Ukrainian President Viktor Yanukovych and Russian President Dmitry Medvedev signed agreements and got soaked by rain in Kyiv on May 17-18. But the big talks are still ahead about melding the two nations’ aviation, energy and other industrial sectors.
The bargaining could become contentious amid signs that Ukraine’s oligarchs are setting limits and conditions. However, even after Yanukovych told his dance partner to slow down, the Russian president responded by saying that talks should be speeded up. Russia also announced plans to go ahead with projects that threaten Ukraine’s status as the main transit route to Europe for Russian natural gas. How friendly is that?
“We have come to the conclusion that one cannot work like this – because holding seven meetings in such a short period of time means forcing the heads of working groups into a situation whereby they are obliged to prepare various decisions faster than they should.”
– Viktor Yanukovych, Ukraine’s president
The Russian juggernaut that has overrun Ukraine since President Viktor Yanukovych took power is flying the banner of post-Soviet unity, even as it attempts to drive a wedge in the ranks of Ukraine’s ruling elite.
Russian Prime Minister Vladimir Putin has deployed a divide-and-conquer strategy against Europe as well as former Soviet republics, following his decade-long taming of Russian oligarchs and domestic political opposition.
Who’s next in the Kremlin sights? It could be that Ukraine’s stubbornly independent oligarchs are being targeted for submission.
Yanukovych and, especially, Prime Minister Mykola Azarov have been keen to entertain or accept far-reaching proposals by their Russian counterparts that seek to move the two former Soviet republics closer together on several strategic fronts.
Russian President Dmitry Medvedev, left, and his Ukrainian counterpart Viktor Yanukovych exchange signed documents while meeting in Kyiv on May 17. Medvedev made a two-day trip to Ukraine, signing several bilateratal cooperation deals with Ukraine’s leadership, in power for three months. (AP)
However, not all the Ukrainian businessmen who supported the Yanukovych-Azarov return to power see Moscow as the best choice of business partners.
As in Europe, where the Kremlin cuts individual energy deals that weaken the European Union as a whole, the same strategy appears to be in place to divide Ukraine. In the business world, it means that at least two classes of Ukrainian oligarchs are forming: Those who want to curry favor with Moscow, and others who want to go slower with rapprochement.
“Viktor Fyodorovych [Yanukovych] said you cannot work this way, but I would like to add that you will have to work this way.”
– Dmitry Medvedev, Russia’s president
During a joint press conference held with Medvedev on May 17, even Yanukovych voiced doubts about the speed and force of Russia’s integration efforts in a telling exchange.
“We have come to the conclusion that one cannot work like this – because holding seven meetings in such a short period of time means forcing the heads of working groups into a situation whereby they are obliged to prepare various decisions faster than they should,” Yanukovych said.
But Medvedev dismissed the complaint in the heavy-handed fashion that Moscow politicians have grown used to using in Ukraine.
“Viktor Fyodorovych [Yanukovych] said you cannot work this way, but I would like to add that you will have to work this way,” Medvedev said, noting that bilateral relations had deteriorated badly under ex-President Viktor Yushchenko, whose antipathy towards closer relations with Russia was a hallmark of his five-year term.
On May 18, the second day of Medvedev’s state visit to Kyiv, the two presidents held discussions with top Ukrainian oligarchs. At the forum, Ukrainian concerns about getting too close to Moscow came to the fore, namely over Russian attempts to monopolize the country’s natural gas sector.
Rinat Akhmetov, Ukraine’s richest man and considered the money behind Yanukovych, was on hand. He let two of his lieutenants – heads of his energy and steel holdings – remind the Russians that Ukraine would prefer to buy some of its gas from Central Asia directly, and at less expensive prices. Fellow tycoon Konstantin Grigorishin also reminded the Moscow guests that Ukraine used to satisfy much of its energy-import needs in barter deals with Turkmenistan, a lucrative business that he and others want to resurrect.
However, over the last five years, Ukraine has imported gas solely from Russia, which has hiked prices sharply while accusing Kyiv of pilfering some of the supplies.
Oleh Rybachuk, chief of staff in 2005-2006 under former Ukrainian President Viktor Yushchenko, said the Medvedev-Putin goal is to extend the grasp of Russian energy giant Gazprom to the doors of Ukraine’s industrial consumers. “This is the way to take control of Ukraine’s economy,” Rybachuk said.
“They did the same thing in Moscow, putting members of the intelligence services in key positions in key industries,” Rybachuk said. “During Soviet times, loyal party members occupied key positions, now it’s the FSB [Federal Security Service].”
Cleaners wipe rainwater outside of Ukrainian President Viktor Yanukovych’s office as an honor guard looks on prior to the official welcoming of Russian President Dmitry Medvedev in Kyiv on May 17. Medvedev arrived in Ukraine for a two-day official visit.(AP)
As for the oligarchs who control the country’s lucrative metallurgical and other industrial assets, Rybachuk said, some will be granted favorable trade conditions in Russia or pressured via Moscow’s friends in the Ukrainian government.
Russia-born Azarov, who came to Ukraine in the late Soviet period, is one of the most pro-Russian politicians in Ukraine, political analyst Vadym Karasyov said. “Yanukovych was brought up by the oligarchs, but Azarov was raised in the Soviet Union,” Karasyov said.
“Russia’s energy sector is one of restrictions and monopolies. They want to swallow up our energy sector as well.”
– Bohdan Sokolovsky, an adviser to former president Yushchenko on energy security
In order to lessen his dependence on powerful sponsors such as Akhmetov, Yanukovych selected Azarov as his premier, according to Karasyov. But now Azarov — who called for Ukraine on May 19 to join an economic trade union with Russia — might be proving closer to Moscow than either Yanukovych or the oligarchs would like.
Karasyov expects Putin to use Azarov and other pro-Russian politicians in Ukraine to help him curb the power of domestic oligarchs, just as he did in Russia. “Azarov could turn out to be the grave digger for Ukraine’s oligarchs,” he said.
In the meantime, the Kremlin is keeping up the pressure on its Slavic brothers, with Medvedev announcing at the end of his Ukrainian trip that Russia won’t scrap prospective pipeline routes bypassing Ukraine – such as South Stream and North Stream.
The moment of truth for the strength of Ukraine’s sovereignty may be linked to a draft law drawn up by the former government that envisions a more open energy sector in Ukraine, one modeled on European norms.
According to Bohdan Sokolovsky, an adviser to former president Yushchenko on energy security, Russia is dead set against passage of this law, which has stalled in parliament since November.
“Russia’s energy sector is one of restrictions and monopolies,” Sokolovsky said. “They want to swallow up our energy sector as well.”
According to Sokolovsky, however, Ukraine is still putting up resistance to Moscow. “Proof of this opposition is the fact that talks on unification of Ukraine’s and Russia’s nuclear industries were supposed to be held on May 17, but never took place,” he said.
Kyiv Post staff writer John Marone can be reached at [email protected].
