WASHINGTON - The agreement signed last week between Ukrainian President Viktor Yanukovych and Russian President Dmitriy Medvedev in which Ukraine will receive cheaper gas in exchange for extending Russia's Black Sea Fleet presence in Crimea through at least 2042 has set off a firestorm of criticism. The rapid ratification of the agreement within five days of its signing by the Ukrainian parliament (known as the Verkhovna Rada and in which Yanukovych's coalition has a majority) will only stoke the opposition. For a deal of such consequence and implications, it was irresponsible of the Rada to have taken up the issue so quickly, without proper review, especially given the agreement's lack of transparency. There are far more questions than answers about the deal at this point, but most disturbing is the divisive impact it already is having on the Ukrainian polity. This was on display for all to see in the Rada Tuesday as fights broke out, smoke bombs were set off, and eggs were hurled at the rostrum. Ukrainian politics have been known to be raucous, but this far surpassed anything in the recent past.
To make matters worse, Yanukovych on Tuesday rejected the notion that the 1932-33 famine in Ukraine was "an act of genocide against one nation." One can debate the Holodomor, as the famine is known, but Yanukovych's answer is like pouring oil on an already simmering fire in Ukraine's polarized politics.
In defending the gas deal, Yanukvoych and his team argue that Ukraine will save between $3-4 billion per year on gas. They claim, with some justification, that gas deals negotiated by previous Ukrainian governments left Ukraine broke and at a disadvantage vis-à-vis Russia. Indeed, Ukraine was paying as much as $330 per thousand cubic meters but will pay closer to $230 under the new agreement. However, the gas deal also raises a series of fundamental questions. As energy expert Ed Chow noted last week in the Kyiv Post, "There is no price discount, but a normal price that Ukraine should have been able to negotiate without undue concessions." Who will benefit from this lowered price? Will it be the country as a whole or favored oligarchs and industries or, worse yet, shady intermediaries? Was striking a long-term gas deal essential to Ukraine's efforts to reach a new agreement with the IMF for some $12 billion in Special Drawing Rights? These would have been good questions for the Rada to have asked before ratifying the agreement.
In exchange for lowering the price, Russia received an extension on its Black Sea Fleet presence at Sevastopol, which currently expires in 2017. The country's constitution forbids the presence of foreign forces on Ukrainian soil (with an exception made for the Black Sea Fleet until 2017. This new agreement will prompt additional challenges in the Constitutional Court, though the opposition shouldn't hold its breath that it will prevail there given that court's earlier questionable ruling on the formation of the new governing coalition. It will also boost Russia's sense that it is recovering its standing in the region, and already Russia's ambassador to NATO has crowed that the deal spells the end of any prospects of Ukraine's membership in NATO (not that those were great any time soon anyway). This, in turn, will reinforce the zero-sum thinking in Moscow that some wishful supporters of the Obama administration's reset policy with Russia had hoped was subsiding.
It is true that the Black Sea Fleet by 2017, to say nothing of several decades from now under the new deal's extension, may look more like a coral reef than an imposing military presence (though that could change should Russia acquire the French warship Mistral). But the point for revisionist Russian leaders is that under this deal they will retain their tentacles in Ukraine in a fashion that is stirring up divisions inside that country. This is likely to reinforce the impression among many in the West that Ukraine is hopeless, cutting corrupt deals with Moscow, and simply not worth engaging. This, too, is a key Russian goal -- for the United States and the European Union to take a hands-off approach to Ukraine.
U.S. Secretary of State Hillary Clinton, when asked about the deal last week, described it as part of Yanukovych's "balancing act." The Ukrainian leader, after all, had had a successful visit to Washington a week before, and his deal with Medvedev was seen as a tipping back toward Moscow. Now, the U.S. and EU governments should be pressing Yanukovych for transparency on this deal and disclosure of all that it entails. Of course, the Rada should have demanded that before its premature vote for ratification, but instead it chose to abdicate its responsibilities.
The "balancing act" Clinton referred to -- a debatable point to begin with -- has quickly turned into an unhealthy tilting toward Russia, producing undesirable rifts in Ukraine that over time could threaten the country's viability as a truly strong, independent state. Yanukovych must remember that he is president of all Ukraine; he needs to act like a unifying leader, not a divisive one.
