Putin Clamps Down on Ukraine Exports to Sway Kiev into Venture

August 20, 2013 07:11 AM

Russian President Vladimir Putin visited Ukraine on July 27-28, on the occasion of the 1,025th anniversary of Christianization of the Kyivan Rus, hoping to improve relations between the two Former Soviet Union (FSU) nations. But Putin's reception in Kiev was cool at best and his administration is growing concerned with Ukraine's wishes to strengthen ties with the European Union.

Russia would prefer Ukraine join a Moscow-led customs joint venture with Russia, Belarus and Kazakhstan, but given the thinly veiled tyranny that rules the FSU, Ukraine appears anxious to more closely align itself with the European Union.

Russia is Ukraine's number two export destination behind the E.U., and in a heavy-handed effort to prevent Ukraine from joining the E.U., Putin has recently imposed a punitive export inspection process for goods crossing the border into Russia. The move is intended to twist Ukraine's arm into joining Putin's venture. But these heavy-handed tactics are what soured relations between Russia and Ukraine in the first place, and when Russia curtailed natgas flows to and through Ukraine in the bitter winters of 2006 and 2009, Ukraine made the smart play toward energy independence from Russia and Putin's tyranny.

When Russia imposed those chilling curtailments, it was not just the Ukraine that was left without heat. Several other downstream E.U. member nations were also left out in the cold, punctuating the notion that Russia may not have changed so much from the dictatorial 'old-guard' of the U.S.S.R. There is no place for dictators in the European Union -- ideally. Nor is there any room for those who cannot solve disagreements diplomatically.

Snubbed by the President of the United States, then given a cool Kiev reception, Putin must be wondering who his friends are, and the truth is, the old rule holds true in Geopolitics... if you want to have a friend, you must first be a friend. There is nothing friendly or rational about turning off a nation's heat -- twice. Add to that threat, a revised trade environment that is prohibitive of exports to Russia, and the world very well could see Ukraine turn its back on Putin altogether, leaving Russia to trade with the shining nations of Belarus and Kazakhstan. You can tell the quality of a man by who his friends are. If the same is true of nations and rulers, the Ukraine would do well to recognize progress can only be forged through forward movement. The backward looking dictatorship that Putin has worked so hard to mask is an homage to an era before the Berlin Wall fell -- an era best left in Europe's past.

Here's your sign -- The sign we are waiting for is the release of jailed former Prime Minister of Ukraine, Yulia Tymoshenko. That singular move would do more to express Ukraine's intent to 'play-ball' with the European Union than any export tender.

Perspective --

Ukraine's natgas reserves in shale added to its already thriving urea and ammonia production would give Ukraine not only peace of mind and a dependable natgas supply in the winter time, but also increased product for export. World fertilizer demand is expected to increase at least 3% each year and if Ukraine can free itself from the old guard tyranny of Putin and his FSU allies, a productive, independent Ukraine has the potential to offer a buffer between the E.U. and Russia, and may help limit global nitrogen pricing.


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