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Ukraine at the CrossroadsF. Stephen Larrabee aa RAND Corporation , Washington, D.C., USAPublished online: 05 Jan 2010.

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I Ukraine at the Crossroads

w h e n Viktor Yushchenko was declared to have lost the presiden- tial elections in Ukraine in late 2004 to Viktor Yanukovych, the candidate backed by outgoing president Leonid Kuchma and by Russia, Yushchenko and his supporters took to the streets to protest that the vote had been rigged. Af- ter 10 days of peaceful but dramatic demonstrations, dubbed the Orange Rev- olution, a rerun was ordered, which Yushchenko won. The Orange Revolution inspired hopes both in Ukraine and the West that Ukraine had unequivo- cally embarked on a course of democratic reform and Western integration. Ukraine's transition, however, has proven to be bumpier than many observers had anticipated.

Political differences within the Orange camp between Yushchenko and Yulia Tymoshenko, the other main leader of the Orange Revolution, as well as a lack of strong presidential leadership have inhibited the consolidation of democratic reforms and created uncertainties about Ukraine's future political evolution and foreign policy orientation. These problems have been com- pounded by a bitter struggle for power between Yushchenko and Yanukovych, who returned to power as prime minister in August 2006 in the wake of the collapse of the Orange coalition. As prime minister, Yanukovych has sought to reduce Yushchenko's authority in foreign policy and curtail his pro-Western course. This struggle for power reached a critical turning point in April 2007 when Yushchenko dissolved parliament and called new elections, which are scheduled to be held on September 30, 2007.

The struggle between Yushchenko and Yanukovych over the role of the president in foreign policy is in effect a struggle to define Ukraine's future

E Stephen Lrrabce holds the Corporate Chair in European Security at the RAND Corpora- tion in ivashington, D.C., and was a member of the National Security Council during the Carter administration.

0 2007 by The Center for Strategic and International Studies and the Massachusetts Insti- tute of Technology The \Y'ahingron Quarterly 30:4 pp. 45-61.

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political evolution and foreign policy orientation. The United States and its European allies have an important stake in the outcome of this struggle, in- cluding the results of the September 30 election, because it will not only sig- nificantly shape Ukraine’s future foreign policy orientation but also strongly influence the balance of power on Europe’s eastern periphery in the coming decade.

If Ukraine evolves into a stable, independent, democratic state closely tied to Euro-Atlantic institutions, Georgia’s and Moldova’s pro-Western ori- entation will be strengthened and Aleksandr Lukashenka’s autocratic rule in Belarus will be weakened. The prospects for the developnient of democracy in Russia will also be improved. If Ukraine remains mired in crisis and fails to de- velop strong democratic institutions and close ties to Euro-Atlantic structures, it will be much more difficult for Georgia and Moldova to continue to pursue a pro-\Vestern course, Lukashenka’s autocratic rule in Belarus will be strength- ened, and the prospects for the emergence of a stable, democratic Russia over the long run will be diminished.

The Collapse of the Orange Coalition

In retrospect, many of the hopes inspired by the Orange Revolution were clearly overly optimistic. The coalition was a heterogeneous collection of disparate groups ranging from pro-\Vestern nationalist forces on the right to Socialists on the left, united primarily by opposition to Kuchma’s increasingly repressive domestic policies. It lacked a common, clearly defined political agenda and vision beyond a desire to remove him and his cronies. Moreover, the Verhovna Rada (parliament) remained in the hands of the old regime until March 2006. Unsurprisingly, the coalition had a difficult time implementing a coherent domestic and foreign policy.

T h e coalition’s internal differences were compounded by Yushchenko’s leadership style. H e failed to develop an effective, well-coordinated decision- making structure for managing foreign policy and national security.’ In the first nine months of his tenure, for example, responsibility for policy toward the West was dispersed among several bodies. Deputy Prime Minister Oleh Rybachuk was given overall responsibility for integration with the European Union whereas Foreign Minister Borys Tarasyuk had responsibility for rela- tions with NATO. Policy toward Russia, on the other hand, was largely in the hands of the National Security and Defense Council (NSDC), headed by Petro Poroshenko.

The Ukrainian constitution designates the NSDC as the main mechanism for coordinating foreign and security policy. Unlike Kuchma, Yushchenko never sought to develop the NSDC into an effective tool for managing foreign

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Ukraine at the Crossroads I

Moreover, Yushchenko stayed aloof from day-to-day governance and spent large periods abroad seeking to drum up Western support for his domestic and foreign policy goals. Al- though these trips helped to improve Ukraine’s image in the West, he failed to exert strong

At stake is t h e balance of power on Europe’s eastern periphery in t h e coming decade.

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the most votes, and only at the last second agreed to reconstitute the Orange coalition. The long delay in reforming the Orange coalition intensified per- sonal animosities and eroded trust between Yushchenko’s O u r Ukraine and Tymoshenko’s BYuT.

The Orange coalition, however, was short lived. In early July 2006, Social- ist Party leader Olexandr Moroz, angered because he had not been given the post of speaker of the parliament, defected from the Orange coalition and joined forces with Regions and the Communists. This gave Regions and the Comniunists enough votes to form a new %nti-crisis coalition,” headed by Yanukovych, and a parlianientary majority. The sudden collapse of the Orange coalition left Ukrainian foreign policy in a state of disarray and sparked a n in- ternal battle for control over Ukrainian foreign and security policy. Since then, Ukraine has in effect had two parallel foreign policies: Yushchenko’s pursuit of integration into Euro-Atlantic institutions and Yanukovych’s “multivector” strategy designed to maintain a balance between good ties to the West and close relations with Moscow.

The NATO Card

Ukraine’s relations with NATO have emerged as a particularly divisive issue since the collapse of the Orange coalition. In 2002, Kuchma announced that Ukraine would apply for NATO membership, but his increasingly repressive domestic policies and reports that he had authorized the sale of radar tracking systems to Iraq (known as the Kolchuga affair) compelled NATO to put rela- tions with Ukraine on hold for the latter half of Kuchma’s tenure.

Relations gained new impetus, however, with Yushchenko’s election as president in December 2004. In April 2005, NATO granted Ukraine Intensi- fied Dialogue status, which is generally regarded as an important preparatory step toward obtaining a Membership Action Plan (MAP) and eventual meni- bership. In the spring of 2006, NATO member states seriously discussed the possibility of offering Ukraine an MAP at the Riga summit in November 2006, with a possible formal membership invitation to be extended a t a follow-up sunimit in 2008.

Yanukovych‘s return to power in August 2006 scuttled these plans. In con- trast to Yushchenko, who strongly supported Ukraine’s membership in NATO, Yanukovych adopted a “go slow” approach to NATO membership. During his trip to Brussels in September 2006, Yanukovych openly sought to set the contours and limits of Ukraine’s relationship with NATO, calling for a pause in Ukraine’s quest for NATO membership. He announced that Ukraine would not seek an MAP, citing a lack of widespread public support for NATO and saying that the issue should be submitted to a nationwide referendum before a

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decision was made. Yanukovych‘s action not only departed substantially from Yushchenko’s objective of seeking NATO membership but also openly chal- lenged Yushchenko’s constitutional role in defining Ukraine’s foreign policy.

Yanukovych‘s attitude toward NATO appears pediency than firm ideological opposition. As prime minister from 2002 to 2004, he support- ed the Kuchma government’s drive for NATO membership. While in opposition from 2004 to 2006, however, he opposed membership and campaigned on an anti-NATO platform during the 2004 presidential election because support for NATO is low in eastern Ukraine, which is Region’s political base. During 2005 and 2006,

driven more by political cx-

Ukraine has in effect had two parallel foreign policies.

Regions voted against legislation authorizing military cooperation with NATO but voted for the legislation once it returned to government in August 2006.

One of the key problems is that popular support for NATO membership in Ukraine is quite low, much lower than it was in the prospective new members from eastern Europe prior to their joining the alliance. According to polls in October 2006, only about 17 percent of the Ukrainian population supports NATO membership.2 According to the same poll, more than 50 percent would vote against NATO menibership in a referendum. This low support is largely a result of the long decades of hostile Soviet propaganda against NATO and the anti-NATO campaign conducted by Yanukovych in the 2004 presidential election. Support varies considerably, however, from region to region. I t is highest in western and central Ukraine and lowest in the heavily Russified regions of eastern and southern Ukraine.

Yet, a large percentage of the population, as much as 40 to 45 percent in the western regions, has no opinion on NATO membership. Many of these people could be mobilized to support membership if the Ukrainian govern- ment conducted a n effective education campaign, as many eastern European governments did prior to entering the a1liance:The Yanukovych government, however, has shown little interest in conducting a n active campaign to inform the Ukrainian public about NATO.3

NATO also is split over the issue of Ukrainian membership. Whereas the United States, Poland, and most eastern European countries favor Ukrainian membership if Ukraine demonstrates a serious commitment to implementing political, economic, and military reforms, many western European members, especially France and Gerniany, have reservations about admitting Ukraine. Some members d o not feel that Ukraine is really a “European” country while others fear that Ukrainian membership in NATO would increase the pres- sure for the EU to admit Ukraine. Many also worry that Ukrainian member-

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ship would antagonize Russia and Iead to a deterioration of relations with Moscow.

Given the current differences within the Ukrainian leadership, the lack of strong public support for NATO in Ukraine, the lack of consensus on Ukrai- nian membership within NATO, and concerns about the impact on relations with Russia, the issue of Ukraine’s membership in NATO is likely to be put on hold for the near future. Routine cooperation will continue, but a significant push for Ukrainian membership is unlikely until popular and elite support within Ukraine itself for membership is stronger.

The EU and European Integration

In contrast to NATO, there is a strong domestic consensus in Ukraine in favor of EU membership. All the major parties except the Communist Party support EU membership. Public support for EU membership is considerably higher than for NATO EU membership is seen as anchoring Ukraine more firmly in Europe and leading to rapid economic prosperity. Most Ukraini- ans have little understanding, however, of the significant economic and politi- cal changes that will be required for Ukraine to qualify for membership.

Under Kuchma, Ukrainian leaders continually sought to persuade the EU to give Ukraine a perspective on membership, but the EU refused to do so. There was a major gap between Kuchma’s rhetoric and the reality of his domestic policies. Although Kuchma pressed the EU to give Ukraine a signal regarding membership, he was never willing to take the concrete steps necessary to make membership a realistic possibility. T h e Political and Cooperation Agreement (PCA), which was ratified in 1998 and expires in 2007, called for closer relations in a number of areas, but it did not contain a perspective on membership.

The EU’s attitude did not fundamentally change after the Orange Revolu- tion.’ Ukraine is included in the EU European Neighborhood Policy (ENP), which is designed to foster closer ties with neighboring countries on the EU’s periphery. T h e ENP Action Plan for Ukraine, approved by the EU-Ukraine Council in February 2005, lays the basis for the EU’s relationship with Ukraine until 2007. It goes beyond the PCA and covers areas such as dialogue and re- form, trade, home affairs, energy, transportation, information society, environ- ment, social policy, and people-to-people contacts. Like the PCA, however, it docs not contain a perspective on membership.

Negotiations for a follow-on agreement to the PCA began this spring, and Ukrainian officials want it to contain a perspective on membership. Yet, Ukraine’s prospects for achieving membership in the next decade do not look promising. Since the French and Dutch referenda in May and June 2005, the mood in the EU toward further enlargement has soured.6 There is a strong

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Ukraine at the Crossroads I

sense among member states that t he EU must deepen before it can widen again. Bulgaria and Romania were admitted in January 2007, but there is likely to be a pause in the enlargement process while the EU seeks to sort out its internal priorities and adjust to the changing public mood in Europe.

The EU has essentially adopted a policy of constructive ambiguity. I t hopes to string out a series of small rewards, such as market economy status, relaxation of visa restrictions, and expanded educational opportunities, to encourage reform in Ukraine without committing itself to offering Ukraine membership. The problem with this approach is t ha t membership is the “golden carrot,” t he ultimate incentive for countries t o implement painful reforms. Without the prospect of membership, even i n the distant future, Ukrainian governments may be reluctant to pay the social and political costs involved in carrying out the type of restructuring and reform that EU mem- bership requires.

Combined with the lack of a firm perspective on Ukrainian membership in NATO, the EU’s hesitation leaves Ukraine stranded in a political no-man’s- land without a firm institutional anchor in the West. This will make it more difficult for pro-Western Ukrainian politicians to get support to undertake reforms needed for Ukraine to enhance its membership prospects.

Relations with Russia

As Ukraine and the \Vest attempt to define their relationship, Ukraine’s politi- cal evolution will be heavily influenced by its relations with Russia. Yushchen- ko’s victory caught the Russian leadership by surprise, setting off alarm bells in the Kremlin. Coupled with the Rose Revolution in Georgia in November 2003, the Orange Revolution threatened to unleash pressures for democratic reform throughout the Commonwealth of Independent States (CIS) and pos- sibly even in Russia itself. Yanukovych‘s return to power, however, has signifi- cantly reduced the danger that the Ukrainian-bacillus will infect the rest of the CIS.

THE ENERGY WEAPON

Buoyed by rising oil prices, Russian president Vladimir Putin has increasingly sought to use energy as a tool of foreign policy with Russia’s neighbors in the post-Soviet space. With Ukraine importing nearly 80 percent of its natural gas from Russia, the Kremlin has begun to use this considerable leverage to pursue a more assertive policy toward Ukraine. In December 2005, Russia announced that the price of gas exported to Ukraine would increase fourfold. Although Moscow eventually agreed to a smaller increase, the gas deal concluded in

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Popular support in Ukraine for NATO membership is quite low.. .

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For 2007, Russia again raised the sales price of natural gas to Ukraine, to $130 per 1,000 cubic meters. Although the price is 37 percent higher than Ukraine’s 2006 price, it is consider- ably less than the $230 per 1,000 cubic meters that Russia charges Georgia and western Euro-

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Ukraine at the Crossroads I

pipeline from Georgia. Third, Ukraine would have to give up one-half of the transit fees it now collects for Russian gas transfers to Europe.8

Yet, energy interdependence is not a one-way street. Much of Russia’s gas sales to western Europe flows through pipelines that traverse Ukrainian ter- ritory, making Moscow dependent on Ukrainian goodwill and cooperation to ensure the distribution of Russian gas to Europe. Ukraine can siphon off or disrupt the flow of Russian gas to western Europe, as it did during the Russian- Ukrainian gas war in early 2006, preventing Russia from fulfilling its coniniitnients to west- ern European clients and damaging Russia’s reputation as a reliable energy supplier. This gives Ukraine a certain counter-leverage. The planned Nord Stream pipeline linking Russia and Germany will bypass Ukraine and reduce but not completely eliminate Ukraine’s ability to exert counter-leverage.

THE BLACK SEA FLEET

In contrast, there is a strong domestic consensus in Ukraine in favor of EU membership.

The Russian Black Sea Fleet, a subunit of the Russian navy stationed in Sev- astopol, Crimea, provides Russia with another potential source of leverage over Ukraine. A 1997 accord granted the Russian Black Sea porting rights in Sevastopol until 2017.9 In October 2006, Putin called for an extension of the accord beyond the agreed 2017 deadline, a move that could complicate any potential Ukrainian NATO membership.

Whereas Yushchenko, Defense Minister Anatoliy Gritsenko, and Tarasyuk all strongly rejected extending the accord, Yanukovych adopted a much more equivocal stance. Putin may hope that the prospects for extending the accord will be more favorable if Yanukovych remains prime minister. Nevertheless, extending the accord would be politically difficult. The Ukrainian constitu- tion bans the stationing of foreign troops on Ukrainian soil, but it makes a temporary exception for the current accord with Russia. A n extension of the accord would require a change in the constitution, which is unlikely because the Yanukovych government lacks the two-thirds majority needed to change the constitution.

THE C R l M E A CARD

The autonomous region of Crimea represents a third possible pressure point. Crimea is the only area of Ukraine in which ethnic Russians constitute an overwhelming majority, with 58 percent of the peninsula’s population. Nikita

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u kraine’s prospects for achieving EU membership in the next decade do not look promising.

ernment did not attempt to exploit the sepa- ratist pressures in Crimea. Faced with serious Separatist pressures in Chechnya, Yeltsin could not afford to encourage separatism in Crimea. He thus turned a blind eye to the crackdown, which he characterized as largely an internal Ukrainian affair.

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Ukraine at the Crossroads I

separatist pressures in parts of Russia, particularly Chechnya and the Northern Caucasus. Nevertheless, Crimea remains a potential source of tension between Ukraine and Russia, particularly if Russian nationalism gains greater strength after the March 2008 Russian presidential election.

Charting a Course for the Black Sea Region

The current power struggle between Yushchenko and Yanukovych could affect how Ukraine chooses to engage the Black Sea region on Ukraine’s southeast- ern border. Kuchma paid lip service to the Black Sea area, but many of his initiatives remained largely on paper, particularly during his second term when relations with the West began to deteriorate and he found himself under grow- ing pressure a t home due to his increasingly repressive domestic policies.

Under the Orange coalition, however, the Black Sea region received new priority. Yushchenko sought to revitalize GUAM-a regional group composed of Georgia, Ukraine, Azerbaijan, and Moldova-and transform it into a seri- ous regional organization that could serve as an alternative to the Russian- dominated Collective Security Treaty Organization. At the April 2005 GUAM summit, he proposed that the informal group be transformed into a formal regional organization with its own office, secretariat, and plan of activities.

Yushchenko also sought to forge a strong strategic partnership with Presi- dent Mikheil Saakashvili of Georgia. In August 2005, the two leaders launched a joint initiative calling for the creation of a Community of Democratic Choice (CDC), which was designed to forge a coninion front among democratic states in the region. Yanukovych, however, has shown little interest in the CDC, in part to avoid antagonizing Moscow, which objected to its heavy emphasis on democracy promotion. Moreover, the initiative lacks a clear, actionable agenda. Without a strong push froni Ukraine, it seems likely to atrophy of its own accord.

Turkey’s growing rapprochement with Moscow also acts as a constraint on Ukraine’s ability to play a larger role in the Black Sea region. In the early 199Os, Ukrainian-Turkish relations witnessed a visible improvement, driven in particular by a common desire to contain Russian hegenionic ambitions in the Black Sea region. Over the last decade, however, Turkey’s relations with Russia have warmed considerably, particularly in the economic sphere. Rus- sia is now Turkey.’s second-largest trading partner and supplies more than 60 percent of Turkey’s natural gas.” This rapprochenient has made Turkey more sensitive about taking actions that couId damage relations with Russia, resuit- ing in a slowdown in Ukrainian-Turkish cooperation.

Finally, Moscow has recently begun to pursue a more assertive policy in the region. This has been reflected in particular in Russia’s growing support for

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separatist movements in the breakaway areas of Abkhazia and South Ossetia in Georgia, its threat to withdraw from the Treaty on Conventional Forces in Europe, the econoniic boycott of Georgian and Moldovan wine, and its op- position to an increase in NATO’s military presence in the Black Sea. These moves have made it clear that Moscow remains a key player in the Black Sea region and that it is ready to play hardball to protect its interests. Taken to- gether, these factors are likely to make it more difficult for Ukraine to play a leading role in the Black Sea region in the future.

Yushchenko’s Electoral Gamble

The future course of Ukrainian foreign policy will be heavily influenced by internal developments in Ukraine, particularly the outcome of the current struggle for power between Yushchenko and Yanukovych over the powers of the president in the area of foreign policy. Under the Ukrainian constitution, amended in December 2004, the president has responsibility for foreign and security policy. H e nominates the foreign minister, the defense minister, the chairman of the Security Service, the secretary of the NSDC, and the prosecu- tor general. The remaining cabinet posts are nominated by the prime minister and must be approved by the Rada..

After becoming prime minister in August 2006, Yanukovych increasingly tried to limit Yushchenko’s authority to define Ukraine’s foreign policy. In ad- dition, he consciously sought to eliminate Yushchenko allies in the cabinet. In early December 2006, he fired Tarasyuk, a close Yushchenko confidant and strong supporter of Ukrainian membership in NATO. Tarasyuk‘s dismissal led to an open confrontation with Yushchenko, who charged that Yanukovych‘s action was unconstitutional because Tarasyuk was a presidential appointee. In the end, however, Yanukovych prevailed and Tarasyuk was forced to resign at the end of January 2007.

Yushchenko suffered a further erosion of his power in January 2007 when the Rada passed a law strengthening the powers of the cabinet vis-;-,is those of the president.12 Under the new law, if the president fails to appoint the prime minister within 15 days of the period stipulated by the constitution, the Rada can do so without the president’s approval. Yushchenko also lost the right to appoint the foreign and defense ministers for the same reason. In addition, the law weakened Yushchenko’s control over regional governors and heads of other local administrations.

Yushchenko found his ability to influence Ukrainian foreign policy progres- sively undercut. As president, he had the power to veto important legislation proposed by Yanukovych, but it was difficult for him to shape foreign policy actively. He faced the prospect of becoming little more than a figurehead,

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nientary elections should be seen against this background. In making this decision, Yush- chenko displayed a decisiveness and resolve

with the real power increasingly being wielded by Yanukovych as prime min- ister. Moreover, the defection in March 2007 of a group of Our Ukraine allies headed by former prime minister Anatoliy Kinakh, who was rewarded with the post of finance minister in the Yanukovych government, raised the pos- sibility that Regions might eventually be able to obtain a two-thirds majority in parliament, enough to change the constitution and legally emasculate the president’s control over foreign policy.

Yushchenko’s decision on April 2, 2007, to dissolve parliament and call new parlia- I Ukraine is stranded

in political no-man’s- land without a firm institutional anchor in 1 the West.

that had often been lacking in the past. Yet, he also had little choice. He had to reshuffle the deck or watch his authority and prospects for Ukraine’s integration into Western struc- tures be progressively emasculated.

Yushchenko’s bold gamble to dissolve parliament provoked a serious inter- nal crisis. After initially resisting the idea, Yanukovych eventually accepted holding new elections, which are scheduled for September 30, 2007. T h e elections will take place at a moment when the party landscape in Ukraine is undergoing a realignment that could have important implications for the country’s medium- and long-term evolution.

First, the democratic opposition has shown signs of revitalization. In late February 2007, BYuT and Our Ukraine signed an accord committing the two parties to cooperate to repeal the 2004 constitutional amendments that cur- tailed the powers of the president and to seek early elections. The accord ap- pears to reflect Yushchenko’s growing realization that he had only two realistic choices: unite with BYuT and seek new elections or live with the Yanukovych government for another four years and watch his own power progressive- ly diminish. In addition, Yushchenko’s tough stand against Yanukovych has boosted his sagging popularity. As a result, Our Ukraine and the democratic opposition as a whole will enter the elections in a strengthened position.

A t the same time, the Orange camp has undergone an important recon- figuration. In June 2007, Our Ukraine and former interior minister Yuriy Lut- senko’s People’s Self Defense signed a n agreement to enter the September 30 parliamentary elections as a bloc. This is likely to add 6 to 7 percent to Our Ukraine’s expected vote level, bringing it back up to its 2002 level. Lutsenko, a former Socialist, is popular among youth groups, and the alliance should strengthen Our Ukraine’s ability to attract these groups. A strong showing by People’s Self Defense in the September elections would give Lutsenko’s po-

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litical fortunes an important boost and make him a possible contender for the post of prime minister in a new Orange coalition.

Second, ideologically leftist parties have lost ground. The Communist Party and the Socialist Party have both witnessed a marked erosion of support. The Communist Party has progressively lost strength to Regions. Although it prob-

ably will win enough votes to be represented in parliament this time, it is unlikely to survive as a serious political force. The Socialist Party is The elections are I

not likely to lead to a radical shift in t h e

not likely to pass the 3 percent threshold and will probably not be represented in the next par- liament. The Socialist Party’s decline is likely to

ove ral I distribution of political power.

benefit BYuT and Lutsenko’s People’s Self De- fense party, which are likely to pick up support from inany disaffected Socialists. At the same time, the failure of the Socialist Party to pass the 3 percent threshold will deprive Regions of

an important electoral ally, leaving Regions dependent on the Communist Party as its main potential coalition partner.

The elections are not likely to lead to a radical shift in the overall distribu- tion of power. Polls suggest that Regions may receive 32 to 38 percent of the vote, followed by BYuT with 22 to 26 percent, Our Ukraine-People’s Self Defense with 20 to 21 percent, and the Communists receiving 5 to 7 percent. Although Regions is likely to obtain the most votes, as it did in the March 2006 parliamentary election, it is unlikely to be able to form a government on its own.

If current electoral projections are accurate, three potential coalitions could emerge from the September 30 elections: a coalition among BYuT, O u r Ukraine, and Self Defense party; a coalition between Our Ukraine and Regions; or a coalition between Regions and the Communists. A co- alition among BYuT, Our Ukraine, and People’s Self Defense would be the most desirable from the Western point of view. I t would yield a government firmly committed to economic and political reform as well as Euro-Atlantic integration. Relations with Russia would remain important t o Kyiv, bu t they would have a lower priority than in the other two alternatives. The main problem would be to avoid the political infighting and petty jeal- ousies tha t hindered the iniplementation of a coherent policy in the first Orange coalition.

The second alternative, a grand coalition between Our Ukraine and Re- gions, would essentially result in a policy of muddling through. A grand coali- tion would be less committed to economic and political reform than a coalition among BYLIT, Our Ukraine, and People’s Self Defense. It would favor EU inte-

u

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Ukraine at the Crossroads]

gration while NATO membership would remain on hold. Moreover, unless the current ambiguities in the constitution regarding the powers of the president are clarified, a Regions-Our Ukraine coalition would risk a resurgence of conflict between Yushchenko and the prime minister over control of foreign policy, especially if Yanukovych became prime minister again.

T h e third alternative, a coalition between Regions and the Communists, would be the least desirable from the Western point of view. I t would result in stagnation of economic and political reform, a n upsurge in corruption, and a slowdown in progress toward Euro-Atlantic integration. \Vestern interest in Ukraine would dwindle while Russia’s political and economic influence would increase.

A lot will depend on whether Yushchenko and Tymoshenko can put aside past differences and work together. The personal chemistry between the two is not good. Yushchenko feels uncomfortable with Tymoshenko, who is a natu- ral politician and tends to overshadow Yushchenko. Yet, he may have little choice. BYuT is likely to receive more votes than Our Ukraine-People’s Self Defense, putting Tymoshenko in a strong position to bccome prime minister in a reconstituted Orange coalition. Moreover, Vyacheslav Kyrylenko, the head of O u r Ukraine, and Lutsenko have both ruled out a coalition with Regions, as has Tymoshenko.

The US. Policy Agenda

The United States has been one of the strongest supporters of Ukrainian in- dependence and integration into Western structures, particularly NATO, and has also strongly backed Ukraine’s application for World Trade Organization (\VTO) membership. Yet, continued political turmoil in Ukraine could lead to a new bout of Ukraine fatigue in Washington and other Western capitals. The United States faces a daunting array of pressing policy issues with China, Iran, Iraq, and North Korea likely to be key priorities, Keeping high-level policy at- tention on Ukraine may thus prove difficult.

Neglecting Ukraine, however, would be a serious mistake. Ukraine’s evolu- tion will have a major impact on the overall balance of power in the Western part of the post-Soviet space and on developments in Russia. For all its weak- nesses, Ukraine is a far more open, pluralistic, and democratic state than Rus- sia. Rather than giving up on Ukraine, Washington should develop a sustained and comprehensive policy designed to promote economic and political reform in Ukraine and help anchor Kyiv more closely to Western political, econom- ic, and security structures, especially now that the democratic opposition in Ukraine is showing signs of new vitality. This policy should have several spe- cific objectives.

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First, the United States should support programs designed to strengthen the rule of lawl good governance, and an independent media. The growth of a vibrant civil society is a precondition for the long-term development of a stable, democratic Ukraine. Particular attention should be paid to supporting

programs aimed a t enhancing transparen- cy, reducing corruption, and strengthening Ukraine’s civil service.

Second , \Va s h i ng t o n s h o u Id e nc o u r age Ukraine to create conditions for a t t ract- ing greater foreign investment. Increased foreign investment is critical to stinidating greater econoniic growth and stability. This growth is dependent on Ukraine’s ability to

carry out broader reforms aimed a t enhancing transparency and strengthen- ing the rule of law, as well as reducing corruption, and requires rolling back recent policies tha t run counter t o Ukraine’s commitments to liberalize its economy. In particular, the U.S. government should insist that Ukraine drop export restrictions on grains and reimburse exporters for the value-added tax paid in accordance with Ukrainian law before Ukraine is admitted into the WTO.

Third, the United States and the EU should pursue a more active energy dialogue with Ukraine. This dialogue should be designed to help Kyiv improve energy efficiency. Ukraine’s profligate use of imported energy curtails growth and imposes a major constraint on Kyiv’s ability to achieve energy security and enhance its political independence.

Fourth, the door to NATO membership should be kept open. Although its admission should not be artificially accelerated, membership in NATO could be an important means of anchoring Ukraine more closely to the West in the medium term, especially because Ukraine’s chances of joining the EU in the next decade are slim. The Ukrainian government should be encouraged to undertake a serious campaign aimed at educating the Ukrainian population about NATO membership.

Meanwhile, Washington should encourage Ukraine to undertake the struc- tural reforms necessary to enhance its qualifications for EU membership in the long term. If the EU develops toward more “variable geometryI” or more flex- ible structures and membership arrangements, Ukraine may be able to partici- pate in some EU activities such as the Common Foreign and Security Policy without being a full member of the EU. This would tie Ukraine more closely to European security structures while giving it more time to undertake other reforms needed to achieve full membership.

kraine’s evolution will have a major impact on developments in Russia. u

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F. Stephen Larrabee, “Ukraine and the West,” Siirviual 48, no. 1 (Spring 2006): 93- 110. See Andriy Bycenko, “Public Opinion on NATO and Ukraine’s Accession to It,” Na- tional Secirrity and Dcfcncc, no. 9 (2006): 20-21. “Koalitziya ne dala dengy MIDy dlya NATO” [Coalition did not give money to MIDu for NATO], Ukrainskaja Pravda, May 15, 2007, http://\V\\‘\\’.praVda.com.iia/rii/ ne\~s/2001/j/I5/58702.htm. “Yalta European Strategy: Survey,” November 2005, http://\~,w\\:yes-ukraine.org/en/ survey/november.htnil. See Taras Kuzio, “Is Ukraine Part of Europe’s Future?” The \Vashington Qitartcrly 29, no. 3 (Summer 2006): 89-108. See E Stephen Larrabee, ”Enlargement and Its Discontents,” Politique Etrangire, no. 2 (July 2007). Roman Kupchinsky, “Ukraine: Putin Proposes Greater Pipeline Cooperation,” Ra- dio Free Europe/Radio Liberty, February 2, 2007, http://www.rferl.org/featuresarti- cle/2007/02/ae84ab4~-417d-4807-a4 ld-5b8bdf3ea778.html. See Vladimir Socor, ”Questionable Rationales for the Bohorodchany-Uzhgorod Gas Pipeline Project,” Eirrasia Daily Monitor 4, no. 41 (February 28, 2007): 1-2. See James Sherr, “Russia-Ukraine Rapprochement: The Black Sea Fleet Accords,” Sitrvival39, no. 3 (Autumn 1997): 35-50.

, See Vladimir Socor, “Putin Offers Ukraine ‘Protection’ for Extending Russian Black Sea Fleet’s Presence,” Eirrasia Daily Monitor, October 30, 2006, pp. 3-55.

, See Suat Kiniklioglu, “The Anatomy of Turkish-Russian Relations,” Insight Xtrkey 8, no. 2 (April-June 2006): 82-96.

, Pave1 Korduban, “Yushchenko Loses Cabinet Law to Yanukovych and Tymoshenko,” Eirrasia Daily Monitor 4, no. 12 (January 17, 2007): 3-4.

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