By Franklin Holcomb and Charles Frattini III
Rising instability in Ukraine has created an opportunity
for Russia to further press its political-military campaign to weaken Kyiv and
exert greater control over Ukraine. Ukrainian activists instituted a potentially
crippling blockade against territory in Eastern Ukraine occupied by Russian
proxies. The blockade has exacerbated tensions between the Ukrainian government
and parts of Ukrainian civil society while increasing political and social
tensions. Russia has further destabilized the situation by providing
additional political and economic support to its separatist proxy forces, which
have seized Ukrainian businesses and continue to conduct military operations. Russian
President Vladimir Putin will continue to exploit vulnerabilities in Ukraine
while American and Western policy remains in a transitional state. Efforts to
strengthen Kyiv and enable it to defend Ukraine’s sovereignty against Russian
aggression will be critical to U.S. interests in Europe.
An activist-led blockade of
Russian proxy-controlled territory in Eastern Ukraine has increased political
and social tensions in Ukraine. The
activists, many of whom are Ukrainian veterans, intend to halt the flow of
goods between separatist and Ukrainian territory. Blockade leaders condemned Ukraine for profiting from trade
with separatists and demanded that Kyiv cease trade with the Russian proxies
and release Ukrainian prisoners held by separatists. MP Semenchenko claimed
that the blockade would “bring the entire war to an end” by putting economic pressure
on the separatists. The blockade threatens a primary source of separatist
income but it comes at a cost to Ukraine. The blockade prevents the transfer of
anthracite coal, a shortage of which
prompted Ukraine to declare a state of emergency in its
energy sector on February 15, 2017, and continues to present economic risks. The
blockade also provided an excuse for Russian-backed separatist forces to seize
Ukrainian-owned and operated enterprises across their territory on March
01 as levels of fighting in the eastern Ukraine steadily increased. Ukrainian
efforts to negotiate with the activists failed to make significant progress. Attempts to disperse the activist-led
blockade on March 13 prompted protests in support of the activists
nationwide. The Ukrainian government took no significant steps to disperse the
activists, due to issue’s sensitivity, public support for the activists, and
limited political capital to confront the veteran-led blockade. Ukrainian President
Petro Poroshenko announced a suspension of cargo
traffic with occupied-Donbas on March 15th, in an attempt to de-escalate
rising tensions and in response to separatist seizures of assets. Poroshenko
emphasized that the blockade will continue until the Russian-backed separatists
return control of seized assets and comply with the Minsk agreements, an
agreement signed by both sides to end the conflict. The Ukrainian
government continued to condemn the blockade despite its policy shift. Ukrainian
Prime Minister Volodymyr Hroisman condemned the blockade, stating that it
was “in the interests of Russia” because it weakens
the Ukrainian economy. Poroshenko accused the activists of finding and
exploiting a “raw public nerve” and condemned the blockade as a “special
operation aimed at pushing the occupied areas of Ukrainian Donbas towards the
Russian Federation” on March 20.
Russia took steps
to increase its economic and political support of its proxy forces in order to
increase pressure on Kyiv as it struggles to deal effectively with the blockade
crisis, and test Western reaction.
The Kremlin maintains its objective of forcing Ukraine to re-integrate the
separatist republics on Moscow’s terms in order to have a permanent lever of
influence within Ukraine. The blockade threatens a primary
source of separatist income and could lead to widespread unemployment and
social crisis in separatist-held territory. Russia needs to intervene through
financial support to prevent the economic collapse of its proxies, or end the blockade. Russia indicated that it would purchase goods
from Donbas in order to maintain economic stability on March 06, although reports emerged that mines in Donbas were
not operating on March 09. The Russian government also increased its political
support for its proxies. Russia officially recognized legal documentation issued by
separatist republics on February 18. This decision prompted Ukrainian nationalist
groups to barricade Russian state-owned banks across
Ukraine, leading to an escalation of tensions and the 22 March announcement by Russian banks that they intend
to immediately cease operations in Ukraine. The Russian lower house of
parliament proposed giving preferences in employment and in pursuing Russian
citizenship to citizens of the Donetsk and Luhansk Peoples’ Republics on March
20[i]. Russia
and its proxies may use the blockade to justify further escalation of
hostilities in order to force Ukraine to end its economic pressure and pursue
legitimization of separatist forces on Moscow’s terms. The Kremlin will also
seek to exploit any political crisis in Ukraine to destabilize the pro-Western
coalition, undermine Ukraine’s reform efforts, and halt Ukraine’s integration
with the West.
Ukraine
took concrete steps to continue its fight against corruption and further integrate
itself with the West despite increasing instability.
The Ukrainian government suspended
the Director of its State Fiscal Service due to a corruption investigation on
March 03. This action may be a catalyst for a much-needed anti-corruption
campaign. The International Monetary Fund (IMF) preliminarily approved
Ukraine for a $1 billion loan on March 05. This loan strengthens the Ukrainian
government’s ability to fulfill financial obligations that are key to its
political stability. Ukraine and Canada extended
their bilateral military cooperation through 2019, signaling Ukraine’s
continued commitment to meeting Western military standards. The U.S. and its
allies must continue to support Kyiv’s efforts to reform and counter
corruption.
