Gas for Fleet
Ukraine’s Premier Viktor Yanukovich even admitted a faint possibility that the Russian Navy would not pull out from Sebastopol in 2017 as agreed; this possibility has never been mentioned since the 1997 Black Sea Fleet base agreement. In other words, ten years to the expiry date, the Ukrainian side agrees the term could be extended – even though its foreign policy is still geared to a step-by-step admission to NATO. What happened?
The East-West standoff in the Ukrainian business and political elite goes on with or without the Moscow factor. If we regard political influence as a kind of economic interests’ promotion, its role can be viewed as largely contextual today. It depends on the size and conditions of Russian investments in local economic sectors, controlled by various elites. While some three years ago Russia invested in Ukraine’s eastern and western regions at a ratio of 3 to 0.8, today’s proportion is 3:2.4. East Ukraine’s economic, and consequently political dependence on Russia has obviously relented, which respectively depoliticized the bilateral relations. Thus, the pro-eastern Premier Yanukovich is no longer accused of supporting his own partisans to the detriment of national interests. Considering his rather shaky position, this is the current starting point for determining the future, meaning the Black Sea Fleet’s future as well. However, different assessments are being voiced in Moscow and Kiev alike. In Russia it happens because its consolidated position in Ukraine’s west is questionable. Wouldn’t it be wiser to “develop” the eastern part instead? Ukraine’s pro-western elites are careful not to lose the “purity of orientation.” And finally, the Russian gas factor is consistently taken into consideration in both east and west Ukraine, which brings us to the next conclusion.
Russia’s over-70-percent domination in the world natural gas markets makes its early adhesion to the EU Energy Charter highly unlikely. It follows that Moscow will so far be the one to set energy prices. The cost of natural gas in Russia fluctuates between $40 and $60 per thousand sq.m, while its international market price is $250-260. Ukraine’s demand for imported gas is 60 to 75%. So Moscow made a reasonable offer of $130, which is half the international price, in exchange for stability which we understand as encompassing more than just the energy market. In addition to the delivery terms which are to remain unchanged for five years (via RosUkrEnergo), including transit tariffs, we would like to ensure certain political predictability, preferably for a longer period. President Putin’s concluding statement sounded quite instructional: “The Black Sea Fleet presence would not be unnecessary.” This is easily read as a recommendation to
Refrain from joining NATO
NATO philosophy has so far emphasized integrity of its member countries which involves the absence of foreign military bases in their territories. NATO’s expedition forces deployment, ignoring some finer points, are determined by Washington’s and Brussels’ military and political interests. For example, no matter how passionately Turkey would deny its involvement in the anti-Iraq campaign, the coalition forces did use its airspace and fly grounds, as allies often do.
Incidentally, Georgia seems to qualify, if only as an applicant so far, even despite its separatist problems – a possibility clearly not discussed at the top level in Brussels, but viable nonetheless. Anyway, in Ukraine’s case, the situation is different. Ukraine’s own constitution does not allow of foreign military bases deployed in that country. It means the presence of Russia’s fleet in Sebastopol is only temporarily admissible, justified by “historic” reasons, if not totally illegal. On the other hand, it is hard to predict which would be more important for both Kiev and Brussels – the presence of Russian warships in Sebastopol or the “case-law” interpretation of Ukraine’s constitution.
It is also unclear whether or not Ukraine will follow its NATO membership plan, compiled but not endorsed – as President Yushenko, along with his defense and foreign ministers, greatly hope it will. Or, will Premier Yanukovich be the one to say the final word? Even if so, how final will it be? The president’s party insists on making the NATO-joining decision in parliament, without a national referendum. Having enlisted Yushenko’s support, they now claim that in a presidential-parliamentary republic like Ukraine, the Supreme Rada has enough authority to make this decision. It just remains to “work closely” with its members. Yanukovich, too, refers to the growing role of the parliament, where he is supported by the majority. He proposes to make this decision by a national referendum, but seems in no hurry to stage it. If the voting takes place today, the “yes” answer will receive between 12 and 25% of the vote – even the premier cannot make a more precise forecast. If it is put off for years, no one can predict the result at all. On the other hand, the Russian presence in Sebastopol allows Ukraine to gradually write down its huge debt to Russia (energy and other) - $3 billion as of 1997 – and to make full use of the “Russian threat” rhetoric. The list of political subtleties can be continued by the so-called
“Tavria Prospect”
which is mentioned ever more often these days. The term dates back to the 19th century. It was used by the Crimean governor, Count Vorontsov, to determine the Turkey-Muslim factor. There are no Turks in the Crimea today, but they still have to be mentioned here. The Crimea is home to 2.3 million Ukrainian citizens. Ethnic Russians comprise 52% of the local population, Ukrainians account for 24%, while the remaining 18% are Crimean Tatars. The latter group enjoys a growing political and economic influence in the vicinity, even though it has only grown from 11% in the Soviet time to the present-day 18%. Kiev has always expected them to counterbalance the Russian population of the Crimea, which is considered “pro-Moscow” for a reason. The majority of the 350,000 population of Sebastopol are Russians. According to the official Ukrainian statistics, 43% of them are employed by the Black Sea Fleet in one way or another; according to the Russian community in the Crimea, the figure is over 60%. The Russian community also warns that the pullout of the fleet will lead to a massive outflow of Russians, as up to one-third of them will leave the Crimea. With only the Ukrainian government and Crimean Tatars left, Kiev will soon be facing new problems, as their separatist ambitions are well known.
The problems might be related to the NATO issue as well. On the one hand, the Crimean Tatars, the group least dependent on the Russian fleet, advocate its early withdrawal. Thinking of NATO and European integration, Kiev has to consider the position of the native population. The EU tends to censure Ankara for the Kurd problem – essentially a very similar one – as much as for the non-recognition of the Armenians’ genocide. The environmental implications of the Russian fleet’s “exile” will make the Crimea a more attractive tourist zone, Yushenko’s supporters promise, meaning that after it is deployed in Novorossiisk on the Russian coast, the Black Sea waters near Gelendzhik and Sochi (popular Black Sea Resorts – Ed.) will become polluted. The tourists will consequently turn to the Crimea.
On the other hand, the Russian fleet based in Sebastopol brings an annual $100 billion to the local budget. That money is what helps support the Crimean tourist infrastructure. Over 70% of tourists vacationing in the Crimea come from Russia, according to the Russian community’s estimates. Almost 85% of them prefer the Crimea to Turkey, for example, only because of its traditional and cozy, almost homey environment, which no doubt will be gone once the Black Sea Fleet is pulled out. In tourist business, Turkey is a much stronger competitor than Sochi, and it would be happy to “exchange” its Kurd problem for the Crimean-Tatar one. It offers much more entertainment for the same price, which needs to be considered in relation to other issues as well. This brings us to
Conclusions
for those who pull out and prospects for those who stay. The land-and-sea tangle of political problems suggests several basic conclusions. First, the Russian fleet’s future is largely dependent on the East Ukraine-West Ukraine dialog, which is in turn related to the Russia-NATO interaction. Second, the decisions made by Premier Yanukovich on behalf of the nation are mostly of tactical nature and are oriented on the prospects of his keeping the office.
As for Moscow, the prices of energy resources are a top priority here. Ukraine’s role as either a wall or a bridge between Russia and the West, and even the Black Sea Fleet’s deployment site are less important at present. Ukraine’s eastern regions - traditionally pro-Russian areas, including the Russian-speaking Crimea – remain an important factor in Moscow dialog with Kiev. The deployment of the Russian fleet and its other functions as well, depend on the geopolitical and regional dynamics. For example, they depend on Russia’s relations with Georgia, a NATO member or not, and on the role of Turkey and its complicated environment, let alone the distribution of forces on the Russia-NATO scale.
In any case, Russia’s “to be or not to be in Sebastopol” issue is of course emotionally loaded.
