Issue: 5 March 2005	PAGE 1 of 1

Yes, our man (Yushchenko) and our system (democracy) won in Ukraine, and once again good triumphed over bad. Yet this presentation, so characteristic of the Western media, misses the point about what the struggle is really about.

If the issue was fair elections, there would have been an equal furore about the grossly rigged elections by which Ilham Aliyev assumed the presidency of Azerbaijan in 2003 from his father, a ruthless KGB hardman in the former Soviet state. In fact the West turned a blind eye, in order to maintain access to Azerbaijan’s oil supplies after a $13 billion contract had been signed with BP in 1998. Equally, there would have been uproar when the pro-Russian Shevardnadze was ousted as President of Georgia in 2003 and the West’s favoured candidate won 96 per cent of the vote to replace him. But nobody raised any complaint.

If the issue was legitimate government, much more attention would have been focused on Yushchenko’s aides and the tenor of his administration. His closest aide, Julia Timoshenko, known as Ukraine’s ‘gas princess’, and now appointed Prime Minister, has been widely accused by both the Russian and Ukrainian authorities of bribery and embezzlement. Another aide admits that ‘the key people in the Yushchenko team are from the same oligarchic mould as our opponents’. Economic interests, not political principle, pitted them against the Yanukovich camp. Many fear that turning over state power to entrenched oligarchs like these will make Yushchenko’s government little different from its predecessor.

What is really at stake is something quite different, almost entirely unmentioned in the Western media. It is rather more prosaic than a ‘people power’ revolution. It is primarily a battle over oil transit routes from the second largest remaining oil deposits in the world, and, more long term, a US attempt to pre-empt Chinese designs on the key strategic space round the southern rim of the old Soviet Union.

In May 2000 an oilfield containing 20–50 billion barrels of oil was discovered in the Caspian Sea off the Kazakhstan coast, probably the biggest hitherto untapped reserve in the world. But, with major exploration only now getting under way, early seismic studies suggest vast resources of hydrocarbons ranging from 70–200 billion barrels of oil and some 250 trillion cubic feet of gas — less than in the Middle East but much more than in the US and Europe.

The geopolitical problem, however, centres on the fact that the Caspian Sea is landlocked, so that oil and gas have to be transported by pipeline to a terminal on the open sea. One relatively short route runs through Iran, but that is not acceptable to the US. Another plan, from the US oil company Unocal, was to extend Turkmenistan’s existing route through Afghanistan and Pakistan on to the Arabian Sea, and this was a consideration behind launching the war against Afghanistan in 2001. A third alternative is a pipeline westwards from the Caspian port of Baku through Georgia to the Turkish port of Ceyhan on the Mediterranean; but this has been heavily opposed on grounds of environmental destruction. A fourth option is a pipeline from Kazakh to the Black Sea, but this has the severe drawback of tanker congestion in the Bosphorus.

Against this background, Ukraine’s geographical location makes it an ideal corridor for oil and natural gas from the Caspian region to Western markets. The most suitable conduit is the Odessa–Brody pipeline which was completed in 2001 and runs north from Ukraine’s Black Sea port to the city of Brody, and is thence extended to the refinery at Plotsk in Poland and a further link to the Baltic port of Gdansk. However, this has been blocked hitherto by Moscow’s stubborn insistence on operating the pipeline in the reverse direction, to move oil from Russia southwards to tankers in the Black Sea for onward shipping to world markets. Moscow has also tried to drag Ukraine into a customs or even an economic union in the framework of its so-called Integrated Economic Zone. By depriving Ukraine of its European prospects and hence of its opportunity to become more independent economically, the Kremlin has been trying to pull Kiev back into Moscow’s orbit.

What has been at stake in Ukraine is less a fight over democracy than a struggle over the geopolitics of oil and military reach. If Ukraine is absorbed into the Nato orbit, Russia will be deprived of access to its naval bases in the Crimea, and Russian oil and gas exports will be squeezed by a new US straitjacket.

But the significance of the Ukrainian confrontation goes even wider. China remains the sole long-term challenger to US hegemony, and while the Chinese economy has been expanding at a phenomenal rate, its weakness continues to be its energy supply. Once oil-independent, China has over the last decade become increasingly reliant on imports, which now account for 60 per cent of its oil consumption, compared with only 6 per cent in 1993. Within the next five years, according to Beijing, China will be importing 50 million tons of oil and 50 billion cubic metres of gas annually.

Chinese petro-diplomacy already extends worldwide, including Africa, and it is busily establishing surveillance stations, naval facilities and airstrips to safeguard the oil route from the Gulf to the South China Sea. But its main goal in escaping dependence on maritime oil supplies is access to Russian and central Asian oil. Another facet, therefore, of intense US pressure on Ukraine is to forestall any Chinese encroachment on this oil-strategic area in the soft underbelly of the former Soviet Union. Ukraine is in reality a key flashpoint in the new Great Game being played out by the US, not so much with Russia, still a declining force, but with China, the emerging long-term threat.