Does Ukraine need closer ties with Russia?

The idea that Ukraine needs to strengthen its commercial ties with Russia to solve its economical problems is getting more popular in the public debate. But the politicians who support it come straight from Yanukovich’s era.

 

At the end of September, the "International Economic Forum" took place in a Kyiv Hilton hotel conference hall.  The presence of diplomats from Belarus, Kazakhstan and Kyrgyzstan made the event “international”. One of the organizers was the oligarch Viktor Pinchuk, son in law of former President Leonid Kuchma, and also founder of the newborn Yalta European Strategy, also  known as the YES Summit. An organisation whose manifesto rejects European integration, in favor of a Kuchma era multivectoral policy and the restoration of "vital" relations with Russia. The economic crisis the country is facing was the main topic of the forum, that came to the conclusion that the only medicine for a prompt cure is to go back to doing business with Russia. The idea didn’t remain between the Hilton walls.

The old nomenklatura

In recent months, more and more voices call for a return to the times before Maidan and the war, when Russia was the first trade partner of Ukraine and the poor economic condition of the population was wealthy compared to the crisis Ukrainians are experiencing today. An idea not only supported by Pinchuk, but also by many politicians of the Opposition Block, the successor of the Party of Regions of the ousted president Yanukovych, including Vadym Novinskiy, Yevhen Murayev, Oleksandr Vilkul, Mykola Skoryk and Yuriy Boyko. But also by members of the old nomenklatura, such as a former adviser to Yanukovych, Yevhen Chervonenko, and former Economy Minister Viktor Suslov.

The idea is that Europe doesn’t need Ukraine and is not going to let it enter its markets; that, in fact, there is little interest in maintaining the country’s production level, but that the aim is to exploit it instead as a huge supplier of raw materials, of which it is very rich. A topic that can leverage the resentment of the population towards the current ruling class and the sense of frustration fuelled by the economic crisis. No matter if the survey released by Murayev’s channel News One  - "more than 75% of respondents want to restore economic relations with Russia" –  is not based on reality.

The wrong treatment

It is true that trade with Russia collapsed in the last three years. However, it is not quite true that this is attributable to the effects of the Association Agreement with the European Union. A closer look, in fact, shows that it is a process which had started well before the Euromaidan, at the time of the Russian trade wars with Ukraine and its stick-and-carrot policy. The process was then accelerated by the war.

As reported by the economic magazine Tizhden, the volume of exports from Ukraine to Russia in the first seven months of 2013 was nearly nine billion dollars, while during the same period in 2016 it did not reach two billion dollars. The collapse is largely due to lost exports to Russia from the regions of Donetsk, Luhansk and Crimea. It is  impossible to recover. But it is also the import capacity of Russia itself that has declined. According to the Federal Customs Service of Russia, all Russian imports overthat time also declined by 50%, due to the collapse in oil prices and raw materials that made domestic demand also decrease.

In short, the disease is there, but the causes are not those presented by those who push for a rapprochement with Russia.

@daniloeliatweet

 

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