Note #7 – July 2004

A Look from the Outside: Moldova and Ukraine - Bilateral Relations
by Dr. Oleksandr Sushko, Center for Peace,
Conversion and Foreign Policy of Ukraine, Director
 

International Conference "Europe and the Transition
Process in the Republic of Moldova ",
July 2-3, 2004, Berlin, Germany
 

Republic of Moldova and Ukraine are close neighbors and natural partners; both countries have similar internal problems and foreign policy priorities. However, bilateral relations are still far from stable and mature. Let me draw your attention to the actual spectrum of Kyiv-Chisinau agenda, which is to illustrate specific political and economic processes in that part of Europe. 

So, what is common for both countries? 

·            Both Ukraine and the Republic of Moldova are so called Newly Independent States,
which appeared after collapse of Soviet Union in 1991. They are new actors at European
stage.

·                 Both countries have met similar problems in the process of state/society building and
maturing independence, namely:  economic and society frustration in the 90s, weak
capability of state institution,  corruption, backwardness, weak justice and judiciary
system, deficit of media freedom, lack of civil culture and the weakness of the 'third
sector'.

·                 Moldova as well as Ukraine belong to the group of the poorest countries in Europe,
which essentially limits their capacity in all aspects of domestic and international policy.
Both countries have survived from the decade of economic decline and has been growing
fast recently (9.4% GDP growth in Ukraine, 6.3% in Moldova in 2003). However, they
remain poor in comparison with their Western neighbors.

·                 Republic of Moldova and Ukraine both have common strategic objective, which is the
membership in the EU (unlike Belarus and Russia which have not expressed such an
ambition). However their European aspirations remain mostly declarative, without strong
pro-European commitments in domestic policy. Both countries created a number of
governmental bodies responsible for European integration, but their efficiency looks
doubtful. In return, the EU builds its policy on the basis of European Neighborhood
Policy, which does not provide the prospect of membership (unlike the EU policy
towards Western Balkans), general dissatisfaction by this fact is visible in Kyiv and
Chisinau. Currently both countries are in the process of the Action Plan preparation in the
framework of ENP. Moldova has already finalized talks, Ukraine is still going on.

·                 Ukraine and Moldova have close economic and political ties with Russia, military
presence of Russia remains sensitive factor, however both states try to avoid becoming
satellites of Russia (unlike Belarus).

·                 Both countries are sending labor migration ones. Millions of Ukrainians and Moldovans
work together in the EU and throughout the world. Citizens of both countries suffer from
human  trafficking.  According to  'La  Strada'  data,  7%  of young  ladies-victims  of
trafficking identified in the EU are Moldovans and 6% are Ukrainians. 

Having a lot in common Moldova and Ukraine at the same time have important differences 

·         The countries belong to different 'weight categories'. Moldova is a small state, in contrary, Ukraine is a 6^th largest (by number of population) country of Europe, and it has an ambition to play a role of middle regional power. This difference makes bilateral relations asymmetric.

·                 Ukraine  successfully  secured  its  internal   stability  and  territorial  integrity  whereas Moldova   still   has   a   Transdniestria   separatist   quasi-state   with   its   non-legitimate 'government'.

·                 Moldova  is  a  neutral   state   according  to  the  Constitution;   Ukraine  is   seeking  a membership in NATO, developing the special relations with the Alliance on the basis of Charter of Distinguished Partnership (1997) and Action Plan of 2002. Ukraine is a contributor of South-Eastem Europe security being invovlved in peace-building activity in Western Balkans since 1993.

·                 Moldova is a member of Stablity Pact for Southern-Eastern Europe which provides a hope to join Stabilisation and Association Process offered to Balkan states by the EU.

·                 Moldova is the only parliamentary democracy in CIS, whereas Ukraine is a presidential republic  with  stronger  authoritarian trends of recent years with unclear prospects.
However parliamentary model hasn't guaranteed mature democracy for Moldova yet.

·                 Moldova has been more successful in the process of joining WTO. It is a member since May 2001. Ukraine is still continuing negotiations hoping to join in 2005. 

There are similiariries and differences mentioned above which determine the agenda of Moldova-Ukraine relations. In practice according to my observation existing level of bilateral cooperation does not correspond to the level needed by both sides to promote their common interests. There is a visible lack of trust between political elites, lack of coperative civil activtiy. The intensity of relations remains low in comparison, for instance, with Ukraine-Poland relations. 

For Ukraine Moldova is evidently an important partner. Ukraine is a participant of the Transdniestria peace process (together with OSCE and Russia) from the very beginning of international efforts to tackle this regional conflict which has become a 'frozen conflict' after the active phase of early 90s. The border with Moldova is the second largest border of Ukraine (after Ukraine-Russia border) - 1222 km. 

Despite it is a small economy, Moldova is a second largest trade partner of Ukraine among CIS states (after Russia). The amount of Ukraine-Moldova trade is comparable with Ukraine's trade with the Netherlands. In the general rating of foreign trade partners of Ukraine Moldova is in the end of top-ten. 

However for a long time border and trade issues have been producing tensions rather then friendly cooperation between Kyiv and Chisinau. The border deal was formally complete in June 2001, when the parties simultaneously ratified the Treaty on the State Border and an additional protocol which provided an exchange of territories. In return of 7 kilometers of the road Odessa-Reni (which is going through Moldova territory across Palanka village) Ukraine has provided Moldova with a small piece (appr. 400 metres) of Danube river bank near Dzurdzulesty village to built a river terminal there. This regulation still didn't get a consensus in Moldovan society. Government of Republic of Moldova has ignored strong opposition inside country. Some political leaders still treat the protocol as wrong and unfair and call for reconsidering. This border dispute determined a debate on the essence of bilateral relations. Complains appeared that Ukraine behaves as an 'elder brother' using the weakness of small poor neighbor. 

In January 2003 the parties started the process of border demarcation according to Border Treaty. Two obstacles actually slowing down this process, namely: lack of funds and Transdniestria issue. Almost a half of Ukraine-Moldova border is under control of Tiraspol separatist regime. This part of border is probably the most criminalized one in the East of Europe. 

Another tension appeared when Moldova have introduced new custom stamps in 2001, demanding all foreign partners not to recognize old ones any more. The reason was to limit illegal economic activity of Transdniestria and meet WTO criteria. Ukraine, however, decided not to stop trade with the old stamps arguing that by this policy Chisinau wants to block and kill economy of Transdniestria. About a year has been needed to dissolve this dispute. This tension gained international resonance; Ukraine's position got negative perception of the EU and WTO.

The parties did not achieve a consensus on establishing of joint custom check-points on Ukrainian side along Transdniestria border. Again, Ukrainian government suggested not to isolate Transdniestria foreign trade before the general solution of the conflict would be achieved.

The key problem of Ukraine's standpoint vis-a-vis Moldova is that there are some strong business-political groups which are interested in preservation of status-quo in Transdniestria to continue some gray and shadow businesses. They do not express their position transparently but try to press government and president of Ukraine to preserve direct contacts with Transdniestria regime leaders. Lobbyists of Transdniestria exploit the issue of Ukrainian minority in that region of Moldova to get some public legitimacy of this policy inside Ukraine. As a consequence, Ukraine's policy remains ambivalent, contradictory, which undermines trust between Kyiv and Chisinau without any real benefits for both. 

The position of Kyiv on the so-called Kozak's Memorandum on federalization of Moldova offered in November 2003 has been unclear as well. In the beginning official support of this plan has been expressed by the president. Later, after plan collapsed, MFA acknowledged that the plan needs further debates and elaboration. 

Ukraine and the Republic of Moldova lack bilateral cooperation in their relation vis-a-vis the EU. In my opinion, it would be a good common agenda, using the experience of Vyshegrad countries, which cooperated for the sake of European integration. 

Europeanization is the strongest ambition for both countries. Ukraine and Moldova are the only Western NIS to search for EU membership. Therefore, they can and should speak in common voice to push European capitals to more active Eastern policy. In particular there is a need of common approach to border policy, visa and migration issues, transport, infrastructure development, dealing with smuggling and human trafficking, rehabilitation of victims of international crime etc. 

Ukraine's policy towards Moldova reflects the desire of official Kyiv to play a role of regional leader in the East of Europe. This is an honorable ambition. However, in order to conduct such a policy efficiently, Kyiv needs to learn and follow European style of leadership with a strong stress on responsibility of the large state before the smaller one.