By Nicholas Hager, Transatlantic Community Analyst
After mounting political pressure swept him out of office in late February, erstwhile Ukrainian President Viktor Yanukovych fled as the Opposition took control and established an interim government, charting a political course toward EU membership. In an attempt to regain political leverage there to advance its strategic interests, Russia has occupied the Crimean region under the guise of protecting ethnic Russians, an action which Ukraine’s interior minister has called “a military…occupation.” Though Russia’s aggression has exacerbated the political and economic turmoil currently gripping the country, Ukraine’s new government must exercise restraint in dealing with the occupation, lest it provide a pretext for a full-scale Russian intervention. The importance Russia places on its paternal relationship with Ukraine cannot be understated because it is the largest country in Russia’s sphere of influence, and it is symbolically important to Russian President Vladimir Putin. Because of that legacy, it would be dangerous for the interim government to use force. And while Western military intervention is not yet warranted, the EU and the U.S. must take steps to ensure that Ukraine is able to move beyond this crisis and become a robust democracy.
One key challenge facing Ukraine is its flagging economy. Opposition leader, and former economy minister, Arseniy Yatsenyuk indicated that the country’s financial system is on the “brink of collapse,” while the hryvnia, its currency, has dropped to an all-time low against the U.S. dollar. This welter of fiscal distress has led the interim government to seek assistance from the International Monetary Fund (IMF), whose head, Christine Lagarde, has indicated that it is “ready to respond.” Despite longstanding need, Ukraine’s previous leaders were not amenable to the IMF’s loan terms; however, the interim government appears committed to doing whatever is necessary to keep Ukraine solvent, so there is hope they can come to a suitable arrangement. The EU is prepared to offer a $15 billion financial aid package while the U.S. announced that it will provide an additional $1 billion energy subsidy package. This will undoubtedly help Ukraine in the short-term, but it is only meant to supplement IMF support. Problematically, Russia is making moves to insert itself into the IMF negotiation process, with EU encouragement. Russia wields little direct power in the IMF voting structure, however, so it is unlikely that it can overtly manipulate the outcome of the IMF decision-making process. That said, the U.S. and the EU must remain vigilant throughout the IMF negotiation process and ensure that Russia does not abuse its informal position within IMF governance hierarchy.
Ukraine’s strong economic reliance on Russia puts Ukraine’s new government in a disadvantageous position from the outset; therefore, outside of managing the IMF negotiation process, the first issue that the West must address is how best to relieve Ukraine’s financial pressure in the long-term with an eye toward forestalling Russian efforts to undermine the process. One approach would be for the EU and Ukraine to continue moving forward with the official signing of the Association Agreement. This could entrench the pro-Russian opposition, so this move would be best reserved for when the benefits of association are more apparent. Additionally, it may be useful to go beyond this as Bohdan Sumenko, co-founder of the Centre for Information and Analysis, suggests. Lifting the EU visa barrier for Ukraine would be a good first step toward convincing EU citizens and officials that “Ukrainians are willing live and work…on the basis of common European values” and should ease potential integration efforts, which themselves could act as a bulwark against Russian pressure.
The other salient concern for Kiev is the possibility that pro-Russian sentiment in the south and east will blossom into a full-scale separatist movement. There are assertions that these factions are supported by the Russian government, and there is certainly a strong circumstantial case to be made that this support might be the first step toward escalating its involvement in Crimea. While NATO initially reacted rather coolly to Russia’s incursion, it is stepping up its rhetoric and its Secretary General, Anders Fogh Rasmussen, formally demanded that Russia “stop its military activities and its threats.” Moreover, Germany’s Chancellor Merkel called Russia’s actions an illegal, “unacceptable…intervention.” In spite of this international condemnation, however, Russia remains steadfastly committed to the narrative that it is simply defending against “ultra-nationalist threats,” and that it intends to remain in Crimea “until the normalisation of the political situation.” The Russian Duma is already working on legislation that would allow the Crimean region to vote itself into Russia by referendum, which already passed in Crimea’s parliament and has since been condemned by Western nations as “contrary to the Ukrainian constitution and therefore illegal.” That, in conjunction with Russian coercion, could set the stage for Ukraine to be partitioned. In this event, Russia would walk away with a large swath of Ukraine’s heavy industry and the EU would be left with the debt-laden western region. To prevent this outcome, the West must adopt a second approach, designed to halt Russian aggression while providing the new Ukrainian government with the necessary political support to navigate this internal turbulence.
Russia’s narrative of an oppressed Russian populace in Crimea is self-serving and disingenuous because there is substantial evidence that the geographic divide in Ukraine is not quite as pronounced as its officials claim, and that its attempts to co-opt a segment of Ukraine may be met with resistance. That said, Ukrainian villagers cannot oppose Russian forces on their own, so the West will need to step in to discourage Russia from extending its illegitimate campaign. The Russian economy is extremely reliant on the West, and so it has quite a bit of leverage with which to threaten, and enforce, a range of sanctions – including “visa denials and asset freezes” – on its leaders and businesses. It might also go beyond the current suspension of preparations for the G8 meeting in Sochi and bar Russia altogether until it relents. The ruble is already plummeting in response to Russia’s bellicosity, but there is much more the West can do to inflict serious damage on the Russian economy. Russia must learn that it cannot continue to enjoy the benefits of international society if it continues its extralegal actions. Allowing Russia to set the precedent that aggression bears no consequence is dangerous course because it may “surrender the [near future] to increasing uncertainty and insecurity.”
The West should also assiduously help the Ukrainian government institute conciliation efforts aimed at allaying the fears motivating the pro-Russian factions and counteracting Russian propaganda – for example, the rumors that Kiev would outlaw the Russian language – by refuting it quickly and thoroughly in order to heal existing cultural fissures and prevent the creation of new ones. The West might also wish to establish formal discussions between representatives from Kiev and those in the pro-Russian opposition to facilitate understanding and create an inclusive agenda. The U.S., moreover, could follow through with its pledge to deploy international observers to report on human rights violations in Crimea – a move Chancellor Merkel proposed and President Putin have provisionally supported – which would ideally ease tensions and make cooperation somewhat easier going forward. Furthermore, providing election monitors to ensure that the May presidential election is free and fair could help mitigate the public’s general anxiety over the recent political upheaval.
The new Ukrainian government represents the hope that democracy can triumph in even the most inauspicious circumstances, but, despite its early successes, it occupies a tenuous position. Beset from within by separatists and from without by a Russia that feels a keen strategic need to exert continued dominance over it, Ukraine presents a delicate situation which requires precision and care to navigate. Any misstep could spark a civil war or an international incident, so Western guidance and support will be crucial in ensuring that Kiev has the tools and support necessary to overcome these challenges and emerge renewed.
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