How Likely Is the Cancellation of the Gas-for-Fleet Pact Between Ukraine and Russia?

By Maskym Bugriy

On June 19, the Ukrainian parliament (Rada) failed to approve a draft law on the denunciation (abrogation) of the “Kharkiv Accord,” which President Viktor Yanukovych’s government signed with Russia in April 2010. The Kharkiv Accord allowed for the continuation of the stationing of the Russian Black Sea Fleet in Sevastopol, Ukraine, in exchange for a discount on natural gas being imported from Russia. While, according to a set of bilateral agreements entered in 1997, the Russian Black Sea Fleet was supposed to leave Ukraine by 2017, the April 2010 Accord prolonged Russia’s lease of the Sevastopol naval base until 2042, allowing for renewal automatically for subsequent five-year periods, unless notified a year in advance (http://zakon2.rada.gov.ua/laws/show/643_359).  The draft law denouncing this deal was initiated by Batkivshchyna Member of Parliament (MP) Volodymyr Yavorivskiy and admitted to the Rada on December 12, 2012 (http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=44950).

A look at the draft denunciation bill’s vote breakdown implies that the bill fell 74 votes short of the 226 necessary for its approval by the Rada. In fact, it also shows the absence of votes of 33 elected MPs belonging to three opposition factions in the Rada (http://w1.c1.rada.gov.ua/pls/site2/p_deputat_list), although their approval votes would not be enough to reach the count necessary for the cancellation of the Kharkiv Accord. Clearly, the opposition lacks the majority to approve the denunciation and even the unity to stand behind it. At the same time, the public appears uninterested in the issue. The news on the failed attempt to legally abrogate the Kharkiv Accord was reported in all major Ukrainian media, but it received little analysis. The language of the denunciation draft law was rather simple, filling two short paragraphs. Its initiator, MP Yavorivsky, is a member of the Rada Committee on Culture and Spirituality. Before the vote, the Ukrainian opposition has not launched any campaign for this draft law. In fact, it was doomed to fail.

On the day of the vote, Ukraine’s First Deputy Foreign Minister Ruslan Demchenko told Interfax that a unilateral cancellation of the agreement is not legally possible (http://en.interfax.com.ua/news/general/157784.html). But it does not mean that the Kharkiv Accord would not be questioned again in the future. Opposition leaders Yulia Tymoshenko, Arseniy Yatsenyuk, Vitaliy Klichko, and Oleh Tiahnybok all had sharply criticized the Kharkiv Accord in the past. Even for the ruling Party of Regions, the agreement stirs up controversy. For one thing, Kyiv hoped that Russia would engage Ukrainian companies in the modernization of the Black Sea Fleet. But instead, as Izvestia investigated, “Putin banned the repair of Russian military ships abroad” (http://izvestia.ru/news/547782). Russian officials often insisted that cooperation is possible only with Ukraine joining the Russia-Belarus-Kazakhstan Customs Union. Interestingly, billionaire Vadim Novinsky, whose Smart Group controls the top Ukrainian naval company Chornomorsky Shipyard, is running for the Rada in the Sevastopol constituency. A Russian national with business in Ukraine, Novinsky was granted Ukrainian citizenship by Yanukovych on June 1, 2012, “for outstanding merits to Ukraine” (http://un.ua/eng/article/394123.html). In running for parliament, Novinsky presents himself as a strong proponent of Ukraine joining the Customs Union as he confirmed on June 17, 2013 (http://www.nr2.ru/policy/444349.html).

Yanukovych’s June 6, 2013 address to the Verkhovna Rada acknowledges the still unresolved issues in the mechanism of Ukraine’s control over the operations of Russia’s Black Sea Fleet (http://www.niss.gov.ua/articles/1192/). But it also states that for the sake of modernization, it is in Ukraine’s national interest to cooperate with Russia as an equal partner not only in the economic, but also in political and security areas. By doing so on the Black Sea, however, Kyiv increasingly acts as a supporter of Moscow’s power projection capabilities. One example is the June 26 joint naval and ground forces exercise “Farvater Mira 2013” around Sevastopol. The drill’s main objective was counter-piracy, but it also practiced air defense by destroying targets dropped from a Russian SU-24 jet fighter (http://interfax.com.ua/news/general/158419.html). Notably, Russia’s command ship during the exercise was the guided missile corvette Bora that can be used against small vessels, but which Russia proudly considers to be its means of fighting off North Atlantic Alliance navies (http://www.rg.ru/2013/05/07/korabl-site.html).

Although it failed to garner enough parliamentary support, the initiative to consider the denunciation of the Kharkiv Accord is a warning sign for President Yanukovych and the ruling Party of Regions. Even though the opposition has perhaps limited foreign policy resources and concentrates its efforts on the most persistent issues of European integration and avoiding membership in the Customs Union, security policy and the Black Sea Fleet’s stay in Sevastopol may now come to the forefront of the political debate. A sign of this is already apparent: On June 24, Arseniy Yatsenyuk, in a presentation at the Brookings Institute, included Ukraine’s integration with the West in his discussion of the country’s military dimension (http://youtu.be/o2mqpT9zQ7Q). This shift in the conversation may eventually lead to calls for the abrogation of the 2009 Gazprom-Naftogaz contract for natural gas supply. And indeed, Ukraine’s new energy diversification policy (see EDM, November 20, 2012; January 28, February 11) will add more incentive to breach Kyiv’s agreements with Moscow over Russian gas. The more confident Ukraine starts to feel about its own bargaining position vis-à-vis Russia, the less certainty there will be that the Black Sea Fleet will stay in Sevastopol forever.

Nouveau Riche Kurchenko Buys Large Ukrainian Media Holding

By Oleg Varfolomeyev

Ukrainian businessman Borys Lozhkin has agreed to sell his Ukrainian Media Holding (UMH) company to Serhy Kurchenko, an energy businessman. Kurchenko is reportedly linked to the circle of officials and businessmen dubbed by local pundits “the family” for their links to the family of President Viktor Yanukovych, in particular his elder son Oleksandr Yanukovych who is a banker and mining businessman. This is the latest in a recent chain of acquisitions of local media organizations, either neutral or opposition-minded, by businessmen reportedly linked to the ruling party, evidently in order to monopolize the media ahead of the presidential election scheduled for early 2015.

The chief editor of Forbes Ukraine, which is part of UMH, Volodymyr Fedorin, suggested that Kurchenko made the acquisition in order to stifle journalists and improve his own reputation (Forbes.ua via Pravda.com.ua, June 20). Kurchenko denied this, saying the acquisition was a good business investment (http://forbes.ua/business/1354323-kurchenko-o-pokupke-mediaholdinga-umh-group). It has been rumored that Lozhkin was pressed into selling UMH, but Lozhkin said there was no pressure on him and all his partners approved the deal (Interfax-Ukraine, June 21).

The deal attracted very much attention in Ukraine. UMH is one of the largest local media holdings and publishes the Ukrainian versions of international newspapers such as Forbes, Vogue, Agrumenty i Fakty and Komsomolskaya Pravda, as well as the popular local weeklies Korrespondent and Fokus. The media company also owns a host of popular FM stations and news websites. However, UMH has also drawn wide interest because of the personality of the buyer. Kurchenko, who is only 27, rose from obscurity astonishingly quickly. He was virtually unknown until last December, when he sensationally acquired one of Ukraine’s most prominent soccer clubs, Metalist Kharkiv. In February, Kurchenko founded VETEK, an energy holding company. Within weeks after that, VETEK bought the Odessa oil refinery from Russia’s Lukoil, and a petrol station chain in Germany (Kyiv Post, June 21).

VETEK is rapidly turning into a strong competitor of the national oil and gas behemoth, Naftohaz Ukrainy. In March, it started importing gas from Hungary and recently it launched talks to buy gas from Russia’s Gazprom. Kurchenko also wants to buy the Lysychansk oil refinery from the Russian state-owned oil giant Rosneft (Kommersant-Ukraine, June 17). In Ukraine, it would have been impossible to rise to such prominence so quickly without links to the very top of the government. Speaking in his first public interview in May to a newspaper that he would buy within less than a month, Kurchenko had to deny the rumor about his close links to First Deputy Prime Minister Serhy Arbuzov, Tax Minister Oleksandr Klymenko and Member of Parliament Artem Pshonka, the son of the prosecutor general. He said he had climbed the career ladder from a courier and a sales manager within ten years thanks to his devotion to the energy business and a favorable business climate (Korrespondent, May 24).

The national news outlets that changed hands shortly before UMH included Inter TV, which energy businessman Dmytro Firtash, who is linked to the ruling party, bought from former cabinet minister Valery Khoroshkovsky in February; the formerly outspoken pro-opposition TVi, whose owner changed in April; and the UBR business channel. Also, before selling UMH to Kurchenko, Lozhkin sold Fokus. Natalya Lihachova, a prominent local media analyst, opined that “the purpose of those acquisitions leaves no doubt: the 2015 election” (Telekrytyka, June 19).

RFE/RL Broadcasts Save Non-Russian Schools in Tatarstan

By Paul Goble

Those who doubt the enormous power and continuing importance of international broadcasting to the post-Soviet countries should consider the case of five Tatar-language and two Mari-language schools in the Republic of Tatarstan, in the Russian Federation. Republic officials, under pressure from Moscow, had decided to close them in the name of economic efficiency but, according to the mayor of the town where the schools are located, they have now been saved because of reporting by Radio Free Europe/Radio Liberty’s Tatar-Bashkir Service.

Salagish Mayor Aydar Khosnetdinov sent a letter to RFE/RL expressing his gratitude for the Tatar-Bashir Service, known as Radio Azatliq, and its contribution to keeping these Tatar- and Mari-language schools open in the Middle Volga. His letter added that this success gives hope that Tatar schools will survive the Russian campaign under the guise of “consolidation” to close them (for Khosnetdinov’s letter, see azatliq.org/content/article/24979225.html; for an English rendering of that letter and a discussion of its meaning, see rferl.org/content/impact-tatar-schools-financial-optimization/25007680.html).

RFE/RL’s Tatar-Bashkir Service had received and posted on its website comments from former students who said that officials had lied about their schools. These students had only positive things to say about their places of learning, including about the state of inter-ethnic relations there. According to Mayor Khosnetdinov, Radio Azatliq’s broadcasts compelled the republic’s education ministry to keep these schools open, even as Moscow closes non-Russian schools in many places where no such Western broadcasts are heard.

If many in the West are now uncertain of the power of such broadcasts, few in Russia and the neighboring region have any doubts about it. The editors of the Russian nationalist website Third Rome, for example, said last week (June 19) that Tatar nationalists and separatists were gaining support “not only at the local level” but from Radio Azatliq based in Prague and were being “officially financed” by the United States Congress (3rm.info/36341-tatarstan-gotovitsya-otdelitsya-ot-rossii.html).

According to this Russian nationalist outlet, Radio Azatliq’s broadcasts are contributing to “a powerful outburst of nationalism and separatism” in Tatarstan and that Tatars are once again calling—as they did in 1991—for their country to expel “all Russian occupiers” and form an independent Tatarstan that would include not only the current republic “but a number of oblasts of Russia “on the territory of which” the Golden Horde once ruled.

Moreover, the Third Rome site continued, Tatars have even picketed in front of what it incorrectly called “the embassy of Turkey in the center of Kazan,” which is, in fact, a consulate. At the time, the site said, Tatar nationalists marched under banners that proclaimed “Turkey! Help the Turkic Peoples of Russia to Preserve Their Rights and Traditions” and “A Linguistic, Spiritual, Cultural and Silent Genocide of the Turkic Peoples is Taking Place in Russia! Turkey, Do Not Be Silent!” Notably, international broadcasters can report on these developments when local media are prevented from doing so.

And in another measure of the power of Western broadcasts, RFE/RL reported last week that Baku officials appear to have begun jamming its satellite broadcasts in Azerbaijani, a violation of international telecommunications rules (rferl.org/content/release-interference-with-rferl-signal-to-azerbaijan/25023524.html). The more authorities in the post-Soviet space want to silence international broadcasting to their countries, the more apparent the continued influence of these outlets such as RFE/RL becomes.

North Caucasian Terek Cossacks Demand Concessions from Moscow

By Valery Dzutsev

On June 8, over 3,000 Cossacks rallied in the city of Lermontov, Stavropol region. The so-called Terek Cossacks came from Dagestan, North Ossetia, Kabardino-Balkaria, Chechnya and Stavropol region itself (http://www.kp.md/daily/26087/2991281/). The Terek Cossack website terkv.ru asserted that over 4,000 members of regional Cossack associations participated in the gathering. The Cossacks unveiled unusually blunt demands in a letter to Russian President Vladimir Putin. They decried their powerless status in the region and vilified Moscow’s envoy to the North Caucasus, Alexander Khloponin, along with the general negligence of the Russian authorities that have undermined the Cossacks’ standing in the North Caucasus. As retribution for their perceived injustices, they asked for “at least” 100,000 hectares of land in the North Caucasus Federal District, quotas for fishing on the Caspian, which is known for sturgeon and black caviar, supplies of brandy from the famous factory in Kizlyar in northern Dagestan, an exclusive license for North Caucasian mineral water, and some other recreational resources. The demands of the Cossacks sounded so expansionist that even Russian politicians in Moscow, who are normally very supportive of Cossacks’ claims, tried to tone down the group’s aspirations (http://izvestia.ru/news/551783).

The Cossacks’ demands sound almost as an ultimatum for the Kremlin. This is unlikely to be simply the fault of poorly drafted wording of the Cossacks’ letter, but rather was by design. The Russian government is increasingly concerned about the outflow of ethnic Russians not only from the republics of the North Caucasus, but also from the large predominantly ethnic-Russian region of Stavropol. Consequently, the Cossacks realize that they have certain leeway in carving out better conditions for themselves in negotiations with Moscow. Moreover, the Cossacks certainly now enjoy greater support from the (non-Cossack) Russian populations of Stavropol and Krasnodar as the government seems to be unable to protect these territories from the influx of non-Russian migrants from the North Caucasian republics. In June 2011, Khloponin even called on the Cossacks to help secure the situation in the North Caucasian national republics: “I would like to see the Cossacks as a force sufficiently capable of addressing many tasks, including law enforcement related issues…for Cossacks to become more entrenched there, in the territory, so that our Russian-speaking population would get stronger in these republics” (www.caucasustimes.com/article.asp?id=20882; see EDM, July 1, 2011). Nevertheless, promoting the Cossacks as the pillar of the containment strategy against the North Caucasians’ inflow into the primarily ethnic-Russian areas of the North Caucasus is likely to create new lines of tension in the already tense regions of Stavropol and Krasnodar.

At the same time, the actual formation of a separate, non-Russian, Cossack identity could become another unwanted corollary effect of this government strategy. These contradictions, therefore, explain Moscow’s irresolute approach to the Cossacks: On the one hand, the Russian government wants to make use of them, but on the other, it fears their potential power.