09-27-2006

YUSHCHENKO: OPPOSITION TO NATO IS LEGACY OF THE PAST

In Jan. 2005, Viktor Yushchenko was sworn into office as president of Ukraine. He assumed power after winning a free and fair election that was held as a result of the Orange Revolution, a mass nonviolent civic protest that engaged millions of Ukraine's citizens. This summer, after free and competitive elections for parliament, Ukraine saw the establishment of a coalition government headed by President Yushchenko's political rival, Viktor Yanukovych, raising new international concerns about the direction of Ukraine's political and economic evolution. In recent weeks, Ukraine's experiment in "cohabitation" among former political opponents has seen the emergence of important policy differences and political jockeying. With Ukraine's still-powerful presidency led by a representative of the reformist values of the Orange Revolution and the government and parliament led by non-Orange forces, there are uncertainties about the directions Ukraine will take on such issues as integration into Europe, cooperation with NATO, and internal democratic and economic reforms. This interview was conducted for Global Viewpoint in Kyiv on Sept. 20, 2006, by Adrian Karatnycky, president of the Orange Circle, an international nongovernmental organization that works to promote "the values that were at the core of Ukraine's Orange Revolution."

By Viktor Yushchenko

Question: Around the world, friends of democratic reforms are alarmed that Ukraine’s new governing coalition, led by the Party of Regions, may retreat from the democratic values of the Orange Revolution. How do you answer those who have such concerns and worries?

Yushchenko: The forces that made the Orange Revolution didn’t lose electoral support between late 2004 and the parliamentary elections in March 2006. The replacement of an Orange coalition by another coalition did not reflect a change in people’s political sympathies, but was based on political events — the Socialist’s departure from the Orange bloc, in part over differences on NATO, integration into the European Union, land privatization, the Common Economic Space (with Russia), and so on.

The new coalition, headed by the Party of Regions, was created on the basis of positions shaped in the last presidential and parliamentary elections. In my view, these positions were rather dangerous for the aims of national unity, national security and a competitive market society. These positions were most likely shaped during the ebb and flow of an election campaign and cannot be the basis of national policy. Still, the coalition that formed naturally represented positions that worry democratic circles.

And this is why after the new (non-Orange) coalition was formed, there was a need for a determined effort at consultations among major political forces to unite around national values. This was the genesis of the Universal Declaration (of National Unity, a political pact signed this summer) whose aim was to ensure that whether in power or in opposition, a political force should be unified around common national interests . . . that reflect national priorities . . . . The forces that signed this document declared their responsibility and adherence to key national policy priorities: the unity and territorial integrity of Ukraine; they affirmed the aims of integrating into European and Euro-Atlantic structures; pledged themselves to shape an effective national security policy; and to resolve differences concerning the status of Ukrainian as the sole state language in the country.

Time will tell (if this mechanism has worked). Still, I am convinced that if the parties adhere to the norms in the pact, we will have stability — for the pact represents the proper national course, irrespective of whether one is in power or in opposition.

Question: Prime Minister Viktor Yanukovych’s recent statements in Brussels about the need to freeze progress toward NATO integration suggests a certain distancing from the basic direction of Ukraine’s political pact. Is it your view that this is the beginning of a sharpening of differences in your relations with the prime minister and his political allies?

Yushchenko: I think the (prime minister’s) position may reflect a certain political fear to take a decisive position on a question that is a foundation of our national security. There have been certain traditions until now, relics of the Soviet era, promoted by the mass media for decades in terms of a (suspicious) attitude to Europe and to Euro-Atlantic integration. So this attitude represents a legacy of the past. But while it is important we acknowledge the influence of the past, we also need to choose the future — one that reflects the real interests of national security. So this may be an answer why the (prime minister) and government have taken such an indecisive position with regard to relations with the North Atlantic Treaty Organization.

I also think that this has to do more with the last elections than with their real position. The prime minister has more than once confirmed his belief in the fundamentals of our choice, and so I don’t see the abandonment of this belief. However, today there is a debate in political circles and within society that is occurring because we are now at a fundamental point in our efforts at integration. Still, today, Ukraine’s Law on the Fundamentals of National Security clearly attests to the aim of full integration into European and Euro-Atlantic security structures. And the reason politicians are taking positions on the question of the timing of this integration is called forth by the fact that Ukraine is nearing that time of decision on whether to join NATO or not.

Question: Do you believe the prime minister and his circle will carry on a political campaign aimed at building public opposition to NATO integration, or will they support an effort to shift public opinion on behalf of NATO integration through better education on the Atlantic alliance. In others words, is this a make-or-break moment?

Yushchenko: You know, I will be frank, there are no serious arguments for changing our foreign policy course, particularly in regard to NATO. If you analyze the interests of the nation, of how to leave the country in an auspicious state for the next generation, then there can only be one answer: This is in the context of a European project, by forming a common security, economic and humanitarian space . . . . All other options are a part of history, and, at that, an unhappy history for Ukraine and Ukraine’s interests . . . . This is why I am convinced that the executive and legislative branches in Ukraine will with every passing day express themselves more clearly on this principled question.

Question: The tempos of economic growth in the last year significantly improved, and this reflected policy changes you introduced last year. Some people say that the Party of Regions has a relatively progressive position on economic policy. Others are of the view that it is an unreconstructed party that reflects pre-Orange authoritarian and statist values. Where is the truth?

Yushchenko: Two processes are at work. Firstly, Ukraine’s authorities and their methods of work cannot be the same as they were two, three or four years ago. Today, you can’t run the country by shadowy means, not only because it is difficult but because it is now impossible. This doesn’t remove the need for a war on corruption, or the struggle against graft, or that this struggle has been won. Obviously not. But it does mean that the authorities and their use of power have become more public over the last 15 years, and government actions have become more transparent. And this leaves an impression on the activity of every political force, including the Party of Regions.

I believe the Party of Regions understands very well that the methods that were in place under the rule of (former President Leonid) Kuchma cannot be used in 2006, whether in economic or in financial policy. I’ll give you a small example. In August, in my view the new tax authorities implemented a policy of compensating value-added taxes in the manner it was done during the worst period of Kuchma’s rule. Look at the reaction of the public, of business circles, and look at how this action was assessed by the policy community. Five years ago, we all knew about such policies, but everyone remained silent and nothing changed.

Today, (the state) examines these actions to ensure that everything is done within the letter of the law. And businessmen, entrepreneurs and political forces have declared their open disapproval. This is a sign that even if one wanted to use the old methods, it is simply impossible in the new context. And so its seems to me these factors are well understood in the Party of Regions. They realize it is impossible to work according to the same values and methods that were popular just a few years ago. Civil society, political forces, and the presidency itself will not allow a return to such disreputable means.

Question: Let’s talk about the intersection of foreign policy, national security and the economy: the question of energy and energy resources, including your efforts to promote energy diversification. I know that you’ve taken up a number of initiatives in recent months, have traveled to meet with leaders in the energy-rich Caspian countries, conducted talks with a number of counties that provide energy, and have given new impetus to projects like the Odessa-Brody-Gdansk oil pipeline. Will you be able to synchronize this policy with the new government?

Yushchenko: I think the time has come in Ukraine for a series of legends to die, including one that posits adequate energy supplies and energy security can be ensured through duplicitous policies. This issue is becoming much more acute with every passing day.

We are witnessing the transformation of our traditional patterns and sources of energy supplies and are resolving problems in protecting the transiting of energy. At the same time, there’s more and more talk about new configurations emerging in regional and continental energy markets that are fundamentally or partly changing the nature of this market.

It’s time for Ukraine’s authorities to take clear positions that recognize we hold a number of aces in our hands . . . . We need to carry out an active policy based on national interest. We must make clear that our energy policy is not directed at someone or some country. We have enough of our own problems. We need to take care of our own national interests. And therefore our national policy should begin from how best to ensure the realization of our national interests in energy supplies, while at the same time safeguarding our national security. And here, accepted international principles begin to operate: How are we to diversify the market? Not to reject or oppose anyone, but how to diversify the energy market in a way that enhances stability, supplies and security.

Here we need to focus on the basic organization of our domestic energy market, including our domestic extraction of gas, petroleum and coal; a new energy consumption policy in which real prices and open competition would be at work.

Another consideration is our work with the key energy companies. This means cooperation in extraction as well as the practice I have introduced of public tenders for the exploration and extraction of oil and gas on the Black Sea shelf. We have the example of Shell, where we are implementing the introduction of what for our market are new and experimental forms of cooperation.

A further set of issues is the need for us to remain an active energy-transiting territory.  And so we advocate a Eurasian oil transport corridor, which can traverse Ukrainian soil traveling from Odessa to Brody and from there to the European Union. It is essential that the project be completed all the way to the Polish port of Gdansk and function fully as planned. Such an energy transport route would assist Ukraine in meeting its crude oil needs and would fill Ukraine’s refineries, but it would also be linked to Europe’s energy market through existing or new pipelines.

This is the most concrete project, one that can be accomplished in a few years. This is why we are conducting diplomatic negotiations, and negotiations at the level of energy ministers that are concentrating on achieving a five-year supply of oil (from the Caspian and Central Asian region) along this route with the integration of Ukraine’s refineries and those beyond Ukraine’s borders.

In other words, this concept has already taken on a practical scope. A working group consisting of the European Union, Poland and Ukraine already is focused on this project. We have created a consortium and proposed that the governments of Azerbaijan and Kazakhstan join it as partners. A council of the presidents of Ukraine and Azerbaijan has been created, in part to realize this project.

We are interested in a broad effort to ensure energy security by linking the Caspian Sea region through the Caucasus and then underneath the Black Sea through Ukraine into the European Union. Such a major project must first begin from the policy and diplomatic side. And this is where the discussion today is focused, on bilateral and multilateral discussions. I am convinced that this project will take shape, and this is why Ukraine is giving it so much attention.

Question: What are the views of the Party of Regions on the topic of energy diversification?

Yushchenko: I think an absolute majority among Ukraine’s political forces supports these (energy) projects and approaches. Moreover, there is a specific plan of action with regard to the development of our relations with Russia in terms of gas and oil transport, and the realization of entirely new projects. Our approach is the following: We are ready to support a program of development that reflects our common interests in relations with energy suppliers, and to offer unique opportunities that the Ukrainian side possesses, including the largest network of gas and oil pipelines that exist in Europe, as well as Europe’s largest gas storage facilities. There are new potential projects as well that could create a new means of ensuring gas and energy security for a certain part of Europe. And here I would say that if one carries out a transparent and open policy, one can find a wide array of partners.

Question: A question about an energy matter that troubles the U.S. and Europe. It is related to the role in energy supplies played by intermediary companies that are not fully transparent, particularly RosUkrEnergo (RUE). Is this intermediary essential to the future supplies of energy from Russia and Central Asia?

Yushchehko: Let me explain a series of nuances in this regard. I remember the end of December 2005, when there were sharp and turbulent discussions with Russia about supplying Ukraine with adequate gas supplies. At that time, a whole series of myths was spread both about the unreliability of Ukraine in ensuring the transiting of energy to Europe. Other myths and rumors also circulated around the RUE company.

At home, we were blamed for not achieving a good price for natural gas, that $95 per 1,000 cubic meters was too high. Let’s see if the passage of time has brought clarity to the situation.

Let’s return to the question of RosUkrEnerho. Yet again, I assert that Ukraine has no relationship whatever to this structure. To this date we have no source of credible information that would point to the fact that some state structure or private structure in Ukraine is a founder of this company. This contrasts with Russia. And yet despite this fact we are fending off an endless stream of complaints concerning the intermediary role of RosUkrEnerho in the transiting of natural gas across Russian territory.

I want to make it clear: I believe it is the sovereign right of Russia to determine who is the licensed transporter of energy over its territory. So whoever it may be, whether RosUkrEnerho or the Gaztranzyt company or Gazprom, then I think such questions should be directed to another party, not to us. This is the sovereign right of Russia, and it sets this policy. As the same time, as we discuss this policy issue, I’d like to raise an economic question. When we discussed the agreed price of $95 per 1,000 cubic meters, we absolutely sought to approach these questions by faithfully applying European practice.

Question: Does this set of European standards also apply to the price RosUkrEnerho charges Ukraine for its intermediary services?

Yushchenko: This same intermediary company, RosUkrEnerho, that provides services to Ukraine is, by the way, also providing its services to Germany and Austria. This company works on the Western market. Thus, we are one of a number of countries that is making use of these same resources and services, which are offered in a similar manner. I believe this issue has been excessively politicized, first through criticism of the allegedly excessive price of $95 price and later through criticism of the intermediary group. The main aim of this criticism was to discredit the decisions of our young administration. But the price we pay is the most optimal, the lowest among countries in our region. Simply put, no one has a better price.

At the same time, we have preserved ownership of the gas transport network, we have retained ownership of storage facilities, in other words, the entire infrastructure for energy transportation. And the agreement we have struck speaks of holding to the current prices for five years. This is why I would like all those who sharply criticized us in the past to support and come to the defense of the current agreement. This would be an immense contribution to Ukraine’s cause.

(c) 2006 Global Viewpoint
Distributed by Tribune Media Services, INC. (Distributed 9/27/06)