In fact, the people of eastern Ukraine would probably be better off with any clear outcome, including absorption into Russia, than with the status quo of living in “countries” no one recognizes.
According to the “official” statistics, there are still a total of 3.7 million people living in the would-be republics. Although this is probably an exaggerated number, it’s safe to say that millions haven’t moved to either Ukraine or Russia in the four years of near-lawlessness and arm’s-length Kremlin rule. There isn’t much work for them in the statelets. Much of the heavy industry, which used to provide about 15 percent of Ukraine’s economic output, is stalled because the factories are in ruins, the equipment has been broken or stolen and Russia — pretty much the only market open to its products — doesn’t need them.
Last year, the republics nationalized the industrial companies, which have since been handed over to a firm called Vneshtorgservis, registered in South Ossetia (that way, it can officially trade with Russia). The company has links to Sergey Kurchenko, an exiled Ukrainian oligarch; it has little interest in keeping any businesses going except the coal mines: There’s a reliable demand for coal. Although the statelets report fast economic growth, they offer no absolute numbers. The official justification is that Ukraine has to be kept in the dark about the economic situation in the territories, but the real reason is that actual numbers would allow anyone with a calculator to divide the amount of Russian aid, a closely kept secret.
Volker is right about Russian taxpayers being on the hook. South Ossetia, a region of 54,000 people that is considered part of Georgia by almost the entire world, but is recognized by Russia as independent, receives about 6 billion rubles ($89 million) a year from Moscow; eastern Ukraine, with its much bigger population, must be far costlier. And yet the elections suggest that Putin is leaning toward a South Ossetian scenario for eastern Ukraine.
The only reason the Kremlin hasn’t recognized the statelets is that Putin finds it hard to admit the failure of his earlier plans to use eastern Ukraine as a bargaining chip in a deal with the U.S. and its Western allies that would involve handing back Donbass to Ukraine in exchange for recognition of the Crimea land grab. No such agreement seems forthcoming, and even Ukraine’s 2019 presidential election offers Putin no chance to trade eastern Ukraine for anything useful: Voters reject any kind of compromise with Moscow. This means the Russian dictator must resign himself to institutionalizing the statelets and making sure people there can survive the long haul. The manipulated elections are a reluctant step in that direction as much as a signal to Western powers that Putin will only negotiate on his own terms.
Leonid Bershidsky is a Bloomberg Opinion columnist covering European politics and business. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru. The views expressed in opinion pieces do not necessarily reflect the editorial position of The Moscow Times.
