FT: Russia seeks to close the window of Ukraine to the West

07 September 2017, 23:15 | Policy
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"Last month, Russia completed the construction of a railway that bypasses Ukraine. This project was entrusted to a special army unit, and it was completed a year earlier than planned, which underlines its importance for the Kremlin. This is the last of several infrastructure projects under the auspices of Russia, which, coupled with the devastation brought about by the conflict with Russian-backed separatists in the Donbas region, risk turning Ukraine, historically serving as a bridge between East and West, to the island, "write the deputy director of the Program for Russia and Eurasia Center for Strategic and International Studies (CSIS, Washington) Jeffrey Mankoff and director of the CSIS project "Reconnecting Asia" Jonathan Hillman in an article for the Financial Times.

Not so long ago, Ukraine hoped to become a significant part of the large-scale Chinese project "One Belt - One Way", stretching along Eurasia and beyond, the authors note..

"The idea of ??the Great Silk Road will be actively supported by Ukraine," said then-President Viktor Yanukovych during his visit to Beijing in 2013. Agreements were signed that promised $ 8 billion of Chinese investments, including the construction of a $ 3 billion port in the Crimea. But these transactions fell victim to the armed conflict that erupted in early 2014, the article says..

"This also applies to the numerous ties that existed between Russia and Ukraine, which either suffered during the fighting, or were deliberately torn up due to economic pressure," note Mankoff and Hillman.

"For both sides of the conflict, a change in the structure of trade and transport is a means of shaping the political and economic fate of Ukraine. While military forces have destroyed the main infrastructure, such as bridges and railways, governments in Kiev and Moscow are establishing new ties that reorient trade flows, "argue experts.

While Kiev seeks to isolate the Crimea economically, Moscow is building new ties that should further integrate the Crimea into Russia, the authors write, pointing primarily to such large-scale projects as the construction of the Kerch bridge and the main road leading to it.

"The recently completed railway allows you to bypass the 26-kilometer stretch of roads in Ukraine, freeing trains from Russia to Belarus, the Baltic states and to other destinations, from the need to cross the Ukrainian territory. Movement along this path may grow after the launch of the long-awaited "North-South Transport Corridor" - from Moscow to Mumbai, "reads the article.

The authors also mention Russia's construction of gas pipelines bypassing Ukraine - "Nord Stream-2" and "Turkish Stream".

"None of these infrastructure projects change the situation radically in and of itself, but taken together, they assume an increasing separation of the Ukrainian state from its traditional structure of trade," note Mankoff and Hillman. Thus, the Eurasian Economic Union introduces new duties, limiting trade opportunities for Ukraine.

"Russia's efforts to isolate Ukraine economically force Kiev to strengthen trade and logistics ties with the West. In some respects, Ukrainian trade has already reoriented from Russia to the EU: in 2016, the European Union accounted for 37% of Ukraine's exports, compared to 25% in 2012, "experts say..

They believe that Ukraine and the West should further build ties. This will contribute to the modernization of infrastructure. The authors note that the rolling stock of the Ukrainian railways is aging and needs replacing, and the roads do not meet international standards. Ports of the country will benefit from modernization of grain transportation points.

Factories should also be modernized so that more of their products meet EU standards, they advise.

"All this will require investment, which means that Ukraine must restore order at home. Kiev moves too slowly with reforms to reduce corruption, encourage foreign investment (for example, allow foreigners to own land) and privatize state-owned enterprises, "reads the article.

"As Russian infrastructure projects show, the world does not stand still. The window of Ukraine to the West will not remain open forever, "the authors conclude..




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