"Ukraine is on the verge of collapse. GDP fell, year-on-year, by a barely conceivable 17.6% in the first quarter of 2015..."
Heavy fighting has broken out near Donetsk, providing the clearest evidence yet that the truce between the Ukraine government and pro-Russia rebels is being unceremoniously ignored.
Ukraine is on the verge of collapse. GDP fell, year-on-year, by a barely conceivable 17.6% in the first quarter of 2015 due to the armed conflict in the Donbas and the depressive effect of domestic austerity policies. One estimate in February forecast that the size of the economy could fall to just $65-70bn in 2015, compared to $178bn in 2013.
The state is entirely dependent on an underfunded $40bn Western bail-out that assumes the conflict with Russia is in stalemate rather than getting worse. The International Monetary Fund is dictating domestic policy, increasing the cost of living and cutting real incomes, resulting in a catastrophic fall in living standards for ordinary people across the country.
The government’s Western bondholders are refusing to accept a $15.3bn haircut, risking an imminent sovereign default. The oligarchs, who employ hundreds of thousands of workers, are in open revolt against the pro-Western government’s attempts to dispossess them of capital and power.
There has been a wave of unexplained bombings in provincial cities, a spate of mysterious deaths among politicians connected to the previous government and even the murder of a “pro-Russian” journalist. Against this backdrop the political mainstream is shifting to the right. People are rallying to the flag as the death toll from the undeclared war edges towards 6,500 people.
Both sides are constantly violating the ceasefire signed in February as part of the Minsk II agreement, resulting in fatalities on an almost daily basis. Equally worrisome for Kiev are the many Ukrainians who, by no means separatists, nevertheless blame EuroMaidan as much as Russia for the ongoing war.
Meanwhile the president, Petro Poroshenko, has appointed Mikheil Saakashvili, the former president of Georgia, as governor of south-western province Odesa Oblast. Saakachvili’s party was resoundingly rejected by his compatriots and is a fugitive from his own country. Ukrainian politics is taking on a distinctly surreal quality.
Pro-Western politicians are intoxicated by the unexpected success of EuroMaidan and the way it has propelled them into their newly elevated lifestyles. They have taken literally the mythical universalism imagined to underpin the “European values” for which they claim to be fighting Russia. Not content with political office, they are so besotted with the image of the West that they want to use the war to export the spirit of EuroMaidan to Moscow.
The result is a blatant disregard for what is actually in the national interest. From the president downwards there is a lack of clarity emanating from Kiev. One minute politicians are arguing there is no military solution to the conflict, another they are publicly hoping Ukranian forces will reconquer the destroyed Donetsk airport.EPA/Tatyana Zenkovich
The prime minister, Arseniy Yatsenyuk, whose party’s opinion poll rating has plummeted to 4%, recently said Ukraine is defending the “free world” against “Russian aggression”. He also ruled out negotiating with the “terrorists” in the Donbas – which contradicts agreements made as part of the Minsk II deal to establish four contact subgroups to discuss security, politics, refugees and displaced persons, and the economy.
Fiddling while Ukraine burns
In rejecting Minsk II – and in the absence of the supply of Western military aid – Kiev secures neither war nor peace. The West, just like Kiev, is simply hoping for the best while the country is crippled by inaction and the risk of escalating warfare.
Whether European leaders decide this month to continue economic sanctions against Russia is unlikely to make a significant difference – it will only alter Russia’s calculation at the margins. It shows no signs of reneging on its goal of a non-aligned Ukraine. The latest fighting in the village of Maryinka to the west of Donetsk is clear proof of that.
It is likely that the 35,000-45,000 strong Novorossiya army, believed to be trained, supported and equipped by Moscow, will continue its creeping occupation of Ukrainian territory. Possible new targets include the cities of Avdiivka just north of Donetsk, the site of Europe’s largest producer of coking coal which supplies the steel works in Mariupol, and Shchastya, north of Luhansk, where electricity consumed in rebel-held territory is generated.
The immediate outcome of the discredited Minsk II agreement will most likely be Kiev losing yet more territory to the rebels. Having made the correct decision not to arm Ukraine, the West is duty bound to persuade Kiev to reach an accommodation with Moscow enshrining the country’s non-aligned status.
To rescue the perilous situation, the authorities in Kiev need to try to negotiate with the rebels and pressure the West to negotiate with Moscow. A successful and prosperous Ukraine in a stable wider Black Sea region depends on managing partition in the context of a genuinely conclusive regional security agreement. That must be based not on illusory universal values but on a sober assessment of mutual national interests.
Dr Adam Swain studies the geography of post-soviet Europe. Through a focus on the Ukrainian economy his work examines the ways economic practices, discourses and identities are forged, aligned and stabilised thereby influencing the comparative economic performance of regional economies. This work is complemented by historical research on British geographies of the Soviet bloc during the Cold War.
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