By: Glen Johnson

Ukraine is facing real retrogression.  The trial and conviction of Yulia Tymoshenko is symptomatic of the blatantly political turn Ukrainian state institutions have recently taken as well as the astounding incompetency of the Yanukovich administration.  The politicizing of state institutions extends to all branches of government: the parliament was transformed into a tool of Yanukovich’s Party of Regions, while presidential authority was officially enshrined as the dominant branch in a revised constitution of October 2010, which, among other things, allows for greater presidential influence on the judiciary.

With this new power, the Yanukovich government proved to be no enlightened despotism.  Over the protests of thousands of small-businessmen who took to the streets, Yanukovich instituted one of the most disastrous tax codes in the nation’s two decade history, which has increased the burden on the fledgling Ukrainian small business sector during a period of economic crisis, forcing many to close up shop for good.

All of the mounting blame is deserved, with the exception of the Kharkiv accords, which allowed Russia to retain its naval lease on Sebastopol in exchange for modest loans, as well as the promise of future subsidized gas.  It is Russian intransigence that is responsible for the failure of this deal, as Gazprom continues to insist on high gas prices and refuses a renegotiation of the 2009 gas deal (last month the Russians finally agreed to “reconsider” the deal—but this was most likely owing to its fear of the Tymoshenko trial fallout, as will be discussed below).  It is largely because of this sort of hard-headedness of the Russian administration that has caused Yanukovich to look to the West, albeit in characteristically bumbling fashion.

Ukraine was faced with an existential choice—accept Russia’s custom union along with Belarus and Kazakhstan, or co-operate with the EU’s Eastern Partnership.  Initially it appeared Yanukovich tried to find some sort of accommodation between the two sides, but it became clear that it was an either/or proposition.  Given the obvious subordinate status Ukraine would assume if it sided with Russia with no assurance of benefit (as per the Kharkiv agreement and intransigence on the 2009 gas deal), Yanukovich overnight became an ardent westernizer.  However, having little experience with the west, Yanukovich misunderstood the nature of the EU offer and the nature of the choice he had to make; less an economic concord than a pledge to “normalize” itself as a nation governed by the rule of law and a compliance with international standards of political freedom.

This sort of cluelessness manifested itself in the recent trial and conviction of Yulia Tymoshenko, the former Prime Minister of Ukraine under President Yushchenko.  The official charges of the overstepping of authority in concluding the 2009 gas deal with Russia are laughable by all accounts.  That is not to say that Ukrainians don’t have cause to be upset with the deal per se.  Indeed, the terms of the binding eleven year deal are most unfavorable: although the price is adjusted quarterly based on the market, it is required to purchase a minimum of 33 billion cubic meters of fuel, regardless of demand.  The demand for Ukraine going into 2012 is projected to be a mere 27 billion cubic meters.  Although the deal is obviously rigid, Tymoshenko’s thinking may have been to stave off future gas cutoffs.

Tymoshenko’s imprisonment could mean a couple of things.  First of all, it means her exclusion from the political arena—albeit at the cost of making her a beacon for opposition groups to rally around.  Second, it may serve as a pretext for invalidating the 2009 gas deal with Russia.  Russia is clearly concerned about this, and has decried the trial as being anti-Russian while finally being forced to at least reconsider the terms of the agreement.  These possible boons to the Yanukovich administration pale in terms of the potential fallout, as Yanukovich has now alienated both sides: Russia sees the as obviously antithetical to its interests in the gas deal, whereas the EU is appalled by Ukraine’s politicizing of justice.  Whether Yanukovich can extricate himself from this mess remains to be seen, although past performance gives little cause for confidence.