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Summary Report

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Summary Report
The Key to Kiev

In this article the authors discusses the problems and tensions between Russia and Ukraine, over natural gas prices and distribution, that started to rise in winter of 2009 and affected the most part of Europe, that has not been completely solved until present day. On January 7th 2009 after disagreement over natural gas prices, Russia completely shut off gas supplies to Ukraine. Therefore, Ukraine shuts off the natural gas supplies to Europe, which created another conflict involving other countries. With intense European pressure after a week of debating and arguing, Russia and Ukraine were forced to reach an agreement for its gas prices. This crisis showed that foreign policymakers should not forget that Ukraine is one of the largest state in Europe and they should count in, besides the week economic growth, it still holds a lot of power of natural gas pipelines that runs through it. After the agreement was reached it was set that the prices for gas in the first quarter of 2009 will be $360 per 1000cubic meters, and when Ukraine will purchase over 60% of its annual gas from Russia it will be $200 per 1000 cubic meter. Furthermore, Russian policymakers were pushing Ukrainian government to give up some pipelines towards Russian advantage, due to Ukraine being unreliable source of distribution of natural gas (economically and technologically). With the inside of the both countries political wars for the presidential elections, it was extremely hard to reach an agreement that would benefit everyone. During this crisis the Ukrainian president Yushchenko accused Prime Minister Tymoshenko of having ties with Moscow, and that it injured Ukrainian’s interests in the gas prices. As I mentioned earlier about the prices agreement, the Ukrainian interests were not injured, this case showed a corruption within country between political leaders who are hungry for money and power and will not reach an agreement between each other. After the case that was brought against Tymoshenko, she strike back with the case against the president Yushchenko and the head of the central bank , in which she accused them in money laundering through RosUkrEnergo secretive private gas company and of conspiracy of bringing down the value of national currency hryvnia. All that led to Yushchenko’s political party to weaken the support of the president, and politically it showed that the president is unable to manage his own support group how can he manage the whole country? It created a lot of antitrust and chaos within the Ukrainian borders. It showed the institutional weaknesses in the country. The article also talks about a severe pressure from Russia to Ukraine, the unfavorable policies that Russian policymakers make towards Ukraine, trying to bring it down economically and politically, in order for Ukraine to depend on Russia completely. Despite all the weaknesses of political and economical uncertainties that Ukraine is facing these days, it will not collapse as Russia was predicting after a Soviet Union has collapsed. It will not fix itself in a short period of time, but Ukraine has hope to become a democratic state in the future. Moreover, Russia keeps treating Ukraine as it carries a risk for the West, and that it require to be a stable state in order to do business with other countries. Facing this difficulties Russia and Europe depends on Ukraine due to a geographic location of the state. Thus they need to help to come up with a solution between Russia and Ukraine in order to secure their relationships and establish a mutual understanding and respect between the nations to conduct a future business. Russia always interfere with its neighbors countries and trying to weaker they policies in its favor, and that’s creates an anger and aggressiveness towards Russia. On the other hand Europe sees all the Russian border countries as an obstacle for them to receive a cheaper gas prices from Russia. In the long run Ukraine is very important state and Europe should not neglect it because of Russian propaganda.
The further weakening of Ukrainian’s state will only be very bad for both Russia and the West. In the meantime in regards of the crisis EU and United states still playing a big political role and willing to work together to help each other to overcome the crisis. Ukraine want’s to enter EU, and it is a big political risk for Russian government, which is why they doing all possible to weaker the Ukrainian economy in order to prevent them of entering EU. But with the help of the USA and EU in the future, I believe, Ukraine will be able to reach an economic growth and political stability to be a part of the EU .Moreover, Ukrainian population today consists of well educated, competent and market savvy people who understand the goals of the country and willing to fight for their favorable policies and freedom from Russian pressure. After all Europe has landed Kiev 16billion International Monetary Fund by recognizing their importance and willing to work for the future development of the country.
In conclusion, the West, the US and Europe will only benefit on its own by conducting the business with Ukraine. They should pursue to reconnect with the country policies to make it better and beneficial for everyone, on the same level, to help maintain good business relationships. Ukraine should be placed back to policy agenda to make it fair to conduct businesses with other countries on its own right. By helping to produce a stronger more secure and more stable Ukrainian state it will be beneficial for all. By doing that it will also help to maintain a better and stronger relationships with Russia and it can solve the issue between two countries, that has been not completely resolved and still exists up until this date.

References: Source: | Foreign Affairs; May/Jun2009, Vol. 88 Issue 3, p106-120, 15p |

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