Ukraine is good for the West; but is the West good for Ukraine?
Dnipropetrovesk, on the Dnipro River (Dneiper). The hometown of President Volodymyr Zelensky is an industrial and cultural center, with the largest multifunctional Jewish Community Center in the world, some say. The colors in this image are reminiscent of the Ukrainian flag.
Bird’s Eye View on: Ukraine
An In-Depth Series by Back to Facts
Part I: Energy Crossroads, Gas Storage Titan
“My assignment was Ukraine. I got all the good ones [laughter].”
“The United States of America is a signal for the world, for everyone. When America says, for instance, that Ukraine is a corrupt country, that is the hardest of signals. ... American, European, companies that have international capital in Ukraine, it’s a signal to them that says, ‘Be careful, don’t invest.’ Or, ‘Get out of there.’”
By Tatiana Prophet
Ukraine is a vital crossroads for natural gas, from Asia and Russia to Europe. Ukraine has always been a crossroads, with access to the Mediterranean via the Bosphorus Strait at Istanbul. It has one of the largest gas transit networks in the world. It also has tremendous storage capacity, as large as all of Europe and more available due to a relatively small domestic demand. The gas networks are used heavily in the winter.
Further, international storage fee contracts are traded in U.S. dollars, making Ukraine almost as important as a Middle Eastern country for its role in the energy sector. And gas storage futures are a big business on the New York Mercantile Exchange.
Ukraine is Europe’s cradle of civilization. Clay model of a Trypillia dwelling (Trypillia BII, around 4000-3900 BC). Image credit: Nataliia Burdo / Mykhailo Videiko.
The earliest known place in Europe where humans practiced advanced agriculture, and created “proto-cities,” was in modern-day Ukraine. From about 5,400 B.C. to 2,700 B.C., the Trypillian people were a matriarchal society that thrived for more than 2,000 years.. And it’s no wonder: the fertile land, and its location, make for a place where humans want to be.
Employees from UkrTransGaz work on gas pipes during an anti-terrorism exercise held near to the Opary underground gas storage facility operated by UkrTransGaz, a unit of NAK Naftogaz Ukrainy, in Lviv, Ukraine, on Sept. 30, 2014.
Photographer: Vincent Mundy/Bloomberg
Strategically located on the northern coast of the Black Sea between Russia to the east and Belarus to the north, Poland to the west with Moldova and Romania to the southwest, Ukraine was at one time ruled by Lithuania, Poland, the Hapsburg and Ottoman empires, and of course Russia. Josef Stalin starved millions of Ukrainians while using their grain to feed other Soviet citizens and sell it abroad. And in 2014, the United States scored a coup of sorts when its top men “midwifed” the Euromaidan Revolution, kicking out the Russia friendly president, Viktor Yanukovych, and bringing in a government much friendlier to the West.
Aside from being a large country in Europe, what does Ukraine bring to the United States? A few things. One, the Black Sea and its five surrounding countries are rich in oil and natural gas. The Black Sea, connected to the Mediterranean via the Bosphorus strait at Istanbul, make for a vital trade route for transporting energy and goods.
The Crimean peninsula juts out into the black sea like a pearl in a ring setting. Crimea separates the Black Sea from the Sea of Azov, which laps the shores of the Donetsk region, with its resort town of Yalta.
Just passing by
In 2019, Ukraine is the vehicle that some hope will transport Donald Trump to the end of his presidency. Roughly half the people in the United States, and more than half in Europe, are giddy with the idea of Ukraine shaping up to be the hill where Trump goes down.
Yet the American media shows very little knowledge or curiosity about the place where all this activity has occurred.
Ukrainian citizens are not reaping the benefits of their country’s positive features, including the third highest natural gas reserves in Europe. The government owes the International Monetary Fund roughly 70 percent of their annual GDP. American and European think tanks are still telling Ukraine what to do. Human trafficking of all kinds is a big business, destroying the lives of the most vulnerable. And Ukraine’s wealth per capita is just above Syria’s.
Quietly walking through the Trump impeachment storm is the new president of Ukraine, the 41-year-old producer and star of the TV show “Servant of the People,” who won a landslide election for his new party, also called Servant of the People, on April 21, 2019.
Recent history
Volodymyr Zelensky defeated Petro Poroshenko, the incumbent who took charge in 2014 with the blessing of the Obama Administration during the “Revolution of Dignity.” Poroshenko had started with such promise, moving away from the influence of Russia, formerly its largest trading partner, and closer to the EU and U.S. Yet by 2018, Ukrainians had twice as much debt as before the revolution, while the median wealth of citizens was below that of Nepal, Bangladesh and Cameroon.
Vice President Joseph R. Biden, Jr., with then-Ukrainian President Petro Poroshenko.
In 2014, Ukraine borrowed more money to service its debt as well as fund the war over the Crimean peninsula and Donetsk region, both annexed by Russia after the Euromaidan Revolution kicked out a pro-Russian government and installed a government that was mainly pro-E.U. and U.S.
It’s not that Poroshenko did a horrible job; how could he when he was swimming in a sea of American and European advisers? Poroshenko followed the instructions of the International Monetary Fund, dutifully appointing foreign nationals from the U.S. and E.U. to his government and pursuing the “market reforms” that would bring him billions more in loans.
Poroshenko had to get those loans to service the bone-crushing debt of his country which in 2015 equaled 79 percent of its entire Gross Domestic Product. Pre-revolution, when President Viktor Yanukovich was in power, public debt was only 40 percent of GDP. But the main justification for the revolution was that Yanukovich allegedly stole as much as $75 billion right from the treasury -- $20 billion in gold reserves and the rest in IMF loans, according to the prime minister in the first half of Poroshenko’s term, Arseniy Yatsenyuk. Some estimates put the theft at $100 billion.
During the Poroshenko era, very few were openly questioning whether the West was serving Ukraine’s interests; in fact, the more Ukraine missed its debt payments, the more the collective finger blamed Ukraine and its leaders because, “corruption.”
In spite of all the advice, all the reforms, and all of the protests organized with international money, Ukraine remains a place where literally anyone could be on the take, or blackmailed.
Zelensky famously told TIME magazine on Dec. 2 that he trusts absolutely no one. Corruption has not gone away; in fact there were several more scandals involving Yanukovych’s cronies in the years that followed his flight to Russia in early 2014. One of those cronies was the former minister of ecology under the universally adjudged corrupt Viktor Yanukovych, the founder and chief executive of gas company Burisma Holdings Ltd. And that, my friends, is where the rest of our story begins.
“Mr. President, thank you very much. And I’m not the first time to stay in New York but I know that you’ve never been in Ukraine. And your predecessor also — how do you say it in English? — didn’t find time; I mean that. So, can you give me a word that you will come to our great country?”
PRESIDENT TRUMP: Well, I’m going to try.””
“This is your game, your geopolitics. You don’t care about Ukraine. You want to hurt Russia, and Ukraine is just an excuse.” - Oligarch Igor Kolomoiskyi, quoted in the Financial Times, May 25, 2019.
