http://hir.harvard.edu/archives/7026Ten (Un)Easy Steps to Save Ukraine
Andreas Umland August 31, 2014 Blogs, Eastern Europe, Europe, Security
Towards a Paradigm Shift in Western Approaches to Kyiv’s Europeanization Efforts
Editor’s note: This piece is by Kostyantyn Fedorenko and Andreas Umland. We display the name of only one author due to technical limitations.
Eminent Yale historian Timothy Snyder has recently added an argument why the European Council should, after all, officially recognize a future membership option for Ukraine. A formally announced EU entry option would not only strengthen and energize today’s reformers in Ukraine, an argument made before. It would also motivate potential foreign investors to come to Ukraine in order to gain a foot in this future EU member country. By encouraging foreign direct investment (FDI) via an EU membership possibility as well as some other measures proposed below, the West could effectively intervene into Ukraine’s economic affairs, with little costs – at least during the next years. Without much effort, the EU could help to balance the current discouragement of investment activities by Russia-promoted military and political instability. Brussels’s official membership perspective would especially encourage multi-national conglomerates to start building up already today a presence in this large East European market scheduled to become one day an integral part of the EU economy.
The official provision of a future EU entry offer should be easier than is sometimes assumed. Opinion polls indicate considerable public sympathy for Ukraine and increasing frustration about Moscow’s policies towards Kyiv, in many European states. This circumstance should make it easy for EU politicians to justify such a move. Under the Treaty of the European Union, all states situated in Europe can apply to become EU members, in any way. Finally, the example of Turkey indicates that, even once official EU entry negotiations are opened, a soon accession is not a foregone conclusion.
Swift VLAP Implementation and AA Ratification for FDI Facilitation: For similar reasons, the EU should push for the completion of its Visa Liberalization Action Plan (VLAP) and full ratification of its Association Agreement (AA), with Ukraine. Visa-free short term travelling for both EU citizens to Ukraine, as already possible now, also of Ukrainian citizens to the EU, under the VLAP, would facilitate economic, educational, governmental, and other interaction. Before the visa-free regime is put into action, EU consulates should issue as many long-term multiple visas as possible. (The widespread fear of an additional inflow of illegal Ukrainian labor migrants is overblown. Their numbers in the EU are already high. The possibilities for illegal migration to the Schengen area are currently wide too.)
Full ratification of the AA, by all EU member states and the European Parliament, would send signals to foreign investors similar to those of an official EU membership perspective. Its implementation would, in a number of ways, encourage, ease and simplify the planning and implementation of foreign investment projects. The fully ratified AA, moreover, presumes the creation of common institutions that would include representatives of both the EU and Ukraine. These institutions will be setting Ukraine’s reform agenda for the years to come and influencing Kyiv’s domestic decision-making. The Association Council to be created once the AA is fully ratified could be vocal on problematic issues in legislation, policy-making, and jurisdiction. It would put pressure on the Ukrainian parliament, courts, and government, both in meetings and via mass media, to deeply incorporate and fully apply EU regulations in practice.
Political Insurance Provision for International FDI: In an article in The Guardian, prominent financial magnate and philanthropist George Soros suggested that Western governments could provide political risk guarantees to those “willing to invest in or do business with Ukraine.” Obviously, potential investors will be more interested, if they feel their investments are safer, while their funds might be crucial to kick start Ukraine’s receding economy. To install such insurance schemes or guarantee funds, European governments and interested private donors should pool callable capital that can be used to cover losses if needed.
They could do so on both the national and international level. In the first case, they could follow, for instance, the example of the German so-called “Hermes cover,” an export credit guarantee scheme that insured, among others, German business relations with partners in the fragile post-Soviet area over the last two decades. In the second case, the Multilateral Investment Guarantee Agency (MIGA) of the World Bank – primarily designed to insure investment risks in developing economies– could be specifically tasked (and, if necessary, additionally funded) to extend credible assurances of FDIs into the Ukrainian economy.
A Crimea Occupation Tax: The European Union could introduce special import duties for certain Russian deliveries through a Crimea Occupation Tax (COT). As long as Crimea remains annexed, all energy imports from Russia – which, in 2013, made up 78% of all EU imports from Russia – would be taxed, with an annually increasing customs rate. One draft project proposes a 5% tax, to be levied already in 2014, which would grow to 25% by 2018. A gradual rise would allow EU states to find alternative gas, coal, and oil suppliers, and incrementally develop non-fossil energy sources. Parts of the COT-generated revenue would be directed to Ukraine; parts could be used by the EU to become more energy-efficient and Gazprom-independent. An EU-wide unified COT would be also a step towards strengthening common EU energy policies. Finally, the economy and budget of Russia would be weakened diminishing funds that the Kremlin can direct towards the military sector.
Non-Lethal Weapons Deliveries, Medical Assistance, Counter-Insurgency Advice: The Ukrainian army is in dire need of medical assistance as well as specialized training, advice and material for suppressing the Russia-supported separatist insurgency in the Donets Basin. Non-lethal equipment and material provided by the West to Ukraine could include body armor, transport helicopters, mobile border surveillance watch towers,as well as first aid kits, medical equipment, and pharmaceutical supplies. Providing medicine and other non-weaponry support would lower Ukrainian casualties and suffering. Such equipment and aid cannot be misused in politically sensitive ways, or cause direct harm to civilians. It has low escalatory potential, and should be soon delivered. Non-lethal weapons and professional counter-insurgency counselling would also support peace-keeping in territories already liberated by the Ukrainian army, as activity of partisan separatist groups has been reported to continue in these regions.
Selected Lethal Weapons Deliveries and Military Intelligence Information: In a further step, NATO and the EU could officially recognize that Ukraine conducts an anti-terrorist operation on its territory, or formally define Russia’s activities in Eastern Ukraine as a military invasion. In either case, supplying crucial lethal weapons systems as well as relevant military intelligence, like satellite data, to the Ukrainian army could be considered. In both symbolic and practical terms, this would be a more risky endeavor than non-lethal equipment provision and non-military assistance. Thus, a positive decision to provide Ukraine with direct military help, even if excluding deployment of NATO troops, would require significant expenditure of political capital, and public discussion. Columbia University’s Kimberly Marten, for instance, pointed recently out the risk of Western weaponry falling into the hands of pro-Russian separatists and Russia.
Anti-Extremist Measures as Conditions for Weapons Deliveries: An additional risk could be that Western guns end up in the hands of Ukrainian radical rightists. There are some minor units of this kind currently serving in Eastern Ukraine under the guidance of Ukraine’s Ministry of Interior. They, for instance, include the numerically small, but well-publicized Azov Battalion, the leadership of which contains professed racists, as documented in research by, for instance, Anton Shekhovtsov. Arming this battalion and similar groups with Western lethal weapons would not only be symbolically disastrous — it could have negative repercussions for Ukraine’s post-war development, a major challenge of which will be the demobilization and deweaponization of currently active para-military units.
Therefore, lethal weapons deliveries should be made dependent upon full dissolution of all ultra-nationalist-dominated military or para-military units. The staff of such battalions should be either dismissed, or purposefully reassigned to, and dispersed in, ideologically neutral platoons. Moreover, parliamentary ultra-nationalist parties as well as individual racists should be excluded from government and other high executive positions. Such a conditionality mechanism will have positive repercussions on Ukrainian state-building that go beyond narrowly military aspects of Western help to Kyiv’s fight against the Russia-directed rebellion.
Kostyantyn Fedorenko is a recent alumnus of the Kyiv-Mohyla Academy’s Political Science and University of Hamburg’s European Studies and European Legal Studies M.A. programs. Andreas Umland is a Senior Research Fellow at the Institute for Euro-Atlantic Cooperation, Kyiv, and General Editor of the book series “Soviet and Post-Soviet Politics and Society” published by ibidem-Verlag, Stuttgart. The article continues an earlier argument of Andreas Umland, “Why the West Should Save Ukraine,” Harvard International Review (web edition), 12 July 2014. We are grateful for some useful advice given by Luc Vancraen.
