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Gas Politics are Backdrop for Ukraine Elections
Posted on Mar. 28, 2006
MoscowUkraine’s Orange Revolution was supposed to be the former satellite state’s unwritten but powerful and internationally popular emancipation proclamation from its master. After years of corrupt pro-Soviet and then pro-Russian government under Leonid Kuchma, followed by that of the even more corrupt Viktor Yanukovich, the Ukrainian people took to the streets. And in 2004, they annulled an obviously bogus election and installed a new government. Viktor Yushchenko became president and Yulia Tymoshenko became prime minister. They were “the king and the queen” of the Orange Revolution, the darlings of the international media who were supposed to usher in a new Ukraine, incorruptible and independent. But the March 26 parliamentary elections have left much of that history in the dust. Polls show that Yushchenko has likely lost the election. His old opponent, Yanukovich, appears to have garnered 33 percent of the seats in the 450-seat Parliament. Yushchenko’s ally-turned-foe, Tymoshenko, got 22 percent of the vote. Meanwhile, Yushchenko’s Our Ukraine party, appears to be in a distant third, with 13 percent of the vote. The new situation in parliament may mean more scrutiny for the gas deal that Urkaine did with Gazprom following Gazprom’s early January decision to shut off natural gas to Ukraine. That move also caused gas flow reductions to Europe. The settlement between Ukraine and Russia saw the emergence of a new company called RosUkrEnergo, which got a monopoly on the natural gas trade between Gazprom and Ukraine. But nobody had ever heard of the Switzerland-based RosUkrEnergo. And no one seems to know who owns it. So far, investigations into RosUkrEnergo have been stymied. Former security services chief Olexander Turchinov was forced to resign in late March, after he “went too far in the investigation” of corruption, according to his own statement. After this forced resignation, Tymoshenko said that the “investigation was artificially closed.” It appears RosUkrEnergo has Yushchenko’s endorsement, as well as Kuchma’s. The company also has ties with Eural Trans Gas, another trader in the January deal who was supposed to bring in cheaper gas from Turkmenistan to add to Gazprom’s.Semyon Mogilevich, a Ukrainian-born character who allegedly has ties to organized crime in Russia, also has been tied to RosUkrEnergo.
The opponents of the deal with RosUkrEnergo (which despite its stench, still provides gas to Ukraine at less than half of market prices) realize that for now, Ukraine has all the marbles. If Gazprom were to shut off Ukraine, Europe would be in an uproar, not to mention that this would place Gazprom’s entire distribution system in jeopardy.It is this realization that allowed Tymoshenko, during a March 23 press conference, to say that “without corruption, it was impossible to sign such an agreement” – referring to the gas supply deal with RosUkrEnergo. Since then, Tymoshenko has declared that Ukraine’s gas supply deal with Russia should be cancelled immediately after the upcoming parliamentary elections. So what happens now? Well, it appears that Yanukovich or Yushchenko will have to form a coalition government with Tymoshenko. And she is eager to reopen the investigations into RosUkrEnergo and/or cancel the gas deal. Whatever happens, it looks like the turmoil between Ukraine and Russia will last for a while.
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