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Tuesday, February 12, 2013

Ukraine: Current Issues and U.S. Policy

Steven Woehrel
Specialist in European Affairs

Since Viktor Yanukovych defeated Prime Minister Yuliya Tymoshenko to win Ukraine’s presidency in 2010, many observers have expressed concern about Ukraine’s democratic development, including the government’s use of the courts to neutralize opposition leaders, including Tymoshenko, who was sentenced to a seven-year prison term in 2011. International observers criticized Ukraine’s October 2012 parliamentary elections as falling short of international standards.

The global economic crisis hit Ukraine hard. Ukraine’s real Gross Domestic Product (GDP) fell by an estimated 15% in 2009. The economy began to recover in 2010, and GDP increased by 4.7% in 2011. However, living standards for many Ukrainians remain low, leading to a rapid drop in Yanukovych’s popularity when compared to the period soon after his inauguration. Slow growth in Western Europe resulted in slower growth in 2012 for Ukraine as well.

President Yanukovych has pursued closer ties with Russia, especially in the economic sphere. A major focus of his policy has been to seek reduced prices for natural gas supplies from Moscow, or failing that, to diversify Ukraine’s sources of supply. Ukraine has so far fended off Russian pressure to sell it control of its gas pipeline system and join Russia-led political and economic integration structures.

Yanukovych has said that EU integration is a key priority for Ukraine, but EU criticism of what it views as the politically motivated conviction and imprisonment of Tymoshenko and others has delayed the signature of a long-awaited association agreement with the EU, which includes a free trade agreement. Yanukovych has made clear that his country is not seeking NATO membership, but will continue cooperation with NATO, including the holding of joint military exercises.

The Obama Administration has worked to “reset” relations with Russia, but has warned that it will not accept any country’s assertion of a sphere of influence, a reminder of U.S. support for Ukraine’s sovereignty. The Administration has focused on helping Ukraine rid itself of its supplies of highly enriched uranium, assisting Ukraine with the clean-up of the Chernobyl nuclear site, and diversifying Ukraine’s sources of energy, including advice on developing Ukraine’s shale gas reserves. Administration officials have expressed serious concerns about regression in Ukraine’s democratic development since Yanukovych took power, including in such areas as media freedoms and selective prosecution of the government’s political opponents.

Legislation was introduced in the 112
th Congress and 113th Congress calling for Tymoshenko and other victims of politically motivated prosecutions to be released from prison. One of them, a modified version of S.Res. 466, was passed by the Senate on September 21, 2012. Among other provisions, it called for sanctions against Ukrainian leaders responsible for selective prosecutions.

Date of Report: January 31, 2013
Number of Pages: 16
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