Posts Tagged ‘CIS’


Trade reciprocity and circumvention – Ukraine & the neighbourhood

December 25, 2015

Looking away from the usual “last minute legislation” expected from the Verkhovna Rada when it comes to facilitating its domestic and international obligations, most recently the tax and budget laws for 2016, the Verkhovna Rada also passed legislation allowing the Ukrainian government the ability for reciprocity when The Kremlin trade embargo with Ukraine commences on 1st January 2016.

A Kremlin inspired embargo (in all but name) is timed to commence simultaneously with the full implementation of the EU DCFTA with Ukraine.  In short the Government of Ukraine may now apply the same rules of the game to Russian produce as The Kremlin will do to that of Ukraine.  The Ukrainian law passed on 24th December with 291 votes in favour from the 420 deputies registered in the chamber.  (226 votes were required to pass the law).

So be it.  Trade between Ukraine and Russia has plummeted following the illegal annexation of Crimea and the occupation of parts of The Donbas in the east.  With a further $900 million reduction anticipated from The Kremlin applied embargo to Ukrainian products, there is really little further damage of significants any Ukrainian instigated trade warfare with Russia will do to its own economy.

Indeed Ukrainian trade will expand with China, the EU, Turkey, Israel and several MENA nations.  Most economists predict economic growth of about 2% in Ukraine during 2016.  They may be right, depending upon the scale of Kremlin designed and controlled hostilities in eastern Ukraine that will undoubtedly continue throughout 2016 – and beyond.

The issue for Ukraine is not returning to growth in 2016 – the issue is maintaining that growth in 2017, for that will require market reforms that thus far have been glacial in coming.

However, necessity is the mother of invention – or perhaps better stated, the mother of circumvention.


Just as it is possible to purchase Belorussian (EU produced repackaged) seafood products in supermarkets in Moscow – Belarus being that entirely landlocked nation renowned for its seafaring abilities (not) – it seems highly likely it will be possible to buy Kazakh produce (that it doesn’t produce – Ukrainian products repackaged) in Moscow supermarkets too.

Indeed it is of note that since The Kremlin’s actions against Ukraine, fellow CIS and EurAsian Union (EEU) nations Belarus and Kazakhstan  have hardly been swift in publicly supporting Moscow.  An inherent problem with allies being coerced or bought off by The Kremlin in order to earn the title of “Kremlin ally”.

Kazakhstan has recently seemed to have taken, if not a more anti-Kremlin stance, then certainly a stance that is so pro-Kazakh – that will be perceived as somewhat anti-Kremlin.  Despite the supposed trade rules of the EEU, Kazakhstan went ahead and signed a political and trade agreement with the EU on 21st December.


Perhaps understandable, for Kazakhstan and Ukraine have some commonalities within The Kremlin – President Putin has inferred publicly that both are not truly sovereign/real States over the past few years.  It may thus be felt in Astana that whilst The Kremlin distracted by busily making poor decisions over Ukraine, Syria, Turkey (and eventually it will with Iran too) – notwithstanding even worse domestic decisions –  now is the time to act and prudently insure its essential place in a Sino-European trade route now.

That said, Astana will be more than aware that President Putin looks set to remain in power for at the very least (discounting ill-health) a few more years yet – and the “collective Putin” even longer.  Some delicate decoupling is required, together with a swift coupling with Chinese and European interests to avoid any gaps, and thus weaknesses, that can be exploited if and when the Kremlin’s Eye of Mordor fall upon Kazakhstan.

Kazakhstan is also receiving more than 10 times the Chinese FDI than Russia currently – much “Silk” related.  Indeed due to the Chinese Silk Road/Iron Rail/Silk Belt projects, Kazakhstan and Turkmenistan particularly in Central Asia, are looking east to China and also west to Europe along these trade routes – no doubt Turkey and perhaps Iran eventually will too.  What is becoming painfully obvious is that it looks far less to Moscow, instead is turning a cool (if not cold) shoulder.

It comes then as little surprise that Kazakhstan has apparently reached agreement with Ukraine over continuing trade that appears to simply ignore The Kremlin imposed trade embargo with Ukraine – an embargo that theoretically should effect all EEU members.  Some may opine that such an agreement simply underlines the hollowness of the EEU project – and certainly when not all EEU members are WTO members, then any trade block/major economy to trade block negotiations will not go very far at all.

Furthermore, Kazakhstan and Ukraine have apparently agreed an intensified industrial cooperation too – and having mentioned Turkmenistan, Ukrainian – Turkmen relations appear fairly warm.  A recognition perhaps that Ukraine may ultimately be the final central/northern spur into Europe for the Chinese “Silk” projects, whilst Turkey services the southern European entry – all of which deliberately avoid the territory of Russian Federation entirely.

The relationship between Ukraine and Kazakhstan may well be something worth keeping an eye upon, for it will say as much about the Kazakh intent in the neighbourhood as it will of that of Ukraine.


Interpol Red Notices and reform Red Flags – Ukraine

January 13, 2015

Yesterday saw Interpol add several Ukrainians of the former regime to those with Red Notices placed upon them – they included former President Yanukovych and former Prime Minister Azarov.

What this means is Interpol informs its member countries that an arrest warrant has been issued for an individual by a judicial authority.  A Red Notice seeks the location and arrest of wanted persons with a view to extradition or similar lawful action.  However, it is not an international arrest warrant and Interpol cannot compel any member country to arrest the subject of a Red Notice.

In short, whilst everybody knows the vast majority of the former regime currently wanted by Ukraine is now very cosily holed up in Russia, neither Ukraine nor Interpol can make Russia arrest those subject to a Red Notice, let alone extradite them.  The system is dependent upon the goodwill and cooperation of its members, and therefore there is next to no chance Russia will do anything with regards to the Red Notices issued.

Indeed, considering applications have long since been submitted to Russia for arrest and extradition for 24 of the former Ukrainian regime – Yanukovych VF, N. Azarov, Klyuyev AP, Pshonka VP, Yakimenko AG, Zaharchenko In .YU., Ratashnyuka VI, Zinoviev PI, Shulyak SM, Koryak VV, Fedchuk PM, Yanukovych OV, Stavisky EA, Kurchenko SV ., SG Arbuzov, Klimenko AV, Prysyazhnyuk MV, Kuzmina RR, Tsarev OA Kolobov Yu, Ignatov AP Bogatyreva RV, Dzekon GB, Dinnik OV – under the longstanding CIS agreement regarding wanted criminals to no avail, there is no reason to believe Interpol Red Notices will cause any change to the Kremlin offering sanctuary to these individuals.

What sort of signal would it send to currently sitting Kremlin stooges/puppets in positions of power around the globe, if it became known the Kremlin will eventually give them up?  A guarantee of inviolable sanctuary for carrying out Kremlin bidding is a requirement for such individuals.  The Kremlin must be seen to look after its own, long after they cease to be useful and have taken sanctuary – recruitment becomes much harder should it fail to do so.

There is, perhaps, some benefit in Ukraine withdrawing from this particular CIS agreement and striking bilateral agreements with the CIS nations individually, looking to the future.

Whatever the case, any expectations relating to the Kremlin actioning the newly issued Interpol Red Notices will lead to disappointment.  Viktor and Alexander Yanukovych, Mykola Azarov, Raisa Bagatyreva, and Messrs Kolobov and Dzekon, all in Russia and subject to Red Notices, have little to fear.  Neither do Messrs Stavitskiy, Kurchenko , Arbuzov, Klimenko, Ignatov, or Dinnik etc.

That the vast majority now be trapped in Russia with their ill-gotten gains for fear of arrest externally, is perhaps the only comfort that can be taken – That and the fact, being trapped in Russia with its evermore internally carnivorous nature amongst the very rich/elite, infers that sooner or later, the Russian system will bleed these nefarious Ukrainians of much of their wealth.

So much for Red Notices – now to Red Flags of the democratic, reformation kind.

In yesterday’s entry when attempting to plant a few benchmarking pegs into the reformation ground to measure the genuine will of the current RADA for reform, Bill 1357 relating to the creation on a national public broadcaster, was one such peg.

This Bill is going to struggle.

Within 8 hours of the blog having selected that particular Bill as a benchmark, it has become apparent that at an internal meeting of the Block Poroshenko camp, it has decided not to support the idea of a national public broadcaster – something quite incredulous to Block Poroshenko MPs such as Sergie Leshenko, who took to Facebook to air his frustrations:

“Такие дни, как сегодня, заставляют меня терять веру в человечество. Фракция БПП решила не поддерживать закон об общественном телевидении, внесенный всем составом комитета Верховной Рады по свободе слова во главе с Вікторія Сюмар. Ключевая реформа из списка рекомендаций ЕС блокируется из-за нежелания депутатов расстаться с рупорами пропаганды. Давно не слышал таких манипуляций! Мажоритарщики привыкли рассматривать областные телекомпании как девок по вызову, которых они могут использовать за скромное вознаграждение или просто теплое слово. В итоге, БПП создает проблемы президенту на ровном месте. Если надо, мы дойдем до МВФ и будем настаивать, чтобы создание общественного ТВ включили в список требований к Украине для получения финансовой помощи. Но зачем самим себе ставить такую подножку?! Зачем?!?!?!”

Without the support of Block Poroshenko it seems highly unlikely to gather sufficient votes within the RADA.  It is a decision that is certainly not going to sit well with many of the Europeans who are expected by Ukraine to finance democratic and economic reforms, that so far have been long on rhetoric and almost entirely absent on delivery.

A day of criminal Red Notices and democratic reformation red flags.


Russia’s Duma ratifies Eurasian Economic Union

September 27, 2014

Today saw the Russian Duma ratify Eurasian Economic Union – the wannabe regional challenger to the European Union, at least in part.

Like the EU, it is supposed to be built upon the overarching principles of free movement of goods, services, labour and capital – as far as the economics of block status go.  How that will sit with the “Russia for Russians” nationalist rhetoric remains to be seen when it comes into force.

Belarus and Kazakhstan are expected to ratify their entry into the EEU in the near future, with the entity EEU agreement coming into force from 1st January 2015.

The EEU also differs in some significant ways to the EU, to the point where the EEU agreement is completely incompatible with the EU DCFTA’s recently ratified by Ukraine, Moldova and Georgia.

The EU DCFTAs ratified by Ukraine, Moldova and Georgia fit together far better with the existing Confederation of Independent States FTA, and a few nuanced teaks of that CIS FTA would have allowed for a very reasonable fit.  Whether that will now comes to pass seems unlikely in a world where The Kremlin operates on zero sum.

The original CIS FTA comprised of ratified signatories, Russia, Belarus, Kazakhstan, Ukraine, Moldova and Armenia, with Kyrgyzstan and Tajikistan signatories that remain without national ratification.  The other CIS nations, Azerbaijan, Turkmenistan and Uzbekistan have never signed nor sought membership of the CIS FTA.

Thus on one side there is now Ukraine, Georgia and Moldova with ratified DCFTAs with the EU – and Russia, with Belarus and Kazakhstan soon to follow, with ratified EEU agreements.

Armenia, it has to be said, is currently under extreme Kremlin pressure to join the EEU despite considerable resistance within its society and the political class.  It is clearly the next Kremlin target for assimilation within the EEU, with “No” not being an acceptable answer.

Whether Kyrgyzstan and Tajikistan will eventually join remains to be seen.  Kyrgyzstan has a mere 300 plus issues with the EEU with which it is trying to lodge reservation (exemption) against within EEU treaty.  (Armenia 900 plus).    It may after all ratify the CIS FTA.  That said, The Kremlin will want to see its new entity expand and be seen to be attractive – even if members are actually bullied into joining.

Azerbaijan is currently plainly not interested in any such agreement with either the EU or the EEU.  Thus whilst there may be the usual manifestations of the resource curse for democracy and human rights, that oil and gas as far as the Azerbaijani leadership is concerned, is sufficient not to want binding block trade deals with anybody.  Turkmenistan and Uzbekistan currently do not appear overly enthused with the idea either.

The question therefore arises, what eventually becomes of the CIS FTA?

At the start of the New Year, 3 ratified signatories with EU DCFTAs remain ratified signatories of the CIS FTA.  Another 3 ratified signatories become ratified signatories of the new EEU.  Kyrgyzstan and Tajikistan will still be ratified to no trade agreements whatsoever.

Armenia, as a ratified CIS FTA signatory will probably be forced into applying to join the EEU, but is unlikely to ratify its membership before the EEU comes into being.

The CIS FTA therefore either becomes a poor relative of the EEU agreements for some nations, or it becomes the bridge between both EU DCFTA and EEU agreements at a somewhat lesser level for those ratified to both.  In doing so it maintains the existing legislative regional trade infrastructure for all current ratified signatories in some shape or from,  as it cannot just be scrapped as a legal instrument as long as two or more ratified signatories intend to use it as a legal basis for their trade.  Moldova and Ukraine for example.  Indeed they may have good reason to deliberately keep it alive, even if it became somewhat hollowed out as EEU nations give notice to leave the CIS FTA agreement.

Will the CIS FTA be put to the sword, allowed to stagger on, or be deliberately kept alive by the EU DCFTA ratifying nations as the platform for their trade relations – which would deliberately irk The Kremlin if it wanted to kill it off.

Whatever the case, if there was ever any doubt that the EEU would come in to being, the ratification by the Duma today, has removed whatever doubt that was left.


Grandstanding and consequences

September 11, 2014

On 9th September, my twitter chum and occasional policy sparing partner Jacek Saryusz-Wolski tweeted:

A more detailed summary of what that means can be found here. My somewhat juvenile response to the discussion that followed:

But there is a point to it.

With every grandstanding event that annoys The Kremlin, there have been immediate consequences.  Be it the ousting of former President Yanukovych and the illegal annexation of Crimea that followed, some seriously poor decisions from those that replaced the ousted Yanukovych regime, particularly in the immediate period thereafter that fueled internal concerns and played directly into the hands of the Kremlin propaganda machine, to a reinvigorated NATO in and around the Baltics that led to yet another immediate response  deliberately aimed to undermine.

That is not to say that either Ukraine, the EU or NATO need or should bow down to Kremlin sensibilities to their detriment.  None should.  But an awareness that there will be consequences, particularly in reply to any grandstanding, will surely have dawned on politicians  – even if those consequences are self-harming and/or self-defeating to The Kremlin over the longer term.

The first plenary session of the new EU Parliament is next week – 15th – 18th September in Strasbourg.

President Poroshenko assured Chancellor Merkel that Ukraine would ratify the EU AA/DCFTA in September when they met in person at the end of August.  Thus it maybe that within the next 8 days, and certainly within the next 20 days if President Poroshenko is to keep his word to Mrs Merkel, that a Ukrainian RADA-European Parliament mutual ratification will occur.

There will be a great deal of pleasure and metaphorical trumpeting from both sides as a result of this mutual (and more or less) simultaneous ratification.  A same day, same time event may well occur if it can be engineered that way for the purposes of symbolism.

The aim of the mutual ratification process is to bring into force the agreement from 1 November (even though some Member States individual parliaments will still be finding parliamentary time slots to ratify nationally).  It is a high profile event, and one that will have a major effect upon Ukraine in particular should it diligently follow the AA and DCFTA framework over the next few years.

Ergo, it seems entirely likely from recent Kremlin performance, that there will be a swift consequence.  How, where, what and with whom remain to be seen.  A symmetrical or asymmetrical retort?  An equally grandstanding reply?

The when, however, is likely to be almost immediate.


The end of the beginning? Probably not

August 27, 2014

On 9th November 1942, at The Lord Mayor’s Day luncheon held at The Mansion House, London, Winston Churchill gave his famous speech regarding “the end of the beginning“, following the first allied victory in North Africa/Egypt.

Ukraine, it has to be said, appears far from “the end of the beginning” unless a rabbit is magically pulled from a hat today in Minsk.


Upon entering the meeting, only an hour ago, stated “the fate of our country and of Europe is being decided here in Minsk.”

By a strange quirk of history, 26th August 1968, saw the Czechoslovakian leadership forced to sign terms with Kremlin regarding the “normalisation” of ties to facilitate leaving Warsaw Pact.  What emerges from 26th August 2014, at the time of writing remains unknown – the meeting occurs at the time of writing.

There does seem very little room to maneuver – although there is some – and thus an “end to the beginning” remains a bleak prospect –  An even bleaker prospect is “a beginning of the end” as far as Kremlin designs upon, and obstructive and coercive actions against, Ukraine are concerned.  They appear robustly set for a decade and more – far over the horizon – unless The Kremlin itself fall, and whether that be closer than we think or not at all, this issue of Kremlin succession seems unlikely to result in any change of policy toward Ukraine.

If the “end of the beginning” would be marked by an end to armed Kremlin shenanigans in eastern Ukraine, the next act in the play will concentrated much more on political obstruction and attempted intervention both domestically within Ukraine and regarding any of its international policies that can be disrupted too.  Needless to say, economic pressures will continue to be exerted,  as well as ad hoc subversive acts across the entire spectrum of political, economic and social life where either opportunity or need present itself.

A “beginning of the end” remains a very, very long way off for Ukraine when it comes to Kremlin interference – regardless of any very unlikely agreements that may magically – or perhaps mendaciously – be claimed in Minsk.



Kremlin Minsk Preparations

August 26, 2014

Tomorrow sees a meeting in Minsk of Presidents Putin, Poroshenko, Lukashenko, Nazarbeyev, High Representative of the Union for Foreign Affairs and Security Policy/Vice President of the European Commission Catherine Ashton, European Commissioner for Energy Günther Oettinger and European Commissioner for Trade Karel De Gucht.

As was stated in an entry here a few days ago, after the humanitarian trucks rolled into Ukraine – and before they rolled out again loaded with looted technical parts from Ukrainian factories required for the Russian defence and space industrial complex – “Perhaps it is far more basic than that? By upping the ante, is it simply a way to give the impression of negotiating from a position of strength when the Minsk meeting arrives? Another act of Kremlin defiance prior to that meeting to insure all attending are well aware of The Kremlin ability to act unilaterally as and when it wants to.”

@leonidragozin As I wrote today in the blog – it is about negotiating from a position of strength, and facts on the ground create that

Somewhat diplomatically put, as that clearly was and remains the case – at least in part.  Since then Russian Foreign Minister Lavrov, today announced that The Kremlin will continue to send humanitarian aid into Ukraine, regardless of any Ukrainian objection or international condemnation.

Also today, approximately 50 Russian military tanks entered Ukraine at Novoasovsk, and whilst engaged by Ukrainian forces, made it ways toward Mariupol, the strategic port city of the Donbas.

The Donetsk People’s Republic looks a far more viable entity with the port city of Mariupol than without it – and creating that impression and possibility prior to the meeting in Minsk tomorrow matters when strengthening a Kremlin negotiating position.

Ukrainian forces have retreated to the city of Mariupol.

As the tweets related above state, a full invasion force it was certainly not.  Creating further difficulties on the ground for Ukraine, and once again upping the ante was and is – at least in part – the point.

To be blunt, The Kremlin does not need to win any military war in eastern Ukraine – it simply needs to avoid losing.  Ukraine on the other hand, cannot afford to have a hot or frozen conflict take root.  The combined weight of Luhansk and the Donbas Oblasts would be an incredibly heavy anchor to have to drag toward Europe.  Not an impossible weight to drag along, but one that would slow any momentum dramatically.

As such it appears The Kremlin has now completed its preparations for the Minsk meeting.  The ante has been upped, military facts on the ground have been changed by entering Ukraine further south of the existing fighting, announcing a  declared intent to ignore Ukrainian borders and refusals of further convoys entering Ukraine under a humanitarian pretext etc.

The Kremlin has improved its negotiating position by changing facts on the ground within the space of 5 days.  It is now in a far stronger negotiating position than 2 weeks ago.  It therefore follows that it will not feel much need, if any, to offer concessions or to reach an agreement that falls significantly short of its initial positions tomorrow.

Ukraine cannot and will not accept any loss of territory or sovereignty.  It is engaged in a war of independence and a fight for its right to choose its own course.

The Europeans are currently bereft of ideas acceptable to all EU Member States, and whilst more sanctions may or may not come, any damage over time will neither change the facts on Ukrainian soil, nor change Kremlin course soon – if at all.


Positive expected outcomes from the meeting tomorrow?  Low to no none, unless there be a rabbit to pull from a hat by somebody.



Lukashenka on Ukraine

March 25, 2014

Stripping away all the journalistic fluff from this RFERL article, President Lukashenka is bang on the money when talking about Ukraine – as you would hope from a dictator ruling a neighbouring state.

Firstly he agrees with the entire world – less Russia – that the annexation of Crimea sets “a bad precedent” –  Of course it does, for international legal agreements such as the Helsinki Final Act (amongst a list of international agreements) have not only been challenged but clearly ruptured.

It may not be that President Lukashenka has any great concerns regarding the annexation of parts of Belarus, but he will have concerns regarding separatist movements within the Russian Federation that by extension may have detrimental outcomes for Belarus.

When it comes to recognizing or not recognizing the annexation of Crimea, Crimea is not an independent state unlike Ossetia or Abkhazia.  Crimea today is a part of Russian territory. You can recognize or not recognize that, but this will change absolutely nothing.

Nobody would dispute what he says – the reality on the ground speaks for itself.  The only thing really worthy of note is that by stating “Crimea today is part of Russian territory” may infer he holds a belief that may not always be the case – though it seems a very remote and distant prospect.

The next statement I will unpack into separate parts.

“Ukraine should stay a united, undivided, integral state that is not a member of any block because it would be very sensitive both for us and for Russia if, for example, NATO’s military would deploy in Ukraine tomorrow, this we can’t allow to happen.  This is our global interest. So we have to make an agreement that nobody has a right to meddle in Ukraine anymore.”

The first – “Ukraine should stay a united, undivided, integral state” .  Here he is absolutely right.  The federalising of Ukraine will do nothing more than create a permanently unstable nation for decades to come.

Secondly – ” that is not a member of any block because it would be very sensitive both for us and for Russia if, for example, NATO’s military would deploy in Ukraine tomorrow, this we can’t allow to happen.  This is our global interest.” 

As I have written before “The political choice offered once again – an officially neutral state that does not “Europeanise” too much and offend Russian sensibilities – or what is left of Ukraine (Lviv and a few surrounding fields that were once Galacia) can do as they will once the south and east have been secured by Russia one way or another.”

President Lukashenka also pushing an internationally recognised neutral status for Ukraine as part of the solution it would seem.

To his last point “So we have to make an agreement that nobody has a right to meddle in Ukraine anymore.” – He is quite right.  The problem now being there is no trust.

Having seen the UN Charter, Helsinki Final Act, Budapest Memorandum, The Russia-Ukrainian Friendship Treaty and more, simply raped of any meaning unilaterally by Russia – and to be frank rather feebly responded to by the Europeans and certain guarantors thus far – trust in Russia is at an all time low, and trust in a few western nations has been shaken too.

What possible guarantees of non-interference in exchange for non-block neutrality will now be accepted – and from who would Ukraine accept such guarantees in the belief they could be called upon, and a swift and robust response delivered?

The trust problem not only exists between Ukraine and Russia of course.  Who would act as guarantor for Ukraine now, when any guarantor can no longer trust Russia to act reliably and legally?

Sadly President Lukashenka offered no insight into the very serious problem of trust.


Changing hats – Interesting times

January 2, 2014

With effect from 1st January the following nations assume the following presidencies of the following organisations:

Switzerland – OSCE

Russia – G8

Greece – EU

Ukraine – Commonwealth of Independent States.

Interesting times!

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