I spent time in Kiev last summer and got a feel for the place and its people and it saddens me to see news reports as the central plaza in Kiev goes up in flames. Here’s my interpretation of events. Ukraine has a spectacularly corrupt government. It’s a flat out kleptocracy. There’s essentially no separation between wealthy private interests and the government so people in power freely ignore or bend the law to their favor. Whenever a popularly elected official manages to start reforming the system s/he’s put in jail on trumped up charges, or the corruption quickly seduces the would-be reformer. This filters down to every level of society and daily life so the current rebellion is completely understandable. But make no mistake, the rebellion is lead by a small young educated middle class in a few big cities. It doesn’t necessarily represent the sentiments of the vast underemployed working class out in the countryside. That bulk of the population wants little more than stability and a reasonable pension and it doesn’t relish the inevitable foreign intervention – from whichever side of the globe. Ukrainians are deeply xenophobic.
The international context for the political upheaval is straightforward. Russia wants to continue to dominate Ukraine as it has for most of history (with brief intermissions like the Nazi occupation that didn’t go so well) while Western Europe and the U.S. want to fold Ukraine into the West as it has with places like Poland, Hungary and the Czech Republic. Meanwhile, Asian countries like South Korea and China are quietly setting up shop in order to export the latest consumer products as well as import much needed raw materials like grain.
The West is offering Ukraine a slow painful expensive integration process (getting corruption under control, harmonizing Ukrainian law and business practices with the standards of the E.U. etc.) that might eventually lead to Ukraine entering the E.U. with favorable trade and immigration rights. This process has been underway for twenty years and is likely to take another twenty. To be blunt, given the economic situation in Europe these days that isn’t much of a prize. And in the end the Western vision for Ukraine is some version of corporate capitalism not “democracy”. Still, this approach is popular with the young, the well educated, and those who are most likely to find employment with international companies who have begun to recruit inside Ukraine. However, the majority of the population (older and less skilled) understands they are not likely to benefit from foreign competition or the lucrative high skill jobs that will remain forever beyond their reach. The current response from the U.S. is to punish Ukraine’s political elite by refusing to issue work and tourist visas to the general population and suspend trade negotiations. This disappoints the Ukrainians who might lean towards the West and provides ammunition to the pro-Russia lobby.
In contrast, Russia is offering Ukraine immediate debt forgiveness, additional ready cash, and heavily subsidized natural gas right now. Moscow is also advising the current corrupt government to crack down as hard as possible on the rebellion and is providing easy transit for Ukrainian nationals who wish to resettle in Russia. Not that Ukrainians have any warm fuzzy feelings for Russia per se… Then again, every ethnic group is targeted for abuse by Ukrainians. It’s something of a national pastime. Ask any Jew if you can still find one.
While this national drama unfolds the real resolution is taking place beyond the sensational headlines and outside any government negotiations. As always, individual Ukrainians are looking around and deciding what to do with their lives given the options presented to them. There are three main categories: 1) keep out of harm’s way and live a modest life largely outside the primary system, 2) integrate yourself into the corrupt system and become a hammer rather than a nail, or 3) leave the country entirely. The poor and working class have little choice but to keep their heads down and muddle along. The corrupt elite are quickly vacuuming up as much liquid cash as possible and relocating to countries that welcome them and their money. This often means Russia but can include places like the Emirates or Hong Kong. The educated, young, and healthy population (a minority in Ukraine after decades of low birth rates and outward migration) is feeling around for where to flee that will take them with the least red tape and best prospects. Keep in mind, the basic infrastructure of the country is failing under the strains of a nascent civil war. The overwhelming majority (over half) go to Russia even though they might prefer Canada, France, or Australia. It’s the fast easy route.
My money is on Russia given the circumstances. Ukraine’s entire economy is dependent on natural gas pipelines from Russia. It’s an umbilical cord. If Ukraine gets out of line Russia will yank the pipeline and Ukraine will snap back into obedience. That’s the beginning, middle, and end of the Ukrainian/Russia relationship. And Russia still maintains a large military base in Ukraine… The current leader has stepped down, but his replacement will only be marginally better. If the West does win the day Ukraine will likely remain just as corrupt, but with a favorable outcome for international corporate interests rather than any great democratic victory for the people. After all the sturm and drang the Great Powers will have spent a lot of money and energy trying to influence Ukraine’s political allegiance. But the true winners will be the Asian commercial interests who spent nothing at all on the conflict and will continue to use Ukraine as an export market and source of valuable but relatively cheap commodities without getting their hands dirty. Smart. I’ll be posting some video from my time in Ukraine soon.
