Putin May Increase Pressure On Ukraine's Yushchenko Before Vote

KIEV, Ukraine -- Relations between Russian President Vladamir Putin and his Ukrainian counterpart, Viktor Yushchenko, may be about to go from bad to worse.

Yushchenko (L) and Putin (R)

Following this month's showdown between Russia and Ukraine over natural-gas prices, Putin is likely to step up pressure in the weeks leading up to Ukraine's March 26 elections in an effort to keep the former Soviet republic under Russian influence.

``The relationship couldn't be worse,'' Rainer Lindner, head of the Eastern Europe department at the Berlin-based Foundation for Science and Politics, said in an interview. ``The very dirty part of the game is still ahead.''

The March 26 elections will be Yushchenko's first voter test since he was swept to power in the Orange Revolution of 2004, when he overcame a candidate backed by Putin. Analysts say Russia may now be trying to tilt the vote in favor of candidates who favor closer ties with Moscow rather than the West.

``Russia will try to indicate its displeasure with the Yushchenko team and will try to get its people elected,'' said Ariel Cohen, senior fellow at the Heritage Foundation in Washington. He says Putin may even engineer a ``last-minute'' confrontation with Yushchenko to emphasize to Ukrainian voters the risks of straying too far from Russia.

Russia restored natural gas supplies to Ukraine on Jan. 4, following three days of international brinksmanship rarely seen since the Cold War ended 15 years ago.

Double the Price

Ukraine, located along Russia's southwestern border, agreed to pay an average $95 per 1,000 cubic meters for fuel coming from Russia and Central Asia. While the price is almost double the $50 Ukraine was previously charged, it is far less than the $230 that OAO Gazprom, Russia's state-controlled gas monopoly, had been demanding before cutting the gas on Jan. 1.

``Western perception is that Ukraine has won; that is bad for Putin,'' Lindner said. ``Putin himself was damaged by Yushchenko.''

Putin, 53, took over the year-long presidency of the Group of Eight leading industrialized democracies on Jan. 1, just as the natural-gas dispute was raising questions about Russia's reliability as an international partner.

Yushchenko, 51, has pursued pro-Western policies, aimed at getting Ukraine into both the European Union and the North Atlantic Treaty Organization, and away from Russia's sphere of influence.

The NATO Question

Ukraine's possible membership in NATO is a particularly sensitive question for Russia, which has leased facilities at the Ukrainian port of Sevastapol for its Black Sea fleet since the breakup of the Soviet Union in 1991. The day Ukraine and Russia agreed to end the gas crisis, Ukraine's Economy Minister Arseniy Yatseniuk called for a review of the Russian fleet's $98 million leasing agreement.

Ukrainian and Russian analysts say the March 26 elections will be pivotal for Urkaine's orientation between East and West.

The Russian government will support any party or politician ready to pursue a `` strategic partnership'' with Russia, said Andriy Ermolaev, director of the Sophia Center of Social Research in Kiev.

A strategic partnership would involve giving priority to economic and trade ties with Russia, as well as cooperating on a common energy policy, Ermolaev said.

The Oil Weapon

Some analysts say Putin's next step may be to take further advantage of Ukraine's energy dependence to exert pressure. ``It can be oil'' next time, Cohen said. Ukraine imports 80 percent of the oil it consumes, mostly from Russia, and Russia-based companies OAO Lukoil, TNK-BP and NK Alliance Group control three of Ukraine's four largest refineries.

Sonal Desai, an economist at Dresdner Kleinwort Wasserstein in Milan, said, ``I don't think oil would be the route for them to go.'' She said Russian efforts to influence the vote may be more subtle. ``Russia would not commit the same errors that they did the last time round,'' she said. ``I wouldn't expect overt influence on the Ukrainian election as we saw for presidential elections. On the other hand, the timing of the flare-up of the gas issue is probably not a coincidence either.''

Desai said Russia may seek to exert pressure through ``small irritants,'' citing as an example its Jan. 1 ban on imports of uncooked meat from Ukraine. The Interfax news agency reported yesterday that Russian authorities said the meat was barred because its origins were unknown.

A Wide Net

``This time, the Kremlin's policy is to cast its net wide, and support those who support closer ties to Russia, '' Ermolaev said in an interview. ``In 2004, the Kremlin didn't hide its sympathy. This time it is taking a more flexible, subtle line.''

The heightened tensions with Russia come at a time when Yushchenko's popularity has sunk since September, when a split opened up in the ranks of the Orange Revolution. A Dec. 10-18 poll of 2,000 people conducted by the Sophia Center showed the ``Party of the Regions'' led by Viktor Yanukovych, the Putin favorite Yuschenko defeated in 2004, with the support of 31.1 percent; 17.9 percent backed Yushchenko's ``Our Ukraine'' party and 17 percent supported a party led by former Prime Minister Yulia Timoshenko.

Another survey by the Kyiv International Institute of Sociology, conducted between Dec. 9 and Dec. 20, showed Yanukovych's party with 34.5 percent to 21 percent for Timoshenko's party and 18.4 percent for Yushchenko's. Under the new Ukrainian constitution, power in the new government will shift from the president to a prime minister.

Harmful to Ukraine

Timoshenko, who was fired in September, has gone further into opposition against her former ally Yushchenko, saying she would bring a legal challenge to the agreement signed by Ukraine and Russia ending the gas crisis. At a press conference on Jan. 5, she said the deal was harmful to Ukraine's interests.

Ukrainian efforts to straddle between Russia and the West won't work in the end, Konstantin Zatulin, director of the Moscow-based Institute of CIS Studies, which focuses on relations among the former Soviet states, said on Russia's state-owned RTR channel on Jan. 4.

``The people of Ukraine have constantly been kept away from this question, and told that Ukraine would be in both camps,'' he said. ``Now the people of Ukraine face this choice.''

Source: Bloomberg