2002: THE YEAR IN REVIEW

Ukraine's foreign affairs: pluses and minuses

Ukraine's foreign affairs this past year, like a potluck dinner, consisted of good and bad moments. At the top of a very uneven year in foreign relations was the Kolchuha affair, which increasingly overshadowed other developments as the year wore on. However, even with accusations of President Leonid Kuchma's involvement in the sale of the air defense systems to Iraq hanging over NATO's Prague Summit in November like a dark cloud, Ukraine claimed success at that very important meeting. During the summit Ukraine and NATO agreed on a new action plan for the country's eventual integration into the defense alliance.

The Kolchuha imbroglio, plus the lack of resolution in several high-profile murders of Ukrainian journalists, including the two-year-old disappearance of Heorhii Gongadze, resulted in a cooling of relations with Washington in 2002. After the Kolchuha issue became a global affair, even Ukraine's close ally Poland voiced concern over actions by some Ukrainian leaders and seemed to politically distance itself from its eastern neighbor, if only slightly. Moscow and Kyiv, on the other hand, became increasingly close with President Kuchma meeting with Russia's President Vladimir Putin more than a half dozen times.

The year began with the development of relations with an unlikely and distant foreign partner. On January 16 Brazil's President Fernando Cardoso visited Kyiv to sign several bilateral agreements for joint oil and gas exploration off the Black Sea coast. He and President Kuchma also made provisions for the joint construction of a space booster rocket. In another deal, Brazil gave Ukraine access to its Alcantar Space Center, while Ukraine allowed Brazilian space researchers to use the Ukrainian-designed Ziklon-4 booster rocket. Mr. Cardoso traveled to Kyiv after spending four days in Moscow.

Ukraine also made a serious foray into the Middle East when President Kuchma made his first tour of that region of the world on April 24-28. It was a trip that mixed economic matters with international politics.

Upon his return to Kyiv he called his visit to Syria, Lebanon and Jordan "fruitful" and underscored that the Palestinian-Israeli issue was potentially the most volatile in the world. He noted that the Ukrainian side was ready to step in as a mediator and had already developed an outline for a program to bring the two sides to peace negotiations.

Closer to home, Kyiv strengthened its already warm relationship with Istanbul after a visit on June 11 to Ukraine by Turkish Foreign Minister Ismail Cem. Both sides belong to the Black Sea Economic Cooperation (BSEC) organization.

Another economic organization in which Ukraine has taken the initiative, one that neighbors the BSEC, held its annual summit in Yalta on July 19-20. GUUAM is dedicated to developing and maintaining transport corridors between its member-states, Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova along what was once the legendary Silk Road. At their Yalta Summit this year the group signed a free trade agreement among the member-states.

Unfortunately, Uzbekistan suspended its membership a month before the meeting, stating its concern over the lack of progress in developing the GUUAM charter. Although a representative of the Uzbek government was present at the Yalta meeting, he did not sign any of the nine documents ratified by the four other members.

Relations with Ukraine's western neighbor, Poland, also remained warm, notwithstanding concern voiced by Polish President Aleksander Kwasniewski in October over Ukraine's involvement in the sale of Kolchuhas to Iraq. With Poland scheduled to enter the European Union in 2004, a central issue between Kyiv and Warsaw was possible new barriers between Ukraine and the rest of Europe as visa restrictions were implemented. President Kwasniewski repeatedly assured Ukrainians that he would fight to keep visa requirements and borders between Poland and Ukraine pliable.

A watermark moment in Polish-Ukrainian relations came on April 18 when Mr. Kwasniewski officially expressed regret over Akcja Wisla (Operation Vistula), the forced expulsion by Communist authorities in 1947 of some 140,000 Ukrainians from their native areas in the southeastern part of the country to Poland's newly acquired northern and western territories. His regrets came in a letter to the National Remembrance Institute, addressed to a conference being held on the matter.

Poland and Ukraine also worked to continue to strengthen economic ties in 2002. Poland's recently elected Prime Minister Leszek Miller made his first visit to Kyiv on February 4 to meet with his Ukrainian counterpart, Anatolii Kinakh, as well as with President Kuchma. Talks centered on the Odesa-Brody-Gdansk oil pipeline. Prime Minister Miller expressed his full support for the plan and Poland's intention to find business partners to complete the pipeline's Polish section through to the Baltic seaport city of Gdansk.

Mr. Miller also said that trade between the two countries, which at that time stood at a paltry $1.2 billion, had to increase. In addition, he expressed reservations about a Russian plan for moving natural gas around Ukraine in the development of a multibillion-dollar gas pipeline through Belarus.

Ukrtransnafta, a wholly owned subsidiary of Naftohaz Ukrainy, reported on April 13 that oil would enter the Odesa-Brody pipeline in a matter of weeks. However, it would still be several years before the "black gold" would flow regularly to Europe from parts east. The oil, called technical oil, would protect the tube and its components from corrosion and degradation.

Ukrtransnafta also announced that a study released by a U.S. consulting company, Halliburton, Kellogg, Brown and Root, in conjunction with Cambridge Energy Research Associates and commissioned by the U.S. Trade and Development Agency, reported that there was a demand in the European market for Caspian Sea oil flowing through Ukraine. It noted the importance, however, of finishing the pipeline through to Gdansk.

Oil and gas remained a central part of Ukraine's relations with Russia, as well. Ukraine's Prime Minister Kinakh said after a meeting with Russia's Prime Minister Mikhail Kasianov on April 10 that the two sides would sign a 10-year gas transit agreement by June. The accord would give Russia secured transit for its natural gas to Europe and would help Ukraine to deal with its thus far unresolved gas debt to its eastern neighbor.

The matter came closer to reality when the presidents of Ukraine and Russia met in Sochi on May 17 and expressed support for the deal their prime ministers were in the process of hammering out.

In Sochi, Messrs. Kuchma and Putin also discussed new developments in NATO, in which Russia was poised to get a seat at the table of 19 North Atlantic Treaty Organization members on certain issues. It was the first indication that Ukraine would make a bid for NATO membership a mere few weeks later.

The gas transit agreement that Russia and Ukraine were discussing took on new impetus and a new dimension on June 10 when the presidents of Ukraine, Russia and Germany, while meeting in St. Petersburg, signed a statement of understanding and cooperation on the continued use of Ukraine's pipeline for transporting Russian natural gas to Germany.

The document envisaged European participation in a multinational consortium that would guarantee the gas supply. The signing came a day after Presidents Kuchma and Putin signed a separate declaration of strategic cooperation in the natural gas sector, which would give Russia joint management and developmental influence over the Ukrainian tube in return for its agreement to abandon a project to develop the alternative pipeline through Belarus.

Ukraine's First Vice Prime Minister Oleh Dubyna attempted to calm growing fears that the Kuchma administration had outrightly given Moscow the Ukrainian pipeline by emphasizing to journalists on June 10 that the oil tube would never be privatized. He explained that terms of the agreement stipulated that an international consortium would supervise the gas transit tube.

While hope remained until the end that the consortium would include Germany, that option did not materialize, and on October 7 Moscow and Kyiv signed a bilateral deal to create a gas consortium that would manage the Ukrainian pipeline. The move elicited harsh criticism by opposition lawmakers in Ukraine's Verkhovna Rada, who said the pact was driven by politics and contravened Ukraine's national interests. Under the deal, Russia's Gazprom and Ukraine's Naftohaz Ukrainy would manage and develop the pipeline as equal partners.

Encouraging closer trade relations remained at the heart of the many meetings between Presidents Kuchma and Putin throughout 2002. The Ukrainian president achieved his biggest victory in this area on August 8 when he flew to Moscow to celebrate his 64th birthday at Mr. Putin's invitation. During brief talks, the two presidents agreed to ease a series of trade restrictions that many political experts had predicted could escalate to all-out trade war between the two sides.

While Moscow agreed to lift trade quotas on Ukrainian steel pipes, which Ukraine had vehemently opposed when they were introduced in 2000, Kyiv agreed to suspend restrictions on the importation of 19 Russian commodities. President Kuchma said that while he was not completely satisfied with the agreement, "it is better to have a bad peace [than economic war]."

As Ukraine and Russia grew economically ever closer, there were still certain issues on which they could not find common ground - most of it centered on history, language and culture. A brouhaha developed on June 8 after mid-level Ukrainian and Russian bureaucrats agreed to look into the formation of a committee that was reviewing Ukrainian and Russian school textbooks and would decide on cultural and historical versions acceptable to both sides. The agreement in principle brought a deluge of criticism from Ukraine.

The controversy arose after the proposal hit the Internet. Many Ukrainians, including many members of the mass media, immediately interpreted the idea as giving Moscow too much influence over bringing accuracy to a Ukrainian history that has often been falsified and twisted in the past - much of the time by Moscow.

A June 18 report in the government organ Uriadovyi Kurier attempted to calm the surging controversy when it wrote that certain facts regarding the initiative had been misconstrued and that Kyiv would never allow any writing of history that did not reflect the national interests of Ukraine, including historical accuracy and expedience.

The flaring of cultural animosities killed that issue rather quickly, only to be followed by another disagreement over cultural differentiation when on October 25 the Russian State Duma voted - and not for the first time - its support for making Russian the official language of Ukraine's Crimean Autonomous Republic. National democrats in Ukraine immediately responded by accusing the Russian Parliament of interfering in Ukraine's internal affairs.

The State Duma had reacted in support of a motion passed on October 18 by the Crimean legislature demanding that the Verkhovna Rada in Kyiv give its autonomous republic the right to determine what language it could use.

National Deputy Pavlo Movchan, the longtime leader of the Ukrainian Prosvita Language Society called it "the most blatant expression of chauvinism that I have seen in all my years" and blamed President Kuchma's recently appointed chief of staff, Viktor Medvedchuk, for initiating the matter to ingratiate himself further with Moscow, where he had plenty of political contacts.

Similar motions for making Russian a second official language came to the floors of oblast legislatures in Donetsk, Dnipropetrovsk, Luhansk and Kharkiv.

President Kuchma had named Mr. Medvedchuk the new head of his administration on June 12, after the multimillionaire businessman who leads the Social Democratic Party-United brought his parliamentary faction into a pro-presidential coalition in the recently elected Verkhovna Rada.

This year's controversial parliamentary elections brought a whole slew of renowned and respected foreign policy experts to Ukraine, including Madeleine K. Albright, President Bill Clinton's former secretary of state, who stated in Kyiv on February 12 that Ukraine must adhere to democratic norms and values in its election process if it was serious about its move to the West. Canada's Secretary of State for Central and Eastern Europe Gar Knutson followed her to Ukraine on February 18. He took a more neutral, wait-and-see stance regarding allegations that Ukraine's parliamentary elections were being manipulated. Meanwhile Javier Solana, European Union foreign affairs representative, expressed a bit more concern during his February 21 visit to Kyiv when he noted that in a truly free and fair election everybody must have the ability to express an opinion and have access to the political process.

It was Mr. Solana's fifth visit to Ukraine during his term in office, which showed the extent to which relations between Kyiv and Brussels had warmed. President Kuchma stated throughout the year that Ukraine had made its "European choice," and would stick to it, a decision that Europe applauded. Yet the EU in Brussels and the Council of Europe in Strasbourg continued to chastise Kyiv for much rhetoric and little action throughout the year.

Ukraine's parliamentary elections complete, President Kuchma made his first trip to the West in 2002 when he spent two days in Copenhagen at the European Union summit. The president returned to Kyiv on July 5, waxing optimistically that he had moved relations with the EU forward and laid the groundwork for EU membership for his country. In fact, however, he had left Copenhagen with little tangible results. Ukraine did not receive the market economy status it had sought, which Russia had obtained the prior month. Nor did the EU hold out a timetable for extending associate membership to Ukraine, which Mr. Kuchma has set as one of his primary goals before he steps down from office in 2004.

However, the joint statement signed by the two sides for the first time did not include criticism from the EU on the slow pace of economic reforms in the country or on dubious press freedoms.

Relations between Ukraine and the U.S, on a downhill slide ever since U.S. President George W. Bush came to office in January 2001, continued to erode this past year.

The year began on a sour note when Washington imposed long-threatened trade sanctions on Ukraine for its inability to stop CD and audio piracy and to legislate law that would halt such activity and assure intellectual rights (see story in economic section).

Then, in response to new demands and requirements determined as essential by the U.S. after the September 11 World Trade Center and Pentagon terrorist attacks, the U.S. Embassy announced on January 30 that it would tighten visa procedures that already made it nearly impossible for an average Ukrainian to travel to the United States. An Embassy spokesman underscored in making the announcement that the new requirements were set to "keep terrorists out" [of the U.S.].

A piece of good news came on March 13 when Rep. Bob Schaffer (R-Colo.), who is a co-chairman of the Congressional Ukrainian Caucus, introduced legislation in the House of Representatives to permanently lift U.S. government trade restrictions against Ukraine based on provisions in the old Jackson-Vanik Amendment, which restricted trade with countries that did not allow free emigration. The law, a vestige of the Cold War, has yet to be retracted in the case of Ukraine, even though it is commonly agreed that no such restrictions, including discrimination against Jews, exist in the country today.

Rep. Sander Levin (D-Mich.), another member of the Congressional Ukrainian Caucus, introduced another resolution to get the Schaffer bill through the Congress quickly when he asked that the House of Representatives on May 14 agree to relieve Ukraine from the required evaluation process.

More good news came on June 10 when the U.S. agreed to restructure a $179 million Ukrainian debt on the more advantageous terms of the Paris Club of creditors. Ukraine's Minister of the Economy Ivan Yushko said he was extremely pleased with the agreement because it sent "a positive signal to other countries and the international financial community," that Ukraine was financially stable.

"A Requiem Concert in Memory of the Events of September 11" was held on September 13 at the National Opera House in Kyiv. The concert brought together some 200 singers and musicians from around the world. Volodymyr Spivakov, conductor of the National Symphony Orchestra of Russia, led the musical tribute with the Academic Chorus of the National Opera of Ukraine under the direction of Lev Venediktov, with soloists Janice Chandier (U.S.), Elsa Maurus (France), Robert Lee (South Korea) and Desmonde Byrne (Canada).

The second part of the concert was opened by U.S. Ambassador to Ukraine Carlos Pascual. Former President Bill Clinton and Michael Bloomberg, mayor of New York, offered their appreciation via video, on behalf of the American people and the people of New York City. On the occasion, President Kuchma presented a gift to the people of America, a mural titled "Eyes of Christ" by artist Aleksander Postupnyi.

What seemed like the beginning of a thaw in relationships between Washington and Kyiv once again went frigid on September 25 when Washington announced it had information that state leaders in Kyiv had negotiated the transfer of Kolchuha anti-aircraft defense systems to Baghdad. At the time Washington announced it had frozen a $54 million program of direct assistance to the central government in response to evidence it had obtained in the form of digitally recorded conversations between President Kuchma ordering the sale of a Kolchuha to Iraq through a Jordanian intermediary.

Further bad news came on December 19 when the U.S. Treasury Department announced it had singled Ukraine out as one of two countries that had failed to develop anti-money laundering legislation and would implement sanctions against the country in response.

Amnesty International kept the bad news rolling Ukraine's way in 2002 when it issued its annual report in May, criticizing Ukraine's human rights record in four areas: ill treatment in the armed forces, inhuman prison conditions, the unsolved disappearance of Heorhii Gongadze and lack of freedom of expression.

A perception that the Ukrainian leadership was reflexively reasserting authoritarian rule as political controversies kept popping up like mushrooms and moving away from its initial thrust towards democracy kept most leaders away from Kyiv in 2002. However, United Nations Secretary General Kofi Annan made the trek to Kyiv on June 3-4 to praise Ukraine's peacekeeping role in the world as part of several U.N. operations and to commend the country for closing the Chornobyl nuclear reactor complex on time.

Ukraine did an about-face of sorts when it declared on May 29, after years of maintaining neutrality, that it would make a bid to join NATO. The announcement was not totally unexpected only because it came a day after NATO had accepted Russia into a special 19+1 regime with the North Atlantic defense alliance. Minister of Foreign Affairs Anatolii Zlenko conveyed Ukraine's intention to NATO Secretary General George Robertson during a two-day working meeting with NATO leaders in Brussels.

Ukraine's Secretary of the National Security and Defense Council Yevhen Marchuk had given the first indication that Kyiv was about to redirect its foreign policy a week earlier, after a special meeting of his agency in which President Kuchma participated. Many had expected an announcement of a new NATO-Ukraine arrangement, but not before a scheduled July 9 visit to Kyiv by Mr. Robertson.

As Ukrainians began to adjust to the proposition of Ukraine in NATO, the ramifications for the country were discussed at several conferences in Kyiv over the next weeks. At one such conference held on June 24 Prof. Michael McFaul of Stanford University expressed the opinion that Ukraine would receive little attention during NATO's Prague Summit, during which seven of the country's neighbors would become members, because several important NATO members - including the U.S. - were not interested in seeing a Kuchma-led Ukraine in the North Atlantic defense club. Other experts warned that the Russian Black Sea Fleet would have to leave Sevastopol in order for Ukraine to qualify for NATO membership.

NATO Secretary General Robertson and ambassadors of the 19-member countries went about separating fact from rumor when they held the second Ukraine-NATO conference in Kyiv on July 9-10. NATO used the meeting - held on the fifth anniversary of the signing of the Distinctive Partnership between Ukraine and NATO - to assure the country that it was wanted in the international security alliance and to encourage Kyiv to take the needed practical steps towards membership.

Mr. Robertson repeatedly told Ukrainian state leaders and journalists that "NATO is willing to go as far as Ukraine is willing to go." However, he also underscored that moving towards membership in NATO meant more than incorporating defense systems. It also meant that Ukraine needed to complete economic reforms, as well as attain rule of law, freedom of the press and a civil society.

The momentum that seemed to be building on a new Ukraine-NATO relationship came crashing down, if only momentarily, when the U.S. announced on September 25 that it would place sanctions on Ukraine for what it believed to be the illegal transfer of Kolchuhas to Iraq by the state leadership in Kyiv. While NATO did not condemn Ukraine for any illegal actions, Secretary General Robertson voiced concern about grave consequences should Washington's allegations prove true.

Nonetheless, on October 30 the North Atlantic Council of NATO in effect informed Ukraine that none of the leaders of the 19 member-states would meet with President Kuchma after it downgraded the Ukraine-NATO conference, scheduled for the second day of the Prague Summit, to a meeting of foreign ministers. The reason NATO gave was Ukraine's inability to convincingly prove that it was not complicit in arms transfers to Baghdad.

Kyiv immediately stated that while it needed to consider the new situation, it reserved the right to refuse to participate in the Prague Summit given the new circumstances. It also announced that the country's National Security and Defense Council would ultimately decide the manner of the country's participation.

In the end, not only did Minister of Foreign Affairs Zlenko attend, but President Kuchma did as well-even though NATO spokespersons insisted even days before the beginning of the Prague Summit that the Ukrainian president's attendance would only upset matters at the meeting.

If nothing else, Mr. Kuchma's presence upset the seating arrangement of the Euro-Atlantic Partnership Council, which is the organization of all the countries that are part of the NATO-sponsored Partnership for Peace Program. Because Ukraine's delegation, including Mr. Kuchma, was to sit next to the U.S. delegation and President Bush if an English-language alphabetical seating assignment were used, NATO decided to utilize French, which is NATO's second official language, and which put Ukraine alphabetically at the other end of the table from the United States.

While President Kuchma even made a short statement before the Euro-Atlantic Partnership Council during the November 21-22 NATO affair, Minister of Foreign Affairs Zlenko signed documents that gave Ukraine reason to believe it could eventually become a NATO member-state. The accords included an overall action plan for Ukrainian membership to precede the formal membership action plan, as well as a specific objective plan for 2003.

After all the controversy, Ukraine's leadership expressed satisfaction with the conference and with its future relationship with NATO. Mr. Zlenko even said that he was now more optimistic about future relations between Ukraine and NATO than he had expected to be.

"We adopted what are new basic documents opening a new strategy of Ukraine-NATO relations. With these documents in mind, Ukraine can now begin practical preparations for NATO membership," explained Mr. Zlenko in Prague.

Copyright © The Ukrainian Weekly, January 12, 2003, No. 2, Vol. LXXI

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