The Dangers of a Sinn Féinist Ukraine

 (Sinn Féin – Irish for “ourselves alone”)

After two years under Viktor Yanukovych, Foreign Minister Kostyantyn Hryshchenko’s recent article in Dzerkalo Tyzhnia this March is the closest thing we have to an intellectual definition of Ukraine’s new foreign policy direction – or lack of direction. It is therefore worrying that his argument is so incoherent.

Hryshchenko’s first gambit is to bracket Ukraine with Turkey, a supposedly natural pair of big powers on the edge of Europe. He argues that the alternative “Polish model” of modernisation in close partnership with the EU (or under the tutelage of the EU) is currently blocked – more because of “emotions than rational calculation” – and “the transatlantic West is in crisis” anyway. Ukraine should therefore follow “the Turkish model of modernisation (by European benchmarks, independent from implementation)”. In plainer English, Ukraine should modernise on its own, rather than through adopting the acquis communautaire via a painful process of step-by-step conditionality with the EU.

But the whole point of the EU-Ukraine Association Agreement is that it will add the momentum for change that Ukraine has been unable to generate on its own. And in any case, Hryshchenko then completely undermines his argument by spending the rest of his article praising the “Chinese model” instead. He does not define this exactly, but does list his proxy criteria for success in the new world order as “political stability, predictable rules in the economy and positive demographic dynamics”, which “open the door to economic breakthrough to dozens of new players”. Ukraine could only plausibly claim to measure up to the first criteria, but moving on, Hryshchenko then highlights “the activation of new strategic directions in national foreign policy”. Ukraine’s “location on the edge of civilization has for centuries been a source of challenges, and now may be a source of new opportunities”. President Yanukovych spoke in a similar fashion in March of Ukraine’s growing role as “a communicator between centres of influence”, and the need “to unite our Eurointegration aspirations with plans for global partnerships”.

Then comes the key point: Ukraine will not prosper as an exemplar of these qualities or because of its own behaviour – i.e. its success in modernisation – but because “in the new world we are entering, the world will really fight for resources, the resources nature has given us generously; including those that are valued the highest – food, water, energy”. In other words, Ukraine will play an expanded game of balance and blackmail based on trading natural resources or other assets.

In March Yanukovych proudly announced the removal of all enriched uranium from Ukrainian territory. In April Ukraine offered NATO an expansion of its peacekeeping role and the use of its heavy aircraft to withdraw forces from Afghanistan. None of which is coincidental. With EU-Ukraine relations currently in the doldrums because of the Tymoshenko affair and a gas deal with Russia elusive; Ukraine is obviously trying to expand its options, not by expanding its own attraction, but by cynically trading its way out of a corner.

But does any of Hryshchenko’s underlying logic actually make sense? It is true that Ukraine’s trade patterns are increasingly diversified. According to an excellent recent paper by Gnedina and Sleptsova, Ukraine’s trade with the EU 27 has actually declined from more than a third of its total in the mid-2000s to just over a quarter in 2010. Trade with Russia accounted for around 30 per cent in 2010, and the CIS as a whole about 36 per cent. The “rest of the world” actually had the biggest share in 2010, at 38 per cent. But part of this was a recession effect: BRIC (Brazil, Russia, India, and China) countries, which were not in recession when the EU was, continued to buy Ukrainian steel and metals. Underlying trade patterns are not booming as they might. According to another Polish analysis, Ukraine’s total trade with Turkey for example is actually down, at $5.2 billion in 2011, compared to $6.5 billion before the economic crisis in 2008.

And even if 1.9 per cent of Ukraine’s trade is with India and 1.3 per cent is with Egypt, these trading partners are not necessarily political partners. Ukraine sets great store by China (5 per cent of trade) as an alternative pole, but Beijing has proven disappointingly mercantilists. Ukraine might do well to form a joint lobby with Turkey (3.8 per cent of trade) rather than just comparing itself to it. The USA, with only 2.3 per cent of Ukraine’s trade, has always been much more important politically. It is far from clear that “the 38 per cent” of Ukraine’s other trade provides a cohesive alternative pole for balancing acts.

Ukraine itself is the anti-BRIC. It is not a sub-BRIC or even a potential new BRIC. Its economic performance is simply not good enough. The IMF has just down-graded its growth forecast for 2012 to 3 per cent, and its economy has been under-achieving for years.

Ukraine is also the anti-China. It is impossible to imagine Ukraine growing dynamically following the “Beijing consensus”: it has no Confucian bureaucracy or large entrepreneurial diaspora.

Nor are alternatives closer to home any more likely. Ukraine is also the anti-Georgia – instead of radical reform of its post-Soviet bureaucracy, Ukraine has a suffocating predatory state. Ukraine is the anti-Estonia. Taxes are low, but without a rule of law, FDI is almost non-existent. Ukraine might even lose money on Euro 2012.

And finally Ukraine is the anti-Turkey. It is not a dynamic regional power increasingly confident to engage Europe on its own terms. Ukraine’s “multi-vectoral” policy cannot compare with Turkey’s dense network of historical relationships in the Balkans, Caucasus, Turkic-speaking Central Asia and the former Ottoman Middle East. Turkey is vibrant and entrepreneurial. As an excellent critique by Oleksandr Pavliuk points out, Turkey’s small and medium-sized business sector produces 55 per cent of “goods and services that meet the EU average, while in Ukraine with its oligarchic economy that is already low down in the last two years, from 18.8 per cent to 14.2 per cent”.

Realpolitik does not suit Ukraine. It does not have the get-out-of-jail cards that grant other states leeway, like nuclear weapons or a major role in energy supply. Countries that have them can afford to become defiant. Countries that start off defiant and then look for a “special role” can expect rough treatment. Hryshchenko rightly points to Ukraine’s potential in agriculture and shale gas. Ukraine could be a serious player in either sector in ten years: but Hryshchenko puts things the wrong way around: the energy sector will not develop without FDI and agricultural sales to the wider world will boom once they are certificated as EU standard.

The “Polish model” remains Ukraine’s only feasible option. If Ukraine drifts away from the EU it will not stand proud; instead it will be increasingly dependent on the region’s real “special path” power – which is Russia. Ukrainian industry is already showing its increasing dependency on Russian loans. If Ukraine takes the Sinn Féin-ist path of “ourselves alone”, it will truly be alone.

Andrew Wilson is a Senior Policy Fellow with the European Council on Foreign Relations (ECFR).