Saturday, 1 May 2010

Russia Digs Deep In Battle For Ukraine Supremacy

MOSCOW, Russia -- It was, admitted Prime Minister Vladimir Putin, an exorbitant sum – $40 billion to keep a Russian naval base in Ukraine until almost the middle of the century.
“But for us, this is not just a question of money,” Putin said.

For Moscow, the bitterly-contested deal with Ukraine to keep the Russian Black Sea Fleet base in Crimea until at least 2042 goes beyond money and to the heart of Moscow’s struggle to regain a historic influence in its neighbor.

The rancor was underlined Tuesday when pro-Western opposition Ukrainian lawmakers staged an unprecedented protest against the deal, letting off smoke bombs and hurling a broadside of eggs at the speaker of Parliament.

“Any kind of practical foreign policy is always expensive,” Mikhail Margelov, head of the foreign affairs committee in the upper house of Russia’s Parliament, wrote in the Kommersant daily.

“Especially if Moscow has the intention of being the leader in the post-Soviet region.” Russia controlled the majority of present-day Ukraine under the Tsars and maintained its hegemony as the territory was ruled from Moscow in the Soviet Union.

Ukrainian independence in 1991 amid the implosion of the Soviet Union marked a break in centuries of Russian-led control over Ukraine, a land wedged between East and West, poor in energy resources but rich in fertile soil.

After over a decade of carefully keeping an intimate relationship with Moscow, Ukraine’s government swung dramatically to the West with the 2004 Orange Revolution that ousted the old pro-Russian elite.

The uprising is still regarded by many as Putin’s most stinging defeat in his decade-long domination of post-Soviet politics.

But the pendulum swung back with the victory of pro-Kremlin candidate Viktor Yanukovych in this year’s presidential elections, an opportunity Russia has now moved with stunning speed to exploit.

"The Russian idea is to bind Ukraine in the long term in the Russian orbit and keep it out of the influence of Western institutions and also of the EU,” said Nico Lange, director of the Konrad Adenauer Foundation in Kiev.

“Russia is trying to close a whole number of long-term deals with Ukraine in a very short amount of time. It is astonishing how fast developments are moving.” Yanukovych, battling an economic crisis and trying to convince the IMF to disburse a much-needed loan tranche, grabbed eagerly at the Black Sea deal, which guarantees Ukraine a 30 percent discount on Russian gas imports.

“Five years ago, Ukraine had a dream – Europe. But now the most pragmatic course from the authorities’ point of view is to get closer to Russia,” said Andrei Ryabov, an analyst at the Moscow Carnegie Center.

“Ukraine gets cheap fuel, employment and delays the need to reform the economy. This is Ukraine’s vision for the next five years, trying to avoid social and economic aggravation.” According to Putin, the cost of the discount to Russia over 10 years will be at least $40 billion, possibly even $45 billion, funds that will hit the budget for years to come.

Less than a week after Yanukovych and Russian President Dmitry Medvedev signed the lease-for-gas deal on April 21, Putin jetted into Kiev to show that this was only the start of a new era of Russian-Ukrainian cooperation.

In an unprecedented move, Putin offered Ukraine the chance to bundle its nuclear power businesses in a vast new joint holding company with Russia’s atomic interests.

Acknowledging the implications of his proposal, he said it could be implemented gradually if the Ukrainian side found it too “revolutionary.”

Meanwhile, reports have indicated that Russia is eying taking a 50-percent stake in Ukrainian aircraft maker Antonov, legendary for its gigantic cargo planes. Another project mooted is a road bridge over the Strait of Kerch between Ukraine and Russia which would symbolize the newfound unity between the two states.

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