Steven PIFER: “I don’t think Ukraine will be told “no” at the summit in Bucharest”

Former US Ambassador to Ukraine Steven PIFER, who is a senior adviser at the Center for Strategic and International Studies, often visits Ukraine. He recently attended the three-day forum “Ukraine-Europe,” where he presented a report prepared by the US Partnership Committee for Ukraine, entitled “Ukraine: Assessment of 16 years of Independence.” In his opinion, the forum was an opportunity for Ukrainians and Ukraine’s friends in Europe and the US to gather in one place to discuss problems that are important for Ukraine’s integration into Europe and to hear words of support from Europe and the US, which are eager to see Ukraine become more integrated into the European and Euro-Atlantic community.

What is the Americans’ assessment of the processes taking place in our country and the recent gas agreement between the Ukrainian and Russian presidents? Why haven’t the Ukrainian authorities succeeded in eliminating the intermediary in Ukrainian-Russian gas relations? These and other questions are raised in The Day’s exclusive interview with Steven PIFER.

“REACHING CONSENSUS IS PROOF OF MATURITY”

Mr. Pifer, don’t the conclusions of the report that you presented seem contradictory to you? On the one hand, it states that Ukraine suffers from total corruption and that the state has tried too often to interfere in market relations. On the other, it says that the Ukrainian economy has grown by eight percent and that Ukraine can serve as an example of a developing democracy for other countries of the former USSR.

“Yes, the first part of the report talks about Ukraine’s achievements. Starting in 1991, they have been very significant. Ukraine has become a sovereign state that is recognized in the world. It has consolidated democratic institutions. Three consecutive electoral campaigns have been conducted fairly in your country. The economy is growing now and is becoming increasingly based on market relations. Ukraine has good relations with its neighbors, and its relations with the EU and NATO are growing closer. This is a very good image for Ukraine. But this image is not perfect yet. Ukraine has problems that in particular relate to political maturity and corruption. So far, the government has a tendency to interfere in the economy. Therefore, there are a number of problems that are preventing Ukraine’s transformation into a modern European state. And these problems are discussed in the second part of the report.

“At the end of the report we give recommendations on eliminating these drawbacks not only to Ukraine but also to the EU and US. That is, we are suggesting not only to Kyiv but also to Brussels and Washington that Ukraine be helped to make the transformation and brought into the Euro-Atlantic community.”

You mean that the main problems remain within Ukraine, in the inability of Ukrainian politicians to carry out the transformation?

“Ukraine’s political system still has attributes of immaturity, and the main political players show their inability to find a compromise. We saw this after the parliamentary elections in 2006 and last spring, and we see now the way the political struggle is taking place in the Verkhovna Rada.

Also noticeable is the tensions in the relations between the president and the prime minister. Reaching compromise and consensus is proof of maturity. It is clear that this is still a problem. Along with that, one positive thing is that this is taking place in a democratic manner. It is important that conflicts are resolved on the foundation of democratic game rules.”

GAS NON-TRANSPARENCY AND ROSUKRENERGO

The US, and you personally, support Ukraine’s move to transparent relations with Russia in the gas sphere and its rejection of intermediaries. Why has this not happened yet? Who benefits from non-transparent relations?

“First of all, I cannot speak on behalf of the US government. As for my own opinion, it is difficult for me to say why this has not happened yet. If we look at RosUkrEnergo, it is not quite clear to me what additional value this company has. At the same time, it earns a lot of money, even though it has a small staff and is not an owner of pipelines. The very lack of information about RosUkrEnergo raises the question of what kind of company it is. It seems to me that Ukraine will benefit from instituting maximum transparency. Nobody needed the crisis two weeks ago. And then Gazprom announced that it would switch off the gas supply to Ukraine within three days if it did not pay off its debts. This would not be a surprise if relations in the gas sphere had been built in a transparent way. Therefore, I think that direct contacts and maximum transparency will be beneficial for Ukraine. I think the reason why RosUkrEnergo exists is that people who are involved in this company are getting huge revenues. And this is not good for Ukraine.”

You probably noticed that RosUkrEnergo in fact became an intermediary during Viktor Yushchenko’s presidency. When Viktor Yanukovych was the prime minister, there were attempts to eliminate this intermediary. Now Yulia Tymoshenko is unsuccessfully trying to get rid of this company. Why is this step so hard for Ukraine?

“I think that certain influential politicians are interested in preserving RosUkrEnergo. But I am convinced that it would be better for Ukraine to eliminate both RosUkrEnergo and any other intermediaries in order to buy gas in a transparent way, so that it is clear how much gas is bought and at what price.”

The prime minister is trying energetically to eliminate intermediaries. How do you assess the recent agreements between the Ukrainian and Russian presidents?

“So far, few details are known about these agreements. As far as I know, they reached an agreement in principle, which is supposed to be transformed into concrete agreements. But this has not happened yet. I hope that concrete agreements will be reached and there will be no intermediary as a result.”

THE GAS-TRANSPORT CONSORTIUM AND UKRAINE’S RIGHTS AS A TRANSIT COUNTRY

Continuing the gas topic, how would you comment on the statement made by Deputy Prime Minister Hryhorii Nemyria, who finds it inadmissible that the EU is not paying attention to the question of energy security?

“This is a very good question. It is truly difficult for Ukraine to participate in energy questions because the EU still does not have a single policy in this sphere. This should become the subject of discussions by the Europeans. Poland and other countries are very dissatisfied that the EU does not have a single policy governing energy imports to Europe, because this creates opportunities for suppliers to exploit this situation. Europeans will only benefit from having a single policy in the energy sphere. And Ukraine’s involvement in the common policy will give Europe an advantage, considering that the majority of energy resources goes to Europe via Ukraine.”

You probably heard that Tymoshenko admits the possibility of Ukraine’s returning to the question of creating a trilateral (Germany, Russia, and Ukraine) international consortium on managing and servicing Ukraine’s gas transportation network. What do you think about this?

“I think that this kind of consortium could be created. Usually, governments do a bad job of dealing with these kinds of issues, whereas private companies have much more experience in managing pipelines. And if this is beneficial to them, they will make more efforts and involve more money to modernize it. But in my opinion, Ukraine should be careful with this question because for any consortium there is a threat that the suppliers — Russia or Central Asia — as well as the consumers — Germany or France — will try to reduce the price for gas transit. Therefore, I think that during the negotiations to create such a consortium Ukraine’s rights as a transit country must be protected. Ukraine deserves to be paid fairly for its services of supplying gas through its territory.”

EXTRACTION OF UKRAINIAN GAS AND STIMULI FOR INVESTORS

Continuing the economic topic, I would like to ask why private American businesses are not showing much activity in Ukraine, whereas companies from other countries are making big investments in our country.

“I know that many American companies have an interest in Ukraine and would like to invest their money here. But they don’t feel confident that the investment climate has reached the level where one can invest safely here. Besides, corruption is another problem. The same goes for Russia.

“But there are American energy companies that are extracting gas. But a strange picture appears. Ukraine pays less for gas that is extracted in Ukraine than for imported gas. Moreover, gas extraction companies do not cover their own expenses. In my opinion, Ukraine must pay the companies that are extracting gas in the country as much as imported gas costs in order to stimulate the extraction of Ukrainian gas and create less dependence on imported gas.”

Can you see any understanding on the part of Ukraine’s new government of the problems faced by American gas extraction companies?

“After talking to the members of the Ukraine-US Business Council, I understood that positive debates are taking place at the moment. They have met with Prime Minister Yulia Tymoshenko and Hryhorii Nemyria, the Deputy Minister for European Integration and International Cooperation. Some progress has been achieved, in particular, on questions related to value-added tax reimbursements. American businessmen also welcome the prime minister’s statements on transparency because transparency decreases opportunities for corruption. The American community would like to see how these statements will be translated into life and what impact they will have on the investment climate. I think that there will be changes. If investments increased last year, I can’t see any reason that would prevent them from growing this year.”

POLITICAL TENSIONS BETWEEN THE PRESIDENT AND THE PRIME MINISTER

Let’s move on to another, hotter, topic. The Ukrainian leaders’ application to join NATO’s Membership Action Plan (MAP) has sparked discussions in Ukraine and paralyzed the work of the Verkhovna Rada. The US-EU Partnership Committee for Ukraine has not succeeded in coming to an agreement on this question. Why, in your opinion, is this question sparking arguments even within the very body that is interested in Ukraine’s integration into Euro-Atlantic structures?

“First of all, I want to underline that the authors of the above-mentioned report admit that NATO should agree with Ukrainian’s bid for joining the MAP. The aim of granting the MAP is clear to us: it is the creation of prerequisites for consideration of the possibility to grant full membership in the future. But this by no means predetermines Ukraine’s decision concerning its application for NATO membership. And, of course, this does not predetermine NATO’s decision to grant it membership in the organization. Albania joined the MAP nine years ago, and there is still no decision concerning this country’s accession to the Alliance.

Dr. Zbigniew Brzezinski thinks that at the summit in Bucharest NATO leaders have to give the MAP to Ukraine. It is true that the committee does not have a single opinion concerning this question. Germany’s former defense minister Folker Ruhe is not an ardent supporter of giving the MAP to Ukraine in Bucharest, citing the low support of Ukraine’s membership in NATO among Ukrainians themselves. I agree that 30 percent support is not enough to invite Ukraine to NATO, but it is enough to give it the MAP. Brzezinski stressed that NATO’s doors must be open for Ukraine. I think that Brzezinski and Ruhe’s views have a tactical difference. But I don’t think that their beliefs differ in the strategic sense with respect to bringing Ukraine into Euro-Atlantic structures. This meets both Ukraine and the Euro-Atlantic community’s interests.”

In your article published a month ago you said that NATO’s refusal to allow Ukraine to join the MAP will disappoint Kyiv’s supporters of Ukraine’s modernization and become a lost opportunity to create a larger and safer Europe. Why don’t France and Germany share this concern, and why are they talking about Ukraine’s lack of preparedness to join the MAP?

“As far as I know, in speaking about Ukraine’s unwillingness to join the MAP, France and Germany mean the population’s low support for the idea of Ukraine’s accession to NATO. Perhaps these countries are concerned about Russia’s possible reaction. Obviously, Russia will be far from pleased by such a prospect. After the talks in Washington, I sensed that there is some concern about the differences that are cropping up between the positions of the president and the prime minister. I can give you a scenario that some US politicians fear in approving the decision on granting the MAP to Ukraine in Bucharest. The American government supports this step in principle. But I am not sure whether Washington has decided to insist strongly on this and lobby some allies that are not such ardent enthusiasts of giving the MAP to Ukraine. Washington fears investing in Ukraine for nothing and that Tymoshenko’s government will resign after Ukraine gets the MAP. Therefore, high-ranking officials are asking themselves why they should make these kinds of investments if the current government may fall and a new government may come to power, which does not support Ukraine getting the MAP.

“In my opinion, Ukraine deserves to get the MAP thanks to the implementation of political, economic, and military reforms. Ukraine has achieved great progress, greater than that achieved by Bulgaria and Romania, which acquired the MAP in their time. Along with this, the political tensions between the president and the prime minister have complicated the question of giving the MAP to Ukraine.”

“THE OPPOSITION IS EXPLOITING THE MAP TOPIC OUT OF TACTICAL CONSIDERATIONS”

Why is this question more complicated, and how did it become so? There is a government program that clearly states that the government should adopt measures to help Ukraine join the MAP. Do you think Tymoshenko is against the MAP?

“She signed the letter. That was sufficient, in my opinion. She thereby indicated that the prime minister supports the president’s application for joining the MAP. This was the key moment that was missing in 2006, when Yanukovych said in Brussels that Ukraine is not ready to move to the MAP. In my opinion, this point has been fulfilled. One way or another, this is one of the reasons why some capitals of NATO member countries are not rushing to give the MAP to Ukraine in Bucharest.”

Do you think that a speech by Tymoshenko to the ambassadors of NATO member countries in Brussels could help push these countries towards approving a resolution that would be positive for Ukraine?

“If the prime minister wants Ukraine to be granted the MAP in Bucharest, this kind of speech would strengthen the message that she gave in January when she signed the letter of application. That would be a good signal. But I repeat: it seems to me that Ukraine has some misunderstanding of the concept behind the MAP. This is not about joining NATO. To some extent, the opposition is exploiting this topic out of tactical considerations. The MAP enables Ukraine to prepare and approve at a certain stage a decision concerning accession to NATO, when the Ukrainian population will be ready for this. On the other hand, by refusing the MAP, Ukraine is shutting down this alternative. I think that it is better for the country and the people when they have as broad a choice as possible.”

Do you share the opinion of your colleague Ambassador William Taylor, who said that “the summit in Bucharest will be positive both for Ukraine and NATO,” in particular, that Ukraine will be given a positive response to its request to join the MAP?

“I agree with this opinion. I hope that NATO will reach a consensus and Ukraine will be given the MAP in Bucharest. It seems to me that even in the event that NATO member countries do not reach a consensus on this question, Ukraine will receive a very positive signal. I don’t think that anyone will say ‘no’ to Ukraine in Bucharest. In any case, it will receive a signal to continue its cooperation with NATO.”

A month ago Congressman Robert Wexler, who was visiting Ukraine, said that the American government would approve the decision to support Ukraine’s bid to join the MAP. This resolution has not been adopted yet. When will it finally be approved? After all, time is needed to persuade those countries that are against giving the MAP to Ukraine.

“When I was leaving Washington for the conference in Kyiv, I knew that the resolution had to be approved soon. As far as I understand, it will be approved in the nearest future. This is also determined by the fact that an unofficial meeting of foreign ministers of NATO member countries is supposed to take place soon. Washington will present its position at this meeting.”

But Paris and Berlin are against giving the MAP to Ukraine. How will it be possible to convince them of the necessity to change their opinion?

“If the US decides that Ukraine should be given the MAP in Bucharest, then I hope Washington will conduct corresponding negotiations and consultations with Paris and Berlin and try to convince them of the wisdom of such a step. Or they will at least read my article in The International Herald Tribune.” (Laughs)

What should the Ukrainian government do in order to get a positive result in Bucharest?

“I think that Ukraine has done a lot of very important things. When NATO member countries will be considering the question of giving the MAP to Ukraine, regardless of whether they say ‘no’ to Ukraine or suggest that it has to continue working, this will be a positive signal. We should not forget that most NATO members consider that Ukraine has achieved important success in the sphere of democratization and implementation of a market economy. And this is already a signal. What Ukraine also needs to do is to have more unity in its messages, and stability in the work of the coalition. This may remove the concern existing in some capitals of NATO member countries. I think that the dialogue based on the results of the foreign ministers’ meeting and members of the Alliance on March 6 should continue as well. I am convinced that whatever the result of the Bucharest summit, Ukraine will receive a positive message. I hope that it will sound in the following way: Ukraine can join the MAP.”

“A POITIVE DECISION CONCERNING UKRAINE MAY BE A GOOD SIGN FOR GEORGIA”

What do you think about Georgia’s chances to obtain the MAP in Bucharest?

“I think that compared to Ukraine, Georgia’s position on getting the MAP has both weaker and stronger sides. Speaking about political and democratic reforms, Georgia’s position is weaker, compared to Ukraine. Unfortunately, Georgia tarnished its image last fall by declaring a state of emergency and short-term suppression of the opposition. But the good news is that Saakashvili is trying to cooperate with the opposition and is aware of the losses Georgia suffered last year. On the other hand, Georgia’s advantage is that it held a referendum, during which 75 percent of voters supported the country’s decision to become a member of NATO. Therefore, we have a situation where, from the objective point of view, Georgia is not as ready to join the MAP as Ukraine. But Georgia enjoys greater support for NATO membership among the population than Ukraine.”

What about the “frozen” conflicts? To what extent does this factor influence Georgia’s chances of getting the MAP?

“Frozen conflicts are definitely a great problem for Georgia. After all, NATO will not readily welcome countries that still have this kind of ongoing conflict on their territory. Usually NATO accepts those countries that have resolved such conflicts and have stable borders. Unfortunately, this cannot be said of Georgia. We still have to see whether this will have any bearing on NATO’s decision to give the MAP to Georgia.”

Can a positive decision concerning Ukraine entail a positive decision concerning Georgia?

“I think that a positive decision concerning Ukraine may be a good sign for Georgia because this shows that there will be no new lines with respect to the former Soviet border. From the psychological point of view, this will be a signal for Georgia that NATO will not be drawing new lines either on the Polish or the Ukrainian borders and is ready to consider the possibility of granting membership to the countries of the post-Soviet space on the condition that these countries meet the Alliance’s standards and can contribute to Euro-Atlantic security.”