Ukraine nd Russia—The Ukrainian Perspective

April 4, 2014

Ukraine and Russia—The Ukrainian Perspective

Chairman: Noble Chummar, President, The Empire Club of Canada

Head Table Guests

Verity Sylvester, Director, CV Management, and Past President, The Empire Club of Canada;

Father Terry Lozynsky, Pastor, Christ The Good Shepherd Ukrainian Catholic Church, Toronto;

Ernie Eves, Former Premier of Ontario;

Tim Smitheman, Manager, Government and Public Relations, Samsung Renewable Energy Inc., and Director, The Empire Club of Canada;

Ken Villazor, Advisor and Consultant to Mr. Melnyk and Senators Sports and Entertainment;

Mark Romoff, President and CEO, The Canadian Council for Public and Private Partnerships, and Director, The Empire Club of Canada;

Paul Grod, President, Rodan Energy, and President, Ukrainian Canadian Congress; and

Eugene Melnyk, Owner Chairman, The Ottawa Senators and Senators Sports and Entertainment, and Member, the Advisory Council of the Ukrainian Canadian Congress.

Introduction by Noble Chummar

“Ukraine’s glory has not died, nor her freedom.” These are the words from the first verse in Ukraine’s national anthem. How fitting is this phrase as it relates to the current affairs and spirit of Ukraine and its people. Ukraine has become centre-stage in global geopolitics. The extraordinary events of the past several months have proved to be an unprecedented demonstration of one country’s might and total disregard to international pressure and economic sanctions.

Mr. Ambassador, in 2003 the Empire Club had the honour of welcoming former Prime Minister and President Yushchenko to this very podium. In his speech, President Yushchenko, then leader of the Opposition, said, “I think that the future of Ukraine today is in the hands of the Ukrainian population. I’m convinced that our people will not make a mistake again. Democracy and freedom will win in Ukraine.” Your Excellency, in 2004 I had the honour and privilege of serving on the Canadian diplomatic mission to observe the elections in Ukraine. It was the dawn of the Orange Revolution. Democratic freedom and national pride were alive in the hearts and minds of every citizen in Ukraine and every expat around the world. Mr. Ambassador, I walked through Independence Square and I visited small villages and your hometown and your birthplace of Odessa on the northern shores of the Black Sea. I met with Ukrainians of every political stripe and learned one important thing—all Ukrainians want democratic freedom, a fair and just legal system, and a promising future for future generations.

Now, a decade later, especially with the events of recent history, I’m sure that sentiment still exists and is undoubtedly even stronger today. What happened in the last few months in Crimea is of concern to all people in the Western world. There are indeed two sides to this story, and the Empire Club will be hosting the Russian Ambassador in a few weeks to hear from that perspective.

One thing that is simply fact and that cannot be argued is that a global superpower has exerted extraordinary hegemony over a geopolitical region with relative ease, despite unprecedented international disapproval. All of this unfolded while the Olympic Games were happening, while the whole world was in the backyard of Ukraine and in Russia. Some say that this is disgusting. Other people say that this is impressive.

Our guest speaker is here to advise us why Crimea and the events of the past few months are so important to the rest of the world. Ambassador Vadym Prystaiko was appointed as Canada’s Ambassador in November 2012. He is fluent in Ukrainian, Russian, and English. He’s had a distinguished career in the public and private sectors, and holds a master’s degree from the Ukrainian Academy of Foreign Trade. Prior to joining public life, His Excellency was in the private sector and co-founded one of the Internet service providers of his country. In 2007, he was part of Ukraine’s NATO negotiating team and served as Director General for NATO in the Ministry of Foreign Affairs. He’s also served in the embassies of Australia and in the United States in Washington, D.C.

Despite the unbelievable events of recent days, Ukraine’s glory has not died, nor her freedom. Ladies and gentlemen, His Excellency, Ambassador Vadym Prystaiko.

Vadym Prystaiko

Thank you very much. Great speech. I have nothing to add.

It’s a really distinguished pleasure for me to be here today to see all of you in this room, and to be able to talk to you.

I will take some 20 minutes to talk, and if we have a couple of minutes, I would be happy to take questions from the audience. I understand the issue is very important, and I’m very glad that people are taking an interest in the things that are geographically far away but very close to the hearts of many Canadians of Ukrainian origin and other Canadians.

Let me give you a couple of words on how I will present today’s speech. It will have three major parts. First of all, it will be about Ukraine and what happened in Ukraine after the fall of the regime of Mr. Yanukovych and how Ukraine resits itself on the bus to European integration, which we’ve been pursuing all the 23 years of our independence.

Second, somebody believes that what’s going on in Ukraine is a threat to Putin and the sovereign democracy he is pursuing and building up in Russia, and that everything going on in Ukraine is just his reaction to the events. It’s up to you to form an opinion. I will try to give you examples and facts for you to consider.

And the third one is the simple one—how the international community is reacting towards what is going on in Ukraine, and how it’s actually hurting the international system, which has been built over the last 100 years.

As you know, when Ukraine was about to sign the European Association Agreement on November 20, the government of Yanukovych, our previous president, changed its course 180 degrees and signed a deal with the Russian Federation for a $50-billion loan. The people didn’t like it so they came onto the streets to protest this decision.

Unfortunately, on November 30 the government decided not to deal with that peacefully, and they dispersed the quiet and peaceful students’ demonstration with batons and enormous force, unnecessary, unneeded, and unexpected in Ukraine.

That in turn brought close to a million Ukrainians, especially Kievans, to the street. Unfortunately, the government didn’t back off. Instead, it went completely crazy and ordered the shootout in the streets. We lost 103 people. More than 1,500 people are still injured, and we’re talking about serious injuries. We’re talking about battlefield injuries—heads, legs amputated, eyes removed. You can imagine the picture. We still have 620 people in Maidan not properly treated yet.

What happened then you more or less know. Yanukovych resurfaced in Russia with all the money he could grab on the way. He read statements prepared by his Russian new masters calling for Russia to come and restate him on the throne, as simple as that. Unfortunately for us, Russia could not miss this chance. They came to Crimea, and grabbed whatever they wanted. I will come to this bit later. Now they are mounting their forces on the borders of Ukraine around the north and east.

These things are more or less known. I’d like to note one simple detail, but I believe this fact is very important. We are talking about the legality of the Ukrainian government. Many people, including the Canadian government, are talking about an interim government in Ukraine. My point is we still have the same government, at least the same Parliament. We have the Party of Regions of Yanukovych trying to find their way. We have Communists in the Parliament. So this beautiful composition of people with extremely different views are in the Parliament and they actually elected a new speaker and created a new government. Only two ministers are still acting ministers, my minister and the Minister of Defence. We expect the President to be elected on May 25, thus completing the cycle of legalization of the new Ukrainian government.

Another question was whether we would be allowed to have this election, or how the new President will be recognized. Our Russian neighbours told us already that they are not going to recognize the new President.

Another very important moment is the so-called agreement of February 21 between President Yanukovych and three leaders of the Opposition. Whether they really represented the people who gathered in Maidan is a different question. They signed an agreement with some ideas on how to get out of the situation, after people had been shot by snipers in the streets. The very short agreement was signed by Yanukovych, three leaders of the Opposition, and three ministers of foreign affairs. Poland, Germany, and France were guarantors of this agreement. The only guy who didn’t sign the agreement was the Russian representative. This fact is completely forgotten by Russians now. They refer to this agreement as something we should respect and abide by, but at the same time they do not remember that they were the only ones who were not happy with it and never signed it.

The first clause was about returning to the constitution of 2004 in Ukraine, which balanced the powers of President and Parliament. President Yanukovych never signed the law of returning to the constitution, breaching the number-one position in the agreement, which he promised to fulfill in 24 hours. It never happened, and ever since then, all hell has broken out.

So what do we have now? The first positive result is a return to a more balanced system, renewing the negotiations with the European Union, even the signing of the Association Agreement. This was partially overshadowed by the sub-marginal economic development. We have a huge amount of debt. We’re talking about $73 billion this year. We need $36 billion to repay our immediate debts. We have an unbalanced budget and we have social complications like separatism. We have divided loyalties within our own people. We have radicalization of certain sectors of society. All of this is true.

The government of Mr. Yatsenyuk, our new Prime Minister, has quite a simple task. It is taking unpopular and painful steps to avoid the default of Ukraine, balance the state budget, reduce public spending, hold a transparent presidential election, and all within just two months.

As proposed by many people, including Russians, the re-federalization of Ukraine, with a second official language, will hardly, in my view, reinforce Ukrainian statehood, and it’s not the Russians’ business how we run our own country. But these ideas are also considered. We probably won’t be going for re-federalization. We’re a unitary state, unlike Canada and Russia itself. We’re a unitary state, but we will probably give more powers to the regions. We call it decentralization of the powers. People will have to decide on budgets, education, even language, many, many things, just to cool down the hotheads we still have in our runaway regions.

We will have to stabilize the state finance system with sharp cuts in the budget. We will review our taxation system and reduce subsidies and benefits. We’re looking forward to the IMF program. We’re talking about $18 billion immediately. I hope to hear the announcement next Tuesday, maybe Wednesday. The IMF mission has already finished its work in Ukraine.

We are reducing our government staff by 10 per cent. I feel it myself. We’re talking about 24,000 bureaucrats around Ukraine. That’s a huge number. Most of these people were well qualified for the job, educated. We can’t afford them anymore. We’re talking the same about subsidies. We were subsidizing these special mining needs, mostly mining needs in our eastern parts, an extremely sensitive question in Ukraine. We have to cut it by at least 10 per cent. With miners, you probably all remember what Thatcher as a Prime Minister of Britain had to face in the 1970s. That’s what we have right now.

Talking about the IMF loan, we hope that it’s not only the money itself, but that it will reinforce the image of Ukraine as a more attractive investment opportunity, and will bring some more things on a bilateral basis. We’re talking about at least $220 million that has been offered by Canada to Ukraine.

Some people will criticize that that’s not enough. If it is compared to the Americans’ billion-dollar pledge, you will see that proportionately, Canada gave at least two, three times more than the Americans did. I’m really proud to be here as the Ambassador to Canada, and see the support from the Canadian government and Canadians.

Our biggest problem is with our energy security. We’re consuming around 50 billion cubic metres of gas annually. All of this we are receiving from the Russian Federation. If we manage to reach an agreement with the European Union we will try to obtain supplies from them, but we will still have to buy from the Russians. Here’s a very good example of hypocrisy in Russia. Russians were getting a reduced gas price for stationing their fleet in Crimea. Just the day before yesterday, the Prime Minister of the Russian Federation, Medvedev, said that because of changed global reality, they don’t need to rent the base in Ukraine, because Crimea is not Ukrainian any more. That’s the way they resolve their issues. Effective yesterday, they immediately increased their gas price.

We have to do many things. Judiciary and law enforcement are extremely important, especially how to deal with the people in the special squads, which were fighting their own people and how to rebuild a system of riot police. We are talking about reforms and re-educating people. We will use some examples of the RCMP and FBI and other international services, which prove to be effective, and more democratic, or liberal, whatever you prefer to call it.

One of the important things we’ve just done, again very difficult, is disarming all the armed groups in Ukraine. That was very difficult to do, as people went through revolutionary times and were shot at. We have to tell them, “Thank you very much. Please return your weapons to the military, to the police.” This is what is happening in Ukraine right now.

What’s going on in Russia and what happened to Crimea? Regardless of the rhetoric they are using—and you will hear a lot of things I’m not going to argue or repeat—one thing is quite, quite obvious. It’s not just betraying their closest neighbour. We’re talking about rewriting the whole international system, proving that there is still a right of the stronger, and the nuclear states can do whatever they want to do. I have to remind you that in 1991, Ukraine had on its territory the third-biggest arsenal of nuclear weapons. This arsenal was bigger than the Chinese, Britain and France together. We gave it up, and in return, were promised security guarantees from five countries. One of these countries invaded Ukrainian territory, and one more country, China, abstained during the voting in the United Nations. So that’s the reality. We are not protected. We are not a member of any bloc, and we are under occupation by our neighbour.

Many things have been done by Russia. We have so called Putin’s tourists coming in numbers and urging people to go for the referendums for re-federalization, local ones who are not happy with being part of Ukraine. Those people are trying to ignite the unrest and unfortunately, we have to admit it is working. They are pouring 100 times more money into propaganda. Thirty-nine percent of Ukrainians are receiving the news about their own political events about their own country from Russian TV. People are getting facts from Russian TV. It is very difficult to fight. That’s how this part of the globe is constructed.

We were talking about Crimea. Crimea is quite a big territory. It’s two million Ukrainians. Two million. It’s a very big chunk of our population. It’s around 4.3 per cent. It’s 3.7 per cent of Ukrainian GDP. What really took a blow is the energy security of Ukraine. The gas fields around Crimea and the Black Sea are very important to us, extremely, critically important. We estimated around 107 billion cubic metres of natural gas, 27 million tons of oil, and 18 million tons of gas condensate. At the end of 2013, Ukraine developed only 4 per cent of these capacities, and our companies were producing annually around seven million cubic metres of gas; 1.2 were consumed in Crimea, the rest was exported to mainland Ukraine. Now all of this wealth is in the hands of Russia. We are talking about gas, but we’re also talking about infrastructure. There are some drilling platforms worth hundreds of millions of dollars. Worse, we are talking about a billion dollars of military equipment, banks, schools, kindergartens, infrastructure, buildings, everything. We are now seeing that these gas and oil companies have been nationalized. And at the same time there has been a 100-per-cent rise in the price.

I’ll give you another example very close to Canadian hearts. We paid $260 million to build a satellite with MDA Corporation in Canada. It’s already done. We scheduled the launch. We can’t do it, because the control system is in Crimea. We have the satellite. We have everything. We can’t use it. We can’t control it. Now we have to find a place where we will be able to control this communication satellite. We have postponed the launch until at least July. We hope that by this time we will find the means of controlling it from other parts of Ukraine. There is the radio telescope, the third-biggest telescope in the world, in Crimea. It’s been now taken over by Russians.

So what is the international community doing, how is it perceiving the events in Ukraine, and what is it doing? Is it doing enough or not? That’s a different question. We had in the United Nations just a couple of days ago the Resolution on Territorial Sovereignty and the Integrity of Ukraine. One hundred countries voted for this resolution. Eleven countries voted against it. I’ll give you the list— Russia, Belarus, Bolivia, Venezuela, Armenia, Zimbabwe, Cuba, Nicaragua, Northern Korea, Sudan, and Syria. They are the nations that actually decided to support Mr. Putin in his endeavour. Nobody else.

We have to reinforce our military. We are trying to find money for this. We increased the funds for the military by 15 per cent. We are having exercises, seven exercises this year. Canadians are coming for the exercises in Ukraine this year to boost the capabilities of the Ukrainian army.

We have many different programs, some simple, some complicated. Some people do them on their own. Governments are doing some. I’ll just give you a couple of examples. A Canadian medical team is already in Ukraine. People are working pro bono. They are coming to Ukraine to see how they can help treat these people in Maidan, who are still injured, and find out what sort of help is needed, with equipment, doctors, everything. They will assess the situation and will come back. Canada, as a nation, has already pledged $220 million. Another million was given to our National Bank to support its activities. The European Union and the IMF, as I mentioned, are trying to do things. Your prime minister came to Ukraine on the 22nd of last month. He’s still the only prime minister, the only leader who has come to Ukraine from the G8, G7 now, countries. The Minister of Foreign Affairs was the first minister of foreign affairs to come to Ukraine to show support. And I expect—I met the prime minister last Monday—that Canada will also help with the observation of the presidential elections on May 25. Twice Canada set the record of sending the biggest-ever observation team. I believe that this will help to show that our elections are really fair and free and democratic, and we have legalized government.

So thank you very much, and the last word I’d like to use is just a sincere thank you to the Ukrainian community of Canada. That’s probably the most important part. I said this before, I know. Now is a very tough time. I’m not as sure, as my president of 2004 was, that from now it will be much better. I sincerely hope, that with your help, with Canada’s help, and with our other friends around the globe, we can do it.

Thank you very much.

The appreciation of the meeting was expressed by Eugene Melnyk, Owner Chairman, The Ottawa Senators and Senators Sports and Entertainment, and Member, the Advisory Council of the Ukrainian Canadian Congress.