Ukraine's Dangerous Game

Yulia Tymoshenko talks with FP about engaging the West, placating Russia, and trying to keep her country in one piece.

As Ukrainian Prime Minister Yulia Tymoshenko rushes out of her Kiev office to greet me, her tight handshake and tense smile make it clear that she didn't get to be the most powerful woman east of Berlin by being a soft character.

This is a tough day for her and an important time for Ukraine. Later she will speak before parliament to defend controversial new budget measures demanded by the International Monetary Fund (IMF) in exchange for unblocking a badly needed financial rescue package. The amount at stake is relatively small, a $1.8 billion second installment of a $16.4 billion loan. But without the IMF, there is little hope Ukraine will regain enough market confidence to roll over the $40 billion in bank loans and bonds coming due this year. By mid-April, Tymoshenko needs to push pension reform and higher gas tariffs through the legislature - hardly a comfortable position for a leading candidate in the presidential elections expected on Oct. 25.

The 2005 Orange Revolution made Tymoshenko an international media icon. With her fiery rhetoric and political savvy - not to mention her stunning looks and famously distinctive braids - she seemed destined to be the face of the post-Soviet world's new wave of democratic revolution.

Four years later, it's not so easy to be Yulia Tymoshenko. The adoring crowds in Independence Square are a distant memory. She feels under fire from all corners, most of all from her former Orange Revolution ally, President Viktor Yushchenko. She was late for our coffee conversation because she first needed to focus on this morning's attacks from the president, who accused her in parliament of running the economy into the ground. She is careful to avoid any explicit reference to him, but notes I am not here to please everybody. In attempting to manage Ukraine out of a crisis while attending to both her country's desire to rejoin Europe and its fear of an increasingly expansionist Russia, it's becoming more and more difficult to please anybody.

The global recession is turning conventional wisdom upside-down as even the IMF now calls for large deficit-spending policies (for advanced economies, at least). One might think the conditions imposed on Ukraine, where unemployment is rising fast and salary delays are now widespread, are too strict and socially painful. The hardship in turn could encourage political radicals and the pro-Russia Party of Regions of former Prime Minister Viktor Yanukovych.

But Tymoshenko isn't complaining. You are never popular when you ask a sick person to undergo surgery, she says. But what has to be done, has to be done. Cooperating with the IMF requires a serious budget policy for any country. It's never easy. But it's a guarantee of stability.

The political challenges Tymoshenko faces as she struggles with Ukraine's financial crisis might be treacherous, but the subject matter, at least, is familiar. She received a typical Soviet-era education as an economist-cyberneticist -- Soviet-speak for management -- in Dnepropetrovsk, the mostly Russian-speaking eastern Ukrainian town where she was born in 1960. She started her career as an economy engineer at a local machine-building plant during the Gorbachev years. With the demise of the Soviet Union and national independence, she was quick to seize the opportunities of the new era. During the 1990s, she was a top manager at Ukrainian Petrol and United Energy Systems of Ukraine and is understood to have made a fortune at that time.

It was a tough, unsparing environment to prosper in, to say the least. Tymoshenko has come a long way from then. It is especially ironic that this businesswoman turned anti-Russian revolutionary is now disparaged by Yushchenko as a thinly disguised Russian pawn.

Not that dealing with Russia has gotten any easier. Russian Prime Minister Vladimir Putin did not like Tymoshenko's recent deal with the European Union on the modernization of Ukraine's gas infrastructure, and Moscow is holding up a $5 billion loan to Ukraine to mark its dissatisfaction.

All this crossfire shows what I really stand for is our own national interest, she says. Then she is quick to add: The Russians worry that we are trying to privatize our pipelines by stealth, but that's not the case and would be illegal. We have to reassure them on that.

Tymoshenko returns frequently to the challenges presented by Ukraine's position between Russia and the European Union. There is no doubt we want to join the EU. At least 60 percent of our public opinion favors this option, and we are now closer to this goal than, say, one year ago. This policy must be the essence of all our actions, she says. But, she warns, it cannot succeed by confronting Moscow or ignoring its concerns.

This is balance-of-power politics of the post-Soviet, post-Georgia-war variety. To her critics, it looks a bit like squaring the circle. To her, it's simply a matter of recognizing reality. I try to defend our interests so that we can find a balance in our relations both with the EU and Russia, Tymoshenko explains, meaning she wants her country to get into the EU without giving the impression of antagonizing Russia.

Could the same strategy apply to Ukraine's relations with NATO? Here the prime minister sighs for a split second: There, it's more complex. It's not so much that she is frightened by Georgia's experience, something she never mentions though it's clearly on her mind. While recognizing it would be uncomfortable for Ukraine to remain in a void, outside all existing security systems, she still sees several political barriers between Kiev and NATO.

Although famous for her sharp tongue, Tymoshenko is treading carefully these days. The first problem she sees is that barely 25 percent of Ukrainians favor joining NATO. Even the president accepts we need to hold a referendum on this, she acknowledges.

The second problem is rather a carefully managed swipe at those Europeans cozying up a bit too much to Russia -- especially Germany and Italy, one suspects. In Tymoshenko's own words, There is no unanimity in the EU on Ukraine's joining NATO as we have not yet witnessed a favorable attitude in every country.

As Tymoshenko goes on, one cannot help but notice her trying to contain her anger when she feels misunderstood in her actions and purpose. She laughs softly at my attempts at humor, but when she finds my questions misjudge her intentions, she bursts out: It's not fair to say that!

In the same spirit, she reserves her harshest criticism for the G-20's grandstanding on protectionism: Everybody is pursuing some stronger or weaker form of protectionism. Some people create hurdles for foreign participation in tenders; others withdraw capital or create tariff and nontariff obstacles to goods. All this proves damaging to us all. But lofty declarations will not prevent it; we need effective rules, she says.

At the moment, Tymoshenko narrowly trails Yanukovych in opinion polls but remains far more popular than Yushchenko, whose support has fallen to the single digits. Nonetheless, she remains a controversial figure. In an identity-obsessed Ukraine that declared independence six times over the last 90 years, even her family origins fuel much debate. She grew up speaking Russian and perfected her Ukrainian only after she moved to politics in her 30s. Through a spokeswoman, she also doesn't comment on rumors that part of her family comes from Armenia. It's hard to imagine her receiving the kind of voter acceptance enjoyed by Barack Obama and Nicolas Sarkozy with their foreign-born fathers.

Despite the sometimes harsh treatment from her constituents and the media, Tymoshenko's national pride and attention to the everyday lives of Ukraine's citizens remain intense. I experienced it myself when I mentioned in a story that Kiev stores were having a serious shortage of salt. Ukrainian TV had previously aired stories on locals hoarding salt in anticipation of inflation and salary cuts. I was called soon after by an angry Tymoshenko spokesperson: It's media speculation, nothing true. Did you try to buy salt in Kiev? I did last night: I found it. Immediately.

Why all this fuss over one anecdote in a foreign reporter's story? Tymoshenko has learned over the years that with countries -- as with their leaders -- image is everything.



Don't Forget Georgia

Why one of the United States' staunchest allies still needs its strong support.

Georgia is heating up once again as opposition forces prepare for a major demonstration against President Mikheil Saakashvili on April 9. A number of opposition figures have been arrested, accused by the government of plotting the violent overthrow of Saakashvili. The fallout from last August's Russian invasion of Georgia, following the state of emergency imposed by Saakashvili in November 2007 and elections early last year, has raised questions about the president's ability to maintain control amid growing unhappiness with his leadership.

Much already has been written and said about the August war and who was to blame, but the challenge before the current U.S. administration is what to do now: What should U.S. policy toward Georgia be? Following the invasion, there was strong bipartisan support for a $1 billion American assistance package for Georgia. The race was on, in fact, between Barack Obama and his Republican rival John McCain to see which candidate could be more pro-Georgian (McCain got out of the starting blocks faster but they ended more or less in a tie).

More recently, however, some analysts have been wondering whether the Obama administration will seek to distance itself from the government in Tbilisi in an effort to score points with Moscow and differentiate itself from its predecessor. Indeed, a clear U.S. focus on resetting relations with Russia, as Vice President Biden said in early February in Munich, raises questions for Georgia. Will Washington sacrifice closer relations with Tbilisi in order to warm up to Moscow? This would be a mistake.

Georgia already paid a price when NATO allies, meeting last April in Bucharest, failed to offer Tbilisi (and Kiev) a Membership Action Plan; that decision was likely interpreted in Moscow as a green light to engage in more reckless behavior within the separatist regions of Abkhazia and South Ossetia and toward Tbilisi.
There is no guarantee that backing off support for Georgia, whether on NATO or more broadly, would lead to improved ties with Russia. The days when U.S. relations with the states in the Caucasus, Central Asia, and Eastern Europe (Ukraine, Belarus, and Moldova) are viewed through a Russian prism should be long over.

In fact, Georgia still needs U.S. help. Over the years, the United States has emphasized support for Georgia's territorial integrity, its integration into the West, and political and economic reforms (though many would criticize the Bush administration for not doing enough on the reform score, especially in light of Saakashvili's November 2007 crackdown following large demonstrations against his government).

Half of the $1 billion assistance package is focused on addressing Georgia's pressing humanitarian needs, repairing infrastructure damaged by Russia's invasion, and restoring economic growth. Indeed, more than half of regular assistance for Georgia in last year's assistance budget goes to political and economic reform. Emphasis should continue to be placed on rule of law, media training, and institution-building programs.

Some 34 percent of the regular assistance budget goes to peace and security designed to train and equip the Georgian military to meet NATO standards and to support contributions to international peacekeeping and security operations as well as to improve the capacity of the Georgian border police and custom service to fight smuggling, increase revenue and improve border control. Georgia has been an important contributor to operations in places like Iraq and Afghanistan (in fact, at one point it was the third largest contributor to multinational forces in Iraq) as a result of the U.S. train and equip program; it also needs to secure its porous borders as much as possible.

Yes, the United States does need to think carefully before launching a serious effort to rearm Georgia. The obvious yet painful reality is that Georgia simply is no match militarily for Russia, and we should not pretend otherwise. Giving less military support might also reinforce the U.S. message that the military option for resolving the South Ossetia and Abkhazia problems is out of the question.

Supporting Georgia's NATO aspirations, however, is a matter of principle. Last April in Bucharest, the alliance declared, [We] welcome Ukraine's and Georgia's Euro-Atlantic aspirations for membership in NATO. Even while aiming to reset relations with Russia, President Obama has pledged to uphold the principle that countries who seek and aspire to join NATO are able to join NATO. For NATO's own credibility, Russia cannot be granted a de facto veto over other countries' aspirations for membership. Nor should wishful thinking of better relations with Russia get in the way of Georgia's aspirations, which the United States has encouraged. Georgia has been a loyal ally and supporter of U.S. efforts overseas; it should expect no less from the United States in return.

Beyond supporting further reform, the West needs to maintain a firm position on Georgia's territorial integrity. The United States was right to condemn Russia's expressed intentions earlier this year to establish bases in the territory of Georgia as contrary to the spirit and the letter of Russia's existing commitments. To this day, Russia has not fully lived up to the commitments it made last summer to French President Nicolas Sarkozy on the status of its forces in Georgia. The United States and the Europeans should continue to press Russia to withdraw their forces to prewar positions, open up the separatist areas to humanitarian shipments, and allow unfettered outside observation, including of allegations of human rights abuses by all parties to the conflict. In addition, as Vice President Biden said in Munich and as President Obama made clear during his recent trip to Europe, the United States must never recognize South Ossetian and Abkhazian independence.

That said, bringing those separatist regions back under Georgian control won't happen any time soon. The hope is that Georgia, through political and economic reform, becomes an attractive place for South Ossetians and Abkhazians to some day want to join. That will take time and patience on the part of the Georgian leadership, not traits often associated with Saakashvili.

Finally, the United States has to fix the international impression that its policy is support for Misha first, Georgia second. It would be a mistake to dump Saakashvili to support any other candidates -- that's for the Georgians themselves to decide. But America should support processes that encourage a level playing field and avoid picking favorites. To that end, the return to Georgia of former U.N. Ambassador Irakli Alasania to join the opposition against Saakashvili has increased the possibility of more effective checks and balances against the government.

The opposition for years has suffered from fissures and feckless leadership; now it is renewing calls for early elections (Georgia held both presidential and parliamentary elections last year following the state of emergency in 2007). Constant elections may not be the answer to Georgia's problems, but development of strong, independent institutions is essential. And it is here that the bulk of U.S. assistance should be devoted.

Much will depend on how the April 9 demonstrations are handled by both the opposition and government forces. Violence would harm not only Georgian-American relations but also Georgia's prospects for democratic development and deeper integration into Europe. Supporting these goals is the best way forward for both Georgia and its allies.

Miguel Villagran/Getty Images