Russia backs
Ukraine into a corner
Russian Ambassador
to Ukraine Mykhail Zurabov recently mentioned that it would be impossible to set
up a consortium based on the Ukrainian gas transmission network because of
Ukraine’s membership in the Europenan Union Energy Charter.
This membership
means that Ukraine is obliged to introduce European energy norms and
regulations, including the third antimonopoly package. The most senior Russian
diplomat in Ukraine mentioned that if Ukraine really wants to have reduced gas
prices then the establishment of consortium should take priority and Ukraine
should withdraw from the EU Energy Charter.
Russia has
previously had some problems with the third antimonopoly package, for example,
the case of the dispute with Lithuanian energy company “Lietuvos dujos.” Thus
they try to avoid working under EU energy regulations in Ukraine. Ukraine will
have to decide on the priority energy cooperation – a long-term partnership
with either EU or Russia.
According to
the latest analysis of the International Energy Agency, Ukraine may be able to
achieve energy independence and not require Russian gas until 2030 simply by
increasing energy efficiency; but it would cost Ukraine $207 billion to
implement. IEA have also mentioned that if Ukraine invested $3-4 billion into
energy extractive industry every year it could achieve a gas production
increase from 20 up to 70 billion cubic meters by 2030.
Experts note
that the governing authorities are able to finance only a quarter of the
required costs, hoping that major energy companies such as Shell and ExxonMobil
will finance the rest. But for these companies to be able to invest in the
development of Ukrainian energy sector the government will have to improve an
investment climate which includes respect for European democratic values.
People First
Comment: When the
Russian ambassador, in not exactly diplomatic language says…”it’s either our
way or the highway” he seems to forget that Ukraine really does have other
choices. Ukraine is sitting on
potentially more gas that Qatar, the only problem is that it is going to take a
decade to bring the reserves online and it is going to cost a fortune thus this
will not solve the immediate problem.
The import of liquefied natural gas from Azerbaijan via Georgia is also
an option but this is going to take a minimum of five years to complete and
thus again does not solve the immediate situation however the answer could well
come from Europe.
As a direct
result of the last series of Russian blackmail, Europe has recognized that
there once totally reliable Soviet partner is growing a little too big for its
boots.
Whilst such
bullyboy policies may have worked in the past they have little credence today
and Europe has simply sought other means of supply. At the same time the USA,
once the largest importer of energy in the world, has developed its own
reserves to a point that the international market is now awash with the
capacity to move vast quantities of particularly liquefied natural gas to
anywhere on the planet. As a result, Europe has heavily invested in LNG
terminals to reduce their dependence on Russia from 80 to 25 percent. Furthermore, the gas industry in Europe is a
free market. Thus it is highly unlikely that European energy companies will
stop importing energy, particularly when there are plenty of markets already
connected to the European pipeline network. All Ukraine has to do is to reverse
the flow on their now underutilized gas pipelines to become a net importer of
gas from Europe at world market prices.
One of these
days the Russians, this regime and the opposition are going to learn that the
world is no longer interested in dealing with bullies, that consensus and good
neighborliness are far more important than saber-rattling and bravado.
The elections challenge EU-Ukraine
relations
The European Union has a lot of
concerns over the results of the recent parliamentary elections in Ukraine,
hosted on Oct. 28. It has been obvious from the latest statements of Catherine
Ashton, high representative of the European Union for foreign affairs and security
policy, and Stefan Fuele, European Commissioner for enlargement and European neighborhood
policy. EU representatives have called for the governing authorities of Ukraine
and the major political parties to force the announcement of results and
process all complaints quickly, in line with the international procedures.
Ashton and Fuele believe that the
voter participation has proven Ukrainians to be supportive of democratic
development and a pluralist civil society.
The final evaluation of the latest
elections in Ukraine by EU will depend on the situation following the
elections, which includes the vote count, presentation of results,
investigation of violations and punishment of those guilty of abuse of power.
Konstantin Yeliseyev, Ukraine’s
ambassador to the EU, has mentioned that the recent statements of EU
representatives on the elections prove that the EU’s doors are still open to
Ukraine. The Ukrainian diplomat expressed a strong believe that the European
Union would be ready to sign the Association Agreement after completing all the
technical requirements.
European media, particularly in Germany, have stressed
that should the European community come to a negative conclusion on the latest
Ukrainian elections, there would be no association agreement and no hope of a
free trade area with the EU for Ukraine. In any case the current Ukrainian
authorities will have to try hard to conclude legal decisions on violations
during the parliamentary elections in a believable manner to prove to the EU
that they support the development of democracy and the establishment of
European values in Ukraine.
People First
Comment: They say that
opposites attract. The question is just how opposite do you have to be before
attraction flips into rejection? Europe and the current regime are chalk and
cheese in just about every area. Europe operates exclusively under the primacy
of the law. In Ukraine, the law and the justice systems are subservient to the
regime. Europe recognizes and defends human rights and human dignity, this
regime treats all but their immediate courtiers with nothing but contempt. Europe practices democracy in all its forms,
here the regime plays lip service to the principles and uses any means possible
to stay in power. In Europe wealth is
earned whilst in Ukraine it is amassed from the state budget at the expense of
the people… the list of differences is almost endless so one really does have
to question why the EU continues to make overtures to what is really a totally
unsuitable suitor.
The answer lies in that whilst the
regime plans for the next 10 minutes, Europe plans for the next 20 years and
beyond. Whilst Europe may be talking to
the regime it is not this regime with whom they are interested in forming an
alliance. The real goal is the people of
Ukraine who are as European as the French, Germans and for that matter the
British. So what is it that Ukrainians
can do to make themselves more attractive as a suitor today and more prepared
for when the marriage finally takes place.
When you are joining a club of 27
nations that have been working together for almost 50 years, you are joining a
very well established family that has no reason to change. It is the suitor
that has to adapt to the new family and not the other way round. It is clear that whilst this regime has
neither the capacity nor the will to understand European values, Ukrainian
citizens can and must if they are to make any future marriage work. The Polish experience is a classic example,
travel to and within Europe and communication with Europeans are
essential. Any forward thinking
government would harness the power of the media and television to demonstrate
what it means to be a European but not in Ukraine. Before the elections Europe still held some
belief that the country would revert to a pro-European course of development as
supported by the opposition. Today it is recognised that this could just be an
illusion.
If Ukrainians really want to be part
of Europe then it is they themselves, through the internet, who have to learn
what it means and if Europe is serious about inviting the Ukraine to join the
family then it too has to do far more to explain why.
Will Ukrainian land be opened to
investment?
The Ukrainian authorities have started preparations
for the opening of the farmland market to foreign investment. The parliament
refused to extend a moratorium on the sale of farmland till 2014 and granted
foreign citizens and enterprises with foreign capital the right to buy farmland
in Ukraine. The parliament has adopted the law “On state land bank”
designed to provide credit conditions for farm owners against the security of
land and other property.
Government members give rather conflicting estimates
of land market prospects. For instance, Mykola Prysyazhnyuk, minister of agriculture
of Ukraine, mentioned that there are still no conditions for the full operation
of the farmland market from Jan 1. There is no Law on the land market and the
land inventory is not yet concluded. At the same time the law on land cadastre,
which is one of prerequisites for the opening of the land market, has been
approved. Oleksandr Yefremov, leader of the Party of Regions parliamentary faction,
has advised that the moratorium will be active until the law on land reform is
approved.
Experts point out that the final rules of the land
game will be defined by those who enter parliament after Oct. 28 as the
previous parliament avoided making a decision on this issue during the election
campaign. Currently there are no price estimates. Calculations vary between $300
and $1,000 per hectare depending on the region. Currently there are no
legislative and administrative regulations, resulting in the delaying of the
opening of land market in Ukraine). The sale of land may attract
considerable foreign investment in Ukraine and create additional budget money
for social needs. Although it is still unclear whether ordinary people will
benefit.
People
First Comment:
Land market or land grab? In this current climate and with this regime in power
there is more chance of hell freezing over than is of a fair, open and
transparent auction of farm land.
Historically land is probably the most valuable of all assets in that it
is constant, permanent and easily traded.
It is what the family dynasties of the past were built upon. It is the foundation of Empires.
The
whole British culture has descended from the landed aristocracy through the
landed gentry to farm owners and even small holders. Owning land means you have really arrived
thus the chances of this regime allowing anybody but themselves and their
cronies to become the Ukrainian aristocracy of the future is incomprehensible
as it is simply not in their psychology.
You only have to take a look at the gated communities near Kyiv where
past and present presidents and ministers live to understand the palaces they
will build once they have unlimited square kilometres as opposed to a few
hectares. Should a land grab actually happen then those in power and in
opposition will most likely compete to see who can grab the most irrespective
of their sweet words during the election
What
is so ironic is that when it happens Ukraine will have completed a historical
full circle… The only difference being that the czar will have been renamed president
and the aristocracy renamed people deputies and oligarchs. The poor will, in real terms, be just as poor
as their 19th century counterparts, the roads will be little more than
modern day cart tracks, education will be only for those with money and the
desire for exodus will be just as strong.
Quite how this potentially great country has gone full circle in 20
years defies imagination, let us hope that the next stage of the nations
evolution does not follow the violent course of the past and that more level
heads prevail.
Kyiv is Ukraine’s only habitable
city
According to State of the
World’s Cities 2012/2013, a United Nations report, Kyiv is recognized as
the only safe city in Ukraine. The research evaluates 600 cities in various
countries according to the following criteria: productivity, infrastructure
development, living standards, social equality and environment. Each city is
assigned a city prosperity index. Kyiv has received the index of 0.8, whilst
Vienna has received the highest rating of 0.93. The worst is Monrovia, the
capital of Libya. Russia’s capital Moscow has received an Index of 0.79).
The rest of cities in Ukraine, a country with a
population of 46 million, were recognized as unfavorable for the elderly and
people with special needs. Dnipropetrovsk is the city with the most rapidly
decreasing population. According to population estimates, Dnipropetrovsk will
decrease by 16.8 percent over the next 35 years – from nearly 1.2 million people
in 1990 down to only 967,000 in 2025. The city dropped below one million in
autumn 2011. Donetsk, Zaporizhia, Kharkiv and Odessa also have very high rates of population decrease.
Without building an infrastructure oriented on the
needs and comfort of the people it will be more and more difficult for Ukraine
to keep people in its cities, due to low urban development which hasten the
emigration drive of the country.
People First Comment: For the visit of President Nixon
to Ukraine in 1972, the then Soviet government built a new six- lane highway
from Boryspil airport into the city centre.
It was designed to show the president that even in Ukraine, the Soviet
Union was as good if not better than the USA.
Forty years later little has changed in terms of the vanity of the
regime. They still think that with a
lick of paint and the odd bridge or two they can impress visiting
dignitaries. Unlike in 1972 we now have
the internet and most dignitaries, at least those from the west, will have been
very well briefed on the realities of the nation and may well have carried out
their own research thus any attempt to impress by glossing over the reality
will have exactly the opposite effect.
Capital construction projects are also a highly effective way of
siphoning money out of the state budget; the bigger the project, the more that
can be stolen especially when the theft is organized and deliberate. Euro 2012
was a classic example.
The combination of vanity and corruption has resulted in Kyiv getting a
far higher proportion of capital expenditure than almost every other city in
Ukraine. In reality it is little wonder
that the other towns and cities fall well below internationally accepted
standards when there has been little or no investment from central government
and where local administrations have neither the will not the ability to make
real change.
The situation in Ukraine today is strangely reminiscent of the fall of
the Soviet Union 20 years ago, but this is hardly surprising when the same
mentality prevails at the top.
Victor Tkachuk is chief executive officer of the Kyiv-based People
First Foundation (www.peoplefirst.org.ua), a former deputy secretary of
the National Security and Defense Council of Ukraine, adviser to three
Ukrainian presidents and a former parliament member, Tkachuk can be
reached via [email protected].
