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Ukraine falling to economic warfare and its own missteps

By Robert Bensh - posted Thursday, 17 April 2014


What Moscow is saying, then, is that the current administration has zero representation from the eastern portion of the country. It is important to remember that over 40% of the Ukrainian population-all from the east-was against signing the economic cooperation agreement with the European Union, which was carried out immediately after the annexation of the Crimea in late March.

Russia can realistically argue that the Maidan protest movement drove the political section process, and that the current government is not representative of the country as a whole. The current administration was interested in placating the Maidan and moving towards Europe, not necessarily in united the country.

And what have they accomplished? Nothing. There are still people protesting in the Maidan; Crimea is gone; and eastern Ukraine is under threat of attack from Russia.

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The current leadership should also take responsibility for its role in provoking the current situation. They refused to speak with Russia once they assumed leadership, stating they had support from Europe and the United States. At the same time, some politicians and ministers are busy conducting their own brand of justice, accusing anyone that is of the former government of crimes with little to no justification and trying to take advantage of their few remaining weeks in office to position themselves for future power.

What Russia wants is an integrated representative government. If this is realized, Moscow will no longer be able to play the legitimacy card. If Petro Poroshenko, who is leading in the polls right now, wins the presidency, then Ukraine will need a prime minister that is accepted in the east in order to have an integrated government.

This new government will also need to find an effective way to pay the country's gas debt to Russia, because that will not disappear. The only way to do that is to start selling off energy assets and privatizing the energy infrastructure.

Russia has been able to manipulate Ukraine's energy dependency to the benefit and pursuit of its foreign policy goals. We're seeing this very clearly today as Putin has called for the payment of $38 billion from Ukraine, the result of unpaid gas sales and the removal of the discount for the Black Sea port in Crimea.

Ukraine's economic crisis had been transformed into geoeconomic warfare caused by Russia's control of supply to Europe and Ukraine's failure to develop its own internal energy resources. And it cannot be coincidental that Russian troops are building up close to Ukraine's gas pipelines.

Ukraine presents the most powerful example of Russia's use of the energy weapon as a means to influence the foreign policy orientation of a post-Soviet state, and as “testing ground†for Russia's possible use of energy as a foreign policy weapon elsewhere in the former USSR and beyond.

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However, Ukraine's new leadership has to take responsibility here as well. The current situation is not as black and white as our Cold War mentalities tempt us to believe. The onus is now on Kiev, and there are diplomatic and economic ways to halt the violent progression and render Moscow's arguments moot.

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This article was first published on OilPrice.com.



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About the Author

Robert Bensh writes for OilPrice.com.

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