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Poland, Belarus & Ukraine Report: June 2, 2006

June 2, 2006, Volume 8, Number 20
GUAM -- A REGIONAL GROUPING COMES OF AGE. GUAM -- a regional grouping of Georgia, Ukraine, Azerbaijan, and Moldova -- always seemed like just another talking shop. This was especially true in a region with what some might consider an excess of regional groupings, like the Commonwealth of Independent States (CIS), the Shanghai Cooperation Organization, the Collective Security Treaty Organization, and others. After Uzbekistan left the body in 2002, many commentators questioned whether GUAM even had a future. But the recent advent to power in Georgia and Ukraine of openly pro-Western leaders breathed new life into the grouping. And with countries threatening to leave the CIS, GUAM has set its sights much higher.

Surrounded by a bevy of wine glasses and photographers last week in Kyiv, Georgian President Mikheil Saakashvili enjoyed a glass of one of his country's biggest exports.

The wine festival in the Ukrainian capital was a clear show of solidarity, after Russia recently banned Georgian wine in a move many think is political.

That spirit of bonhomie also seemed evident in the more serious business of politics. Ukrainian President Viktor Yushchenko, who was elected the first-time secretary-general of GUAM, spoke enthusiastically of the region's prospects.

"I am firmly convinced that our region has great potential and that it will become one of the most promising regions in modern Europe. This concerns not only energy or transport projects but also security projects, I'm sure," Yushchenko said.

The presidents of the four GUAM countries adopted a new charter, rules of procedure and financial regulations. And crucially, the leaders also expressed their desire for increased cooperation with NATO and the European Union.

They also gave the organization a new name. GUAM will now be known as the Organization for Democracy and Economic Development-GUAM.

This apparent reawakening is likely to irritate Russia. From the outset, Moscow has reacted to GUAM with mistrust and hostility, perceiving it as a secret weapon with which the United States, a GUAM funder, planned to emasculate the CIS.

Whatever the cause, the CIS -- which rose from the ashes of the Soviet Union in 1991 -- seems to be in trouble.

In recent weeks, Saakashvili has repeatedly hinted at possibility of his country withdrawing from the CIS.

In Ukraine and Moldova, senior politicians have alluded to the possibility of leaving the CIS. Of the four GUAM countries, only Azerbaijan has ruled out leaving the body.

Aleksandre Rondeli, the president of the Georgian Foundation for Strategic and International Studies in Tbilisi, thinks that GUAM's transformation is part of the disintegration of the CIS.

"GUAM in the beginning was created mostly as a certain kind of resistance toward Russian security policy. But now it's developing into a serious, full-fledged international organization, but with an economic basis," Rondeli says.

Indeed, at the Kyiv meeting, economic cooperation was high on the agenda.

Since its inception, the presidents of the GUAM member states have consistently stressed the anticipated benefits of economic cooperation. That means, in the first instance, the construction of export pipelines for Caspian oil and gas that bypass Russian territory. The Baku-Tbilisi-Ceyhan (BTC) oil-export pipeline is to be formally inaugurated next month and the Baku-Tbilisi-Erzerum gas pipeline will go into operation this fall.

Much of the renewed cooperation will now be concentrated on reducing dependence on Russian oil and gas. Ukraine, Georgia, and Moldova are all reliant on Russia for gas supplies. But Azerbaijan could replace Russia as Georgia's supplier when gas from its Shah-Deniz field starts flowing through Georgia in the next few months.

At the May 23 summit, the presidents took another bold step, announcing that they had signed a protocol on creating a free-trade zone and a customs union.

Saakashvili, speaking to RFE/RL's Georgian Service, stressed that the renewed interest in the alliance was for self-protection: "It is very important that, at a time of real economic sanctions against Ukraine, Georgia, and Moldova, at a time of new obstacles and embargoes, we have agreed to introduce a free-trade regime among our countries, because it offers concrete benefits to all [GUAM member] countries, all citizens, all producers."

But is this likely to amount to much?

Katinka Barysch, chief economist at the London-based Centre for European Reform, says that since the breakup of the Soviet Union there have been numerous attempts to create political and economic cooperation. She says that most of these initiatives have been only mildly successful as trade between countries has not increased.

"My impression is that the policymakers in the former Soviet Union have a very statist and traditional view of international relations. The state is supreme over markets and there is a clear distinction between high politics and low politics," Barysch says.

And high politics is big presidents getting together and signing deals, and that very often includes economic deals, but this isn't really something that's driven from the ground up, that's driven by the business sector. The motivation behind that seems to be political."

Konstantin Kosachyov, the head of the Duma's Foreign Affairs Committee, has no doubt that the motivation for GUAM is political. In an interview with RFE/RL's Russian Service, Kosachyov said he couldn't see what the countries had in common:

"I find it extremely hard to imagine that something actually unites these countries, in particular slogans on democratic elections and adherence to the idea of progress. And that explains Russia's reaction -- we find it strange to see an alliance formed not on a positive but on a negative note; not for something, but against something."

Besides, there could be tensions within the grouping itself. Georgia, Ukraine, and Moldova have unequivocally pro-Western and pro-NATO orientations, whereas oil-rich Azerbaijan has taken a more nuanced position.

Speaking after the summit, Azerbaijani President Ilham Aliyev was keen to stress how the organization wasn't about confrontation. "It is not aimed against anybody," he said. "We didn't gather here to make friends in order to oppose someone else."

(RFE/RL's Liz Fuller, Luke Allnutt, Claire Bigg, and the Russian, Ukrainian, and Georgian services contributed to this story.)

NEW PARLIAMENT CONVENES, SETS DEADLINE FOR COALITION. The inaugural session on May 25 of Ukraine's newly elected parliament effectively launched a 30-day countdown for the formation of a ruling coalition. Deputies from the Yuliya Tymoshenko Bloc, Our Ukraine, and the Socialist Party passed a resolution adjourning the session until June 7, by which time they expect to present a coalition accord on a new government.

All seemed in order as the 450-seat Verkhovna Rada convened for its first session today -- but the composure on the Ukrainian parliamentary rostrum was short-lived.

A dispute among deputies erupted immediately after the Yuliya Tymoshenko Bloc, Our Ukraine, and the Socialist Party -- the three allies in the 2004 Orange Revolution -- proposed that the session be postponed until June 7.

By that time, they pledged, the three groups will have agreed on the principles of a renewed coalition. The motion eventually passed with 240 votes.

Dissent came from the ranks of the Party of Regions and the Communist Party, whose members argued that the Orange Revolution allies have had enough time to agree on a coalition and should allow the legislature get to work.

The March 26 parliamentary vote in Ukraine, which was internationally praised as fair and democratic, produced a legislature comprising five forces: the Party of Regions (186 seats), the Yuliya Tymoshenko Bloc (129), Our Ukraine (81), the Socialist Party (33), and the Communist Party (21).

Over the past two months, the five parliamentary groups have held several joint meetings chaired by President Viktor Yushchenko and many bilateral and trilateral conferences devoted to the formation of a parliamentary majority, but all of them proved fruitless.

In mid-April the Yuliya Tymoshenko Bloc, Our Ukraine, and the Socialist Party signed a protocol pledging to work toward creating such a parliamentary majority. Their subsequent efforts led to the preparation of two draft coalition accord -- one endorsed by the Yuliya Tymoshenko Bloc and the Socialists, the other worked out by Our Ukraine.

The main stumbling block in the coalition talks is the question of who will become prime minister. Tymoshenko has made no secret of her desire to regain the post she held before being dismissed by Yushchenko in September. But the restoration of Tymoshenko as prime minister is exactly what the president and his political partners from Our Ukraine would like to avoid.

Yushchenko officially split with Tymoshenko after she accused some of his closest allies of corrupt practices and of running a "second" government. All of them were subsequently elected to the Verkhovna Rada from the Our Ukraine list. If the former Orange Revolution allies eventually decide to restore their coalition and Tymoshenko becomes prime minister once again, the old conflict may reignite.

There is also another source of potential discord between the president and Tymoshenko. Tymoshenko promised during the election campaign to cancel a gas-supply deal that Yushchenko's cabinet signed with Gazprom in January. The deal raised the gas price for Ukraine from $50 to $95 per 1,000 meters and gave RosUkrEnergo, an opaque Swiss-based company owned half by Gazprom and half by two Ukrainian businessmen, the role of sole supplier.

The cancellation by Tymoshenko of the gas deal with Gazprom could lead to a serious conflict between Kyiv and Moscow. Russia could cut gas supplies to Ukraine, as it did for a short time in January, or impose trade sanctions, as it recently did with regard to Georgian and Moldovan wines. Ukraine, which currently sends some 22 percent of its exports to Russia, would hardly benefit from any trade ban from Moscow.

Another hurdle to an Orange coalition is the Socialist Party's opposition to some goals pursued by Yushchenko's presidency. In particular, the Socialists object to Ukrainian aspirations to join NATO. They also object to the privatization of land, thus undermining Yushchenko's efforts to implement reforms he pledged during the 2004 Orange Revolution in an effort to bring the country closer to the European Union.

If Our Ukraine doesn't allow Tymoshenko to realize her dream of regaining her seat as prime minister, she will most likely switch to the opposition, and Yushchenko will have to seek a coalition with the Party of Regions led by Viktor Yanukovych -- his former presidential rival.

Such a coalition, with 267 votes in the Verkhovna Rada, would provide solid support for its cabinet, provided that the two seemingly mismatched parties could adopt a consistent program.

Both parties represent the interests of major oligarchic groups in Ukraine, so in theory they could very easily agree on a set of basic economic reforms. But difficulties could emerge in the determination of foreign-policy priorities, as Yanukovych's party is generally seen as Russia-leaning, in contrast to the Western-oriented Our Ukraine.

But for Yushchenko, this coalition option is fraught with much more serious dangers than mere differences of opinion on foreign policy. The Party of Regions, which won the March 26 vote, would most likely demand the post of prime minister. It is not clear whether Yushchenko would prefer Yanukovych or someone else from his party to Tymoshenko as prime minister.

Under the constitutional reform that went into effect in January, presidential powers in Ukraine were substantially reduced to the benefit of the parliament and the prime minister. Since the Party of Regions has many politicians with great experience in running the government under former President Leonid Kuchma, Yushchenko should think twice before handing the keys to the cabinet over to them. Such experienced politicians could do more to diminish the role of the president in practice than the constitutional reform did in theory.

Yushchenko told the Verkhovna Rada today that he will expect the new cabinet to embody his future vision for Ukraine.

"The government should be made up of those who, as a single team, will ensure Ukraine's development on the basis of European values, who are capable of consolidating the nation, stimulating economic reforms, and respecting the rights and freedoms of the people," Yushchenko said.

However, the president could find these goals very difficult to achieve -- not only because of discrepancies among the potential coalition parties but also because of the personal ambitions of their leaders. (Jan Maksymiuk)