After multiple rounds of talks and continuous resistance with Russia, Ukraine’s Prime Minister Mykola Azarov officially admitted on January 20 at a press conference in Kyiv that he did not exclude the possibility to join the Customs Union. However, the Chairman of the National Security Committee of the Verkhovna Rada, Anatoly Hrytsenko, admitted that neither the opposition nor most civilians approve of joining the Customs Union. According to Hrytsenko, Ukraine would go too far by joining the Customs Union and allow Russia into its most strategic and vulnerable economic sectors, such as energy.

Accession to the Customs Union has not been on the agenda of Ukraine until recently, when Russia refused to limit its gas imports. Although President Medvedev has clearly claimed that Ukraine will not join the Customs Union in a special 3+1 format, Azarov is not ruling out the possibility of joining while figuring out the pros and cons first. President Yanukovych also replied that Ukraine would prefer to see how the union works in practice, and how relations would be structured within the customs bloc when its members join the World Trade Organization. Kazakhstan is planning on the accession to the WTO in 2013.

Although Russia is not imposing any deadlines, it has extended lower gas prices for Kazakhstan and Belarus in a move to convince Ukraine to make commitments and join the Customs Union. While selling a stake in the Ukrainian pipeline network to Russia could be a condition for lowering prices, Ukraine’s national interests would be highly jeopardised. Looking for alternative strategies might be seen as a way around this offer. For example, Norway has already offered Ukraine its own gas, but Norway could not guarantee cheap transit. Ukraine has boosted the use of coal at its thermal power plants for heating instead of gas in order to save about 6 billion cubic meters of gas per year. At the same time, Ukrainian gas monopoly Naftohaz has increased imports of gas from Russia while recently struggling to cut it down.

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customs union · Gas · Russia · Ukraine

Kazakhstan’s leading political party, and the party of President Nazarbayev, Nur Otan, won the parliamentary elections on January 15 with 81% of the vote. Although international observers from the Organization for Security and Cooperation in Europe (OSCE) largely criticized the election for its ‘undemocratic’ nature and a high voter turnout, monitors from the Commonwealth of Independent States (CIS) recognized the victory as fair.

Nur Otan’s political monopoly was broken by the pro-business party Akzhol and the Communist People’s Party of Kazakhstan (KNPK) joining the parliament for the first time. Akzhol polled 7.5% and the KNPK 7.2%. However, with Nur Otan retaining its parliamentary majority, Kazakhstan’s economic priorities and direction are likely to remain the same.

Despite a small number of demonstrations that urged a boycott of the elections, the party is still viewed by many as the best guarantor of political and economic stability, something that has set Kazakhstan apart from its neighbors.

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elections · Kazakhstan · Nazarbayev · Nur Otan

While U.S.-Russia relations strain amidst continuing elections protests in Moscow, St. Petersburg, and other cities, the State Department swore in Michael McFaul as the new U.S. Ambassador to the Russian Federation. McFaul replaces John Beyrle as the first non-career diplomat to become Ambassador to Moscow in three decades.

McFaul is known as an outspoken yet diplomatic critic of Russia’s authoritarianism and specialist on democracy and Russian elections. Under the Obama Administration, he was the Special Assistant to the President and Senior Director of Russian and Eurasian Affairs on the National Security Council, and he has become best known in the recent past as the architect of the U.S.-Russia “Reset” strategy.

McFaul’s swearing in came in mid-December after Senator Mark Kirk (R-IL) lifted his hold on the process. Kirk initially blocked McFaul’s nomination over concern that, with McFaul as Ambassador, the White House might share missile defense information with Russia without congressional approval. Kirk lifted his hold, however, after receiving a letter of reassurance from the administration and after new language was added to the defense authorization bill, requiring the administration to inform congress of its plans to share sensitive information with Russia 60 days in advance.

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Ambassador · elections · McFaul · reset · Russia

Shop till you drop.

As the Internet becomes accessible to more Russians (see recent blog post), barriers for e-commerce —from convincing potential customers of the validity of online purchases to ensuring their delivery of these purchases—are diminishing.

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e-commerce · internet · Russia · technology