May 3, 2010

Russia extends its reach | The Japan Times Online

Russia has considered states on its periphery as part of its sphere of influence. Frequently, however, those neighbors have had ideas of their own and their domestic politics have been defined by the struggle between pro- and anti-Russian factions.
This fight was played out most recently in Ukraine, where the election of Viktor Yanukovych earlier this year signaled the resurgence of pro-Moscow forces in the country. Last week, the two countries signed a gas-for-bases deal that consolidates Russia's presence and influence.
While Yanukovych is no less nationalist than his rivals, his sympathies lie more with Moscow than did those of his predecessor, Viktor Yushchenko. Indeed, Yushchenko's pro-Western inclinations created considerable tension with Moscow. He sought Ukraine's membership in NATO and the European Union, halted the formation of a consortium with Russia that would have modernized Ukraine's gas pipeline network, and had pledged to to expel the Russian fleet from its Black Sea base in Sevastopol in 2017, when its current lease expires.
All those moves angered Russia, which saw them as undermining its position in its "near abroad" and diminishing its status more generally. Moscow responded with increasingly hostile diplomacy and a seemingly annual suspension of natural gas supplies in January when Ukraine was most vulnerable.
Yanukovych's election this year offered a chance to transform the bilateral relationship; Moscow responded with alacrity. Last week, the two governments agreed to a deal that will extend the Black Sea lease to 2042 in exchange for a steep cut in the price of the natural gas Russia sells to Ukraine. And there is no mistaking the linkage of the two.
According to Russian President Dmitry Medvedev, "These issues are directly and unequivocally combined in the agreement." In addition, the two countries have agreed to resume the stalled energy consortium. (The parliaments of both Russia and Ukraine ratified the Black Sea fleet deal this week.)
Plainly, Russia benefits from the deals. The extension of the Black Sea lease continues Moscow's presence in southern Europe. The fleet, which consists of some 40 combat vessels, provided support for Russian ground forces during the war with Georgia in 2008. Coming on the heels of the new Strategic Arms Reduction Treaty with the United States, it reminds the world that Moscow is an international diplomatic force.
Rejuvenation of the pipeline project puts Moscow firmly at the heart of Europe's energy policy. The Ukrainian network is the second-largest in Europe and serves as a transit route for Russian gas supplies to its largest market. This deal helps consolidate Russia's position as an economic power in Europe.
Of course, Ukraine benefits as well. Russia's agreement to waive export duties on the natural gas it sells to Ukraine will cut the price of natural gas by about 30 percent, saving Ukraine an estimated $1.5 billion in 2010 and some $10 billion over the life of the contract. For an economy that shrank 15 percent in 2009, such savings are invaluable. Moreover, it will aid the country in its negotiations with the International Monetary Fund over a new $12 billion loan. The IMF last year suspended an earlier $16.4 billion loan program, after releasing around $11 billion, when the government pushed for large increases in social spending.
Economic benefits notwithstanding, the deal has its detractors in Ukraine. Opposition politicians have denounced the lease extension as treason, saying it violates the constitutional prohibition against foreign military bases on Ukrainian soil. Former Prime Minister Yulia Tymoshenko, who now heads the country's largest opposition party, complained that the deal is "the start of the systematic destruction of the independence of our state."
That is an exaggeration. But Ukraine is in a precarious geopolitical position. It lies not only between Russia and Europe, but between Russia and the Mediterranean. It straddles the pipeline routes that Moscow sees as critical to its influence in Europe and its global status. Russia is a fact of life for Ukraine, one that cannot be wished away with foreign policy.
Every Ukraine government must acknowledge Russian concerns and interests. The trick is balancing them with the desire to maximize its own sovereignty and freedom of diplomatic maneuver. That is a difficult assignment.
Key to Ukraine's success will be its leaders avoiding the most divisive choices. For example, Ukraine's membership in NATO is an incendiary option. In fact, real integration with the West would result from membership in the EU, rather than joining the trans-Atlantic military alliance. The economic and social linkages that flow from EU membership are much deeper and more enduring. It is more difficult for Moscow to object to the EU than to a military institution that has an ambiguous relationship with Russia.
Meanwhile, it is important to recognize that with this deal Russia has extended its reach. Moscow continues to be a force to be reckoned with, for some countries more than others. Ukraine is one such country.

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