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Crisis In Ukraine: Will The Eastern or Western Economic Model Win The Day?
Thu Mar 06, 2014
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While much has been made of the recent tensions in Ukraine, not much time has been spent parsing through how Ukraine, Russia, and The West got to this point. Ukraine has found itself in the most recent tug of war between the East and West and the end game is currently anyone's guess.
Ukraine's economy has been struggling and on the verge of collapse for the past decade, if not longer. Years of political corruption and shady accounting practices on both sides of the aisle in Ukraine has hammered their economy, leaving a good portion of their population to fend for themselves. Add in the fact that the country is nearly evenly split between those wishing to have closer ties with Europe and those wishing to have closer ties with Russia and you get the powder keg of tension that we are witnessing today.
The European Union has been in negotiations with Ukraine to establish closer ties for over a decade now, but Russia has always been strongly opposed to this and has done everything in their power to sabotage various proposals since negotiations between the EU and Ukraine began back in the late 1990's. Every time an agreement seemed close to being had, another obstacle came up that put the brakes on greater integration.
While it is easy to place all of the blame on everyone's favorite boogeyman Russia, the West are not without fault. The European Union is justifiably worried about the amount of corruption in Ukraine and her inability to get control of it regardless of who is in charge. They are worried that welcoming in a country that has severe economic turmoil will only invite a multitude of problems for the entire bloc of nations. While that fear has plenty of merit, they have not done enough to guide Ukraine into making better political and economic decisions that would invite greater cooperation with the bloc of nations.
Russia has not helped in this matter much either. They are terrified of losing their "buffer" zone with regards to Western encroachment on its borders. The last thing they want is a large nation like Ukraine to drift towards the West and away from their sphere of influence. It is only natural for Russia to offer billions in economic assistance to try to keep Ukraine under their sphere of influence. The only problem with this is that the Russian economy does not come close to matching the economic power of the EU. Add in the assistance the United States can chip in and you can see why Russia is so worried about what happens next and is trying to win this chess match by force.
What happens next in Ukraine is anyone's guess. The EU has just signed off on $15 billion dollars (11 billion euros) to prop up the ailing government in Kiev. That is the exact amount of money that Russia offered in their now defunct offer of aid to the previous government of Viktor Yanukovych. The ball is now in Russia's court to see what they will do next. Will they let the rest of the country go and just carve out the Crimean Peninsula or will they try to carve out a larger buffer zone to keep the West from creeping up on their borders? I guess we will know soon enough.
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