OIL, OLIGARCHS AND THE UKRAINE CRISIS
Pipeline Politics Behind "Orange Revolution"
by Raven Healing
While blogs and alternative media in the US were still debating whether or not Bush had actually won the elections, representatives of the Bush administration were criticizing the accuracy of the presidential results in Ukraine. As reports of electoral irregularities mounted in Ohio, Secretary of State Colin Powell stated, "the Ukrainian people deserve fair elections." However, a peek behind the headlines indicates that neither candidate ever represented the needs of the Ukrainian people.
Ukraine was already a divided country, ethnically, linguistically and religiously. The western regions are inhabited mostly by Ukrainian-speaking Uniate Catholics who identify more strongly with Europe, while the east is predominantly Russian-speaking, Orthodox Christians who generally favor close ties to Moscow. The eastern provinces supported Russian-speaking Viktor Yanukovich, and the western provinces largely went for Viktor Yushchenko, the Ukrainian-speaking candidate.
However, the elections became more than just a contest over which candidate the Ukrainian people wanted, but rather which world power Ukraine should align itself with--and, given the country’s dire economic situation, potentially be dominated by. The Ukraine electoral crisis--which nearly led to a civil war, according to many analysts--was manipulated by rival outside powers, each with its own economic agenda. One of Ukraine’s most important economic interests is provided by its strategic location between the oil-rich Caspian Sea and western markets--and particularly the Odessa-Brody pipeline, recently built to carry Caspian oil from Ukraine’s Black Sea port of Odessa to Brody, near the Polish border. Controlled by Ukraine’s state pipeline company, the Odessa-Brody has ironically only been used to carry oil in the reverse direction--exporting Ural oil from a Russian company to Odessa for export via the Black Sea.
In November of 2004, Victor Yanukovych was declared the winner of the elections in the Ukraine. His opponent, Victor Yushchenko, along with some NGO's, criticized the election as rigged; claiming votes had been added to mobile ballots. Colin Powell said that the US refused to accept the results of the elections, adding: "If the Ukrainian government does not act immediately and responsibly there will be consequences for our relationship." Groups of young protestors flooded Kiev, and the Ukrainian Supreme Court ruled the first election a fraud. This circumstance was coined the "Orange Revolution," evoking the "Rose Revolution" in Georgia a year earlier--in which Russian-backed President Eduard Shevardnadze was ousted by a protest wave following contested elections.
Before the revote, Yushchenko revisited a clinic in Vienna that he had been in twice before for a mysterious disfiguring illness--only this time the doctors rather quickly came to a conclusion that Yushchenko had been poisoned with dioxin. In an environment tainted with accusations of an attempted assassination, the re-vote was held Dec. 26. Yushchenko was found to be the winner by 52 percent. In both elections, the results were divided along the linguistic and cultural rift--Yushchenko winning in the west while Yanukovich won in the east.
Yanukovich was acting prime minister of Ukraine from November 2002 to December 7, 2004, when he resigned due to fallout from the assassination accusation. Yanukovich's candidacy was supported by Leonid Kuchma, president of Ukraine for over ten years, as well as by Russian President Vladimir Putin, who often appeared alongside Yanukovich during his campaign. Just before the first election, Putin told the Ukrainian press that dual citizenship was a possibility, as well as an easier visa process--the unspoken condition, by strong implication, being the election of Yanukovich.
Yanukovich tried to present himself as a tough-guy populist, but the opposition saw him as a "business as usual" candidate representing the interests of the various oligarchs who had taken control of Ukrainian industries--as well as those of Russia, which is selling oil to western markets via Ukraine pipelines. He is connected to the "Donetsky clan," a powerful business and political group, and its leader Rinat Akhmetov, Ukraine's richest tycoon. Yanukovich advocated closer relations with Russia and even favored some political integration with Russia. Furthermore, he represented the continuation of the authoritarian tendencies and suppression of media freedom that plagued Kuchma's presidency. Some critics of Yanukovich feared that he has close ties to both the FSB (successor to the KGB) and to Bratva, the organized crime machine. He was said to have acted as a lobbyist for Bratva in national-level politics.
Yushchenko's past is by no means clear of similar negative associations. He was the head of the National Bank of Ukraine (NBU) in 1997 when, according to some critics, millions of dollars in IMF loans were embezzled and laundered, profiting certain oligarchs, although apparently not Yushchenko personally. Some oligarchs, such as Yuliya Timoshenko, who has been publicly implicated in unethical economic practices, openly supported Yushchenko's candidacy. While Yushchenko was acting as prime minister in 2000, the IMF audited the NBU, finding "irregularities" in accounting practices and suspended a loan. Yushchenko worked to mend fences with the IMF, as well as with US leaders. By the end of 2000, the IMF reinstated the loan under condition that Ukraine submit a list of enterprises subject to privatization. By this time, Ukraine had borrowed over $3 billion from the IMF, most of which was used to stabilize the national currency, an accomplishment for which Yushchenko is given credit. Bill Clinton praised Ukraine for its "progress" and encouraged "efforts to more fully integrate Ukraine into the West." Meanwhile, Clinton was also brokering plans for a Baku-Ceyan pipeline, a second artery to carry Caspian oil to western markets, through the Caucasus.
Western media portray the "Orange Revolution" as a movement of the people, and Yushchenko's presidency as heralding a new era of freedom and prosperity for Ukraine. Yushchenko's presidency may mean a revolution, but this revolution only changes which wealthy hands are grabbing the profits from oil transfers, while the people themselves remain in poverty. And the youthful protests were, at least, greatly aided by the US and Western financial interests.
The US State Department funded the exit poll in the first election that showed Yushchenko leading by 11 points. The State Department sent $65 million over the past two years to groups in support of democracy in Ukraine. One of these groups was the International Center for Policy Studies, on whose board Yushchenko sits. The US Agency for International Development (AID) sent millions to the Poland-America-Ukraine Cooperation Initiative, an NGO that in turn funded various other NGOs in support of Yushchenko. There are accusations that some of the NGOs which assessed the fairness of the elections are affiliates of the US National Endowment for Democracy, which is closely associated with US AID. The "Pora" youth movement responsible for many of the protests was funded by financier philanthropist George Soros and by Freedom House, a Washington-based proponent of "democracy" and "free markets" which is funded by such groups as the Soros Foundation, Whirlpool, US Steel, the Ford Foundation, the National Endowment for Democracy and US AID. Western media generally did not cover protests by supporters of Yanukovich.
With Yushchenko seeking membership to the EU, and potential membership in NATO; with his clearly pro-Western position; with the role the US has played in promoting a re-vote; with Ukraine so dependent on loans from the IMF, which insists that Ukraine's oil trade be in US dollars--it was easy for Putin to accuse the US of playing "sphere of influence" politics. Of course Putin was himself playing "sphere of influence" politics.
The "Rose Revolution" in Georgia was also a funded "revolution." Again, George Soros funded the youth group (Kmara) responsible for most of the protests; a Russian-backed president was unseated and replaced with a more pro-Western one. This new pro-Western president, Mikhail Saakashvili, seeks membership into both the EU and NATO. President Saakashvili did not herald a new time of freedom for the people; there have been many concerns about his authoritarian tendencies, including heavy-handed use of the police to break up protests. However, he did lessen Russia's traditional control over Georgian politics. After his meeting with Powell in January 2004, Powell called for the removal of all Russian troops from Georgia, and for opening the country to more US military advisors. Saakashvili also protects the interests of the US companies who want to pump their oil through Georgia in the Baku-Ceyan pipeline.
The Ukrainian people were caught between two imperialist powers vying for control of the world's oil. They were essentially asked to vote for which world power they would rather have reaping the profits from the flow of Caspian oil through their country--for it is certainly not the impoverished Ukrainian people who will be making any money. To both Russia and the West, the countries on the precious route from the Caspian to insatiable western markets are important due to their geopolitical location--not their culture or people. As Russia has shown in Chechnya, and the US in Iraq, the rights of the people are of little consequence when control of oil resources are at stake.
Wall Street Journal on the Odessa-Brody pipeline
Special to WORLD WAR 4 REPORT, Jan. 17, 2005
Reprinting permissible with attribution