Chess pieces, wiring and The Black Sea

A long time ago, 22nd October 2011 to be precise, I wrote a short blog entry on the importance and future usage of a geopolitical and and socio-economic entity called the Black Sea Economic Cooperation Organisation – or BSEC to employ the favoured acronym – in the chess game between the EU, potential members and partner states (be they disillusioned or clear eyed and keen), and of course  the geopolitical states that present almost systemic opposition to the EU in one way or another.

Of the 11 BSEC member states, Albania, Algeria, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey and Ukraine, the EU has hardly made any progress with regards to its transposition of sensibilities to the EaP members.

The EU has also certainly not increased its popularity within certain quarters in Bulgaria, Romania or Greece – the 3 EU members within the BSEC.

Even if the Association Agreement between Ukraine and the EU does get signed at the Vilnius summit in November, and agreements to begin similar documents with nations like Georgia and Moldova happen, none are likely to be ratified by the EU Member States any time soon.  That being the case, we can only expect the most politically and economically expedient parts to both sides to quietly be actioned regardless of official ratification as and when the time is right for either.

It is therefore necessary to have other hooks into Ukraine to stop it drifting whilst remaining in a more formally organised purgatory.  Some hooks are quite obvious, EBRD etc – some less so.

It should come as no surprise that this week the EU Commissioner for Maritime Affairs, Maria Damanaki, met with the Ukrainian Prime Minister to discuss cooperation over the Black Sea.  Inevitably leading to more agreements, memorandums of understanding, treaties and associated bureaucratic chains to tie one side to the other outside the Association Agreement and DCFTA.

We have statements from the Ukrainian Prime Minsiter “Ukraine is a maritime nation, so for us it is very important to develop cooperation with the European Union in the Black Sea region,”  - adding that Ukraine is ready to participate in the implementation of the EU’s integrated maritime policy such as conservation of fish stocks, sea cleaning, the development of infrastructure and the like. “This cooperation is especially significant now, when we started to develop the Black Sea shelf.

So for us it is important to decide on the notification by the European Union of the certificate, which is issued by the authorized bodies of Ukraine for fishing activities. This concerns not only the export of Ukrainian products from the customs territory of Ukraine to the EU, the volume of which is small enough. This is in the first place the delivery of products caught by vessels flying the Ukrainian colors.”  

In response, the EU Commissioner gave the expected responses relating to the importance the EU places on the Black Sea, and that without Ukraine it is impossible to do anything in the region.

The upshot – joint scientific research into the Black Sea, joint seabed mapping etc (funded by the World Bank apparently) prior to other  environmental and energy projects  - read monitoring the development of the Black Sea Shelf now that is eventually underway.

Thus, whilst all eyes remain looking at the obvious wiring between the EU and Ukraine, the circuitry in the background becomes ever more entwined in the event of any major short circuit on the mainframe.

Just how many more additional wires and hooks can be connected and inserted (over and above the numerous already existing) prior to the Vilnius summit – and what may be a success or disaster in equal measure as matters stand today – remains to be seen.

One has to suspect as many EU hooks and anchors as possible will be deployed in Ukraine over the coming months as insurance that in the event that the Association Agreement does not get signed (or in the event it does, but ratification is a very long way off) – Ukraine cannot drift too far eastwards easily.

It seems there is a flurry of activity on the chess board as the EU and Customs Union see November as a critical part of the game.

European Space Agency – Ukraine assesses costs of membership

Space.  The final frontier.  These are the financial musings of Ukraine over whether to join the European Space Agency.  To explore strange new worlds, seek out new life and civilisations.  To boldly go where no Ukrainian has gone before.

No?  Ok, let’s try this:

Clangers, froglitts, Soup Dragons?

Errrm OK.  Maybe the aspirations, imagination and wondering of the night sky is not exactly going to be Star Trek in my lifetime, and the discovery of a Clanger or Froglitt would be incomprehensible, let alone a Vulcan, the Borg, or the appearance of a Vermicious Knid inside an elevator (with or without Willy Wonka).

Anyway, space is not exactly a new frontier as far as Ukraine is concerned.  Even if we completely and utterly ignore its experience and expertise during the days of the USSR, in the last 20 years Ukraine has propelled into space in excess of 100 bits and pieces.  In fact Ukraine accounts for approximately 13% of all global launches.

At the moment, amongst many space orientated things, it is heavily involved in a joint R&D programme with China, as well as closer neighbours east and west.  In the scheme of all things Ukrainian, space is something it does rather well.

It seems therefore natural that Ukraine would be interested in joining   the European Space Agency.  It would also seem a fairly good idea from a European viewpoint to have a tried, tested and successful new entrant to the agency.

Thus, it seems, Ukraine is now looking at membership and more importantly given the condition of the State coffers, the membership fees, rather closely.  One has to hope that when finances allow, Ukraine will decide to join the ESA.  It seems like a prima facie win/win situation for all.

Ukrainian/Chinese trade set to exceed expectations‏

Well as you would expect when the President of China Hu Jintao is in town, trade and investment are high on the list of talks. Nobody wants to miss out on the ebb of cash China is strategically seeping in various directions around the globe and particularly not Ukraine.

That said, China would not overlook Ukraine. It is rich in all those things China needs to feed its economy. Ores, coal, fertilizers, chemicals, grain, metals and off-shore oil and gas which China has been invited to explore with Ukraine.

According to the Chinese and Ukrainian leaders, trade with China has increased by 80% this year. A very fortunate state of affairs for a commodity export economy like Ukraine of course. It is anticipate that Chinese/Ukrainian trade will pas $10 billion year, a figure that would exceed what both nations initially aimed to achieve.

Unsurprisingly, there is now a Chinese consulate in Odessa. You would expect nothing less for a nation projecting its influence. Odessa is a major logistics hub and a location where much going to and coming from China will enter and egress.

What the above link doesn’t say is that China also loaned Ukraine $3 billion yesterday. That said, you suspect the Chinese may feel safer loaning money to Ukraine than buying US Treasuries. At least Ukrainian loans can be repaid in ores, metals, minerals and all the things the Chinese economy needs if Ukraine should default by way of cash repayments. Raw materials and commodities must be a very attractive security in a world of fiat financing, much of which has no security at all.

I suspect a continued interest in Ukraine by China. Some mines and steel mills badly in need of investment will probably end up under Chinese ownership within the next 5 years. R&D in space will pick up by way of joint ventures. Energy, technology and raw materials will undoubtedly be a solid base for the Chinese/Ukrainian foreign and trade relations for the next 20 years.