Ukraine is in minority: Georgia and Moldova thaw in relations with Moscow

Author : Pavlo Horin

Source : 112 Ukraine

Kyiv is dealing with the same choise as the Georgia and Moldova: restoration of economic ties with Russia in the name of stabilizing the country's socio-economic situation
15:09, 2 December 2016

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Today Ukrainian government continues to put visa-free regime with the EU and the completion of ratification of the Association at the head of the foreign policy strategy, forgetting to look at the sides at least that would once again make sure there is a reliable rear. We are losing allies rapidly. And not only in the EU, but also among post-soviet partners.

As you know, one cannot conquer alone. Fall 2016 first showed that among the countries that signed the 2014 Association Agreement with the EU, Ukraine is one-on-one in its opposition to Russia. The parliamentary elections in Georgia and presidential elections in Moldova have confirmed an increase in the population of these countries supporters of the Russian vector. A stubborn desire of these countries to restore economic ties with Russia in order to avoid negative consequences of anti-sanctions only strengthens us in this opinion.

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But we share a common desire not only to the EU. Georgians, Moldovans, and Ukrainian, feel the aggression of Russia on their "own skin". Each country now has at its borders so called "unrecognized republics:" South Ossetia, Abkhazia, Transnistria, Crimea, "Donetsk and Luhansk People's Republic."

Perhaps the Kremlin used the tactic of "carrot and stick" for some of the former Soviet Union is still paying off. Georgia and Moldova have chosen the course of least resistance and, forgetting the old images were made for the recovery and closer economic ties with Russia. As you know, from the economic to the political dialogue - one step. Then everything will depend on the ingenuity of Moscow.

On the issue of sanctions and anti-sanctions

Among the aforementioned Ukrainian partners in the European integration only Georgia introduced minor sanctions against Russia. And they were connected with export restrictions of Crimean products. Tbilisi explained its position that the volume of trade between countries is so small, there is no sense to impose sanctions.

Then, in 2014, special envoy of the Prime Minister of Georgia for relations with Russia Zurab Abashidze said that "if one foresees trade and economic relations and Georgia's accession to the sanctions, it should be noted that the volume of trade relations with Russia are so insignificant that this topic is really irrelevant."

Zurab Abashidze

Zurab Abashidze

In fact, Georgia, adopting this decision, chose the path of least resistance. Taught by bitter experience of fighting with Russia, they decided not to deviate from to base foreign policy strategy proposed by the end of 2012 is now the ruling party "Georgian Dream". The basis of its election program then lay down a policy of normalization of relations with Russia, which allowed already in 2013 to restore the supply of wine to Russia.

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The Kremlin highly esteemed this position and also decided not to use food embargo (ed. – anti-sanctions) against Georgia. However, their official position was identical to Georgian one. The Russian government said that at the moment (ed. - 2014-2015) Moscow and Tbilisi did not have active relations and high turnover. Moreover, unlike other countries, the Georgian leadership has introduced sanctions against Russia are insignificant. In this regard, it was decided not to include this country in an expanded list of countries against which Russia enters the anti-sanctions.

Moldova, on the contrary, in 2014, joined the EU sanctions and, in addition, prohibited the broadcasting on its territory several Russian media. In response, the Kremlin imposed import duties on a number of products - among them the main items of Moldovan exports - meat, vegetables, fruit, alcohol, grain and furniture. Later were introduced ban on imports of fresh vegetables, canned goods, meat, and in March 2016 year - a ban on re-export of Moldovan fruits and vegetables through Belarus. And all this against the background of already existing from September 2013 to ban the import of Moldovan wines to Russia.

It was not until recently, but now the situation takes an entirely different turn.

Russia in 2016 ranked third among the major trade partners of Georgia. Russian anti-sanctions become so effective at Moldovan direction that Chisinau during the year 2016 sought to repeal, written appeal to Putin with a request to restore trade and economic ties.

Trade between Georgia and Russia is growing rapidly

According to records of the National Statistics Service of Georgia "Sakstat" in 2016, Russia came in third among the countries - major trade partners of Georgia, giving primacy only to Canada and Turkey.

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The foreign trade turnover of these countries in January-October increased by 16% compared to the same period in 2015 and totaled more than 687 million dollars. The turnover with Russia for the period amounted to 6.9% of the total foreign trade turnover of Georgia.

The main indicator of Georgian exports to Russia this year was formed the following product groups: natural grape wines (42.1 million USD), alcoholic beverages (9,5), mineral water (28.5), ferroalloys (25.7) and hazelnuts (7.4).

During the first ten months of 2016 there was also recorded the first increase in imports from Russia to Georgia. Imports this year increased by 14.2% and amounted to more than 533.7 million dollars. - 6.5% of total imports Georgia.

Russian Deputy Foreign Minister Grigory Karasin
Associated Press

Russian Deputy Foreign Minister Grigory Karasin

In January-October Georgia imported from Russia oil and petroleum products (volumes grew by 54% over the same period last year), grain and electricity.

In addition, this year for the first time in recent years as increased business activity of the parties. For only visited Tbilisi in November just two Russian business mission.

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November 8, was held a one-day Russo-Georgian forum with the participation of eight companies from Novosibirsk, working in the field of energy, infrastructure, tourism and construction. Further, according to the organizers of the forum (ed. - Employers Association of Georgia), such measures should be conducted regularly and serve as a platform for networking between companies of the two countries. Already in December, another meeting in this format to be held.

Shortly after the Forum, November 14, Russian delegation of Chamber of Commerce, led by the Vice President of the Chamber Maxim Fateev, visited Georgia. The event was attended by ten Russian companies representing the construction, energy, tourism and advertising business. In this extended format meeting B2B businesses of the two countries held the first time in years.

During the meeting, director of the department said that "the current level of trade turnover between the countries can hold both sides. The decisive role in stabilizing the situation, the output of the economy, and, consequently, their trade cooperation on the path of further growth to play businessmen two countries, including representatives of regional small and medium businesses."

During the 2016, Chisinau created favorable conditions for the resumption of economic cooperation with Russia.

Moldova is warming relations with Moscow

The logical conclusion of this year to Moldova and Russia was the first after four-year break meeting of the Moldovan-Russian intergovernmental commission on economic cooperation, under which the parties signed an action plan (so-called "roadmap") for the development of trade and economic relations in 2017.

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The prerequisites for the start of oncoming traffic Chisinau to Russia last year's protests began, which lasted almost the entire 2015 and 2016 and the first half-year. These formed the basis put forward demands to the government to stabilize the economic situation in the country. And it was due to the way many thought that the previously selected course of rapprochement with Europe with a simultaneous reduction of trade and political relations with Russia did not prove.

Note: after the signing of the Association Agreement and FTA experts predicted GDP growth of 3.2%, and the expected increase in foreign investment. But growth has not happened. In this case, the foreign trade turnover with Russia is rapidly falling.

Already in 2015, compared to 2014, it fell by 32%, including exports from Russia fell by 30% - up to 1.036 billion dollars, and imports by 41.3% - to 156.3 million dollars. Products previously delivered Moldova to Russia, the European market was much less popular. Experts noted that the demand for Moldovan products is lower than expected - the European market is saturated and so agricultural products, especially after Russia imposed a food embargo. As a result, even the quotas that have been allocated for Moldova European countries do not use them fully. For example, in 2014 Apple used only 2% of the quota. As a result, turnover in the last two years and fell with the EU, which previously relied Chisinau hopes.

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According to the National Bureau of Statistics of the Republic of Moldova, according to the results in 2015, total exports from the country fell to a record for the last five years. It decreased by 37% - to 1.24 billion dollars. The volume of trade with EU countries fell by 2.3%. Especially strongly reduced supplies to Bulgaria (-26%), Hungary (-22%), Italy (-19%), and Lithuania (-49%).                                  

In 2016, the fall in exports continued. In January-August were sold abroad goods worth 1.24 billion dollars, which is 3.5% less than the same period last year, supplies to Europe thus fell by 1.3% - to 784, 4 million USD.

Moldovan Prime Minister Pavel Filip

Moldovan Prime Minister Pavel Filip

In mass protests of 2015-2016, a significant part was the Moldovan farmers who suffered perhaps the most significant losses from the application of bilateral sanctions. As a result, achieving the government's resignation in January 2016 year they got a new prime minister - Pavel Philip, soon after the formation of the government took his first steps towards the Kremlin. During the year, the government held a series of bilateral meetings and consultations with their Russian counterparts, which formed the basis for joint development of so-called "road map for the development of trade and economic relations between Russia and Moldova for 2016-2017 years". The document consists of 13 items relating to key areas, including trade and economic cooperation, transport, agriculture, energy, business.

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A marked warming in trade relations between the two countries started since July 2016, when the Rosselkhoznadzor allowed 43 Moldovan enterprises import to Russia fruit and berries.

As a result, in the first eight months, the volume of exports of food and agricultural raw materials increased by 42%. According to the Eurasian Economic Commission showed an increase supplies of frozen beef, milk, onions, cabbage, grapes, apples, apricots, cherries, plums and other fruit.

Other types of exports increased supply of timber and pulp and paper products - by 26%. The highest growth showed exports to Russia of paper and paper packaging.

Despite some progress, the volume of Russian-Moldovan trade are still low. Correct position is called "road map" and further discussion of trade issues between Chisinau and Moscow. The plans of the new Moldovan President Igor Dodon concern not only the lifting of the embargo and the restoration of free trade with Russia within the CIS, but also the preservation of a free trade zone with the EU. Thus Russia can not hold the possibility of re-export of goods from third countries, but, according to Dodon, to address this issue by introducing possible asymmetric trade - when Moldovan exports went to the European market duty free, while imports from the EU were subject to import duty. On the one hand, it would protect Moldovan producers, on the other - would reduce the risk of re-export. But to agree with the terms of the EU - the big question.

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As you can see, the dynamics of economic relations with Moldova and Georgia is quite dynamic. In this case, both states did not abandon its European intentions, because having Russian market more easily overcome the difficulties associated with the development of Europe. Ukraine is a permit that luxury cannot for obvious reasons, so will have to overcome the current difficulties with unequal "partners" conditions.

In this situation, you cannot exclude the possibility of recovery in the medium term, the former political dialogue in the format "Russia - Georgia" and "Russia - Moldova", which again will not play into the hands of Kyiv. The only question is what will serve as the basis for beginning such a dialogue?

Eligibility of "Russia - Georgia" and "Russia - Moldova" cooperation formats

Today in Georgia and Moldova authorities are in favor of intensification of political dialogue with Russia. While only available on the settlement at their borders "frozen conflicts".

Recently elected president of Moldova Dodon said directly that the people voted for closer ties with Russia and the resolution of the Transnistrian conflict.

Igor Dodon

Igor Dodon

He noted that for the first time in seven years all the forces together and "voted for friendship with Russia, on neutrality, the Orthodox, the unification of the country in solving the Transnistrian conflict." "In the next year or two will have a good chance to begin to solve this issue. Why do I think so? Everyone - both Russia and the West - need a positive example of how to negotiate. After Crimea, Georgia and many other events needed an example how to solve frozen conflicts," said the elected head of state. He expressed hope that "Transnistria will be a case."

However, "to take concrete steps, we must await the results of elections in Transnistria, which will take place in early December. And early next year to the negotiating table and start addressing the issue," - he said.

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Situation with Georgia is more difficult, since 2008, diplomatic relations between the two countries severed, and their recovery has not yet discussed. Since 2012. the main dialogue is conducted within the Geneva discussions format "Karasin-Abashidze", in which the State Secretary, Deputy Foreign Minister Grigory Karasin and the special representative of the Prime Minister of Georgia, relations with Russia Zurab Abashidze to meet 3-4 times a year, discussing problems restoring relations. They have managed a lot to do but these achievements do not belong to radical solutions, and the local arrangements, became easier visa regime opened flights, were held products across the border, and so on.

According to Abashidze, it is early to talk about improving relations between Georgia and Russia. At the same time, further deepening the political dialogue parties, restoration of diplomatic relations can take place through a compromise on the issue of reconciliation of Georgia with Abkhazia and South Ossetia.

November 5, Abashidze in an interview with TV Company "Rustavi 2", said: "The question of the restoration of diplomatic relations has been never discussed, but if there is a significant qualitative advance progress on issues related to Abkhazia and Tskhinvali region (South Ossetia), then at some point the question may appear on the agenda ... Russia since the beginning of this year has simplified visa regime with Georgia and the number of issued visas from them has increased significantly. We cannot force Russia to further simplify or even remove it."

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In addition, Catholic Patriarch of All Georgia Ilia II calls to political dialogue "Russia-Georgia", the idea of which among the Orthodox population of Georgia plays an important role.

Also on November 26 in Georgia was appointed the new government, which again led Georgy Kvirikashvili. On the eve of his re-election, he clearly signaled that the government of Georgia will continue to seek ways to normalize relations with Russia, and especially the issue of unrecognized territories.

And given the victory in the 2016 parliamentary elections the party "Georgian Dream", which came to power in October of 2012, named one of the top priorities of Georgian foreign policy normalization of relations with Russia, the issue of rapprochement between the two countries is a matter of time. Moreover, this year the Georgian parliament for the first time were obvious supporters of rapprochement with Russia - the party "Alliance of Patriots of Georgia".

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Indeed, at this stage of the restoration of Russia constructive political dialogue with the above countries is possible only through their involvement in negotiations on resolving issues related to t. Called. "Unrecognized republics". This growing deepen economic cooperation sides will play into the hands of Russia. Since part of further development of trade and economic cooperation with Georgia and Moldova, Moscow is likely to try to attract as trading partners of South Ossetia, Abkhazia (ed. - Negotiations with Georgia) and Transnistria (ed. - Negotiations with Moldova ), and to maximize the integration of their economies.

Giorgi Kvirikashvili

Giorgi Kvirikashvili

In the format "Russia-Moldova" this process has already begun on November 30 as a result of signing of a "road map" of the two countries on the development of trade and economic relations in the years 2016-2017. The composition of the Moldovan delegation, at the insistence of the Russian side included representatives of unrecognized Transdniestria and Gagauzia. They reached agreement on should also be directly involved in the implementation of this "roadmap".

Apparently, the Kremlin tactics applied in the post paid dividends. Countries that at any given time with the direct participation of Russia were at their borders with the territory of "frozen conflicts" now begin to "thaw." Today they seek to establish a constructive dialogue with Russia in order to avoid further confrontation. But it took only a few years.

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For Ukraine is just beginning, occupied Crimea, and in the east formed "pseudo-republics." The situation is very similar to that which previously faced Chisinau, Tbilisi, so do not rule out that a few years of Ukrainian government and people will make the restoration of economic ties first, and then the constructive political dialogue with Russia.

Will Ukraine come in line after Moldova and Georgia?

As a result, Ukraine signed the agreement on the FTA, which came into force in January this year, trade with the European Union for the 9 months increased by 6%.

At the same time, this year to Ukraine ends with GDP growth of just 1%. Obviously, the effect would not be as strong, if not falling turnover with Russia that would speak a kind of stabilizer, which guarantees the preservation of a large part of exports.

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Introduced by the Russian government from January 1, 2016 in response to the ban on import of Ukrainian food immediately led to a drop in mutual trade turnover doubled.

Thus, exports of goods from Ukraine to Russia in January 2016 year decreased by 48% - to 121 million dollars., While imports from Russia hit the 60.6%, or more than 2.5 times - up to 246 million dollars.

According to preliminary calculations, the loss of Ukraine this year from Russian trade and transit aggression will make $ 900 million.

Related: Donetsk and South Ossetia: Friendship of unrecognized republics

Against this background, Ukrainian society is dissatisfied with the Ukrainian authorities. Apart from increasing tariffs, people require normalize socio-economic situation in the country. In the media space is growing external pressure on Ukraine from Russia with a view to persuading the country of the need to restore economic cooperation with Russia.

Open source

In November, the head of committee of the State Duma CIS Affairs Leonid Kalashnikov urged Ukraine to take lessons from Moldovan experience. He emphasized that Ukraine is now making the same mistakes that his time has made some CIS countries have tried to make yourself a priority for the European market. "Problems of Ukraine can be explained by the example of Bulgaria and Moldova.

Ukraine, unlike its partners, continues to "keep blow" and bear all the burdens chosen foreign policy. While the European Parliament once again postponed consideration of our questions on visa-free, the Netherlands continue to impose conditions on Kyiv Association, and the Kremlin uses the tactic of "carrot and stick" for some post-Soviet countries begin to bear fruit.


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