UKRAINE IN CRISIS

By Robert McMahon, Editor, Foreign Affairs

Ukraine’s most prolonged and deadly crisis since its post-Soviet independence began as a protest against the government dropping plans to forge closer trade ties with the European Union and has since spurred a global standoff between Russia and Western powers. The crisis stems from more than twenty years of weak governance, a lopsided economy dominated by oligarchs, heavy reliance on Russia, and sharp differences between Ukraine’s linguistically, religiously, and ethnically distinct eastern and western halves. After the ouster of President Viktor Yanukovich in Feburary 2014, Russian moves to take control of the Crimean Peninsula signaled Moscow’s intent to retain its sphere of influence and raised serious questions about the ability of the state’s new leaders to provide stability and a path to meaningful reforms.

Why is Ukraine in crisis?

The country of forty-five million people has struggled with its identity since it gained independence with the dissolution of the Soviet Union in 1991. Ukraine has failed to resolve its internal divisions and build strong political institutions, hampering its ability to implement economic reforms, overcome corruption, and lessen the sway of powerful oligarchs. In the decade following its independence, successive presidents allowed oligarchs to gain increasing control over the economy while repression against political opponents intensified. By 2010, Ukraine’s fifty richest people controlled nearly half of the country’s gross domestic product (GDP), writes Andrew Wilson in the CFR book Pathways to Freedom.

A uniformed man, believed to be a Russian serviceman, stands guard near a Ukrainian military base in the village of Perevalnoye, outside Simferopol, March 6, 2014
A uniformed man, believed to be a Russian serviceman, stands guard near a Ukrainian military base in the village of Perevalnoye, outside Simferopol, on March 6, 2014. (Photo: Vasily Fedosenko/Courtesy Reuters)
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A reformist tide briefly crested in 2004 when the Orange Revolution, set off by a rigged presidential election, brought to the presidency Viktor Yushchenko. Yet infighting among elites hampered reforms and severe economic troubles resurged with the global economic crisis of 2008. The revolution also masked the divide between European-oriented western and central Ukraine and Russian-oriented southern and eastern Ukraine.

Campaigning on a platform of closer ties with Russia, Yanukovich won the 2010 presidential election. By many accounts, he then reverted to the pattern of corruption and cronyism. His family may have embezzled as much as $10 billion, according to Anders Aslund of the Peterson Institute for International Economics. He also turned against his opponent in the 2010 presidential race, Yulia Tymoshenko, one of the high-profile reformist leaders of the Orange Revolution, imprisoning her on charges of abuse of power.

Yanukovich continued talks with the European Union on a trade association agreement, which he signaled he would sign in late 2013. (Tymoshenko’s release was one of the conditions set by the EU for the trade association agreement.) But, under pressure from Russia, he dropped those plans, citing concerns about damage to Ukrainian industry by European competition. The decision provoked demonstrations in Kiev on what became known as the Euromaidan by protesters seeking to align their future with Europe’s and speaking out against corruption.

The Yanukovich government’s crackdown after three months of protests and reprisals by radicalized demonstrators spurred the bloodiest conflict in the country’s post-Soviet period, with scores killed. Yanukovich’s subsequent ouster sowed new divisions between the eastern and western halves of the country, though a new group of transitional leaders promised to form a national unity government and hold elections on May 25, 2014. Concerns are mounting about separatism in Crimea and eastern Ukraine, as well as the potential for conflict between Ukrainian and Russian forces on the peninsula, which could spur further clashes elsewhere in Ukraine.

What are Russia’s concerns?

Russia has strong fraternal ties with Ukraine dating back to the ninth century and the founding of Kievan Rus, the first eastern Slavic state, whose capital was Kiev. Ukraine was part of Russia for centuries and the two continued to be closely aligned through the Soviet period, when Ukraine and Russia were separate republics. Ukraine is also an economic partner that Russia would like to incorporate into its proposed Eurasian Union, a customs union due to be formed in January 2015 whose likely members include Kazakhstan, Belarus, and Armenia. Ukraine’s membership would increase the union’s population “by a solid 27 percent,” writes Simon Saradzhyan, a research fellow at Harvard Kennedy School’s Belfer Center.

Ukraine also plays an important role in Russia’s energy trade; its pipelines provide transit to 80 percent of the natural gas Russia sends to European markets, and Ukraine itself is a major market for Russian gas. Militarily, Ukraine is also important to Russia as a buffer state, and it is home to Russia’s Black Sea fleet, based in the Crimean port city of Sevastopol under a bilateral agreement between the two states.

Russia considers EU efforts to expand eastward to Ukraine, even through a relatively limited association agreement, as an alarming step because it opens the doors toward strengthening an array of Western institutional ties at the expense of Russian ones. The EU’s Eastern Partnership Program, established in 2009, is aimed at forging tighter bonds with six former Eastern bloc countries. Russia sees it as a stepping-stone to organizations such as NATO, whose expansion eastward is regarded by Russia’s security establishment as a threat. Ukraine belongs to NATO’s Partnership for Peace program but is seen as having little prospect of joining the alliance in the foreseeable future. Similar concerns about Georgia contributed to Moscow’s deployment of forces at the Georgian border in 2008, which led to a brief war and Russian occupation of the breakaway regions South Ossetia and Abkhazia.

Russian president Vladimir Putin has portrayed his country’s role in Ukraine as safeguarding ethnic Russians worried by lawlessness spreading east from the capital, charges that leaders in Kiev dismiss as provocations. In the case of Crimea, Putin has stressed Moscow is not imposing its will, but rather, supporting the free choice of the local population, drawing parallels with the support Western states gave to Kosovo’s 2008 declaration of independence from Serbia.

What is the status of Crimea?

Crimea is an autonomous republic of Ukraine with its own parliament and laws that permit the use of the Russian language in everyday life and empower local representatives to levy taxes. But the parliament’s acts can be vetoed by the central government in Kiev, which must approve the republic’s prime minister. Since the ouster of Yanukovich in February 2014, Crimea’s parliament has asserted greater autonomy and voted for a March 16 referendum to decide whether Crimea should become part of Russia or remain a part of Ukraine, but with enhanced local powers.

Ukraine Map

Occupied for centuries by Muslim Tatars affiliated with the Ottoman Empire, Crimea was conquered in 1783 by Russia’s Catherine the Great. Soviet leader Joseph Stalin deported the Tatar population of about two hundred thousand to Central Asia during World War II, and the bulk of them did not return until 1989. Today Tatars constitute about 12 percent of Crimea’s population.

The peninsula only became part of Ukraine in 1954 when Soviet leader Nikita Krushchev transferred it from the Russian Soviet Socialist Republic to the Ukrainian Soviet Socialist Republic in what was seen as a largely symbolic administrative move within the Soviet Union. The majority-Russian residents of Crimea continued to have strong ties with Russia. Following the dissolution of the Soviet Union in 1991, the two new countries reached an agreement to permit the Russian Black Sea fleet to remain based at the Crimean port of Sevastopol.

Yanukovich and then Russian president Dimitry Medvedev signed an agreement in 2010 that extended Russia’s lease of Sevastopol until 2042 in exchange for a 30 percent drop in the price of natural gas sold to Ukraine. Russia has eleven thousand forces stationed in Crimea, which were reportedly joined by five thousand Russian troops since the ouster of Yanukovich, although Russians officials have denied this. Thousands of Ukrainian forces occupy bases on the peninsula currently blocked by what they say are Russian forces.

Overall, Russians make up an estimated 59 percent of the population of Crimea and Ukrainians, about 23 percent.

Do Russian moves in Ukraine violate international law?

U.S. officials say Russia’s actions are in breach of international law, including the nonintervention provisions in the UN Charter; the 1997 Treaty on Friendship and Cooperation between Russia and Ukraine, which requires Russia to respect Ukraine’s territorial integrity; and the 1994 Budapest Memorandum on Security Assurances. That document states: “The Russian Federation, the United Kingdom of Great Britain and Northern Ireland, and the United States of America reaffirm their commitment to Ukraine, in accordance with the principles of the Final Act of the Conference on Security and Cooperation in Europe, to respect the independence and sovereignty and the existing borders of Ukraine.” For its part, Russia has rejected charges that it is violating international law and has called for Ukraine to return to the terms of the February 21, 2014 agreement between opposition leaders and Yanukovich that permitted him to stay in office as the head of a national unity government while elections were planned.

What are U.S. and European policy options in Ukraine?

U.S. officials have repeatedly expressed their desire to see Ukraine become a stable democracy with firm economic and political connections to the European Union. In response to the developments in Crimea, the preferred outcome for Washington and many states, says CFR President Richard Haass, “is to see the Russians be persuaded to leave Crimea in exchange, say, for some participation in an economic package and some protection for Russian speakers.” EU and U.S. policymakers have begun a series of steps that include:

  • Economic aid. The European Union has announced $15 billion over the next several years conditioned on Ukraine reaching an agreement with the International Monetary Fund and enacting tough reforms like ending gas subsidies. Washington has promised $1 billion in U.S. loan guarantees and technical assistance.
  • Sanctions. The U.S. State Department on March 6 announced a visa ban on “Russian and Ukrainian officials and individuals responsible for or complicit in threatening the sovereignty and territorial integrity of Ukraine.” President Barack Obama also signed an executive order sanctioning individuals and entities deemed responsible for the crisis, but no officials or entities have yet been identified. The EU said it had frozen the assets of Yanukovich and seventeen other officials suspected of human rights and other abuses. But the United States and EU countries such as Germany and Britain disagree on whether to level tough sanctions on Russia.
  • Energy aid. Some experts and U.S. lawmakers have called for accelerating the approval of U.S. natural gas proposals, which would take advantage of booming U.S. production to help lessen the reliance of European partners and Ukraine on Russian natural gas. Some experts say it is unlikely a U.S. export boost would make inroads on Russian gas sales in Europe. “It is far more profitable for buyers of U.S. natural gas to ship it to Asia—where prices are far higher—than to Europe,” writes CFR’s Michael Levi. But the State Department’s Bureau of Energy Resources, headed by Carlos Pascual, a former ambassador to Ukraine, has worked with Ukraine and other European states to find other sources for gas supplies, like Africa, helping to ease their dependence on Russian gas, reports the New York Times.
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