Lord Risby: Grain, gas, and troubles with corruption - the future of the Ukraine
Lord Risby is Chairman of the British Ukrainian Society
Ukraine has not been enjoying favourable publicity of late. The trial and imprisonment of the charismatic former prime minister and Presidential candidate, Yulia Timoshenko, has in the eyes of western diplomats and commentators reflected significant shortcomings in the country’s judicial processes.
Ukraine recently celebrated twenty years of independence from the Soviet Union. Yet perhaps more than any other European part of the old Soviet empire, it has had at times a truly dreadful and at best fractious relationship with its huge northern neighbour. In the early 1930s a famine, the Holodomor, took the lives of millions of Ukrainians. Many believe it was a deliberate act by Stalin and was therefoe in effect genocide. Ukraine’s capital city, Kiev, is centrally important to the Russian Orthodox church.
Ukraine is the biggest country in Europe, with a population of 46 million. Its soil is incredibly fertile, and last year it was the world’s third biggest grain exporter. Fruit growing and viticulture thrive in the autonomous Crimea region bordering the Black Sea. The economic difficulties of the 1990s were replicated after 2008, with a major downturn in industrial production. However, recovery is now underway. Both politically and commercially, Ukraine, by virtue of its geography, has constantly to balance its desire for closer integration with Europe with a working relationship with Russia, which supplies most of the country’s energy and provides an important part of the gas pipeline transit route for Russian gas to Europe. Russia remains its main trading partner.
Ukraine is now at an important juncture. In 2008 it joined the WTO. That year the EU agreed to negotiate an Association Agreement. Last month this was approved in principle and the next necessary processes are now underway, which should lead to full ratification. Difficulties are likely to arise. As EU national parliaments and the European Parliament consider this agreement, concerns will inevitably be expressed about the country’s judicial processes under President Yanukovych, highlighted by the Timoshenko trial, and that of other opposition politicians.
As Prime Minister, Mrs Timoshenko in 2009 signed a gas contract with Russia. Ukraine is now paying the world’s highest price for gas, costing $4-5 billion each year in overpayments. It is a crippling burden on the economy, and very difficult discussions surround the country’s attempts to address the gas price. The issue remains stubbornly unresolved. Corruption has undoubtedly seeped into Ukraine’s political processes. The precise impact of this, and the trial itself, on the EU Association Agreement ratification process is unclear at present.
Meanwhile, the Russian bear continues to loom on the horizon, both directly and indirectly. Russia is vehemently opposed to Ukraine joining NATO. The Ukrainian government has adopted a policy of non-bloc status whilst supporting a strengthened relationship with NATO. The Russians have been allowed to continue to keep their Black Sea fleet at Sevastopol in the Crimea. Yet throughout the changes of government in both London and Kiev, the bilateral relationship has held firm. Britain has positively encouraged the reform processes there and does not suffer the same instinctive dislike of further EU expansion held by others. We have welcomed Ukraine’s generous participation in peace-keeping operations abroad.
The British Ukrainian Society was established to strengthen bilateral links. For example, we have been working to encourage the admirable Slynn Foundation, comprising retired High Court judges, to work with their Ukrainian counterparts. Their wisdom and experience is highly prized by the Ukrainian judiciary, ranging from constitutional to commercial law. The Employers’ Federation is now in contact with our CBI as it tries to shape a structure which will more effectively bring business needs to the attention of their government. There is an active All-Party Parliamentary Group, ably chaired by John Whittingdale MP. We work closely together and try to engage with visiting Ukrainians on a whole range of activities. Ministerial visits both ways have continued to enhance contact, with energy matters high on the agenda.
Given its size and geopolitical significance, the success of Ukraine is something many of us care about. As a people they really deserve a better fate than history has often bequeathed them. The next few months may well be difficult and may test their European aspirations but they know that Britain is their friend, albeit at the other end of Europe, and whatever we may say or do is in that context.
We were the first EU country to recognise their independence. We just want them to succeed, and will continue to try help them on that path.