How Ukraine lost control over its own destiny

Violent clashes between pro-democracy demonstrators and riot police….Corrupt and unresponsive leaders turning a deaf ear to the people…An authoritarian superpower pulling the string of a puppet government.  It sounds like a chapter out of the Cold War, set behind the Iron Curtain in the heyday of the Communist era, not a scene from modern day Europe.

It wasn’t supposed to be this way. The Ukrainian people toppled their Communist dictators in the 1990s.  They fought for their freedom again twenty years later with the Orange Revolution. A year ago the world thought Ukraine was on its way to being an independent nation, like its neighbors in Eastern Europe. The Ukrainian people thought so too, and wanted an economic relationship with the European Union.

But today Ukraine is back in the grip of unprincipled and incompetent leaders, propped up by Russian overlords. The Ukrainian people have taken to Kiev’s Independence Square and cities throughout the country, demanding their government compromise or step down. The West seems powerless to help. But In the end, Ukraine is likely to fall back into the Russian fold, because only Russia has the deep pockets, military muscle and staying power to prevail.  Ronald Reagan must be rolling in his grave.

How did Ukraine get to this point? How did they lose control over their own destiny

First, they borrowed too much money and have too much debt.  Their debt is upwards to $30 billion and they need a $15 billion dollar bailout just to keep afloat. Europe, with economic problems of its own, is unable and unwilling to pull out the checkbook. Russia, on the other hand, has pledged an immediate infusion of $2 billion, with more to come. They’re also likely to sweeten the offer with a little extra for Ukraine’s notorious corrupt leaders.

Second, Ukraine doesn’t have energy of its own, and relies completely on natural gas imports coming from Russia. Europe doesn’t have its own energy either, and it too is dependent on imported Russian gas. US may now be gas exporter, but it’s a long way to Ukraine. Russia has shown in the past that it is willing to turn off the spigot on Ukraine, leaving them without gas and shivering in the dark to make a point. They’ve offered cheap gas if Ukraine joins the Russian trade union. They’ve implied a cut off if Ukraine doesn’t.

Finally, Ukraine’s current crop of leaders are no George Washington’s or Ronald Reagan’s.  Despite the Ukrainian people’s desire to move closer to the West, Ukraine’s leaders are eager to do Russia’s bidding and are not likely to shy from a fight. They routinely throw political opponents in jail. They have already sent riot police to stop demonstrators, and tanks are probably not far behind.  If the crisis escalates, the group to watch is Ukraine’s military. Will they stay in the barracks? Will they come out on the side of the Yanukovich government? Or will they support the people?

Is there anything American can do to save Ukraine? Only if President Obama steps up and offers financial relief, help with developing Ukraine’s energy resources, and stands up to Putin. While President Obama never shies away from spending money, it’s doubtful he would support fracking in Ukraine. And we’ve seen time and again President Obama runs for cover every time Putin raises his eyebrow. Sanctions won’t help, they would only push Ukraine further into Russia’s arms. Predictably, Obama has issued yet another threat about consequences of crossing lines, but nobody takes those threats seriously any more.

On the other hand, Putin won’t back down. Ukraine is historically part of greater Russia and essential in Putin’s clawback of their lost empire. Ukraine is the path into Russia which invaders from Genghis Khan to Hitler have trod to get to the heartland. Although Americans don’t take the threat of invasion seriously, Russians do. Ukraine has two essential ports – Odessa and Sevastopol – which give Russia Black Sea access to the Mediterranean. Ukraine is also the breadbasket of Russia, which Russia needs to prevent its endemic food shortages. Finally, pro-democracy movements in Kiev could well spread to Moscow. Ukraine is a country Putin just can’t afford to lose to the West.

Watching events unfold in Kiev’s Independence Square is a great tragedy for Ukrainians, but it should also be a wake up call for America.  If you don’t control your finances and energy, you don’t control your destiny. Ukraine’s leaders borrowed too much money, and don’t have a plan to pay it back. They need to borrow even more to keep things going. They need to import energy resources from abroad, which not only comes at a high price, but with an even higher political price tag.  Finally, their elected leaders have proven corrupt and incompetent to the point where the people no longer control them.

Putin claims the greatest tragedy of the 20th century was the breakup of the Soviet Union. He studied the causes and planned the comeback, even writing his dissertation on it.  Putin realizes Reagan’s economic warfare won the Cold War more effectively than guns could have. He’s now turned the tables and is rebuilding the Russian empire with cash and gas. The Sochi Olympics is the debutante party of Putin’s new Russia. Ukraine is his first dance and Putin won’t take no for an answer.