Is Tymoshenko guilty or a victim?

On Oct 11, 2011, former Ukrainian prime minister Yulia Tymoshenko was convicted of exceeding her powers while in office by ordering state energy company Naftogaz to sign a gas deal with Russia in 2009. A court sentenced Tymoshenko to seven years in prison, asked her to pay back $186 million lost by the state energy company because of the deal and banned her from political office for three years, with implications for her role in next year's parliamentary election.

Leaders of major powers and organizations, and some Western celebrities have condemned the current Ukrainian authorities for arresting and imprisoning a political leader and former prime minister. Perceiving the trial and sentence as a political move deliberately targeting the opposition with selective justice, the Western community has been reiterating the significance of justice, transparency and independent judicial procedure in Ukraine and urged the Ukrainian government to stick to fair play.

Russia, too, has urged Ukraine to conduct a fair and unbiased trial for Tymoshenko, saying that the 2009 gas contract is in strict compliance with the laws of Ukraine and Russia, as well as international laws.

The dispute over the Tymoshenko case revolves around whether the trial has been fair and transparent and whether it is a political move of current Ukrainian President Viktor Yanukovych against his opposition leader. But without complete details of the trial process, it is not easy for either the Ukrainian people or the international community to make the right judgment.

The condemnation of the Yanukovych administration has become increasingly ubiquitous in the West, because the investigation against and trial and sentencing of Tymoshenko is beneficial to the current Ukrainian authorities. After all, Yanukovych's Party of Regions, the majority party in Verkhovna Rada, that is, the Ukrainian Parliament, won the local elections.

It seems that the Party of Regions wanted to ensure its victory in the 2012 parliamentary election by defeating the bloc led by Tymoshenko.

As for the gas contract, Yanukovych is currently seeking a substantial cut in the gas price that Ukraine is obliged to pay Russia. In April 2010, Yanukovych had secured a further discount of $100 per 1,000 cubic meters of gas by extending the lease of Russian Black Sea Fleet facilities in Crimea. But Naftogaz, the Ukrainian energy utility, doesn't seem to be able to afford the current bill. And the conviction of Tymoshenko offers a possibility to the current Ukrainian authorities to invalidate the 2009 gas contract and thus ease Ukraine's fiscal burden in the aftermath of the global financial crisis.

Ukraine's economic condition is characterized by high unemployment and inflation, low rate of growth and macroeconomic imbalances represented by the difficulty in fiscal budgeting and the pressure of the debt crisis.

Since Ukraine's economic recovery is weak, it has not been able to eliminate the risk of fiscal budgeting, debt and sovereign debt crises. The current Ukrainian leadership is using the Tymoshenko case to kill two birds with one stone: easing the severity of the economic problem by invalidating the 2009 gas deal and convicting its major political opponent, the ex-prime minister, who ordered the signature of gas contract while in office.

But the case has had an impact on the both Ukraine-West relations and Ukraine-Russia relations. The West's harsh condemnation and criticism of the Ukrainian authorities reflects that it no longer recognizes that democratization is progressing well in Ukraine.

The European Union is likely to decelerate its efforts to integrate Ukraine into the bloc and even frustrate Kiev's endeavor for a free trade deal, and the West as a whole has changed its attitude toward the Yanukovych administration from recognition to suspicion. But Yanukovych has announced that Ukraine's integration into the EU would serve the country's policy priority and has turned down Moscow's invitation to integrate into the Customs Union of Russia, Kazakhstan and Belarus.

All said and done, compared with the state of Russia-Ukraine relations under former president Viktor Yushchenko, bilateral relations have ameliorated fundamentally under the Yanukovych administration as characterized by two major facts. One is the extension of Crimean facilities' lease for 25 years for Russian Black Sea Fleet since 2017 in exchange for getting Russian discounts on gas process. The other is Ukraine's de facto exclusion from NATO membership endeavor because of a law passed by the Verkhovna Rada in June 2010, which bars the country from becoming a member of any military blocs.

There is still a possibility that the Yanukovych administration could invalidate the 2009 gas contract through further judicial procedures thanks to the conviction of Tymoshenko. The invalidation of the 2009 gas deal, if actualized, will cause Russia to suffer economic loss. But relations between Ukraine and Russia are not likely to deteriorate drastically.

Intrinsic conflicts between the two are expected to occur sporadically on gas (or other) issues, though, and they could intensify and become frequent if Russia tries to gain the upper hand in bilateral oil and gas deals.

The author is a researcher in Ukraine studies at the Institute of Russian, East European and Central Asian Studies, Chinese Academy of Social Sciences.

(China Daily 10/19/2011 page9)