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Elena Ulansky Headshot

American and Western Help to Ukraine: A Day Too Late and a Dollar Too Short?

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Co-authored by William Witenberg a contemporary artist focused on abstract painting

On Sunday as a result of Vladimir Putin call to President Obama, John Kerry went to Paris to meet with Russian Foreign Minister Sergey Lavrov. The meeting ended with both sides simply restating their respective positions on how to de-escalate the situation in Ukraine. Kerry rejected Russian proposal which suggested for Ukraine to become a federation. In his turn Kerry demanded from Russia to remove its troops from the eastern border of Ukraine. Kerry further expressed the obvious need for the interim Ukraine government to be involved in the discussions.

On Monday it was reported that Putin told German Chancellor Merkel that he has ordered the partial withdrawal of troops from the territory along the Eastern Border of Ukraine.

Whether Russian troops stay on the eastern border of Ukraine and what the Ukraine will look like post the annexation of Crimea depends in part on the economic changes that are brought to Ukraine.

The opposition that overthrew the government of Viktor Yanukovych is driven not just by his refusal to accept European Union's overtures. The revolution was a rejection of his authoritarian rule, violent handling of the anti-government demonstrators, corruption, but most importantly it was caused by the feeble Ukrainian economy, unemployment, poverty, and a large percentage of educated but dissatisfied youth within the population. Views of a democratic western leaning government resulting from his overthrow should be tempered by remembering Egypt's "Arab Spring". A revolution in a poor country that overthrows a corrupt authoritarian leader does not guarantee a democracy will be installed.

It is clear than that whatever is decided between the United States, Russia and the Ukraine, the most important ingredient is to put Ukraine on the road to stable economic development. The one billion loan package from the United and the eighteen billon IMF, while important, do very little to address the underlying economic malaise in the Ukraine.

It is not often mentioned that Ukraine use to be the breadbasket of the Soviet Union. Presently country's status as a major exporter of agriculture is gone. Today, agriculture makes up less than 10 percent of Ukrainian GDP. That could change if ways are found for the farmers to modernize their machines and techniques.

Ukraine is heavily dependent on the importation of its oil, natural gas and all of its nuclear fuel, from Russia. Ukraine is heavily in debt to Russia for its fossil fuels. If EU countries and the United States just lend money to Ukraine it will be used to pay Russia. While many commentators have called for an increase in LNG delivers to Ukraine from the United States that is a long term solution but in the short term it is simply not possible to build LNG ports and satisfy Ukraine's fossil fuel and nuclear needs. The EU and America have to accept the reality of Russia playing a crucial role in the future of Ukraine.

Despite Ukrainian highly skilled and educated workforce the gross national income is significantly lower than the rest of the developed world. This has resulted in the large migration of workers to other countries.

There is no easy solution to this. American and European companies should be incentivized to make investments in Ukraine and use Ukraine skilled labor force. Absence of changes to Ukrainian economic landscape along with the discussion between Russia, the United States on Ukraine's future will ultimately bear no more fruit than the "Arab Spring" did.