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 UKRAINE: ANOTHER CRISIS FOR 'EUROPE'S BREAD BASKET'

UKRAINE: ANOTHER CRISIS FOR `EUROPE`S BREAD BASKET`

A year on since the start of the Ukraine crisis, the power struggle between Brussels, Moscow and Kyiv shows no sign of abating. International affairs expert, Alexander Mercouris, told DW about the wider implications.

Deutsche Welle: Ukraine is one of the world's top exporters of wheat. The former Soviet Republic is known as "Europe's bread basket." How has the conflict affected Ukraine's agricultural purse?

Alexander Mercouris: The whole of the Ukrainian economy, including its agricultural sector, is in deep crisis. We now have a situation in Ukraine, according to official figures, that the economy contracted 7.5 percent in 2014, and it is expected to contract by at least a further 6 percent in 2015.

There is talk of a financial default; there is also talk that inflation is increasing to an extraordinary degree by 260 percent since the start of the year. This is affecting every sector of the economy, including the agricultural economy, which ought to be one of Europe's strongest. Ukraine has some of the richest agricultural land in the world, it has been an agricultural bread basket for all of previous modern history, the city of Odessa was constructed to enable Ukraine to export its food and all of this has come to a stop.

China brokered a major deal with former Ukrainian President Viktor Yanukovych before the political crisis erupted. It would have been one of the biggest so-called "land grab" agreements, with Beijing eventually controlling three million hectares, an area equivalent to Belgium. This is now being disputed by the present government. How can Ukraine even go back to the idea of international trade, given the current crisis?

It needs to stabilize its political situation and achieve a measure of peace within the country because while there is a conflict of the sort that we are seeing, realistically investment is not going to come there.

Ukraine needs investment because potentially it is a very rich country. What it needs is people coming in, bringing their money and their expertise to make all the various parts of the economy start working again.

The Chinese deal may not have been the best way to do it because essentially what it did was cede control of an area of Ukraine to China. It was, however, a way of bringing Chinese investment into Ukraine. Simply cancelling, tearing up these agreements is not going to be a way of attracting more Chinese investment into Ukraine and it is not going to make a good impression on other potential investors. We need a stable political framework, a stable economic policy, and a stable legal framework. If all of these things come together, Ukraine actually has great potential.

Ukrainische Soldaten bei einer Schießübung in der Nähe von Lugansk 29.01.2015

Ukrainian troops in the Luhansk region

Should all of the parties involved in the crisis also be focusing on the socio-economic future of Ukraine, as well as its political stability?

They should be, but the problem is that they are not, and the reason is because this has now become very much an ideological conflict and a geopolitical one. We have two completely different visions of Ukraine, which have increasingly little connection with the lives that ordinary people are living, which are becoming ever harder. It is a dispute between ideologies. It is a dispute within the elite. It is a dispute between great outside powers, but it is no longer a dispute that has any real agenda for the Ukrainian people who are being forgotten, and who are the victims as a consequence.

Can "Europe's bread basket" truly recover from this political crisis without a joint effort from the EU and Russia?

I think it can recover provided that a joint effort is there. If it is not there, then I do not think it can happen. I think this is actually well understood in Russia and the EU by a lot of people, but there are still other people in both blocs who do not want to accept that. If these two blocs, the EU and Russia, came together in Ukraine, the country's potential would be enormous. It could be made to work very well. It could work for the Ukrainian people, it could work for Russia, and it could work for the EU. It could provide a bridge between these two great regions, and have a consolidating role for Europe. Without one or the other, it is impossible because each part of Ukraine - the east faces towards Russia, the west faces towards Europe - unless both parties are involved in Ukraine, the whole thing cannot stand together.

Alexander Mercouris is a former human rights lawyer and the International Affairs Editor of Russia Insider.

This interview was conducted by Lucia Walton, for Deutsche Welle

Source: DW
 
 
 
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