Russia, The Reset & Jackson Vanik come into focus

We are a little less than two weeks past the Russian Presidential elections that took place on 4 March 2012 – elections which opposition leaders promised would see the end of Vladimir Putin’s dominance of political life, and the reawakening of Civil Society. Mr. Putin won the election, undoubtedly more comfortably than he could reasonably have expected to, and appears to have performed well in the postscript; a protest on 5 March 2012 polarised the opposition when the likes of Alex Navalny and Sergei Udaltsov attempted to ‘Occupy’ Pushkin Square in Moscow and the riot police moved in. The follow-up protest, on 10 March 2012, drew a fraction of the hundred thousand marchers that the city had become accustomed to over the past three months. Several protest leaders have been arrested and jailed, albeit for short periods.

While not admitting defeat, the opposition has highlighted one area in which Putin stands to gain. The repeal of the Jackson Vanik law, moved by the US Congress and with the strong support of the White House and the US Ambassador in Russia, Michael McFaul, has proved controversial, to say the least.

On the one hand, the law is illogical. The initial object of the bill was to impose sanctions on any country that impeded the free movement of labour, in response to the Soviet confiscations of Jewish property in the 1970s. Today the law applies to Russia, which does little to hinder immigration on the scale of the USSR, but does not impede American trade to China. Russia has long felt this iniquity and along with WTO membership, has sought a repeal in order to open American markets to its products. With the Reset, and Russia’s accession to the WTO (which exists to prevent trade restrictions), the law is unnecessary and economically useless.

A day or so ago, Russia’s opposition leaders lent their support to the repeal of the Amendment. This was smart thinking, a popular issue and one which would illustrate the business friendly potential of Russia’s opposition. However, it allowed Ambassador McFaul to invoke their support when he called for the repeal not to be held up by the substitution of so-called ‘smarter sanctions’, such as a targeted list of individuals thought to be involved in corruption or human rights abuses. This has led Boris Nemtsov and Garry Kasparov, two of the older generation of protest leaders to clarify their position, effectively asking for US support in restricting Putin’s freedom (they might say impunity) of action.

This raises the wider question of how the United States of America can aid democracy in semi-authoritarian countries, of which Russia is undoubtedly one. Critics, such as David Kramer of Freedom House, argue that human rights violations need to be addressed vocally. That can be and is important, especially when the US calls into question fraudulent elections, giving protestors moral support and legitimising their cause. However, the Russian Presidential elections probably delivered a fair result, unfairly; Putin might have won unaided but the result was inflated by fraud.

Furthermore, authoritarian and semi-authoritarian regimes often rely on antipathy towards the United States. This is not helped by what can be seen as hypocrisy on the part of the Americans. US foreign policy has come a long way since the realpolitik of the Kissinger years and the obfuscation of the Reagan administration, but the Clintonian approach to Russia in the 1990s left deep sores, especially when so much support was targeted towards Eastern Europe. The advantage of the Reset is that it lends no credence to Putin’s claims of American interference.

This is not to say that the US should not impose the Magnitsky list sanctions. On the contrary, these well targeted sanctions highlight the contradictions of the Russian government, separating criminality from diplomacy. Only one of these can be rewarded.

To punish the entire Russian economy, as Jackson Vanik does, to some extent, is not right. Russia is moving in the right direction on arms control, it has not interfered in neighbouring countries during the past three and a half years and it is debating political liberalisation.

A rational step towards improving the links between the Russian and American people is therefore in the interests of both countries. The attempt to attach conditionality to a request from the Obama Administrations is a long-established Congressional practice. From outside America, it does not look so attractive.

The same is true of non-governmental diplomacy. In a surprise move, uncovered by the New York Times, the Obama Administration is attempting to free up funds invested through the 1989 Supporting Eastern European Democracy Act (SEED), which could mean a $50m bonanza for Russia NGOs and civic groups. This is likely to anger Vladimir Putin, who since 2004 has been paranoid about an Orange Revolution in Russia. Some democrats fear reprisals, but promoting a civil opposition movement should be a priority for all Russians, given the chaotic party system and problems with corruption.

The Obama Administration is currently keeping counsel over recent arrests following the election. Mr McFaul could undoubtedly be more vocal here, although American efforts in the Khodorkovsky case have not been productive. In the current climate the American policy is sensible – nudging both Russia’s government and opposition down the road of moderation and due process.

For further information on the potential flashpoints in US-Russian relations, see my previous blog, here.

Dealing with Putin

The results of the Russian Presidential Election had barely begun when a victory party in honour of Vladimir Putin began in Moscow. Those who had predicted that the margin would be relatively comfortable – around 59% on current results – were proved correct. Omens were seen in the reshuffling of Vladislav Surkov out of the Kremlin; Surkov, it was believed, had argued that Putin needed to limit the extent of his support to something like 53% to be seen as credible amongst those wavering on whether to join the protest movement.

Accusations of vote-rigging have already been levelled. In some areas, such as Dagestan or Chechneya, which will grant Putin Saddam Hussein-like levels of support, evidence is hardly needed. The West will feel the need to query the results, but in the absence of internal pressure on the Kremlin (i.e. one of the major candidates calling for a re-run, supported by large public demonstrations), that will blow over.

Nonetheless, the West will have to make some big calls over the next couple of years, which will undoubtedly impact on its relationship with Putin. Here are some of them:

1. Does the US proceed to repeal the Jackson Vanik agreement? The arguments against repeal and for a specific exemption are well made here, yet it is hard to see how the amendment can apply to today’s Russia, or to two countries in the World Trade Organisation.
2. How does the WTO relationship pan out? Russia’s accession to the WTO theoretically makes it more difficult for Russia to adopt preferential trade agreements with favourite partners, or to block imports from neighbours like Ukraine or Georgia, but the Kremlin will undoubtedly lean on the US and EU to prevent this.
3. Does the EU push through the liberalisation of the European gas trade? This article highlights the problems that Gazprom’s fixed term contracts are causing EU members. Might this be a moment when the EU finds a common position on Russia?
4. The autumn of 2012 is likely to see Britain open an inquest into the death of Alexander Litvinenko, opening a barely healed sore. The Kremlin refuses to extradite the suspects, so how far does Britain go? Sanctions are plausible, but are likely to be restricted to travel visas for certain officials to begin with. If that doesn’t solve anything (and it probably won’t), where do you go from there?
5. Does the EU press ahead with a or the US expand its Magnitsky List of sanctions?
6. Do the EU and/or US ratchet up the pressure on Russia over Iran and Syria? Russia is unlikely to want to ditch its allies, while the West is becoming increasingly anxious in both cases. Will Vladimir Putin take diplomatic urgency as an affront or an expample of Western ‘colonialism’ as he has recently accused Britain of pursuing?
7. Does the EU start to bring sanctions on Ukraine if the 2012 elections are described as undemocratic? Putin has not treated Viktor Yanukovych as an important strategic ally, but neither will he want to see the West weakening a country that many in Russia see as essentially Russian and/or a bulwark against the advance of NATO and the EU.
8. How does the US manage the Reset? The geopolitical pressures that existed in George W. Bush’s time no longer exist, while both Russia and the US appear to have benefitted from the Reset between Obama and Medvedev. The Reset could easily survive, if limited to arms control, but as a principle, bilateralism is difficult with Putin. Wilfully threatening at his worst and dependent on anti-Americanism to sustain his electoral machine, the advantages that Medvedev sought from Washington will not benefit Putin, who will instead have to face the goading of John McCain and potentially a Republican Senate.

Russia, Putin & the Georgian War

Norma Percy’s documentary on the rule of Vladimir Putin gains in stature each week. Of course, it has not been without its critics, who dismiss it as pro-Putin propaganda and have sent the programme’s consultant, Angus Roxburgh, into a spin. Most of these criticisms have related to the narrator’s allegedly prejudiced tone, his use of the word separatists when he apparently should use ‘freedom fighter’ and the absence of some of the more widespread conspiracy theories, such as Edward Lucas’ well-plotted account of how a series of suspicious apartment bombings in Moscow in 1999 prefigured a coup of sorts.

However valid these critiques are on their own account, they obscure one very important bonus, namely the breadth of sources used and interviews given. To have Condoleezza Rice, so recently US Secretary of State, and Sergei Lavrov, still the Russian foreign minister, discussing open sores in public can only benefit the historian or journalist. Moreover, there is certainly enough scope for viewers to pass judgement against the Russian side to the story, such as the accounts given by Rice and Lavrov of the infamous telephone conversation in which Russia effectively demanded that Georgian President Mikhail Saakashvilli step down as a precondition of peace talks.

War

The programme does not deal a decisive blow to either the Georgian or Russian account of what is known as the 2008 South-Ossetian War, but neither does it pretend to umpire. Given the twin benefits of disinterestedness and hindsight, the War begins to look, like many other wars, as a foolish endeavour. Russia, with its unfortunate habit of getting itself involved in skirmishes on behalf of what it sees as persecuted minorities, only to be painted as the aggressor and be humiliated by the ceasefire (The Crimean War and 1914 come to mind), looks to have come off no better here. Georgia, whose desperation to join NATO was part of the provocation for Russia’s involvement, set back its chances of joining any Western Alliance by some years. America found itself conflicted and wrong-footed, whereas the EU chalked up a first major success in peacekeeping terms by broking the ceasefire and commissioning a report into the causes and conduct of the War.

Putin, Russia & The West undoubtedly leaves some questions open, and here are two important ones:

1. To what extent was the War the result of short-term factors, or the actual events on the ground in South Ossetia, and
2. Does this shed any light on our attitudes to nationalist separatism in the 21st Century?

Causes

At the turn of the millennium it became apparent that the unresolved political status of South Ossetia and Abkhazia had become more difficult to manage and that there was no clear-cut solution in sight. At the same time, geopolitical changes became manifest, among them NATO ́s eastward enlargement and a new international interest in the Caucasus region, linked to extended security considerations and energy supplies.

EU Report into the South-Ossetian War

Percy spends a perhaps slightly unhealthy amount of time on the summitry and general deal-making which is central to Great Power relations. Given the charisma of Secretary Rice and the twists and turns of American policy, this is understandable from a programming point of view, yet any case against the Americans on the bases of inconsistency or weakness towards Russia or indeed Georgia is summarily dismissed by Rice.

Ultimately, missile-defence shields or MAP must have played a limited role in Russia’s decision-making, for the former was irrelevant to Georgia and the latter ought to have persuaded Russia that it was on the brink of taking on the whole of NATO under Article 5. Control of oil pipelines may have played a slightly more significant role, which is hinted at in the EU report into the crisis, yet the situation in Abkhazia and South Ossetia was already unsustainable in 2008 and escalated very quickly.

We may never know how far Russia would have been content to continue supplying separatists with armour (a peculiar understanding of the peacekeeping role mandated to them) and kept their distance, had Georgian troop not begun shelling separatist positions. The EU Report is quite damning of the Georgians, calling their initiative illegal and disproportionate; Russia also comes in for criticism, for threatening to push on to Tbilisi, but her limited right to defend South Ossetia is relatively hard to obscure.

Had George W Bush not called Georgia a ‘beacon of freedom’ in 2005, hubris might not have got the better of Saakashvili as it undoubtedly did. Most significantly, however, this was a conflict zone that the UN saw fit to forget and at no point was it considered a big enough issue to raise until Nicholas Sarkozy bravely took it upon himself to broker a ceasefire after five miserable days.

Separatism

As a power with traditionally strong links to the region and understandably enough, important political, economic and security interests there, Russia was given the role of facilitator in the Georgian-Abkhaz and the Georgian-Ossetian negotiation processes, and that of a provider of peacekeeping forces. This formula, while seemingly in line with the rules of Realpolitik, seriously affected the existing political equilibrium in the region. It meant in practice that these two conflicts could be settled not alone, when the sole interests of the Georgians, the Abkhaz and the Ossetians were duly reconciled, but that the interests of Russia had to be satisfied as well.

EU Report

Were there no provision in the Constitution of the Russian Federation mandating her leaders to protect ethnic Russians overseas, such a policy would remain popular and would most likely still be pursued. The diaspora of Russians over the lands formerly under control of the Russian Empire and Soviet Union make this element of Russian foreign policy unavoidable, however one constitutional anomaly present in both the Russian and Georgian basic laws render diplomacy as effective as a blunt, rusty knife.

To deny dual citizenship, as both these countries (and others) do, is to deny a portion of each population representation. In another area, it has cost Russia some of her best talent, but in Georgia it elevated the fate of ethnic Russian Georgians from an ambassadorial matter to a foreign policy one.

Another mistake, quite forgivable at the time, was to grant to Russia the responsibility for peace-keeping in her ‘Near-Abroad’, thus formalising the sphere of interest which the EU Report sets out to crucify. Of course, Britain and the US have both intervened in areas geographically and historically close to themselves, yet the distinction between the Falklands or Grenada and the breakaway regions of Georgia is that neither Western power outwardly pledged to uphold the status quo while (not so) secretly attempting to unsettle it. This may have made sense while Russia was dealing with the old Soviet hand, Eduard Shevardnadze, but it became untenable under an independently-minded Georgian regime. The EU, which scored a first and last notable success with the ceasefire, has proved to be a relatively level-headed mediator in this role.

Was the West hypocritical about the Russian recognition of Abkhazia and South Ossetia? No more so than Russia herself, which is trying to prevent the exact same consequence in Chechnya, to take one example. The Russian Empire and the Concerts of Great Powers have long since passed, yet the similarities between 2008 and 1856 do often bear out. It is this sense of pathos and waste, rather than intrigue, which Percy would do well to draw out.

Hope is the Last to Die

Protestors gather in London to call for the resignation of Putin and Medvedev

“Ne Revolutsiia,” they chanted in response to the provacateurs in their mist. No revolution. In Russia, even a protest that brings a hundred thousand people onto the streets carries an enormous weight of historical baggage. On one of the first days of protests, calls to march on the White House (the seat of the legislature, not the executive) were not merely disregarded but encouraged the protestors to head home rather than revisit the painful memories of 1993.

It is rarely understood by the West that Russians are as suspicious of Western democracy as Vladimir Putin, largely blaming foreign forces for the events of the 1990s and the disintegration of the political for the default and subsequent inflation. Hence United Russia’s large measure of popularity over the past decades. Putin promised a steady hand on the tiller, and war on any of the get-rich quick oligarch’s who threatened the stability of the country.

That stability increasingly means less and less in a Russia that is struggling with the after-affects of the financial crisis of 2008. Pressure on pensioners is especially toxic, but soaring property prices in Moscow will also have left a large number of losers. That said, economics may not be key. The internet as a forum for discussion and the hated draft of the country’s young men will also have fuelled dissatisfaction.

What has surprised people is the willingness of the Kremlin to allow these protests to proceed – indeed the democratic process is usually only allowed to endorse decisions already taken. Despite an attempt to match the number of protestors with 50,000 riot police in Moscow, no violence was reported and arrests were not on the same scale as on the first and second days of the protest. Given that many of the protestors leaders were in jail as a result of their exhortations, this was not always a given.

Moreover, many have remarked on the media’s coverage of yesterday’s protests, which in contrast to previous days was fulsome. This bodes ominously for organisers of the poll, including the election chief Vladimir Churov, and for current President Dmitry Medvedev, who is seen as tarnished by the fraud.

The moderation of the protests has legitimised them in the eyes of the government, who fear losing power. The opposite is not yet true, and it is undeniable that the protests have acquired an anti-Putin dimension (“Russia without Putin”). Professional pride and a lack of alternatives will ensure that Putin is a candidate in March, whilst Sergei Mironov of A Just Russia has also confirmed that he will stand and will not seek to govern in a coalition with United Russia, an irony for an initially Kremlin-sponsored party.

The election results have been declared valid, leaving little room for manoeuvre. Putin could seek to broaden his coalition, which seems implausible for the reasons mentioned above. The most likely solution for Putin is to brazen it out, throw resources at the election in March and hope the protestors can be bought out.

The risk is that this election does not deliver a genuine victory and that the protestors see no reason not to repopulate the streets. Moderation and patience have been a hallmark of the Snow Revolution, but hope could outlast both.

The Reckoning

Little more than a month ago, the ruling elite in Russia looked nothing if not secure. United Russia, a political party built around the image of Vladimir Putin, was expected to comfortably win another majority in the forthcoming Duma elections, whatever arrangement Putin and his successor Dmitry Medvedev came to was expected to be meekly accepted and the economy was still functioning and expected to return from health after a sharp recession.

Dear Vlad, The #ArabSpring is coming to a neighborhood near you: online.wsj.com/article/SB1000…—
John McCain (@SenJohnMcCain) December 05, 2011

Then, things started to go wrong. In the wake of the congress at which Medvedev nominated Putin to stand for the Presidency for a third time in March the financial minister, Alexei Kudrin, resigned. A nationalist march in early November drew 7,000 angry young men to the streets and not long ago, Putin was booed at a martial arts event. Kremlin political operators blithely ignored the signs and resorted to their tried and tested strategy; cheating.

Blog – Putin and the Loss of Trust in United Russia: wp.me/pxTeJ-9e—
Josh Black (@OutoftheBlack) November 12, 2011

The elections were still widely expected to produce a comfortable United Russia victory as most of its competitors had been banned. The Communists, part of Putin’s nostalgic Sovietism, and Just Russia, stage managed by the Kremlin, were expected to act as a safety valve, but a low turnout (60%) and a high protest vote counterracted the usual ‘merging of party and government’ as reported by the OSCE.

Saddest press conference ever – Medvedev/Putin reaction to Duma results – tinyurl.com/7ajfsu3—
Jesse Heath (@russiamonitor) December 04, 2011

There were some positive results – United Russia held their 99% of the Chechen vote, but the tired and disappointed expressions on the face of Putin and Medvedev spoke volumes. Putin formally headed the United Russia list and it was his face on the billboards, by and large. Medvedev, soon to be Prime Minister, we are led to believe, was there to face the music.

Whose speech was more misjudged is difficult to say. Medvedev spoke for six to seven minutes, mentioning democracy repeatedly. Putin merely snarled a token acknowledgement of the state of the country and declared that this bode well for the stability if the country.

Crowd chant "vor dolzhen sidet v tyurme" (a thief should be in prison). Putin's soundbite on Khodorkovsky, turned around to refer to Putin—
Shaun Walker (@shaunwalker7) December 05, 2011

It was an inadequate performance in any case. Tonight, thousands again took to the streets of Moscow to protest in a disorganised fashion. Despite being caught unprepared, the police were out in force and arrested many, including the talismanic anti-corruption campaigner, Alex Navalny, who was intimately involved in both the march in early November and tonight.

There it is: speaker says this is the "Russian Tahrir."—
Julia Ioffe (@ioffeinmoscow) December 05, 2011

Talk of a revolution is immature in the short term. The three scenarios in which one could conceivably happen are each as unlikely as each other. Firstly, Putin and Medvedev could decide that the regime is fatally flawed without greater concessions to democracy, introduce limited measures and see public opinion outrun them. Secondly, the protests could spiral in a way that sees political actors (especially the fresh blood in the Duma) begin to act independently. Thirdly, Putin could lose the Presidential election in March. As the Arab Spring has again proved, revolutions do not require leaders, only the hints of a faster way out of the mess the country is in.

Nonetheless, Putin will want to work up his popularity both before and after the March election (assuming the polls are still a true and fair reflection). Medvedev is not widely regarded as a strong leader and disappointed liberals by caving into Putin’s re-election, so could easily be fired. Yet that would leave Putin without a buffer from a) public discontent and b) political pressure from the Duma.

Biggest gains in the Russian elections look to be military (Communists) and welfare (Just Russia) budgets. Limited scope for a Kudrin return—
Josh Black (@OutoftheBlack) December 05, 2011

The election has delivered a large left wing protest vote (not surprising given hindrances on Yabloko and the Union of Right Forces). Just Russia’s leader, Sergey Mironov, has in the past said that he wanted Putin to win elections. Nonetheless, he will have demands for spending on welfare budgets he would like to see extracted before delivering another such endorsement. The communists are more hardline and will not support the government explicitly. However, they will also frame the debate around welfare and military spending.

Unemployment is in the region of 10%, and disproportionately affects young men. Inflation has dropped massively as a result of credit restrictions. This suggests that Russia will try to use its huge foreign reserves (third largest) to purchase goodwill. Currently, the budget only balances when oil prices are at $115 a barrel. That seems improbable, given that it has been so high only twice in the past five years.

To get the WTI oil price, please enable Javascript.

What then will happen? Unlike Egypt there is no ecumenical structure to rear protest, the regime is not yet ageing and sclerotic and the finance is available to buy off dissent. That will merely kick the can down the road. The re-emerging middle class and the entrepreneurs who want Russia to remain in the first rank of nations will not suffer higher spending forever, hence Kudrin’s resignation. An alliance of old biddies and young unemployed men are warming to Navalny’s critique of ‘the party of crooks and thieves.’ Moreover, the gas simply will not last forever. That means that reform may prove unavoidable, if not irresistible, in the long term.

Whether that will wash with the alliance of business and politics that currently runs Russia is the critical question. It would be strange if the oligarchs, who have benefitted so much from the regime, were the cause of its downfall but in Russia stranger things have happened.

Ukraine and Yulia on Trial

Last week brought drama that would previously have been though unthinkable to the trial of former Prime Minister Yulia Tymoshenko in Ukraine. On Wednesday the judge, Rodion Kireyev, resisted arrest of Ms Tymoshenko. Ms Tymoshenko repaid this apparently chivalric show of judicial independence by calling the judge a governmental stooge and announcing that she will be calling for a replacement this week, having apparently documented his multiple failings on her iPad.

Having laughably raised the possibility of charging Ms Tymoshenko for spending the proceeds of carbon trading on much needed flu vaccines during the 2008/9 winter, the prosecution has settled on charges relating to the gas deals Ms Tymoshenko signed with Vladimir Putin in 2009. That these deals increased the price of gas Ukraine purchased from Russia, while also setting minimum quotas means that the current government of Victor Yanukovych has a useful political point to bludgeon home.

That said, it remains bizarre that Mr Yanukovych would want to put his rival in last February’s poll on trial, confirming, in the words of The Economist, that he is the very thing he has sought to avoid, ‘a neo-Soviet autocrat.’

Since that election, he has struck a new deal with Russia, by no means beyond criticism, but with a 30% discount on imports as the headline figure. This has encouraged the IMF to re-open its credit line, while in a separate but no less important show of confidence, foreign investment is up 35%. The summer has started very promisingly, while this year promises a bumper grain harvest and next year Ukraine is co-hosting Euro 2012 with Poland.

Moreover, the wider political atmosphere is congenial, to say the least. Western governments, if not all diplomats, have largely bought into Mr Yanukovych’s promise that he has not turned his back on European integration. NATO is currently conducting joint exercises with Ukraine, while Poland is making a free trade agreement with its Eastern neighbour a priority of its EU Presidency. Surprisingly, given election propaganda at the time, the international consequences of Mr Yanukovych’s victory have been almost nil.

There has been criticism of Mr Yanukovych, for sure. Freedom House has been critical of his administration and in a compelling analysis of the deal Mr Yanukovych made with the Kremlin, trading lower gas prices for a renewal of the lease on the Sevastopol naval base used by Russia’s Black Sea Fleet, Chatham House’s James Sherr has cited several clauses that disadvantage Ukraine at least as much as Ms Tymoshenko’s two deals.

Firstly, the discount is calculated as a debt, meaning that if in future the lease is terminated, Ukraine will be lumbered with a huge bill by Russia. Secondly, the transit fees will not be allowed to rise in line with market forces, as per the previous deals. Finally, Gazprom has indicated that it is resistant to letting Ukraine off the hook with the take or pay quotas and could oppose re-exporting the gas. Russia, meanwhile, has not let up in its indications that it would like to build a new pipeline to bypass Ukraine altogether, removing a staple of the Ukrainian economy.

Ukraine’s judiciary has proved its independence before, most noticeably when the Supreme Court ruled for a repeat of the corrupt 2004 elections that preceded the Orange Revolution. This raises the possibility that the trial might collapse, Ukraine having proven its relative freedom while depriving Ms Tymoshenko of resources and the ability to challenge Mr Yanukovych’s dealings in the mean time.

In a sense, it is win-win for the government whether Yulia Tymoshenko is found guilty or not, assuming that the EU continues its unchallenging stance. Business confidence hardly seems phased by internal politics and the government is relatively unassailable as the economic situation continues to improve. Yet that very invulnerability doubles up as a reason to drop the trials of several members of the previous government. Some politicians, such as Senator John McCain, are only too keen to press home uncomfortable truths when Mr Yanukovych is in a less comfortable position. Given that Mr Yanukovych won the last election by a whisker, he ought by Western standards to be more careful. But in the former Soviet Union, that does not always appear to be the first instinct and old habit die hard.

A Crisis in Ukrainian Democracy

There has been a considerable hush in the international media since the Ukrainian Presidential Election in February of 2010. Of course, there is nothing like an election to get the democratic pulses flowing – plenty of people to talk to, rumours of corruption to pass on and crude positioning to sneer at – but you would be forgiven for thinking that, if only the calendars of new democracies could be synchronised so that the elections of all of them could be covered in the most comfortable and efficient manner, all would be right in the world.

I must admit, that I wish Ukraine’s democratic election could have been the start of a happier period in the history of that unhappy nation. However, the opposite is true. When I wrote about the election, it was to mourn the passing of then-Prime Minister Yulia Tymoshenko from the political scene. In her brief second government, Tymoshenko negotiated a loan with the IMF in late-2008 and struck a gas deal with President Putin, against whom she had previously sought a European strategy of containment, after Gazprom halted supplies to Ukraine.

Ms. Tymoshenko’s defeat was always going to be total because her opponent, Victor Yanukovych now has the Ukrainian state apparatus at his disposal. Sure enough, while the rest of the world was gearing up for Christmas, charges were brought against Ms. Tymoshenko for ‘mis-spending state funds.’

Perhaps the government felt that the headlines that this charge would generate would be severe enough for the former Prime Minister. Yet, they amount to an accusation that Ms. Tymoshenko applied funds from the sale of Ukraine’s carbon quota under the Kyoto Protocol, not for personal profit, but to the pensions deficit. Never mind that Ms. Tymoshenko was openly critical of the previous President, Victor Yuschenko’s pre-election largesse in the wake of a flu-epidemic, or that Ms. Tymoshenko insists that the money is still at the disposal of the Environmental Ministry, the charges are wholly disproportionate and are inflamed by the recent brawl in the Ukrainian Parliament. The Yanukocych government has settled on intimidation, and intimidate it will.

The charges against Ms. Tymoshenko would not be so unwelcome if the government were itself pure and travelling in broadly the right direction. Here I owe a debt of gratitude to the author of this article in Der Spiegel, for describing a recent case settled in the Arbitration of the Stockholm Chamber of Commerce. The facts, as presented, are thus; In 2009 Ms. Tymoshenko struck a deal with President Putin when Gazprom (the Russian energy company) cut off supplies to RUE (the private company which buys gas on behalf of Ukraine but is 50% owned by Gazprom) on the basis that the Ukrainian state gas company (Naftogaz) would assume RUE’s liabilities to Gazprom. This deal also included increases of 30% in the transportation costs and a rise in the price of gas from $180 per thousand cubic metres to $235.

RUE contested the transfer of control over the gas held in storage in Ukraine and after getting nowhere with the Ukrainian courts, sought arbitration in Sweden. The renown of the Institute partially explains this change of tactic, but RUE can hardly have considered the confidentiality of the case to have been a disadvantage in their case.

After February’s election, new-President Victor Yanukovych replaced the entire board of Naftogaz, then dropped the case against RUE, agreeing not only to return the gas held in storage, but an additional ten per cent as compensation. It is all but certain that the Ukrainian government simply changed its position, adopting on behalf of the Ukrainian people a liability to RUE equivalent to either one-quarter of its annual gas requirements, or over $5.4bn. To put this into perspective, the Ukrainian budget Mr. Yanukovych has just adopted forsees total expenditure of $40bn, of which nearly $8bn is debt-repayment.

In 2012, Ukraine will be the joint host of the European football championships with Poland, with all the attendant costs. It will be another distraction, and perhaps a means of apologising for the Ukrainian government that appears to have no interest in the well-being of its citizens. Perhaps we will never know quite what the extent of the back-handers from the RUE-Naftogaz were, but what is most important is that it seems very unlikely that Ukraine can recover from the financial crisis of 2008 in any short time, or whether Ukraine’s citizens will see the results of what little gain there is.

In short, the Ukrainians need the protection of international scrutiny, by the IMF, the EU, and the media. They are unlikely to get anything of the sort from inside their own country, where it is still dangerous to be a journalist, let alone a politician. And yet, although history and ignorance teaches me to be a sceptic, it is still a little joy to me to see Yulia Tymoshenko kicking out;

“The oligarchy would not like such a choice. They need cheap labor, poor and disenfranchised people who can be forced to work at their factories for peanuts. And they also need Ukraine’s riches, which they have been ruthlessly stealing for the past 18 years. They’re not interested in your fate or the future of your children. They haven’t lived in Ukraine for a long time, they just exploit it…

And I will fight for principles and values that you share. I will fight regardless of whether I am in power or opposition. And I will never let them take away the Ukraine that you all deserve – a free, strong, fair, prosperous and beautiful Ukraine. I am with you!”

Yulia Tymoshenko, 22 February 2010