Ukraine Defence and Security Report 2009

In December 2008 the US and Ukraine signed a ‘charter on strategic partnership’, which was seen as ‘likely to annoy’ Russia. The agreement, signed by outgoing US Secretary of State Condoleezza Rice and Ukrainian Foreign Minister Volodymyr Ogryzko, called for ‘enhanced cooperation’ between the two countries in defence, security, trade, energy security, democracy and cultural exchanges. Rice said there would be heightened military co-operation between the two countries through equipment and training programmes for the Ukrainian armed forces and stressed that Washington supported the Ukraine’s ‘integration into Euro-Atlantic structures’. The agreement also provided for the establishment of a US diplomatic presence in Simferopol, the capital of largely Russian-speaking Crimea. Crimea is also used as the base for Russia’s Black Sea Fleet. The Russian Navy has a 20-year lease agreement allowing it to use the port of Sebastopol and the Kiev government has said it does not intend to extend it when it comes up for renewal in 2017. In November French Foreign Minister Bernard Kouchner told reporters that Moscow was distributing Russian passports in Crimea, as it had done since 2002 in the breakaway Georgian territories of South Ossetia and Abkhazia.

During 2008 Ukraine continued to experience a political crisis that threatened to undermine the country’s defence and security fundamentals. The confrontation between President Viktor Yuschenko and his one time ally in the ‘Orange Revolution’ of 2004, Prime Minister Yulia Timoshenko, was the dominant theme of the year. Within that broad split, there were other smaller factional rivalries and disputes played out in a potentially very volatile picture. The feuding between the two may eventually shift electoral support to favour the party of former Prime Minister Viktor Yanukovich, traditionally seen as closer to Moscow.

The country retained a deep political divide between Ukrainian speakers in the west, predisposed to look towards Europe and the development of the market economy as the natural path for Ukraine’s future, and Russian speakers in the east, for whom the alliance with Moscow loomed large. While Yuschenko and Timoshenko supporters patched together a new coalition in December 2008, BMI believes political instability is still a major concern going forward.

In terms of defence alliances, and reflecting its internal political divisions, Ukraine has oscillated in recent years between NATO on the one hand, and a close alliance with Russia on the other. Following tension over Russia’s invasion of Georgia in August 2008, NATO has been divided over how fast to move towards Ukrainian membership.

Ukrainian military expenditure patterns have remained fairly constant in recent years. In 2006, the Ukrainian Ministry of Defence announced that it would allocate UAH8.9bn in 2006 for defence, which accounted for 1.74% of GDP. Of this figure, 17% of the total defence budget was to be allocated to arms development, modernisation, procurement and maintenance.