Washington Profile
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'Ukraine Doesn't Like Crises, but It Doesn't Fear Them Either'
Ukrainian Prime Minister Yuri Yekhanurov sounds off on the recent Ukrainian-Russian natural gas dispute.
[Russian text: http://www.washprofile.org/ru/node/4474]
Washington Profile: What's your assessment of the current crisis in Ukrainian-Russian relations? Is this a logical succession of events, a random incident or something else?
Yuri Yekhanurov: I am not inclined to characterize the events surrounding the settlement of the Ukrainian-Russian gas affair as a crisis. The Ukrainian government was guided by a slightly different set of motivations. For us, they were the following: securing the country’s gas balance, finding an economically sound price, establishing a mechanism for setting market prices, sticking to contractual relations, remaining profitable and ensuring the gas transit system’s uninterrupted operations.
I am fully aware that the difficult course of negotiations was linked to, among other things, the fact that Russia’s actions were driven by different concerns. That was evident from the general tone of commentary emanating from the Russian media. However, the final compromise was reached on the basis of the ideas Ukraine had supported all along: Included in the 4 January agreement was wording on the price, transit costs, time schedule and volumes; no mention was made of the two sides’ political priorities. If, however, you insist on posing your question in terms of a crisis, I will say that no one has yet to devise a way of settling conflict without crisis, particularly when several parties with different interests are involved.
The current Ukrainian government does not like crises, but it doesn’t fear them either. In the gas dispute with Russia, Ukraine did not seek to aggravate the situation, but it also did not avoid discussing problematic issues.
I acknowledge that our attitude toward the situation at the end of 2005 with respect to Ukrainian-Russian gas relations was ambiguous. On the one hand, we had no problems with many of the arrangements, especially as they related to pricing. On the other, we knew very well that the patriarchal, opaque, barter nature of our relationship was not viable and was in conflict with today’s realities.
We accepted Russia’s desire to introduce market principles into our energy relations. In that respect, our intentions were in agreement. We were prepared to embark on a far-reaching dialogue, and assumed that given the seriousness of the task this dialogue would be complex and lengthy. We also hoped that it would be conducted in a professional and competent manner. We were completely opposed, however, to our negotiation partner deciding all unsettled points before the talks even began. We were told directly to forget about existing agreements, accept an instantaneous, almost fivefold increase in gas prices, say ‘thank you’, and get along with our business. If it makes any sense to talk about a crisis, its origins, in my judgment, can only be found in [Russia’s] unilateral refusal to hold a productive, objective dialogue. Hence, we faced a situation that took on the characteristics of a crisis that Ukraine didn’t cause.
Washington Profile: What role did politics play in the “gas crisis”?
Yekhanurov: It’s difficult for me to say, since the Ukrainian government was led by the motivations I mentioned earlier. At an operational level, we had to resolve tens, if not hundreds, of concrete action-oriented problems, primarily of a technical nature. That doesn’t mean we didn’t think about the universal implications of the situation. We were completely aware that the basic values of our independence were threatened. But it’s important to understand one thing: universal values do exist; there is no such thing as abstract values. What is economic sovereignty? It’s not just a symbolic gesture made by a nation’s delegation head at the negotiating table. True economic sovereignty exists when a nation’s authorities are able to duly resolve all critical economic issues internally, taking into consideration all national interests, including foreign policy issues. That was our attitude.
On the other hand, the basis of any state’s policies is its economic sovereignty. In this sense, the Ukrainian government really did express a certain political position when, under the conditions of a sudden cut in gas supplies, it scrambled to keep the nation’s industrial sector on an even keel and stabilize society.
I don’t want to comment on Russia’s political motivations. I think Western governments have already drawn the right conclusions.
Washington Profile: Does the compromise reached with Gazprom serve Ukraine’s interests? How permanent do you believe the current arrangement for gas supplies is?
Yekhanurov: The very word “compromise” suggests partial conformity with our interests. A compromise is reached when no one party to an agreement obtains exactly what they had hoped for.
Concerning the price, I think we did as well as we could; particularly considering Ukraine concluded contracts for gas over the next couple of years at a comparatively low price (given the market conditions), a price that no one else in Europe (with the exception of Belarus which is a completely different story) has obtained. All in all, we are satisfied with the amount of gas imports stipulated by the 4 January agreement, as it will allow us to close the year without a deficit.
We are less satisfied with other conditions of the agreement. For example, the Russians introduced the plan to use the intermediary Rosukrenergo as the gas supplier. Needless to say, we thought there were other options. But our negotiation partners didn’t offer any reasonable alternatives.
Above all, we are concerned about the question of guarantees. Can Rusukrenergo fulfill all its price and capacity obligations over the next five years? For us, this is a key question that must be answered decisively in the affirmative. Of course the fact that this intermediary was proposed during official negotiations represents Russia’s indirect guarantee for the company’s future actions. No other conclusion can be logically drawn.
But indirect guarantees concerning such issues are not sufficient. So we will consider the question of guarantees closed only after corresponding agreements based on the framework agreed to on 4 January have been signed. Our principal objective now is to harmonize and conclude these agreements.
Washington Profile: Considering last year’s events, do you believe Ukraine is headed toward Russia, the West, or in a direction all its own?
Yekhanurov: Ukraine has chosen its own path. This path leads toward Europe. I also want to stress that when we talk about European integration, we are not talking about a choice between civilizations. That choice was made hundreds of years ago: Ukraine was, is, and will always be a European country. We are talking about joining the pan-European space and all of its European institutions. This is the foreign policy dimension. There is also a domestic implication. Here, I have in mind the achievement of European living standards and Europe’s level of economic and social development. Both of these dimensions are closely interrelated.
Concerning relations with Russia, I don’t want our current movement toward the EU to be construed as an intention to distance ourselves from Russia. For the most part, our countries are at odds only about the way we want to interact with Europe: While Ukraine has expressed a desire to join the EU, Russia has not.
Washington Profile: It’s believed that there are economic and scientific areas of knowledge that Russia and Ukraine are only able to excel at if they pool their resources and work together. What are the prospects for such cooperation, and to what extent does it depend on political factors?
Yekhanurov: In this era, no major industry or branch of knowledge can flourish without cooperation from the international scientific community. I’m not talking about the production of any specific product. (Clearly Ukraine, like many other countries, can independently meet the country’s needs in terms of nails, for instance.) Here I’m referring to far-reaching, important spheres of the economy.
To illustrate this, consider the natural gas sector. Ukrainian engineers have explored many Russian gas fields; Ukrainian drilling equipment and pipeline infrastructure are used in Russian gas production and transportation, respectively. You have to agree that given this reality, some observers’ use of the expression “Russian gas” where stress is placed on the first word is not appropriate. Not to mention that any product once purchased becomes the property of the buyer; hence, it is more correct to speak of “Ukrainian gas originating from Russia (or Central Asia).”
I can say that in matters of scientific and industrial cooperation with its neighbors, the Ukrainian government is guided entirely by pragmatic considerations. We welcome any mutually beneficial form of cooperation. At the same time, we recognize the special status of our ties with the Russian Federation, which have been determined by well-known historical circumstances.
The only thing we are opposed to is someone monopolizing cooperation with us; just as we avoid this in our relations with other nations. And, of course, the high level of political dialogue between our countries constitutes an additional incentive to develop the kind of cooperation to which you are referring.
Washington Profile: What will Ukraine look like two decades from now? What do you want Ukraine to become?
Yekhanurov: In two decades’ time, I would like to see a Ukraine that is a full-fledged member of the European community and, at the same time, enjoys stable, amiable relations with Russia.
In twenty years my grandchildren will be fully grown. I hope that political and social circumstances will be such that they won’t even consider leaving Ukraine. Ours is a wonderful country with an impressive history. It deserves a wonderful future. That’s what we are creating today. I believe in this.
Sergei Bakumenko for Washington Profile.