TCS Daily

The Discovery of Ukraine

By Sascha Tamm - December 3, 2004 12:00 AM

Only when the presidential election dispute had reached the streets of the capital Kiev and other major cities of the Ukraine did the European Union start to deal with the problems of one of the biggest nations of Eastern Europe. Until then only one member state with deep-rooted historic ties to Ukraine maintained intensive relations to its neighbor: Poland. The special relationship between the two may help to open the door for the EU for Ukraine. Still, one should not forget that they also caused some difficulties for Poland during its own accession process. The history of the 13 years since Ukraine's independence tells a story of ignorance on the part of Europe. The so-called "Partnership and Cooperation agreement" is nothing more than a drop in the bucket.

To high-ranking European politicians and officials, Ukraine was part of the Russian sphere of influence, which they accepted in the framework of their cautious and passive policy towards Russia. The actions of Ukrainian President Leonid Kuchma and the successive governments also fueled doubts about the country's orientation. Europe's policy was based on some simplifications which are also essential to understanding the public view of what is now happening in Ukraine.

First, it is not exactly true that Ukraine is divided into a pro-Russian part east of the Dniepro River and a pro-European West. However, the majority of the Russian-speakers live in the East, and Ukrainian is the mother tongue for most natives in the western parts. Throughout history, Ukraine has been an independent state only for very short periods of time. Parts of today's territory were governed by Poland, Russia and the Habsburg Empire. This history has shaped the people of Ukraine and their political attitudes. And the economic situation is at least as important as the linguistic and cultural issues. The industrialized East with its run-down coal mines and steel mills depends on gas and oil supply from Russia. But from a long term perspective, the only promising markets for steel and other products of the Ukrainian heavy industry are in Europe and in the Far East. They are certainly not in Russia, which already has too much production in this sector.

Second, the question of whether Ukrainian politics should be oriented towards Europe or Russia is misleading. Politically, the answer is clear. If "Europe" means democracy and market economy (I'm not sure whether the latter applies to the EU), Ukraine should become a European country. But this does not exclude intensifying the relations with Russia, too. The Russian market offers a lot of opportunities for many industries, for example agriculture and food processing. Traditional ties may help.

And finally, the good guy-bad guy scheme doesn't perfectly fit the government-opposition conflict. Yes, Yanukovich is a man of the oligarchs. But the same applies for Yushchenko. At least he was the man of the oligarchs as a former prime minister. He has attracted support from some groups of economic leaders during his presidential campaign. But he was also able to attract real public support. It is a good sign for the future of Ukraine that this public support will most probably be decisive. The protests show that Ukraine is only the second member state of the CIS - after Georgia - where the political opposition has been able to mobilize protest and presumably take over power. This would have been impossible in Russia.

The key for the success of any new leadership in Ukraine will be economic development. People in the West and in the East of Ukraine will trust the new government only if their lives improve. Growth rates are encouraging since the financial turmoil of 1998. Ukraine made some progress in privatization and economic reforms under both prime ministers Yushchenko and Yanukovich. Now some 80 percent of it GNP comes from private companies. However, the problem is that a relatively small group of so-called oligarchs own the major share of big companies - they are said to suck the country dry. This is the reason for a lot of discontent.

The solution for this problem is not state control and interventionism, but a real market economy. The power of the oligarchs will decline only if a new government creates a favorable environment for entrepreneurs, for all sizes of business. The new government has to face this challenge. If it succeeds the political split of the country will not last.

If Europeans are really interested in the long term prosperity and stability of their neighbor, the events in Kiev should cause hope and not fear. The so called "civil society" doesn't need much help from Europeans - the citizens have shown how powerful they are. Europe should open its own markets completely and encourage improvement of the business environment in Ukraine.


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