BRIEFING PAPER: Kyiv Introduces the Blockade of Donetsk and Luhansk Regions

Summary

 

  • On 15 March, Council of National Security and Defense of Ukraine with the support of President Petro Poroshenko decided to introduce the blockade on cargo rail and road communication with the territories of Donetsk and Luhansk regions that are not controlled by Kyiv.
  • However, the so-called commercial blockade of occupied territories has been in force in Ukraine since 26 December 2016 (25 January effectively) and was conducted by former military volunteers and activists (including representatives to the parliament Semen Semenchenko and Volodymyr Parasiuk) despite the opposition of Ukrainian government.
  • The blockade has caused severe shortages in the supply of coal (which resulted in introducing the emergency state in the energy sector) and led to separatists confiscating multiple coal mines and companies, mostly owned by oligarch Rinat Akhmetov.

 

Background

 

On the 26th of December a group of military veterans and activists decided to start the blockade as a result of a failed ultimatum issued to separatists on releasing the prisoners of war. The initiative escalated since the 25th of January when, step by step, the railway transport from Donetsk and Luhansk regions was effectively halted. This resulted in the shortages of some crucial supplies like anthracite coal. On the 15th of February the state of emergency in Ukrainian energy sector was introduced, while Prime Minister Volodymyr Hroysman publicly expressed concerns that Ukraine may be forced to supply the coal from USA or Russia.

 

At the beginning of March the situation further escalated. On the 1st of March the separatists took control over the coal mines and other companies which were earlier affected by the blockade (mostly controlled by Rinat Akhmevov as a part of the DTEK holding) and the reportedly re-oriented them on the trade with Russia. In consequence, on the 15th of March, the Council of National Security and Defense of Ukraine took the decision to ban all cargo from crossing the front line in the east of the country until the separatists reversed their seizure of the companies. President Poroshenko called this situation ‘a new reality’. In addition, Ukraine imposed sanctions on five Russian banks.

 

 

Analysis

 

Multiple experts agree that from the economic point of view, the blockade is a burden that has had and can further hurt the Ukrainian economy. The potential loss has not been properly estimated but President Poroshenko in the middle of February claimed that up to 300,000 people could lose their jobs and Ukraine could lose $2 billion in foreign currency revenue because of the blockade. The warnings that Ukraine would be forced to supply coal from Russia may not be accurate but they bring up the topic of strong dependence on Russia in the energy sector. Nevertheless, the situation is difficult for the energy sector which was confirmed by introducing the state of emergency on the 15th of March and halting the activities of some companies both in regions under control of separatists and Ukrainian government.

 

After the decision of Council of National Security and Defense of Ukraine which in fact recognised the blockade, it entered a new phase. However, the political consequences of last few months are still relevant to be considered. For a couple of months (since the 26th of December 2016 to 15th of March 2017) Ukrainian government did not officially support the blockade (or even numerously condemned it) but was not in the position to influence its organisers or even to suppress it by force. It put the government in a peculiar situation and suggests its weakness in dealing with certain powerful groups within the country.

 

From the point of view of the organisers of the blockade, and many Ukrainians backing this idea, the trade with occupied territories was in force because of the benefit of business and political elites and it was a civil duty to abolish it. However, the way the blockade was introduced raises serious questions about the political power of war veterans who in this case were “private individuals exercising too much of a state function” which, like Maksym Bugriy warns, can lead to the radicalisation of Ukrainian political scene.

 

The veterans forming voluntary battalions and fighting in the ATO zone earned respect of the society, which however, gives them the possibility to arbitrarily pursue their public and political goals while the politicians, including President Poroshenko, are not in the position to openly confront them. The voluntary battalions from the beginning of the war in the Eastern Ukraine were the necessity of the circumstances (their role in stopping the separatist forces supported by Russia is unquestionable) but their independent structure and financing often received from powerful people with an interest in political gains (like oligarch Ihor Kolomoysky) created a possible risk factor for the stability of the country. The blockade was an example of using their position to act against the official stance of the government, therefore, the official position of the country in order to force the authorities to act according to the veteran’s will.

 

This power game was lost by President Poroshenko who tried to 'save his face' by introducing an official blockade (building on the behaviour of the separatists who confiscated the companies) and in consequence probably preventing early elections. Politicians who supported the blockade, particularly leader of 'Bat'kivshhina' Julija Timoshenko, have a strong will to topple the government of Prime Minister Hroysman and call the parliamentary elections. It may shift the political landscape of the country and bring Julija Timoshenko to the position of prime minister, as her party is currently leading in the polls. Indeed, the political landscape of the country already has changed as a result of the blockade, namely in case of Rinat Akhmetov, who lost a significant portion of his wealth after the confiscation of his companies in the Donetsk region.

 

Besides the consequences regarding the political landscape of Ukraine, the blockade will most likely lead to weakening the ties between occupied territories of Donbass and Luhansk and Ukraine which can impede the future integration process of the territories. Some international actors, including EU member states like France, issued statements bringing these consequences in the spotlight. The European Union did not take any position on the issue.

 

 

Author: Kinga Jaromin

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