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    December 15, 2014

    Dmitry Medvedev Manifesto: Russia and Ukraine - Life Under the New Rules. Part 1. The Common Past

    Photo: press service of the gov. of the Russian Federation
    Dmitry Medvedev, Prime Minister of Russia - NG.ru

    Dmitry Medvedev is convinced that Moscow and Kiev have to build relations on the basis of pragmatism. 

    A year ago, at the end of fall 2013, when the Ukrainian crisis began, no one could imagine what consequences will this "bitter November" bring to our neighbors.

    A split in the society, which cut through entire families. The decline in the economy. The surge of radicalism to the point of boasting Nazi symbols. Flood of refugees to neighboring countries. A military operation on their own territory against their own countrymen. And in the end - thousands of people killed, including peaceful civilians.

    Just one year - and from a country dear to us, with which we were friends, with which we traded, where we went on vacation and to visit relatives, only memories are left. We in Russia are taking these events as our pain. We help even those who accept this assistance with a smirk, continuing to live under a slogan "Ukraine is not Russia". I am truly sorry that members of Ukrainian elites could not offer or implement a different strategic development program for the country. As a Chairman of the government, I see it every day in the numbers, which confirm that the hardest times for our neighbors, are unfortunately, still ahead.

    No matter what blame may be voiced against us, we have no right to succumb to provocations. Have no right to forget: on the other side of the border live people close to us in spirit, culture, mentality, whose fate will never be indifferent.

    THE COMMON PAST

    What determines the specific nature of relations between Russia and Ukraine 

    We really have a lot in common. Because the roots of our relations go back centuries deep. Unfortunately, to push two nations against each other, today some in Ukraine deny objective facts. Including the commonality of our cultures, faith, a thousand year history. Speculating on the past, imposing ideological constructs that have nothing to do with historical reality. It is clear: that this closeness that has developed between Russians and Ukrainians is unique and has a great power. It was a determinate factor in the relations between our countries even after Ukraine gained independence in any case, not less than the economy. And for millions of people from Russia and Ukraine, whose lives, families, family ties have always been closely intertwined, it certainly was more important than other factors.

    Every Russian person holds Ukrainian culture very near and dear, Ukrainian folk songs, which we perceive as our own, native. Rich in talent Ukrainian land has given the world artists, musicians, poets, writers, creative heritage of which is our common heritage. For example - the life and works of Repin, Kuindzhi, Yaroshenko, Bulgakov, Babel. Having lived part of their life in Ukraine, they have kept the warmest feelings towards Ukraine and have expressed them in their paintings, as well as in novels and stories. Russian literature was decorated with Ukrainian motifs in the works of Pushkin, Tolstoy, Kuprin, Chekhov, Blok, Pasternak, Mandelstam. How can one determine which component is greater - Ukrainian or Russian - in the immortal books of Gogol!

    This culture belongs to both nations. Initially tolerant, open - it always united us, was a source of cohesion between us. Taught us the same values and ideals, the principles of human relationship, norms of behavior in society and in family life. All that cannot be destroyed overnight. Even when we began to live in different States, we read the same books, liked the same artists, watched the same movies. Spoke one language, which is considered native by almost a third of Ukraine's citizens and which is understood in Ukraine by absolutely everyone. And it seemed to us that in the spiritual and cultural communication between us there will never be any boundaries.

    How the Ukrainian industry was created

    We had not only common historical and spiritual roots. But also a close interconnectedness and interdependence of our economies, production and technological chains, which have developed over decades.

    As a part of one state united with Russia in the nineteenth century, Ukraine emered as a major industrial region, and the Donetsk basin - as a major mining and metallurgical center. While part of the USSR, Ukraine not only consolidated its power, but being an agrarian republic, received a developed industry. Europe's largest hydroelectric station Dneprogas was built in Ukraine - with help of the entire country. With the same rigor, under the slogan "All for Donbass!", the coal region was reconstructed. Giants of machine-building and metallurgy were created (Kharkov tractor and turbine, Krivoy Rog metallurgical works, "Zaporozhstal", "Azovstal" and others), transport infrastructure, including a network of seaports, powerful agrarian and military-industrial complexes. Unique production and scientific-technical centers appeared, including Yuzhmash, "Southern", Paton center.

    As a result, Ukraine has become one of the most developed republics. The main part of its industry, agriculture and trade was financed from the budget of the Soviet Union. With the efforts of many people and companies from different republics an oil pipeline "Druzhba" was laid, built five nuclear power stations and seven hydroelectric power stations, which are now the basis not only of the Ukrainian energy sector, but also the whole national economy. Also thanks to Soviet scientific-technical potential, Ukraine still has basic aerospace technologies, competitive products in some segments of the aircraft industry. Nearly a third of all built in the Soviet era enterprises and design construction bureaus of missile and aviation industries is now on the territory of Ukraine.

    How Russia supported the Ukrainian economy

    After the collapse of the USSR all of this (including gas transportation system) was inherited by Ukraine. In addition, all the debts of the USSR were taken over by Russia. And Ukraine entered its new history, unburdened by debt payments. This is why in 1991 starting conditions for its development were among the best in the post-Soviet space. Thanks to this the economy of independent Ukraine remained afloat. Moreover, until recently, Ukraine was feeding off of the results achieved in the past. Continued to rely on the cooperation with Russia. Used our resources.

    In the most complicated period for Russia, in June 1993, our country provided Ukraine with a loan of about 250 billion rubles. Special support from Russia made it possible to develop many sectors of the Ukrainian economy, including aviation and space industry. As a result a first national space program of Ukraine was created. The level of technological ties, including nuclear energy, between our two countries was higher than in many European countries within the EU. Deliveries to Russia contributed to successful development of Eastern regions of Ukraine.

    An important role for the Ukrainian economy, particularly for its basic industries, was played by Russian investments in machine-building, metallurgy and metalworking, aerospace, shipbuilding, oil refining. A major factor that has strengthened the banking sector, was also the Russian investments. The most important of them were made in the context of the global financial crisis of 2008-2009, when credit institutions of Ukraine had experienced the most pressure due to the massive loan defaults and a flight of depositors.

    Only for Ukraine were created exceptionally favorable conditions in the energy sector - so called "energy exclusive". For a long time (until 2006) the cost of gas for Ukraine was extremely low - $40-50 per 1 thousand cubic meters And the volume of delivered raw materials exceeded those that Gazprom sold to Germany and Italy put together. Thus our country has, in fact, subsidized Ukrainian economy for decades.

    Since there was no separate contract for transit, we paid directly with the gas from the pipe. Meanwhile Kiev took more gas than Russia owed Ukraine for transit. Because of this Ukrainian debt to "Gazprom" continued to grow. If we limited supplies, the Ukrainian side begun unauthorized withdrawals, and to be more exact, stealing gas intended for European consumers.

    Of course, Russia tried to negotiate with Ukraine on civilized principles of cooperation. Including during negotiations between presidents Vladimir Putin and Viktor Yushchenko in 2005, when the Russian side proposed to abandon barter schemes and move to cash settlement, to separate the issues of supply and transit. However, Kiev behaved extremely unconstructively, demanded special conditions. Wanted to establish European-level prices for transit, while maintaining preferential price for Russian gas. The Ukrainian side rejected almost all of our offers (including a loan of $3.6 billion for debt repayment). But even under these conditions, Russia continued to be willing to compromise.

    I should note that Ukraine became the last former Soviet Republic with which Gazprom has moved to market relations in the gas sphere. In 2009, for the first time in the history of relations with this country was established a long-term contractual framework that is fully consistent with longstanding practices of gas business. On January 19, 2009, after negotiations between Vladimir Putin and Yulia Tymoshenko Gazprom and Naftogaz signed new long-term contracts. The price of gas and the transit rate was calculated according to the common European formulas. But even after that Ukraine continued to violate its payment obligations, illegally extracted gas. In 2010, we signed with President Viktor Yanukovych a new package of "Kharkov" agreements, according to which Ukraine has extended the presence of the Black Sea fleet in Sevastopol for 25 years, and Russia reduced the rate for 1 thousand cubic meters to $100.

    Constant interruptions with payments only added to Kiev debts. By the fall of 2013 it reached $2.7 billion. But then the Russian side provided Ukraine with significant support. From January 1, 2014 Naftogaz had to pay $268,5 per 1 thousand cubic meters, that is to receive gas at a significant discount. This would allow Ukraine to save about 7 billion dollars annually. In addition, the Russian government gave Kiev a loan of 3 billion dollars, which, among other things was to be used for repayment of gas debts. But no one was going to pay. So in April 2014 we were forced to cancel the "December" discount. And to move, strictly in accordance with the applicable contract, to a price of about $485 per 1 thousand cubic meter, which Ukraine was not satisfied with. And later (in June) "Gazprom" put "Naftogaz" on advance payment system. The debt of Ukraine by that time reached $4.5 billion.

    Meanwhile the Russian side never used the economic factors for solving any political issues. So, questions about the signing by Ukraine of the CIS Charter, establishment of the Russian-Ukrainian state border or the presence of the Black Sea fleet in Crimea were decided on the basis of international law.

    It is clear that any move by Russia, if desired, can be interpreted exclusively in a negative way - "expansion", "dependence", which some do today. Ignoring the fact that we are talking about jobs, salaries of Ukrainian citizens, taxes for the Ukrainian budget. But the truth is that the economy of independent Ukraine was created largely due to the support from Russia. And the amount of Russian investments, concessional loans, supplies on favorable terms far exceeded one hundred billion dollars. Only due to low gas prices Ukraine saved more then $82,7 billion. Such support was not enjoyed by any of the republics of the former Soviet Union. We not only helped the Ukrainian economy, but one can say we practically maintained it. It is unlikely that Kiev would receive such gifts for decades from any country other then Russia. But, unfortunately, this economic reality was not adequately understood by the Ukrainian leadership.


    Translated by Kristina Rus for ForRuss.blogspot.com


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