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On causes and consequences of the war in eastern Ukraine: economic geography perspective.

Updated: Feb 6, 2020

Dr. Vlad Mykhnenko is an Associate Professor of Sustainable Urban Development at the Department for Continuing Education at the University of Oxford. He is currently the Department’s Director of Graduate Studies for Postgraduate Research Students (DGS-R). Dr. Mykhnenko is also a Research Fellow in Sustainable Urban Development at St. Peter’s College, Oxford. Dr. Mykhnenko is also a Fellow of the Regional Studies Association (FeRSA) and of the UK Higher Education Academy (FHEA).

Recently, he has completed the five-year-long investigation, “On causes and consequences of the war in eastern Ukraine: economic geography perspective.”

1. You finished the five-year-long investigation, “On causes and consequences of the war in eastern Ukraine: economic geography perspective.” Could you touch upon 2-3 critical points of this investigation and its importance for Ukraine?

Firstly, this academic study shows evidently that the fundamental cause of the war in the Donbas was an exogenous one: it was neither an all-Ukraine civil war nor an internal conflict between the central state and renegade peripheries. This brutal and still ongoing armed conflict is the result of a foreign infiltration-cum-invasion. None of the few locally-originating grievances has been necessary or sufficient for such a war.

Secondly, as we have by now established that the responsibility for the war lies in the Kremlin’s court, Ukraine ought to start pressing not only for the de-occupation of the Donbas and the Crimea but also for the war reparations. This study applies a special formula to assess the total permanent physical asset value loss suffered by the two war-ravaged east Ukrainian provinces, mounting to US$ 85 billion in 2013 prices. Ukraine’s total permanent physical asset value loss on the Crimean peninsula, following the Russian de facto annexation, amounts to US$ 29 billion. The Ukrainian government should add to this US$ 114 billion total price tag of direct economic losses the cost of human loss of life and limb, too.

Thirdly, given the long-term devastation caused by the Russo-Ukrainian armed conflict in the Donbas, the international donor community should focus its efforts on helping three millions of Ukraine’s internally-displaced people and refugees to settle and integrate into the life of their new host communities, whilst advocating for the right to return.

2. Just to clarify, was the Kremlin’s military intervention in eastern Ukraine paramount for the commencement of hostilities, or were there sufficient local economic/material conditions that led to the emergence of separatist LPR and DPR?

This research has demonstrated that the ongoing armed conflict in the Ukrainian Donbas was not economically determined and could not be explained within the boundaries of economic rationality. Despite the existence of certain drivers of some baseline separatism, the Donbas was neither outstandingly prosperous nor excessively economically depressed – relatively to the rest of Ukraine – to warrant an armed uprising on its own volition.

3. Can the dire state of Donbas economy be reversed in case of return of control over separatist-controlled territories back to Ukraine?

The evidence presented in this study is conclusive that the occupied Donbas as a whole does not possess the sufficient economic and demographic basis for anything resembling a financially and materially sustainable future as an independent statelet. The occupied territories are most heavily dependent on Russia and are formally governed by Moscow’s Inter-Ministerial Commission for the Affected Districts, acting as the shadow civilian government. Russia’s annual price tag of sustaining the so-called LPR and DPR approximates US$ 2-3 billions.

Poverty, depopulation, and the degradation of economic development on the occupied territories of eastern Ukraine are major long-term challenges. Depopulation is irreversible here, as elsewhere in eastern Europe. At the same time, poverty alleviation and economic restructuring could happen fairly quickly, as long as the central government’s control is restored, alongside the rule of law and the protection of property rights. Let’s not forget that today’s minimum and average wages and pensions are much higher in Ukraine than in the occupied Donbas. Ukraine’s minimum wage now is higher than the Crimea’s. So, the simple restoration of the nationwide labour market and its pension system would already improve living standards in the war-affected areas.

4. Do you think there is the chance of détente between Ukraine and Russia in the near future, or the Kremlin will continue to deindustrialize further and de-develop territories controlled by LPR and DPR by turning them into another Abkhazia?

Oh, this is a $3 billion a year question, isn’t it!

Any chance for détente between the two neighbours depends on the Kremlin’s recognition of Ukraine as an independent state. Since his infamous 2007 Munich speech, Vladimir Putin has continued to allege that Ukraine is an ‘artificial state formation’ and that Ukraine’s eastern and southern regions have always belonged to Russia. Given President Putin’s internal legitimacy hinges on geopolitical great power posturing, I cannot envisage Mr. Putin making a U-turn on Ukraine.

What is extremely depressing for me, personally, being Donetsk- born and raised, is that we see gastarbaitery (‘guest workers’) from Donetsk and Luhansk now being reduced to harvesting mandarin oranges in Abkhazia for a night’s stay and a bottle of beer a day; that’s all! On many levels, deindustrialisation and de-development in the occupied Donbas have already surpassed Abkhazia, with no end in sight.

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