[LINK] "Trade Going West"

[rfmcdonald]

The Inter Press Service's Zoltán Dujisin reports that nominally Russophile Ukrainian President Viktor Yanukovich is on the verge of closing a free trade agreement with the European Union, perhaps demonstrating the principle that only Nixon could go to China--or, in the Ukrainian context, that only someone relatively inclined towards Russia could link Ukraine up with Europe as well. Living conditions for Ukrainians aren't likely to improve overmuch, mind.

Ukraine is a key market for the region. Its 45 million people constitute the second largest population and economy of all post-Soviet states, behind only its gigantic Eastern neighbour.

In the short-term the EFTA (European Free Trade Agreement) would impose both economic and political challenges for Ukraine, whose biggest trading partners are still the former Soviet republics.

The step is surprisingly being taken by President Viktor Yanukovich, who became known to the world as the Russian-backed ‘villain’ of the orange revolution in 2004.

During the presidential elections that same year, popular unrest forced a repeat vote which was eventually won by the liberal and pro-Western candidate Viktor Yushchenko.

However, little in the way of integration to the West happened over the chaotic Yuschenko presidency, which lasted from 2005 and 2010. At the same time Yanukovich, who succeeded Yushchenko in 2010, has vowed to bring Ukraine closer to the EU without angering Russia.

So far, Yanukovich’s actions have been more pleasing to the West than to Russia, considering the low initial expections. A recently released WikiLeaks cable shows that even the U.S. embassy considers Ukraine’s President a changed man compared to 2004.

[. . .]

Yanukovich took power under favourable economic conditions. Largely driven by strong metal prices, in 2010 GDP growth rose to 4.5 percent, while investments are expected to kick in by 2012 when Ukraine and Poland co-host the European Football Championship.

In what is also an attempt to please both the EU and the IMF, steps have been taken to deregulate and decrease the number of licences and permits, freeze pensions, increase gas household prices and reform the state administration, but there are enormous difficulties in implementation.

"This is especially due to corruption. What the government does is not always what it preaches," Ildar Gazizullin, economic analyst at the International Centre for Policy Studies in Kiev, an independent think-tank, told IPS.