Today Kiev held a television debate, whose participants tried to find out if Ukraine can successfully combat the economic crisis without Russia.

Kirill Dmitriev, Ukrainian economist and President of Icon Private Entity, reminded that Ukraine’s annual sale of machine building output to Russia is 6.1 billion dollars, while Russia’s sale of similar goods to Ukraine is estimated at 3.1 billion dollars. However, as the expert pointed out, in recent years this turnout dropped because of Ukraine’s ambitions to join NATO.

“The ideology and plans to become a NATO member have made many people in Kharkiv and Donetsk lose their jobs. Russia, fearful of Ukraine’s unpredictability, stopped to buy Ukrainian products. Ideology ruins economic ties”, noted Mr. Dmitriev. “Russia is a huge market. If Ukraine joins the Customs Union, its GDP may rise by additional 3%-5% per year”, he forecasts.
“Love should be mutual. I am not sure that the EU is particularly in love with Ukraine. There are strong doubts about China’s affection for Ukraine. However, Ukraine’s importance for Russia has been historically proved, and we should make good use of these mutual feelings. Russia is ready to sacrifice a lot to revive its partnership with Ukraine”, believes Mr. Dmitriev.
Kost Bondarenko, Ukrainian political analyst, disagrees. “Russia is a great country but it cannot take the place of the entire world”, he summed up. “If we opt for partnership solely with Russia, what is the point of our independence?” he asked. In his opinion, Russia is merely one of the countries for Ukraine to have mutually beneficial relations. Ukraine’s partnership with Belorussia, for instance, is no less important.

Mr. Bondarenko also stressed that Victor Yushchenko is not the only one to be blamed for worsening relations between Kyiv and Moscow. “Blame lies with the Russian leadership as well. The Russian rulers cannot separate economy from humanitarian issues. They say, if Ukraine does not respect Russian concept of history, it should be subject to economic sanctions”, he explains.

“The Customs Union will bring forth short-term dividends. But what are its benefits in the long-term, strategic perspective? Why did the European Economic Area not succeed? It may be because it lacked a political superstructure, and this should not be created on a fair basis – different participants do not have equal rights”, thinks Mr. Bondarenko.
He was followed by Evgeny Gavrilenkov, Russian economist and Managing Director of Troika Dialogue Group. He stated that Russia also has many partners hence there is no need for Kyiv to confine its foreign cooperation to Moscow only. He explained that Russia and Ukraine should join efforts not only to emerge from the economic crisis, which unraveled a year ago, but to overcome the long period of recession, which followed the collapse of the Soviet Union. Mr. Gavrilenkov reminded that neither Russia nor Ukraine can boast of modern technologies and lag far behind many developed countries.

His arguments were questioned by Andriy Shevchenko, Verkhovna Rada MP (BYuT). According to him, “Russia is not the locomotive to pull us out of the crisis”. “We better see who this locomotive is”, he added. He reminded that Russia retained only several leading industries, such as space and military technologies, aircraft building and nuclear energy. “However, it is in these sectors that Russia strictly limits Ukraine’s access to these technologies. Russia is aimed at creating closed cycles in these industries”, noted Mr. Shevchenko. He also emphasized that the agreement on free trade zone, which was signed between Russia and Ukraine several years ago, remained on paper.

“Most exceptions were made on Russia’s initiative. We remember how Russia blocked Ukrainian diaries from its market together with Georgian wine. And this happened not because of our plans to join NATO, but as a Russian antidumping measure. Of course, these restrictions are often made under political slogans. But let us call a spade a spade. There is an official policy of limiting the penetration of Ukrainian goods into Russian markets”, stressed Mr. Shevchenko.

He also noted that there are markets where Russian and Ukrainian economies “are doomed to compete with each other”. “Objectively, we can hardly help each other much. Strategic partnership is a great idea, but we cannot support this strategic partnership by real projects”, stated Mr. Shevchenko.