Kuchma and Putin meet in Dnipropetrovsk (02/18/01)

Kuchma and Putin meet in Dnipropetrovsk

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Russian Federation President Vladimir Putin broadened and deepened his country's cooperation with Ukraine on February 13 during a two-day visit to the country's industrial heartland.

President Putin and the large Russian delegation he brought with him signed 16 assorted bilateral agreements on developing economic and business relations with their Ukrainian hosts, the most important of which was in the joint development of aerospace technology. The two sides also agreed to reconnect Ukraine to Russia's energy grid - a move that would allow Russia to better track Ukraine's electricity needs, while also giving it access to the Moldovan market, which is experiencing severe energy shortages and has requested Russian aid.

"It is a colossal step forward," said Ukraine's President Leonid Kuchma at the conclusion of the talks, according to the Kyiv newspaper Den.

In Vienna, where Mr. Putin traveled before arriving in the south-central Ukrainian city of Dnipropetrovsk the evening of February 12, the Russian president told journalists that closer relations with Ukraine are at the top of Moscow's agenda.

"Relations in the post-Soviet territory are a priority to us, especially with Ukraine, our largest partner," said Mr. Putin.

In Dnipropetrovsk, the Russian president visited the Pivdenmash rocket factory, the largest in the world and the place where President Kuchma had spent years as its general director before embarking on a political career in Kyiv that would take him to the highest office in the land.

After the two presidents signed documents on cooperation in aviation and space technology development, which removes duties between the countries on all commodities and services associated with their rocket-building industries, Mr. Putin said the agreement would improve cooperation in the aerospace sector, including the development of joint international contracts. He said that by joining forces the two countries could generate as much as $6 billion in foreign revenues.

"It is very important to develop bilateral cooperation with regard to foreign markets," said Mr. Putin.

Ukraine and Russia, along with the United States and Norway, are partners in an international commercial project called Sea Launch, which lifts commercial satellites into orbit from an ocean launch pad using the Ukrainian-made Zenit booster rocket.

The document signed by the two presidents states that Ukraine will contribute technologies in support of Russia's contributions to the International Space Station, while both countries jointly coordinate the development of the Zenit, Cyclone and Dnipro booster rockets for future commercial use. They also signed a memorandum of intent to cooperate in the destruction of outdated RS-22 and RSM-52 solid-fuel rockets.

Moscow and Kyiv agreed to jointly develop standardization and certification of rockets and spacecraft between the Russian Aerospace Agency and the National Space Agency of Ukraine, and to develop common legal documents and procedures.

The two sides acknowledged their continued commitment to the development of the AN-70 cargo aircraft as the best military vehicle of that type.

They also affirmed their intention to uphold international obligations between the two states, particularly in space exploration for peaceful purposes and the non-proliferation of rocket technologies and missiles for military use.

Alleviating concerns voiced by Western leaders in the press in the days before the Dnipropetrovsk meeting, in Vienna Mr. Putin declared that he would not attempt to make Ukraine a partner in nuclear weapons production.

"Ukraine is a nuclear-free state and we respect its status. There is no need for us to encroach on the current situation, simply no need," underscored Mr. Putin, according to Interfax-Ukraine.

However, Moscow and Kyiv did not shy away from increasing military-industrial cooperation in research and development, an area in which they signed three agreements. One specific agreement, between the Russian Ammunition Agency and the State Committee of Industrial Policy of Ukraine, is designed to develop a program of mutual cooperation and sharing between defense enterprises.

In a related agreement, Moscow and Kyiv agreed to support each other in the modernization and upgrade of heavy machinery factories, many of which are directly connected to the military-industrial sector of the individual countries.

Russia and Ukraine also announced they would draw closer in electricity sharing by reuniting their energy grids. Ukraine had partially disconnected itself from Russia's electricity system in the first part of the 1990s; the final separation occurred about two years ago, with the exception of three northeastern oblasts that were severed during 2000.

Anatolii Chubais, the billionaire chairman of Russia's quasi-public Integrated Energy Systems, who oversaw the merger of the two systems, said a single energy grid will allow Russia to buy fuel for energy development at cheaper costs and will give Ukraine, which he called a "natural energy market," higher quality electricity supplies. The reintegration of Ukraine into Russia's electricity grid will allow Russia to extend its high-quality electricity to Moldova, which has suffered extensive blackouts this winter.

The agreement did not come without criticism, however. Oleksander Hudyma, chairman of the Verkhovna Rada's Committee on Fuel and Energy, said Ukraine's reintegration into Russia's energy grid "threatens Ukraine's energy safety," according to Interfax-Ukraine. He said the new arrangement would lead to more energy debt owed to Russia, to the tune of $45 million annually. He also said he believes Russia eventually will use that debt load and its newly acquired access to Ukraine's power grid to force Kyiv to extend Russia the right to send its electricity through Ukraine to Europe, where it is attempting to establish a market.

"Chubais' goal is evident. He wants Ukraine to give the Western energy island as repayment of the debt of Russian electric energy," said Mr. Hudyma.

The two sides also touched the sorest spot in their economic relations: Ukraine's absolute dependence on Russian natural gas. While the two sides agreed last December on a schedule for repayment of Ukraine's $1.4 million debt and put that issue aside, for the present at least, Mr. Putin said Russia was not planning to change its course in a decision to bypass a Ukrainian natural gas pipeline that runs to Western Europe and build a parallel one through Belarus and Poland. He said that Russian studies have shown the Ukrainian pipeline will not be able to meet future demands for Russian gas to Europe.

Finally, Mr. Putin said that his meeting with the politically embattled Ukrainian president was not an effort to express political support for Mr. Kuchma and that he was not about to get tangled up in the Gongadze affair or the associated tape scandal.

"You know that we cannot, we should not and we will not either support, hinder or harm," explained Mr. Putin in Vienna before leaving for Dnipropetrovsk. The visit to Dnipropetrovsk was arranged in St. Petersburg, where the two presidents met in December.

He added a bit later, "Leonid Kuchma is the legally elected president of Ukraine. We will cooperate with him. We are not going to suspend our cooperation, as Russia has the right to count on a certain stability in relations with its partners. We have large-scale common plans and tasks with Ukraine, including those which must be considered now."

The day Mr. Putin left Ukraine, the leadership troika of the European Union and a representative of the U.S. government met with Ukrainian government officials in Kyiv.

Christopher Patten, the EU's external affairs commissioner, said that in talks between the EU hierarchy and Ukrainian officials, including President Kuchma, there was no discussion whatsoever on the agreements signed between Russia and Ukraine the previous day.

Meanwhile, U.S. Deputy Assistant Secretary of Defense Jeffrey Starr met briefly with Yevhen Marchuk, secretary of Ukraine's National Security and Defense Council. Mr. Starr did not comment directly on the development of cozy defense relations between Kyiv and Moscow. In his public comments he only affirmed that cooperation in the military field would remain an important element of the strategic partnership between the United States and Ukraine.

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