On October 28, 2012 Ukraine will hold their first democratic parliamentary elections since agreeing to new rules in November 2011, a significant achievement in reforming the electoral process. The current government has made headlines during the past year, including in the U.S., because it is going through a complicated reform process. Ukraine is a place where economic freedom and embrace of democracy are still the exceptions and not the rule, and the current government needs the support of the West. However, recent events could make it easy for the U.S. to take the wrong angle and accidentally push the country away from open democracy and pro-liberty western ideals.
Since Ukraine became independent of the former Union of Soviet Socialist Republics (U.S.S.R.) in 1991, Russia has repeatedly meddled with the country’s freedom and democracy. Why? Ukraine was once the breadbasket of the U.S.S.R. The country has lots of natural resources as well, including natural gas and oil, which are under exploration. Currently, Ukraine holds an estimated 4th largest shale gas reserve in Europe. At the same time, however, Ukraine has been trying to meet Western standards to join the European Union, which requires a transparent market economy. It is easy to see why a country that was once part of the U.S.S.R. might have a hard time changing its culture to fit with the E.U.’s membership standards.
As a result the Ukraine has been caught in a tug of war between moving towards the European Union and moving back towards Russia. The West stands to benefit from Ukraine moving toward the E.U. – and toward economic partnerships with western allies – and should be supportive of Ukraine’s efforts to reform and remain independent from their former masters in Moscow.
Despite poor economic growth around the world, Ukraine’s economy grew by 4.2 percent in 2010 and exports grew 3.7 percent in 2011. Ukraine’s current government has been working to reform their energy sector to ensure that natural resources are efficiently used. The country can work as a pathway between the Caspian Basin and Europe. But Russia still maintains a pipeline route through Ukraine to send gas to Europe. The stakes of Ukraine’s uncomfortable position – caught between Russia and the West – becomes especially obvious when examining energy issues in the country.
It is easy to see that the European Union can increase economic opportunities for Ukraine. Russia would decrease economic opportunities by forcing the former Soviet satellite into a tighter relationship that would preclude the rest of the world from exploiting Ukraine’s resource rich landscape. The Deep and Comprehensive FTA (DCFTA), an agreement between the E.U. and several non-members that would eliminate barriers to trade and foreign investment, awaits ratification and signing to be finalized. Notably, Russia has repeatedly declined invitations to join the Customs Union with the E.U.
Ukraine’s new electoral system, too, will help rebuff attempts at hegemony by Putin’s Russia. Drafted with the Venice Commission’s help, the electoral reforms received broad approval last year; 81% of Parliament approved, including members from every faction. The negotiations over the new rules saw the chief requirements of both the current government and the opposition codified in the new rules. Further, to prevent Election Day corruption, Ukraine has installed webcams at over 30,000 polling stations.
Due to intrinsic political drama in the Ukraine, the U.S. could easily overlook all that is at stake. In the Washington, DC bubble, it is easy to focus on a few political issues and miss the big picture. And democracy in Ukraine is still too delicate for that kind of mistake on the West’s part. The Ukrainian government now, more than ever, needs allies in the West. They deserve praise for the steps they have taken toward economic and political liberalization, steps that the Nobel laureate economist Milton Friedman himself would likely have endorsed.