out military actions abroad). It also apparently warned Georgian President Mikheil Saakaskvili to avoid taking actions that would give the Russians a pretext for militarily intervening in Georgia.
Perhaps he naively (or arrogantly) thought that the world community would support his country’s right to self-defense, irrespective of his actions. Unfortunately, he acted impetuously – perhaps he underestimated Russian resolve or wanted to act before a new U.S. president was in the White House. President Saakashvili impulsive policies do not excuse Russian behavior, which risks losing a lot of economic and political capital.
In April 2005, then Russian resident Vladimir Putin remarked in a nationally-televised address before the Federal Assembly that the break-up of the Soviet Union was “the greatest geopolitical catastrophe of the century.” Unfortunately, we may be witnessing only the first stage of a process where Russia is reasserting its power over its geographic periphery.
A number of factors have led to the Russian decision to react in the way if has with regard to Georgia. The Russian leadership wishes to portray its actions as motivated by a desire to acts as “peacekeepers” that can protect ethnic Ossetians in Southern Ossetia, which happens to be part of the sovereign state of Georgia (Gruzia). Its actions, however, belie its rhetoric.
For more than a decade, Russia has materially and politically supported Abhazian and Ossetian separatists in Georgia. While Russia has every right to complain of any alleged discriminatory acts of the Georgian government, there are international fora within which to air and win backing for its concerns. Nonetheless, Russia does not have a right to militarily intervene unilaterally, particularly in a manner that is its official statements concerning its objectives. Perhaps regime change in Tblisi is indeed Russia’s ultimate goal.
What could be motivating the Russians at this time of Olympic festivities? Even if President Dmitrii Medvedev’s declaration that Russian forces will cease offensive operations, it is not clear the Russian forces on the ground are in compliance. While this could merely be a matter of time (armies often seek to improve their military positions halting operations), or it can reflect that President Medvedev is either playing the “good cop” or lacks the authority to control Russian armed forces. It is significant that Russian Foreign Minister Sergei Lavrov’s recently Prime Minister Putin’s use of the term “regime change” even after President Medvedev announced the ceasefire.
There are numerous factors behind Russian policy in Georgia.
• The Russian governing elite has never accepted the demise of the Soviet empire and considers the countries constituting the “near abroad” as being within its sphere of influence. This is the reason Ukraine’s and Georgia’s indication that they might wish to join NATO is so unacceptable to them. While the Baltic States may constitute a “special case” that must be tolerated, they do not serve as a model.
• The Russian Government needs to assert itself on the national stage. It was humiliated when NATO forces (without UN Sanction) dismembered Serbia – leading the way to an independent Kosovo. The Russian armed forces could do little more than watch – now NATO will experience what it faced in Hungary (1956), Czechoslovakia (1968), and Poland (1980).
• Prime Minister had to make clear to both the Russian population and the world community that he remains in control over (at a minimum) the country’s economic, foreign and defense policy. As the front-line figure for Russia in this conflict, regularly on TV, he appears to continue the role he possessed when he was de jure president. By contrast, the staging of the conflict demonstrates President Medvedev’s influence is either limited or symbolic. In either case, Mr. Putin and his principal supporters will not acquiesce in the equivalent of another “color” revolution.
• Russia will not permit foreign states or private companies to interfere with its “energy weapon” foreign policy tool. The Baku-Tbilisi-Ceyhan pipeline may be permitted to operate, but only on Russian terms. Central Asia, China and Europe should harbor no illusions.
• The Kremlin wants to remind all residents of the Caucuses, both within Russia and abroad (as well as those Caucasians living in other parts of Russia), that Russia will not tolerate separatism or meaningful federalism.
Georgian President Saakashvili has undoubtedly not unified his country politically; indeed there is an active political opposition in the country for whom economic growth and foreign investment are not the barometers of a successful presidency. He overestimated the degree to which the West could and would support his irresponsible actions. Attending Columbia University is not the gold standard for being a democratic liberal ruler. In any case, small countries must learn how to live with powerful neighbors, particularly suspicious ones like Russia.
What will the long-term consequences be of Russia’s flexing its muscles?
Perhaps the International Olympic Committee should consider an alternative location for holding the 2012 Winter Olympics so that their athletes will have a place to compete – the Committee has plenty of time to complete this task.
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18. UKRAINE RISKS WRATH OF RUSSIA AS YUSHCHENKO SIDES WITH THE WEST
But, with the outbreak of conflict in Georgia, the Ukrainian President, Viktor Yushchenko, seemed to make what, to many fellow countrymen, looks like a suicide leap off that tightrope.
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19. UKRAINE: NO CHICKEN KIEV
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20. THE DRIVE TO SECEDE
Georgian provinces likely to join Russia OPINION: By Eric Margolis, Winnipeg Sun
Winnipeg, Manitoba, Canada, Sunday, August 17, 2008
On Aug. 8 Russia’s Prime Minister Vladimir Putin swiftly and deftly checkmated the United States on the Georgian strategic chessboard. Georgia’s President, Mikheil Saakashvili, fell right into Moscow’s trap.
Georgia and Russia have been feuding since 1992 over two Georgian ethnic enclaves, South Ossetia and Abkhazia, whose people wanted to decamp Georgia and join Russia.
The young, U.S.-educated Saakashvili became Georgia’s president in 2003 after an uprising, believed organized by the CIA and financed by U.S. money,
overthrew the able former leader, Eduard Shevardnadze. I interviewed Shevardnadze in Moscow when he was Mikhail Gorbachev’s principal ally and
architect of Soviet reform.
Saakashvili quickly became the golden boy of U.S. right wing neocons, who saw him as a model of how to turn former Russian-dominated states into
“democratic” U.S. allies. Critics claim Saakashvili kept power by bribery and vote rigging.
U.S. money, military trainers, advisers, and spooks poured into the former Soviet Republic of Georgia. Israeli arms dealers, businessmen and intelligence agents quickly followed.
The Bush administration brazenly flouted agreements with Moscow made by presidents H.W Bush and Bill Clinton not to expand NATO into the former
U.S.S.R.
Russia’s tough Deputy Prime Minister Sergei Ivanov sneeringly termed Georgia a “U.S. satellite.” This former KGB elite foreign directorate agent certainly knows a satellite when he sees one.
Georgia provided the U.S. with oil and gas pipeline routes from Azerbaijan, Turkmenistan and Kazakhstan that bypassed Russian territory. Russia was
furious its Caspian Basin energy export monopoly had been broken and vowed revenge.
On Aug. 7 Saakashvili, his head swelled by Washington’s promises of additional aid, arms and eventual membership in NATO, rashly sent his little army to invade the breakaway region of South Ossetia. Washington likely backed this attack or at least knew of it.
Putin seized upon Saakashvili’s disastrous blunder and unleashed two Russian divisions against the Georgians, who were quickly routed. Impudent Georgia
and its American sponsors were humiliated.
South Ossetia and Abkhazia likely will move into Russia’s orbit. The West backed independence of Kosovo from Serbia. The peoples of South Ossetia and
Abkhazia have as much right to secede from Georgia.
PUTIN THWARTS BUSH
In one swift blow, Putin thwarted Bush’s clumsy attempt to further advance U.S. influence into the Caucasus. He delivered a stark warning to Ukraine
and the Central Asian states: Don’t get too close to Washington. Putin put the U.S. on the strategic defensive and showed that NATO’s new eastern
reaches – the Baltic, Bulgaria, Romania, and the Caucasus – are largely indefensible.
It’s a good thing Georgia was not admitted to NATO. Is the West really ready to be dragged into a potential nuclear war for the sake of South Ossetia?
Georgia is a bridge too far for NATO.
President George W. Bush, VP Dick Cheney and Sen. John McCain all resorted to table pounding and Cold War rhetoric against Russia. McCain, whose senior foreign policy adviser is a rabid neocon and registered lobbyist for Georgia thundered, “the U.S. has important interests in Georgia.” Interests that are barely a few years old, senator. Russia’s go back two centuries.
The Caucasus is Russia’s backyard. Imagine Washington’s response if Russian troops were deployed to Quebec.
Hypocrisy was thicker than shellfire. Bush, who ordered the invasion of Afghanistan, Iraq and Somalia, denounced Russia for invading “a sovereign ation.” Putin, who crushed the life out of Chechnya, piously claimed his army was saving Ossetians from ethnic cleansing.
Paper tigers Bush and McCain demand Russia be punished and isolated. The humiliated Bush is sending some U.S. troops to deliver “humanitarian” aid.
Their response is dangerous, provocative and childish.
RUSSIAN INTERESTS
The West must accept that Russia has vital national interests in the Caucasus and former U.S.S.R. Russia is a great power and must be afforded respect. The days of treating Russia like a banana republic are over.
The most important foreign policy concern for the U.S. is keeping correct relations with Russia, which has thousands of nuclear warheads pointed at North America. Georgia is a sideshow.
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LINK: http://www.winnipegsun.com/Comment/2008/08/17/6479426-sun.html
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