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February 27, 2014

Ukraine: Next Steps

By

Ukrainians have succeeded in their struggle against a corrupt, incompetent president. For now. But for the revolution to be a success, Kyiv’s new leaders must make a strong effort to reform the economy, revitalize government institutions and protect the country’s sovereignty—not squabble over power and portfolios.

The Rada, Ukraine’s parliament, removed Viktor Yanukovych from power on February 22. That same day, it granted amnesty to all political prisoners, including former prime minister Yulia Tymoshenko. Best of all, it voted to return to the constitution of 2004, which limits presidential powers, and to hold early presidential elections on May 25.

So far, so good.

Those changes followed three months of rowdy demonstrations against Yanukovych. The protests grew even bloodier last week when Yanukovych's riot police and interior troops last week savagely attacked the demonstrators in fatal shootings. The bloodshed only strengthened support for the opposition, however, and over the weekend they finally gained control of the capital.

But what they now control is a near-bankrupt country with history of stratospheric corruption and bureaucratic incompetence, and a polity which is still a work in progress. Ukraine became a failing state under Yanukovych. And the political turmoil has further weakened an already-struggling economy. The new government and its political supporters must act quickly to build a new country.

At the top of its urgent to-do list:

· successfully conduct early presidential elections;

· formulate a strategy for comprehensive reforms, and

· work closely with international financial institutions, especially the IMF, to secure a financial support package. Otherwise, the national currency, hryvnia (which just recently hit a ten-year low), will devalue further, and the country will most likely default.

The new government must also make a strong effort to reach an equitable political arrangement with the eastern, Russian-speaking regions, to prevent them from splitting from Ukraine. At stake is the future of the Crimea, Donetsk, Luhansk and possibly Kharkiv, the country’s second-largest city. If they call referenda, pro-Russian majorities in these regions may vote to secede.

Yanukovych, who has been charged with mass murder, refused to accept his resignation and fled. His supporters also called the Parliament’s decision illegitimate, and declared that they are taking control over the eastern regions.

The future of Ukraine depends also on Russia’s reaction. The Kremlin is furious over Yanukovych’s ouster and has called the new Ukrainian government illegitimate. Moscow is especially angry since the new Kyiv government’s top priority is pursuing closer cooperation with the EU and signing an Association Agreement that Yanukovych abandoned in November. It was this reversal by Yanukovich that sparked the protests which led to his fall from power.

Moscow has already suspended a massive economic package it negotiated with Yanukovych. One of Moscow’s next moves could be financial and military support of the separatist politicians in eastern Ukraine, and specifically in Crimea. One of Moscow’s frontmen, a citizen of Russia, was just elected mayor of the strategic port city of Sevastopol, where both Russian and Ukrainian naval bases are located. Moscow may also escalate the give-away of its passports to sympathetic Ukrainians, as it did in Abkhazia and South Ossetia before the war with Georgia in August 2008.

It is possible that the Kremlin might impose tougher trade sanctions on Ukrainian imports. It did so last year to help convince Yanukovych that he should drop the Association Agreement. The move cost the Ukrainian economy billions of dollars.

Russia may also close its border with Ukraine to block the free flow of people between the two countries, and tamper with remittances that millions of Ukrainian migrant workers send home.

Nor should anyone exclude the possibility that Russia will use military force in Ukraine to occupy and detach the strategic Crimean peninsula. Earlier this month, Russia announced that it might intervene in Ukraine to “maintain security of Russian citizens,” many of whom live in the Crimea. In fact, President Putin recently ordered military exercises of ground forces “

If the Kremlin decides to use military force in the Crimea or beyond, it will lead to an armed resistance by the Russian Crimean Tatars and Ukrainian nationalist forces. This may create a flood of refugees from Ukraine into Europe and Russia.

A military intervention in Ukraine would also place a heavy financial burden on the Russian economy. All of this should be clearly communicated to Moscow by the United States and the European Union to deter it from using force. The West should also warn Russia that this would be against international law and would lead to immense economic and political consequences for Russia.

Meanwhile, the U.S. and EU should be ready to provide financial aid to the struggling Ukraine—after the reforms are under way. The future of Ukraine is in the hands of the new government that must, as soon as possible, begin rebuilding the country and making it tolerant, transparent, and business friendly.

As for Kyiv, making symbolic gestures will not suffice. The new Ukrainian leaders need to prove to their people and to the outsiders who care about their country that they are not cut from the same cloth as the corrupt politicians who have ruled in Ukraine since independence and that they can build a new, free and transparent way of life for their people.

 - Ariel Cohen is a Senior Research Fellow in Russian and Eurasian Studies and International Energy Policy at the Heritage Foundation

Originally appeared in The National Interest

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