It is a pleasure to have been invited to speak at this event tonight. Firstly, I would like to pay tribute to the work done- and which continues to be done- by the British Ukraine Society and the All Party Parliamentary Group on Ukraine. Both organisations, for many years and under successive governments, have dedicated themselves to enhancing relations between the UK and Ukraine. In this year- the 20th year of Ukraine independence- it is right to pay tribute to both organisations. I value the work which has been done for many years to highlight the importance of Ukraine to the UK’s commercial and political interests.
Ukraine is a country which - despite its position at the opposite end of Europe - matters a great deal to Britain. This evening I would like to explain why the partnership between Ukraine and the United Kingdom is so important to both of our countries, and what the coalition government intends to do to take that partnership forward.
Why is Ukraine important to the UK?
It is worth beginning with some plain facts, many of which will be utterly familiar to the audience this evening.
Firstly, in terms of size, Ukraine is Europe’s largest country and has, by most estimates, the 7th highest population in Europe, with around 45 million people.
Secondly, it is situated in a geographical position of immense strategic importance, bordering four EU Member States and, of course, Russia.
Thirdly, Ukraine has considerable energy reserves, with significant unexplored deposits of shale gas, and, vitally, it also controls energy transit routes that are critical to the energy security of Britain and Europe.
For these reasons alone, Ukraine is clearly a country which demands our attention. Indeed, all of Europe has a strong interest in a stable and prosperous Ukraine, which is firmly embedded in the international community. The alternative, a Ukraine wracked by instability, would be bad news for the entire region and would present a serious risk to Britain’s security and prosperity.
That, if you like, is the pessimistic imperative to build relations with Ukraine and support its development and stability as a country.
But there is also a far stronger optimistic reason to try to strengthen our bilateral relations.
Ukraine has the potential to act as a role model and a beacon to its neighbours. We are now twenty years on from the dissolution of the USSR. During that time, we have seen remarkable changes in the former Soviet Union - particularly in the Baltic States. But, we have also seen disappointing trends, for example in Central Asia.
I visited Russia last week and as well as Government Ministers, I met with Human Rights defenders and political parties and discussed the restrictions placed on the media. A democratic, peaceful and increasingly prosperous Ukraine, home to a robustly pluralist society based firmly on the rule of law, could have a tremendous positive influence on its region. This is why we call it a potential “swing-state” for the whole of the Former Soviet Union. It is firmly in our national interest to use our friendship with Ukraine to shape such a positive scenario.
Why is the UK important to Ukraine?
So, that is the case for Ukraine; but what are Ukraine’s reasons for listening to us? Why should this island on the western fringe of Europe matter to Ukraine? Let’s think why Britain should matter to Ukraine.
Well, for a start, there are the bonds of friendship that go back a long way, as is clear from this gathering hosted by the British-Ukrainian Society. The UK has embraced the Ukrainian diaspora in years past as it still does today, and our country has derived great benefit as a result. Britain has become home to thousands of Ukrainians over the years, and this country remains a magnet for Ukrainians seeking a place to do business, a place to invest, and a place to educate their children. That kind of tie builds friendships and mutual respect. We are not however quite at the stage as France, where potential French candidates see London as a campaign stop. However, Ukraine’s diaspora celebrates its ties with the mother country as well as integrating well into British Society.
As a result, our bilateral relationship has prospered. At government level we enjoy regular contact - I was in Kyiv last October, and have been privileged to welcome a number of senior Ukrainian Ministers to London in the year since the government took office. Our respective Ambassadors work energetically to build on that friendship. Indeed Leigh Turner, our man in Kiev, has the most widely read blog of all Britain’s ambassadors around the world. I encourage you all to read it, if you do not do so already.
But above all, Ukraine knows that it can count on Britain as its friend in the European Union. We are, and will remain, enthusiastic advocates of Ukraine’s closer integration with the rest of Europe, and we look forward very much to the day when we welcome Ukraine into the EU as a full member.
The Eastern Partnership of Europe is valuable in its own right, but should also - if countries so wish - be the antechamber to full EU membership. Today, I had lunch with Polish Ambassadors and we talked about EU issues. When I was challenged on the prospect of Ukraine becoming a full EU member, my reply was that the only way the EU can deal coherently and in a way that is morally defensible in its ideas about enlargement is that, if a country is European and wants to join the EU and meets the accession criteria, there is no reason not for it to become a member. That is not to say that the accession process is quick and easy.
EU Enlargement is a central part of British foreign policy. Successive governments have followed this policy since the fall of the Berlin Wall. The path to full EU membership should be open, but we should not be lowering the bar. The accession criteria are rigorous and demanding. Countries wanting to join need to undertake reforms, which mean changes to domestic policy and the judicial and economic sectors. The UK is vigorous in championing enlargement but rigorous in saying that the accession criteria must be met and met in full.
Challenges Ukraine faces
Of course, it is the responsibility of true friends to speak honestly when they see something which concerns them. As you know, Ukraine is facing a number of challenges, and I would like to talk briefly about our two most pressing concerns for Ukraine’s future.
Firstly , corruption.
My experience in my first 14 months as a Minister has taught me that when companies are looking to invest in a country, the first criterion is whether they have confidence that contracts and licenses will be awarded fairly and without political favour. If there is a dispute, they also want to be confident that a Court outside of government will arbitrate. If companies do not have this confidence, they will go elsewhere.
Ukraine should be an economic powerhouse. It has both the human and resource potential and an enviable geographical location next to several large regional markets, first and foremost the EU. With these advantages it should be a top investment market, vying with Poland and Turkey as a destination for pounds, Euros and dollars. The reality, unfortunately, is different.
Worrying levels of corruption mean that Ukraine is struggling to attract international investors, who have become increasingly wary of a difficult business environment. Indeed, I often receive reports of corruption from British businesses looking to invest in Ukraine. They face problems with the rule of law and operation of the courts; and problems with the customs and tax authorities.
Indeed, according to Transparency International’s Corruption Perceptions Index, in 2010 Ukraine was ranked 44th most corrupt country out of 178 countries measured. Given the challenges of doing business in Ukraine, it is sadly not surprising that many investors choose to go to Ukraine’s competitors. And it is nothing short of a tragedy - for ordinary Ukrainians, first and foremost, but also for the rest of the continent - that this fine European country has consistently failed to maximise its huge economic potential.
Secondly, we are worried that Ukraine’s reputation as the regional standard-bearer for democracy is being eroded. I do not say this lightly.
Several developments in the last few months give cause for grave concern.
The administration of last autumn’s local elections undermined public confidence in the electoral process. In January, Freedom House downgraded Ukraine to “partly free” in terms of political rights and civil liberties, citing “a deterioration in press freedom, state efforts to curb student activism, intimidation of NGOs, local elections that were almost universally derided as neither free nor fair, and indications of increased executive influence over the judiciary.” And then in recent weeks we have seen what appears to have been politically-motivated criminal investigations and prosecutions of opposition leaders and members of the previous government.
Ukraine cannot be complacent about these challenges, and I do not believe that it is.
President Yanukovych and his government have often reaffirmed their commitment to the rule of law and to their country’s European future. I welcome that.
They have embarked on a courageous programme of economic reforms, and they are looking at reforming the country’s electoral code. I welcome that too.
I know that they are listening to the UK and other international partners as they set about this task. We tell them clearly: political stability and pluralism are not mutually exclusive. On the contrary, international experience over decades and indeed centuries is that, far from threatening our stability, a multi-party democracy, open and frank political discourse, clear separation of powers and a free, activist press are the only long-term guarantees of stability.
For example, if you look at the Arab world, a generation of young people are able to exchange information electronically about other societies and want to have a part in the way the governments in their own countries are shaped. Our message to the Arab World has been that there will be no political stability if governments lack legitimacy in their own peoples’ eyes.
Using our Partnership
That is our assessment of the situation. The question now is how we in Britain use our partnership with Ukraine to deliver this message to best effect. What can we do to support Ukraine’s efforts to reform?
There are some who have argued that the international community should take sanctions against Ukraine over the recent prosecutions of opposition politicians. I do not believe this would be the right course of action. Having talked to the relatives of people detained, and in some cases tortured, in Belarus, I am confident that the situation in Belarus and Ukraine are very different. Ukraine is not Belarus - far from it. We will not help Ukraine tackle its problems by isolating it.
What is important is that Ukraine must ensure the independence of its judiciary and the objective application of the rule of law. We can support them as they set about doing this.
In the first place, we and our international partners must continue to put the case for pluralism and strong institutions as the key to stability and prosperity. I think that simply preaching would be the wrong approach. I have not found a country anywhere in the world yet that takes well to being lectured to by foreigners. But what we can do is share our experience. I believe that the European model stands on its own merits. Given a choice between a political culture like ours, on the one hand, and those of some of Ukraine’s neighbours, on the other, I have no doubt that most Ukrainians will choose to go with the former. The newest Member States of the European Union have been through a similar process and are very well placed to share their experiences too.
So we should continue to use every opportunity to put the case for the kind of Ukraine that we’d like to see. That is what this government is doing, from Ministers through to diplomats and civil servants in all government departments. But others can do this too, perhaps to even greater effect. In particular, two groups who are well-represented here this evening: parliamentarians and business leaders. Your advocacy for democracy and the rule of law is important and makes a real difference.
Here in Westminster and Whitehall we need to develop a more coherent approach to our relations with Ukraine. Too many are unaware of the country’s significance for the UK. And often, we are equally unaware of our influence over Ukraine. It’s time for the whole of government to repeatedly make the case for pluralism in all our dealings with Ukraine.
So that is one way that we can deliver the message.
But ultimately, I believe that EU integration offers the best way forward. Sharing our experiences and using our influence is important. But in the post-communist countries of Central and Eastern Europe we did more than just make the case for a new kind of politics: we worked with these countries to build institutions and, in doing so, we created facts on the ground. We need to do that in Ukraine.
The European Track
We’ve seen how the EU has transformed the continent of Europe over the past fifty years: how first it enabled Europe’s war-exhausted economies to rebuild from the devastation of Nazism; then, consolidating democracy in the former military dictatorships in the south; and most recently in the formerly Communist countries of central and eastern Europe.
With its message of economic integration and joint action, the European Union creates an environment in which the rule of law can flourish, and where its core values of respect for liberty and diversity can take deep root. It would be simply wrong of us to withhold that prospect from Ukraine. It’s vital that the EU keeps the door open to Ukraine’s eventual membership, and I want September’s Eastern Partnership Summit in Warsaw to say this quite clearly.
Of course, Ukrainian membership of the European Union still lies some way down the track. It certainly won’t happen overnight. But the track is certainly there.
It’s in the form of the rather dry-sounding European Neighbourhood Policy, or ENP. The ENP is the European Union’s framework for its relations with its neighbours; the Eastern Partnership is its regional element.
It describes a path for stepping up contractual relations between the EU and Ukraine - we are negotiating an Association Agreement, incorporating a Deep and Comprehensive Free Trade Area, which, if agreed and implemented, could potentially transform Ukraine’s economy and society the way that the accession process did for the countries of Central and Eastern Europe in the nineties.
At the end of that path, Ukraine finds itself much closer to EU membership than it does now - in effect, Ukraine would have done much of the work to join if it chooses to go down the path of EU membership subsequently.
This path - set out in the prospective Association Agreement - offers the best chance to establish rule of law, pluralism, and a prosperous economy. Closing it down would be self-defeating from the EU’s point of view and would be a sure-fire way to encourage the very trends that we want to combat.
At the same time, I believe Ukraine will be storing up problems for itself if the anti-democratic trends which we have seen recently continue. The Association Agreement that we want to see concluded will have to be ratified by the European Parliament as well as all 27 (soon to be 28) national Parliaments. How will these Parliaments react if they see Ukraine retreating from the principles of democracy which form the basis for European integration? I would ask my Ukrainian friends to reflect seriously upon this prospect.
A final thought: the European Union has just relaunched the ENP as the core of its response to the events of the Arab Spring. It offers partners across the Neighbourhood the prospect of deep economic integration with the EU, and access to our markets, in exchange for meaningful, lasting, political reforms. Of course, the focus has been on the southern part of the Neighbourhood, but that does not make it irrelevant to Ukraine.
I know that the new Polish Presidency of the EU is utterly determined that, with all the energy going into the EU’s response to the Arab Spring, we do not forget about the Eastern Partnership. Poland has made it very clear that for them the EU neighbourhood has to be East as well as South. The UK is also very clear that we support the Polish vision of the European Neighbourhood Policy.
Indeed, Ukraine is the model which other neighbours will now seek to emulate. The Agreements which the EU is currently negotiating with Ukraine set the pace for others to follow across the Neighbourhood. Ukraine stands to benefit from the new system of allocating resources, where those who make the most progress in implementing reforms will receive the lion’s share. But this makes it all the more important that the EU gets it right with Ukraine. We have so much at stake: not just in Ukraine, but also in the wider region, and in the Neighbourhood as a whole, including the Middle East and North Africa.
Ukraine matters. It matters as a growing market for British goods and services; as an investment destination; as an energy transit route and as an energy supplier. It matters because the evolution of its democracy could have important consequences for the region. And it matters because its relationship with the European Union is a test case for the EU’s entire strategy towards its Neighbourhood and especially towards its Eastern neighbours.
It is time for the wider Westminster and Whitehall community to acknowledge the importance of the UK-Ukraine relationship, to give it the attention which it deserves and for us in Britain to commit ourselves wholeheartedly to strengthening our relations both bilaterally and also through the EU.