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Threats to Ukraine’s New Order, Labor Protests in Croatia

Plus, Latvia and Lithuania are tipped to lead EU growth this year and Kyrgyzstan’s opposition wants a referendum on the Customs Union. by Barbara Frye, Ioana Caloianu, Sarah Fluck, and Karlo Marinovic 27 February 2014

1. Russia mounts maneuvers near Ukraine as tensions rise in Crimea


Russian saber-rattling and regional ethnic tension are threatening the stability of an embryonic order in Ukraine before it has a chance to establish itself.


While some Russia experts say they doubt Moscow will intervene militarily in Ukraine, Russia has called snap exercises to check the combat-readiness of its troops, RIA Novosti reports. The maneuvers will take place in two military districts, one of which borders Ukraine.


Russia's defense minister and Senate speaker both said the exercises were not related to events in their western neighbor, but residents of Ukraine’s Crimea region, which hosts Russia’s Black Sea Fleet, have reported seeing more movement of Russian military vehicles in the past few days, according to The New York Times.


Oleksandr Turchynov, Ukraine’s interim president, urged Russian service members in Crimea “not to leave the boundaries of their base determined by the relevant Ukrainian-Russian agreements,” Interfax Ukraine reports. “Any movement of military servicemen with weapons outside this territory will be viewed as military aggression,” Turchynov told parliament.


Also in Crimea, armed men stormed the regional parliament building and government headquarters Thursday and have barricaded themselves in, Interfax Ukraine reports. Russian flags were raised over both buildings. Ethnic Russians outnumbered Ukrainians in Crimea by more than 2-to-1 in the most recent census, conducted in 2001.


Outside the barricaded parliament, thousands of Russian and Muslim Tatar residents of the region staged dueling demonstrations, with the Tatars supporting the protesters in Kyiv who had brought down the government of former President Viktor Yanukovych, according to The New York Times.


This week a legislator in Russia called for Crimea’s ethnic Russians to be issued Russian passports, though other voices were proceeding cautiously on the idea. Part of Russia’s justification for its war with Georgia in 2008 was protecting residents of the Georgian breakaway region of South Ossetia who held Russian passports.


Writing in the Kyiv Post earlier this month, Kyiv-Mohyla Academy political scientist Andreas Umland warned that the Georgia conflict could be a model for Ukraine’s future.


“The scheme of Russia’s intervention is simple: An already breeding domestic conflict, with a little help from the Kremlin, escalates and turns violent,” Umland wrote. “The use of force leads to a request for protection from the clash’s pro-Russian side portrayed as being under a ruthless attack by local ultra-nationalists.”


2. Protest, strikes greet proposed labor law in Croatia


Croatian unions organized demonstrations across the country this week to fight new labor legislation that officials say is aimed at reducing unemployment, the Jutarnji list newspaper reports.


Protests in Zagreb against the proposed new labor law. Image from a video by SensServis Agencija/YouTube.


About 1,000 people protested the measure outside parliament 26 February, the day after union workers walked off the job for two hours.


“If necessary, we will fill the [city] squares and we won't give up the efforts to stop changes to the labor law,” Kresimir Sever, president of the Independent Trade Unions of Croatia said, according to Jutarnji list.


The legislation would allow employers in some industries to extend staffers’ hours in a particular week if hours are commensurately reduced the following week and don’t average more than 40 a week over any given four months. The measure would also make hiring and firing easier, and extend from one year to three the period for which firms can employ temporary staff hired through agencies.


The changes, now before parliament, are aimed at making the labor market more dynamic, encouraging investment, and safeguarding jobs, said Labor Minister Mirando Mrsic, according to Jutarnji list.


Croatia has an unemployment rate of more than 22 percent, and the figure is close to 50 percent among young people, according to Al Jazeera.


In a recent statement, five unions said that instead of “reducing workers’ rights,” the country needs investments in “innovation, knowledge, new, clean technologies, green jobs,” and lower energy prices and reindustrialization.


Along with unions, human rights groups have criticized the measure, saying the changes will exacerbate income inequality and hit women particularly hard, making them more vulnerable to dismissal should they get pregnant.


To fight rising youth unemployment, the government started sponsoring public-sector jobs for young people in 2009, with the program later expanding to private industry. Al Jazeera reports that 17,000 university graduates were hired through the scheme last year.


3. Forecast: Latvia, Lithuania to lead EU growth in 2014


Latvia and Lithuania could have the highest economic growth rates in the EU in 2014, according to the European Commission’s winter 2014 European Economic Forecast.


The commission estimates Latvia’s economy will grow by 4.2 percent and Lithuania’s by 3.5 percent this year, compared with an EU average of 1.5 percent and a euro zone average of 1.2 percent.


Those numbers constitute a remarkable turnaround for the Baltic neighbors. Latvia’s economy was the region’s hardest hit during the financial crisis, with its GDP plunging by 18 percent in 2009. It implemented harsh austerity measures, which led to large public protests in 2009 and 2010.


Lithuania fared only slightly better during the crisis, with a drop of nearly 15 percent of output in 2009.


Latvia’s economy has been hot for the past couple of years, expanding at a faster rate than the EU average, the forecast notes. Unemployment is falling as exports and consumer and government spending fuel the economy. Major spending is coming from EU funds and corporate profits, as the banking industry is still sidelined with high rates of bad debt.


In Lithuania, growth is boosted by rising consumer spending “supported by a substantial increase in wages, low inflation, a robust labor market and strong confidence indicators,” according to the forecast.


4. Kyrgyzstan’s new opposition against Customs Union


A new opposition group in Kyrgyzstan is demanding a national referendum to decide whether the country should join the Russia-led Customs Union, Radio Free Europe reports.


Ravshan Zheenbekov
“We want to invite official authorities to public debate. If the constitution doesn't work, we will switch to political technologies,” said Ravshan Zheenbekov, leader of the newly minted United National Opposition Movement, the news agency reports. He said the group, which opposes joining the union, would not rule out organizing protests on the issue.


The Customs Union was established in 2010 among Belarus, Kazakhstan, and Russia, with Moscow hoping to eventually bring in most of the post-Soviet states. Armenia announced last fall that it would join, but the costs and benefits of membership have been hotly debated in some countries.


Kazakhstan, for example, has seen price increases on basic goods and additional regulations on its businesses. Mukhtar Taizhan, a Kazakhstani economist and former government adviser, warned Kyrgyzstan to stay out of the union in a May 2013 interview with the Vecherniy Bishkek newspaper. Taizhan said Kazakhstan had not profited from the trade zone, which he called “nothing more than Russian imperial ambition.”


Russia has been trying to get Bishkek to join the Customs Union. In December Kyrgyzstani President Almazbek Atambaev distanced himself from the project, saying a plan for membership did not protect his country’s interests, RFE reports.


5. New pipeline highlights growing Kazakhstan-China trade ties


Kazakhstan will launch the third line of a gas pipeline network to China later this year, amid talks of deepening economic cooperation between the countries.


The line will open in October with an initial capacity of 5 billion cubic meters per year, Sauat Mynbayev, chairman of the state oil and gas company KazMunaiGaz, announced this week, according to energy news service Platts. That will bring the network’s capacity to 35 billion cubic meters, almost one-quarter of the 146.7 billion cubic meters of gas China consumed in 2012.


Kazakhstani and Chinese officials met in Beijing 26 February, the Trend news agency reports. In addition to energy, the talks focused on agriculture and transit, with plans mooted to build a grain terminal on the border, exploit Kazakhstan’s vast uranium reserves, and upgrade an existing refinery in Kazakhstan.


China has worked to cultivate links with Central Asian countries and in 2009 overtook Russia as a major trade partner with Kazakhstan. Last year, the two countries’ trade amounted to $22.53 billion, according to Trend.

Barbara Frye is TOL's managing editor. Ioana Caloianu is a TOL editorial assistant. Sarah Fluck and Karlo Marinovic are TOL editorial interns.
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