Stanislav Secrieru. The Polish Quarterly of International Affairs. Volume 23, Issue 4, 2014.
Post-Soviet Quicksand
The Russian-Ukrainian crisis has had wide political, security and economic ramifications across the globe. To begin with, the United States’ reaction to the crisis is being carefully observed in the Asia Pacific, where it plays the role of security guarantor. The crisis has also pushed NATO to refocus from “out of area” missions to its core task, namely collective defence of its members. Meanwhile, Russia’s tit for tat food embargo against the West in response to sanctions has provided an occasion for farmers from South America and Asia to step in to the Russian market, whilst the closure of mines in conflict-ridden areas of eastern Ukraine has offered South Africa and Australia the opportunity to export coal to Ukraine. Harassment of the Crimean Tatars caught the eye of jihadist recruiters from the Middle East, who may arguably try to enlist more disgruntled Muslims from the peninsula to the ranks of “holy warriors” in Syria and Iraq. Although Russia and Ukraine have reached a provisional agreement on gas supplies during winter, it may collapse if fighting resumes on a bigger scale, putting in jeopardy gas transit to Western Europe and the Balkans. But nowhere are the effects of the Russian-Ukrainian crisis felt more intensively than in the post-Soviet world, where the epicentre of turmoil resides.
The last audit of the state of affairs in the post-Soviet world was conducted in 2011-2012, on the 20th anniversary of the Soviet Union’s dissolution. It aimed to assess two decades of post-Soviet transition in the independent republics and non-recognised entities, as well as to measure Russia’s adjustment to its post-imperial role. This evaluation also sought to answer the question as to whether the former Soviet republics still form a coherent region, or whether “post-Soviet” had become an outdated descriptive label for a region that has ceased to exist.
Back in 2011-2012, the reality check concluded that after a relatively peaceful divorce from Russia, the independent republics had become relatively successful state projects. They preserved statehood, nurtured national myths, built essential institutional infrastructure to provide basic services to citizens, and diversified their commercial ties. With few exceptions (for example, Azerbaijan, Georgia and Moldova), states kept or regained (Tajikistan) the monopoly on violence and control over their entire territory. States that suffered separatism managed to contain the threat of further contamination. However, the speed at which Ukraine lost Crimea, and the celerity of local structures disappearing in spring 2014 in parts of eastern Ukraine, raised the question of how well statehood is entrenched in the post-Soviet world. The apparent ease with which Russia fuelled unrest also poses questions of new potential flashpoints in the post-Soviet region.
Although Moscow regularly meddled in the domestic affairs of most former Soviet republics, it seemed that after over 20 years since the implosion of the USSR, Russia had come to terms with new borders. Although Russia invaded Georgia in August 2008, and recognised Abkhazia and South Ossetia, these acts were perceived as accidents for which the government in Tbilisi was to some extent co-responsible. In general, Georgia’s territorial amputation at that time was not regarded as a game changer in the region. Few would believe that Crimea might be the next hot spot. As Lehman Brothers collapsed in September 2008, the West rushed to a business as usual mode with Russia. Thus, Russia “spent only a few minutes in the penalty box for the 2008 invasion of Georgia” before the West pushed the “reset button.” Do not provoke Russia, but engage it more via arms reduction talks and trade was the Western recipe to correct Russia’s misbehaviour in the neighbourhood. The precipitous “reset,” which convinced the Kremlin that it could get away unpunished was coupled with a largely commercially-driven approach towards Russia. This strategy backfired in 2013-2014. Georgia, it now seems, had indeed been a game changer. It redefined what is doable for Russia in the region. In 2014 Russia simply went much further, yet again pushing back the limits of what is possible. As a matter of fact, this process is still under way.
Since 1991 the geography of region has changed. Latvia, Lithuania and Estonia have essentially left the region, successfully migrating to Western structures (NATO and the EU). Georgia, Moldova and Ukraine have tried, although not as steadfastly, to follow in the footsteps of the Baltic States. Increasingly self-reliant Azerbaijan, powered by oil revenues, was rediscovering its Middle Eastern roots, whilst the Central Asian “stans” could not resist the Chinese economic gravitational pull. Even Russia’s close allies, Belarus and Armenia, were looking beyond the “near aboard” fence for business opportunities or additional security guarantees. As the Russian economic model displayed more signs of distress under the impact of the global financial crisis, further fragmentation rather than Moscow-inspired Eurasian integration of the post-Soviet region was expected. The Russian- Ukrainian crisis raised the spectre of more fragmentation, not of the region, but of states, providing Russia with additional levers to reclaim hegemony, albeit in a more chaotic environment. It also increased among post-Soviet states (including Russia’s formal allies, such as Belarus) a sense of regionness, even if defined in negative terms (for example, the common security threat factor). The sense that there was a danger of being dragged back into the post-Soviet turmoil resurfaced among those, such as the Baltic States, who had escaped, apparently for good, from the post-Soviet world and found protection under NATO’s security umbrella.
The Russian-Ukrainian conflict shook down the 20 year inertia, sending shock waves across the region. The 2011-2012 review of the post-Soviet region had predicted continuity, yet two years later the new buzz word on everyone’s lips is uncertainty. The region stands on quicksand, facing another bifurcation. The Russian-Ukrainian conflict is far from over. Resumption of hostilities on a bigger scale is still highly possible. But one year after the outbreak of Euromaidan, which precipitated Russia’s aggression against Ukraine, is a good occasion on which to make a preliminary assessment of how the crisis reverberated across the region. Russia’s massive military build-up near and inside Ukraine, the outright annexation of Crimea, a rediscovered taste for hybrid warfare, prospects of a new “frozen conflict” in Donbas, reference in political discourse to imperial territorial units of Tsarist Russia (for example, Novorossiya), and finally the contestation of the legality of the Soviet Union dissolution act, provide enough motives for such analysis.
A Multi-layered Mess
Russian-Ukrainian relations have been through ups and downs. Throughout the 1990s, Russia and Ukraine bickered over the partition of the Black Sea Fleet and the terms of Russia’s military base in Crimea. The Kremlin used Ukraine’s gas debt to extract more concessions from Kyiv. In 1997 a basic treaty and deal on the division of the Black Sea Fleet was concluded, promising to eliminate irritants that had strained relations. But in 2003 the states again flexed their muscles in a stand-off over the Tuzla Island, located in the middle of the Kerch Strait. The same year, however, Ukraine aligned with the Russian initiative to form a Common Economic Space, together with other two ex-Soviet republics, Belarus and Kazakhstan.
The “Orange Revolution” in 2004 significantly cooled relations between Moscow and Kyiv. Several trade wars and gas crises followed, in 2006 and 2009. In 2010, Viktor Yanukovych prevailed in the presidential contest, bringing about a short honeymoon in Russian-Ukrainian elections. Russia’s rights to military bases in Crimea were extended beyond 2017 in exchange for a gas discount. Both sides also signed a border demarcation treaty in 2010, and reached a preliminary deal on maritime border delimitation in the Kerch Strait. After a short commercial spat in 2011, relations reached boiling point in 2013, this time over Ukraine’s intention to sign an Association Agreement (AA) with the EU, at the Eastern Partnership Summit in Vilnius.
This brief overview shows Russian-Ukrainian relations were not short of political, diplomatic or economic conflicts. Nevertheless, the conflict of 2013-2014 surpassed in scale and complexity all those that had come before. With each new phase of the crisis, new players emerged, new fronts opened, and contentious issues piled up, all together producing a multi-layered Russian-Ukrainian conflict.
As the crisis began, in summer 2013, when Russia had halted almost all Ukraine’s imports for a few days, many assumed that it was part of just another trade war with geopolitical connotations. Initially this was true. Russia struggled to prevent a binding contractual relationship between Ukraine and the EU (the AA), which, besides anchoring Ukraine strongly in the European economic and normative space, would spell the end to Russia’s efforts to lure Ukraine into the Customs Union (CU) and later its successor the Eurasian Economic Union (EEU). What Ukraine hoped was that it could participate in both the Commonwealth of Independent States Free Trade Area (CIS FTA) and Deep and the Comprehensive Free Trade Area with the EU (DCFTA).
Contrary to Russia’s accusations, the EU DCFTA does not rule out closer trade relations between Ukraine and Russia within the CIS FTA. It was rather the Kremlin that framed relations in zero-sum terms by trying to force Ukraine to give up on the AA and join its CU, a move that would make the EU-Ukraine DCFTA impossible, as Ukraine would have to apply the common customs tariffs agreed inside the CU. Hiding behind economic arguments about how the DCFTA allegedly damages Russia, the Kremlin was pursuing a geopolitical agenda, namely to institutionalise its own sphere of influence. Thus in August 2013 it decided to give a preview of what might happen to Ukraine if it signed the AA.
After putting up some resistance, Yanukovych ditched the AA, a move that triggered protests at Maidan. This development introduced new players- Ukraine’s public-and shifted the conflict lines, pushing the governments in Kyiv and Moscow head to head against Ukrainian citizens and the political opposition. To sweeten the pill and prop up the Ukrainian government, the Kremlin provided gas discounts and lent $3 billion (out of $15 promised). The first instalment was thought to be enough to weather the winter and to encourage the government to quell the public protests. The authorities made several attempts to suppress the protests at Euromaidan, but these backfired, expanding the geography of unrest, increasing the number of protesters and the level of organisation (for example, Automaidan and Maidan Self Defence), but also changing the message. Repressive tactics on part of the government brought to attention the failings of the political regime, channelling protest against corruption, unaccountability and suppression of basic freedoms. Thus, what initially began as a pro-European rally evolved into openly antigovernmental dissent, with a rapidly increasing number of non-governmental players involved on both sides. As volunteers were patrolling Euromaidan to protect its perimeter, the government relied heavily on paid hooligans (the so-called Titushki) to intimidate protesters and decapitate its leadership. Statues to Lenin were brought down across Ukraine (almost 300 in February alone), a phenomena called Leninopad (in translation “Leninfalls”), and in December, Russia launched its first salvoes in the information war that would expand in the coming month. To delegitimise Euromaidan, Russian officials and TV would portray protesters as far right, Banderovtsy, neoNazis, fascists, and extremist nationalists, to mention just a few labels.
When Euromaidan prevailed in late February 2014, and Yanukovych fled Kyiv, Russia opened new fronts in Crimea and later in eastern Ukraine to “protect” Russian speakers.
What began as trade war with a geopolitical agenda attached evolved into a special operation to annex Crimea and launch hybrid warfare in eastern Ukraine, which subsequently turned into a conventional military conflict. Apparently, the Kremlin decided that if it cannot keep Ukraine in its sphere of interests through the corruption of elites, it would simply subdue the country via military siege, internal destabilisation and sharper economic measures. The Kremlin decided to blow up the house in order to erect as many obstacles as possible on Ukraine’s fragile European path. By substantially raising the costs of Ukraine’s financial rescue package, Russia also sought to deter the West from putting too much effort into helping Ukraine. At the same time, the Kremlin wanted Ukraine to understand that only Russia could extinguish the conflict and bring back peace, which would happen only if the new authorities in Kyiv gave up their European path.
Russia introduced new players to the conflict. These were a motley crew composed of regular Russian military forces (without insignia) and security services, defected Ukrainian policemen and special forces units (such as Berkut), criminal networks and oligarchs connected to the Yanukovych regime, Russian volunteers, and Cossacks. On the Ukrainian side, a new government emerged in February, a new president was elected in May, and in the meantime battalions of the National Guard formed. The conflict became territorial, with the Kremlin annexing Crimea and seizing control of parts of the Donbas region. The information war, appealing to historical memories, then escalated as Russia introduced into the discourse elements of “historical justice” (annexing Crimea), “historical right” (for Novorossiya) or “historical illegality” (the dissolution of the Soviet Union). In Crimea almost no shots were fired, but in eastern Ukraine the conflict descended into a bloody military affair, which, has so far resulted in nearly 5,000 deaths and more than half a million internally displaced people.
On the legal battlefield, Russian Investigative Committees opened criminal cases against Ukrainian officials for allegedly committing “war crimes.” The businesses of some Ukrainian oligarchs in Russia, for example, Ihor Kolomoisky, were raided. Ukraine reciprocated by launching investigations against Russian officials. On the economic front, Gazprom cancelled the discount offered to Ukraine under Yanukovych and shut down gas supplies to Ukraine, although deliveries resumed in early December. It was the longest cut off that Gazprom had applied to Ukraine in 20 years. Russian state agencies also harassed Ukraine throughout 2014, introducing embargoes on meat, milk, cheese, vegetables and alcohol. Russia tried to close the entire Customs Union market for Ukrainian products by pushing for embargoes within the Eurasian Economic Commission, while the government in Kyiv compiled a list of 172 individuals and 65 Russian companies against whom Ukraine might introduce restrictive measures.
Beware of What You Wish For
The multi-layered conflict has caused multiple outcomes, and many of these are just the opposite of what Russia initially craved. Even relative gains for the Kremlin, namely the annexation of Crimea, promise to turn into a headache in the medium and long term.
The European integration battlefront. The Kremlin began the conflict to prevent Ukraine from signing the AA in November 2013. Nevertheless, the document was signed in two stages, the political part in March 2014, and the economic one in June of that year. In September, the Ukrainian Rada and the European Parliament simultaneously ratified the AA. Out of 28 EU Member States, nine completed their national procedures of ratification by early December. The only concession the Kremlin got as a result of trilateral talks between the EU, Russia and Ukraine was a one year delay in the full implementation of the DCFTA provisions. In exchange, the EU extended the regime of autonomous trade preferences for Ukraine for the duration of the DCFTA’s suspension. In the meantime, the Russian government passed a decision to impose customs tariffs on Ukrainian products in the event that Kyiv began DCFTA implementation before 2016. Russia will also insist on amendments to the AA. After the delay, Russia is likely to sabotage DCFTA implementation, exerting economic and military pressure on Ukraine. However, the goal of dragging Ukraine into the CU/EEU is less attainable than before, not the least due to public opinion in Ukraine.
Identity mutations. The “identity mutation” of the Ukrainian population is another less than favourable outcome for Russia. Ukrainians (re)discovered Ukraine-ness a fact reflected in the massive display of national flags in public and private spaces, collective intonation of the national anthem, and changes in fashion preferences, which often include traditional national elements (for example, Vyshivankas). Ukrainians also donated money via text messages for the Ministry of Defence ($10.5 million by June 2014) and collected funds to equip local battalions of the National Guard. Identity changes reached as far as consumption patterns. According to some estimates, Russian products sales in Ukraine dropped between 25% and 40% in 2014, which forced retailers across Ukraine to give up on Russian products. Overall, the conflict with Russia boosted popular support for an independent unitary Ukrainian state and strengthened the Euro-Atlantic orientation of Ukraine. Between March and September 2014, support for a unitary state climbed from 64% to 75%. At the same time, the number of supporters of federalisation (an idea posited by the Kremlin) dropped from 10% to 5%. Support for EU membership soared from 42% in September 2013 to 59% in September 2014, whilst the ranks of CU sympathisers deflated by 20% for the same period. However, the most dramatic changes in public opinion related to the divisive issue of NATO membership. If in previous years support for NATO had fluctuated at around 20%, and opposition at approximately 30%, in September 2014 the majority of Ukrainians expressed support for NATO membership (52%), with 19% against.
For many Russian-speaking Ukrainians, military escalation of the conflict was an eye opening event that would redefine their national consciousness too. In the first place, 89% in the south and 78% in east dot not support Russia’s decision to send the army to protect Russian-speakers in Ukraine. To make this point more clear, 79% of Russian-speakers in Ukraine do not need Russian army protection. Asked whether they are proud to be Ukrainian citizens, overwhelming majorities in the south (77%) and east (65%) replied affirmatively. Thus, identity transformations touched eastern and southern Ukraine as well, slowly narrowing regional divisions within the country, and reducing the space for Russia to capitalise on society’s polarisation.
Promise of political change. There is no promise of political change in Russia. Conflict with Ukraine consolidated the authoritarian features of the Russian political system, raising patriotic feelings and uniting society behind the head of state. President Vladimir Putin’s high approval ratings (above 80%), T-shirts and chocolate with his portraits, initiatives to name streets after him, and the celebration of his birthday, are worrying signs of an evolving cult of personality with extremely dangerous consequences for the country in the long run. As Vyacheslav Volodin, the Russian president’s deputy chief of staff laconically summarised: “there is no Russia today if there is no Putin.” In the case of Ukraine, a clear pro-European majority was generated in parliament as the October elections results demonstrated. To some extent, the non-participation of the conservative electorate from Crimea and partially from Donbas amplified the success of the pro-European parties. In Ukrainian politics, new faces appeared, thus sparking a rotation of elites. For instance, out of 423 elected MPs in the Rada, 242 MPs are serving their first terms. Among them are former journalists, civic activist who participated at Euromaidan, and former combatants from eastern Ukraine. A substantial reset in political power in Ukraine is thus possible, especially if the lustration process of the public administration succeeds.
Absorbing economic shocks. The Russian-Ukrainian conflict undermined economic growth in both countries. Russia slipped to near stagnation, declining from 1.3% growth in 2013 to a projected 0.7% in 2014. Ukraine was hit harder, falling from 1.9% in 2013 to an estimated -8% by the end of 2014. Inflation in Ukraine was set to exceed 20% in 2014. Sanctions and Russia’s self-defeating food embargo against the West rather accentuated the existing economic problems. The Russian stock exchange lost nearly 45% in 2014 (its capitalisation falling to below that of Google alone), capital flight reached $85 billion by October, whilst inflation surpassed 10% in December against the target of 5-6%, with prospects of a further surge. Both national currencies lost substantially in value against the United States dollar, the ruble was down 50%, and the hryvna fell 83%. Russia’s trade restrictions and gas cut-off forced Ukraine to look for alternative markets and sources of energy. In parallel, the EU lifted customs duties on most imports from Ukraine in April 2014. As a result, Ukraine’s exports to Russia in the first seven months fell by 27% ($2.7 billion), while to the EU they rose by 14% ($1.3 billion). Russia’s share in Ukraine’s exports declined to 20%, while the EU’s share climbed to 33%. If Russia continues to restrict access to its market to Ukraine’s producers, it risks depriving itself of an important lever in relations with Kyiv.
The situation remained difficult in the energy sector. Ukraine’s domestic production lost 1.7 billion cubic metres of gas extracted in Crimea (in 2013). Together with the peninsula itself, 44 oil and gas deposits were lost to Russia, as well rich hydrocarbon reserves on its shelf, which had been eyed by world energy giants, including Shell and ExxonMobil. On the bright side, the crisis facilitated negotiations and the actual implementation of gas reverse supplies through Slovakia from September 2014. In its first stage, the pipeline will deliver 3 bcm annually. In 2015 it is expected to reach a capacity of 10 bcm per year. Ukraine also reduced gas consumption by almost 17% compared to the previous 9 months (an equivalent of approximately 6 bcm). In 2013 Gazprom exported 25 bcm to Ukraine. However, suspension of deliveries and gas reverse supply throughout Europe diminished Gazprom’s share in Ukraine’s 2014 gas imports, from 52% to 34% (14.5 bcm). Nevertheless, in the short term, Ukraine will not be able to totally replace Russian pipeline gas. Still, if the Ukrainian government continues its energy diversification strategy it will undermine the instrument with which Russia corrupted the Ukrainian elites and ultimately hampered state-building in Ukraine. However, the perverse effect of Ukraine’s effective economic “de-leveraging” strategy in bilateral relations with Russia could be an increase in the Kremlin’s reliance on the use of military force in Ukraine.
Strategic and military stakes. There are several strategic and military outcomes of the crisis. By annexing Crimea, Russia illegally solved the issue of military basing rights for its Black Sea Fleet. No more quarrels with Kyiv about terms and rent. By unilaterally denouncing agreements that had regulated the presence of the Russian fleet on the territory of Ukraine, Moscow has demonstrated that it does not consider itself bound by bilateral treaties. Russia announced plans to introduce up to 30 different classes of military vessels by 2020, including between six and eight non-nuclear submarines. On the ground, Russia plans to create a self-sustained battle group in Crimea, including infantry, artillery, air force (long-range strategic TU-22 bombers) and air defence units (S-300 and S-400 launchers). Russian experts expect the Russian government to pick up a $30 billion bill for its military designs in Crimea. A substantially, beefed up military presence will represent a constant threat for Ukraine’s Black and Azov Sea coastal regions.
Through the seizure of the peninsula, Russia regained control over the Kerch Strait. Thus, Ukraine’s maritime communication in and out of Azov is now at Russia’s mercy. However, vulnerability is mutual. Vital fresh water supplies (close to 90%), electricity (80%), food (90%) and tourists (approximately 70% before the annexation) to Crimea come from continental Ukraine. Since there is no terrestrial link between Russia and Crimea, the former might try to acquire a land bridge to the peninsula by occupying Ukraine’s Azov Sea coast. The shortest ferry communication route with Russia (Krasnodar Krai) across the Kerch Strait can hardly satisfy transport needs. Ferries are often suspended during foggy weather and during the winter. These structural dependencies cannot be undone in the short term. Crimea will require substantial federal investments as the region is not financially self-sustainable, while sanctions deter not only foreign investors but also big Russian companies that do not want to be blacklisted for operating businesses on the peninsula. The Russian state plans to allocate around $18 billion until 2020 for Crimea’s development. However, reality bites-short of cash and on the edge of recession, Russia will struggle to find the funds to fulfil its economic and military plans in Crimea. Besides financial problems, Moscow inherited a largely pro-Ukrainian Tatar minority in Crimea, who represent a potentially ticking time bomb.
In eastern Ukraine, despite ceasefire, hostilities take place randomly. Ukraine has no control over more than 400 km of its border with Russia, or of close to 4% of its continental territory. At the same time, Russian troops and pro-Russian militias occupy the two biggest cities in the region (Donetsk and Luhansk), and parts of Donbas, including the short strip on the Azov Sea. The Ukrainian government took several measures that locked the sides into a shaky status quo. It conducted a partial mobilisation, increased defence spending (to climb to 3% of GDP in 2015), cut military cooperation with Russia, turned to the local defence industry to produce equipment for the army, and began fortifying the border with Russia and along the contact line in Donbas. It looks like the post-Soviet region is about to have another “frozen conflict;” Transnistria is often given as a reference point for the situation in Donbas.
Yet, although there is some resemblance between the two, several factors speak against a “frozen conflict” scenario in Donbas. Unlike in Transnistria there is no natural barrier (the Nistru River) to separate the sides along the front line. The problematic spots in the Transnistrian conflict are exactly those areas where the conflicting sides cohabitate next to each over (for example, Tighina), as they do in Donbas across a much longer distance. In Transnistria “red directors” and former Communist Party apparatchiks seized power, interested in avoiding inter-factional fighting, a rapid stabilisation of situation, and resumption of industrial activities. Transnistria sought to demonstrate that it is more prosperous than Moldova was at that time, and not least for this reason deserves its own statehood. The leadership in Donbas is composed of “entrepreneurs of violence” who prosper and will be able to hold onto power as long as the fighting is going on. Moreover, local “warlords” often fight with each other for booty and power on the local level. Their attitude towards local business and industry is predatory rather than managerial. Last but not least, back in the early 1990s Moscow instrumentalised the Transnistrian conflict in order to keep its influence on Moldova at a low cost, until Russia could rise from its knees. In 2014, the Kremlin was in a more combative mood and saw the conflict as an opportunity to reshape the post-Soviet order. Russia’s aim in Donbas is to keep the conflict burning in order to exhaust Ukraine’s economy, defocus the government from reforms, and intimidate other postSoviet states, in particular those hosting so-called “frozen conflicts.”
Warming-up the “Frozen Conflicts”
The Transnistrian conflict has served Russia well by holding Moldova back and supporting the persistence of the regime in Tiraspol. Moscow worked with some success to co-opt Ukraine into this game.
By ratcheting up tensions around Transnistria, Moscow sought to amplify disarray in Ukraine and punish the stubbornly pro-European Moldovan government. Russia bases between 1,500 and 2,000 military personnel in the separatist region, whilst Transnistrian armed forces and security structures encompass around 10,000 on active duty. It can mobilise at least a further 20,000 in the event of conflict. When Moscow launched destabilisation operations in eastern Ukraine from Crimea, it was expected that Transnistria, only two hours’ drive from Odessa, would be used as a springboard for similar operations in Ukraine’s south. Street clashes in early May in Odessa, provoked by pro-Russian groups, were planned to create such a situation. In the event of Ukraine failing to reinforce its military presence along the Moldovan border (on the 453 km long Transnistrian segment), and in the scenario of Odessa descending into chaos, an undercover military invasion from the breakaway region across a porous frontier (as a part of simultaneous offensive from Crimea and Russia) would be possible.
Ukraine’s decision to fortify its border (including digging a 3.5 metre wide ditch) and ensure stricter traffic controls along the border with Transnistria in the spring and summer of 2014 prevented the worst case scenario from emerging. Kyiv also visibly shifted its position on the conflict resolution process by joining the EU’s visa restriction regime (suspended since 2010) against the former Transnistrian leadership and effectively preventing the current separatist leader from flying to Moscow via Odessa (forcing him to use Chisinau airport). Russia will keep on spoiling activities in this area to drain Ukraine’s thin military resources, which are in demand in eastern Ukraine. Military drills in Transnistria, attempts to smuggle in Ukraine weapons, recycling of former Transnistrian leaders in Donbas (for example, Vladimir Antiufeev, the former head of the security service), as well as elements of information warfare (such as information on separatists flags displayed on administrative buildings in the south) are indicative in this sense.
Besides such security threats for Ukraine emerging from Transnistria, Moldova found itself in a tricky situation too. Since 2013, Russia has warned that European integration might result in an even smaller Moldova. In the aftermath of the annexation of Crimea, the Transnistrian “parliament” appealed to the Russian leadership to recognise its independence and facilitate unification with Russia. Later, a special representative of the Russian president in Crimea pledged that, ultimately, Transnistria will be part of Russia too. In March 2014, Moscow resumed its accusation of there being a blockade against Transnistria, which was clearly refuted by trade statistics (exports in the first nine months of 2014 were up 48%) and data on border crossings (the entry refusal rate was just 1.2% in March). Transnistrian military forces conducted several exercises, which included assembling portable bridges across the river. Meanwhile, the Russian military contingent in Transnistria doubled its number of exercises. Such developments were making the scenario of military escalation more plausible than before. After a long break, between April and August, Moldova’s armed forces organised consecutive military exercises to test their combat readiness and hardware. As Ukraine stiffened its resistance in the east, the risk of military clashes in Transnistria temporarily abated as well. However, it is not clear how long Russia will cling to its formal position of respecting Moldova’s territorial integrity if Chisinau increases the pace of European integration.
Crisis in Ukraine has not passed unnoticed in the other conflict-ridden regions of the post-Soviet world. The South Ossetian leadership revived the idea of holding a referendum on unification with North Ossetia. At about the same time, the “president” of Abkhazia, Alexander Ankvab, was ousted in a shallow imitation of Euromaidan. Russia has not put in much effort to defend the Abkhaz leader, instead backing Raul Khadzhimba, who ran on the Russian card twice in the elections of 2011 (when he lost to Ankvab) and 2004 (when he was beaten by Sergey Bagapsh). In his third attempt, in August 2014, Khadzhimba won. Moscow refrained from answering South Ossetian calls for a unification referendum, but approached Tskhinvali and Sokhumi with new bilateral “inter-state” agreements that would liquidate, step by step, the remaining features (such as customs controls, law-enforcement bodies, and the army) of the de facto statehood of South Ossetia and Abkhazia. If for South Ossetia the offer was less than it expected, for Abkhazia it was more than it wanted from its relations with Russia. Thus, Sukhumi sent to Moscow a revised version of the treaty, which defends those elements of de facto statehood that Russia sought to dissolve over time. After partially accepting the amendments to the draft, Moscow pushed Sukhumi to sign the document, which would remain in force for ten years, provoking public rallies in Abkhazia. New security developments in the region raised concerns for the government in Tbilisi too. In July the Ministry of Defence asked the government for an 11% budget increase in 2015. Georgia doubled its diplomatic efforts to secure arms deliveries from the U.S. to enhance its self defence in a very uncertain environment.
Elites in Nagorno-Karabakh welcomed the annexation of Crimea, considering it as useful a precedent for conflict resolution in the South Caucasus. However, such enthusiasm did not last long. Exactly 20 years since the self-enforced ceasefire was agreed, Armenia and Azerbaijan engaged in intensive violence along the “contact line” that separates the two sides and far beyond it. Skirmishes and sniper shootings before had previously produced 20-30 casualties annually on the frontline, but between January and August 2014 alone both sides would incur a total of 60 fatalities, with 30 deaths inflicted during late July and early August, when the most intensive fighting took place. Unlike in previous years, the conflicting parties used heavy weaponry and more advanced means of reconnaissance. The escalation culminated in November with the shooting down of an Armenian MI-24 helicopter, an incident without precedent since major hostilities had been suspended in 1994. Both sides traded accusations of blame for this new wave of violence. However, renewed hostilities beyond the routine probing of each other’s offensive/defensive capabilities served for both sides as a barometer of how Russia would react to a significant escalation of the Nagorno-Karabakh conflict. In August, the Kremlin mediated high level talks between Azerbaijan and Armenia at Sochi to cool off tensions. However, as the helicopter incident and Armenia’s swift pledge to deliver a painful response later proved, the diplomatic efforts were to little avail. The risk of low scale hostilities in Nagorno-Karabakh turning into full blown war remains high. In sum, should a major conflict emerge in the South Caucasus while fighting is still going on in Ukraine, it would bring even more disorder to the post-Soviet region.
Vaccine against Destabilisation
Russia has tried to steer tensions or destabilise situations beyond the stage of “frozen conflicts.” In this respect, the Russian strategy was linked to national minorities, forthcoming elections or leadership succession issues in the post-Soviet states.
In Moldova, Moscow cultivated the Gagauz minority (approximately 130,000), living compactly in the south of the country, to rise against the central authorities in Chisinau. To this end, Russia provided political and financial support for an illegal plebiscite in Gagauzia, held in February 2014. Local authorities asked the population to choose between two integration options, European or Eurasian. As Chisinau closed official channels for funding the “referendum,” money for this enterprise was dully provided by a Russian businessman of Moldovan origin. In parallel, Russia, in partnership with local power representatives in Gagauzia, recruited and trained young people in diversionist tactics at specialised facilities in the suburbs of Moscow and Rostov. Those detained by Moldovan law enforcement bodies and sentenced in the summer of 2014 confessed that 100 people were supposed to undergo training in Russia. Besides destabilising the situation in Gagauzia, small cells had as a task to organise unrest ahead of the parliamentary elections in Moldova, held in November. More arrests came in mid-November, when the Moldovan intelligence service detained two Russian and four Ukrainian citizens connected to the radical left association Borotba (involved in the unrest in Kharkiv and Odessa in the spring of 2014) and Russia’s Left Front. The security service also detained local members of the anti-fascist movement “Antifa,” linked to the League of Russian Youth in Moldova, which is supported by the Russian embassy in Chisinau. During searches police discovered arms and munitions. All those mentioned above were detained on suspicion of planning to provoke public disorder or illegal involvement in the electoral campaign.
The Kremlin also relied on the links between pro-Russian parties in Moldova, for example the Socialist Party of Moldova, and Russian TV channels. In their broadcasting, Russian channels reconfirmed Moscow’s interpretation of events in Ukraine, and criticised the government for signing the AA. In July, the Socialist Party, in partnership with “Antifa” tried to mobilise farmers’ anti-governmental protests as Russia imposed an embargo on Moldovan fruits. Russian TV was keen to portray the small staged protests as the beginnings of a massive wave that would sweep over the entire country. In response, the Moldovan broadcasting authority suspended Rossyia 24 from airing until January 2015, and fined four local TV stations that retransmitted Russian news bulletins. In the summer, Moldovan intelligence services mapped national security risks revealing that more than 100 organisations, movements, parties or mass media outlets in Moldova undermined Moldova’s statehood in one way or another.
Russia’s formal allies in the Collective Security Treaty Organisation (CSTO), and partners in the EEU, were not spared by the Kremlin. As Russia was extending an arc of instability in Ukraine in the spring, it pushed Minsk to organise military manoeuvres along the border between Belarus and Ukraine. The Kremlin also insisted that Belarus join the trade restrictions against Ukraine. To make its ally more compliant, the Kremlin tried to re-activate pro-Russian organisation cells in Belarus ahead of the 9 May celebrations, which coincided with the opening of the Hockey World Cup tournament in Minsk.
President Alexander Lukashenko engaged in a delicate balancing game, by adopting half measures to satisfy both sides. For instance, on the one hand, Belarus gave the green light to the deployment of six Russian SU-27 jets at the Baranovych air base, in a response to an alleged increase in NATO’s presence nearby. On the other hand, Belarus raised the level of its oil export products to Ukraine, which were in high demand by the army in Donbas. Minsk instituted some trade restrictions against Ukraine (for example, candy) only to agree to withhold them as a part of mutually advantageous solution with Kyiv in the summer.
Lukashenko used the moment to invest in Belarusian nationalism and assume a leading role in this process. For example, he gave an address to parliament in the Belarusian language, met representatives of the Union of Writers, and tolerated a pro-independence manifestation in Minsk (the first since 2011) commemorating the short-lived 1919 republic. Visible success for Belarus was reaped when it hosted the talks between Russia, the EU and Ukraine in Minsk. As a result, in spite of the delicate situation, Lukashenko was able to extract palpable advantageous ahead of the elections in 2015, lifting his electoral rating by 10%. But stability in Belarus is fragile as economic recovery proceeds slowly and very much depends on economic developments in Russia.
Before and in the aftermath of the annexation of Crimea, several Russian politicians and officials raised territorial claims regarding Kazakhstan, which is home to almost four million ethnic Russian, meaning 23.7% of the population, concentrated mainly in the north, east and west of the country, along the border with Russia. First, MP Vladimir Zhirinovski, leader of the populist Liberal Democratic Party, suggested that Kazakhstan should become part of a Russian “Central Asian Federal Region,” and that the capital should be switched back to Almaty and then renamed “Verny”-the old Russian name of the city. This was followed by statement from Vladimir Shtygashev, head of the local legislative of the Khakassia Republic and leader of the regional branch of the governing party Yedinaya Rossiya, in which he laid claim to parts of Kazakhstan that had allegedly been transferred under Soviet power from the Russian Federation. However, the biggest blow came from the top. Speaking to young people at the Seliger camp in August, Putin, while praising the leader of Kazakhstan and his health (president Nazarbayev turned 74 in 2014), claimed that there was no Kazakh statehood at all before 1991. Moreover, the Russian president placed Kazakhstan in the “Russian world”-an ideological formula used to demark Russia’s sphere of influence in the post-Soviet region. Shortly after, Russian armed forces conducted large military exercises near the Kazakh border, involving 4,000 personnel and heavy weaponry.
Russia’s changing of the rules of the game in the region alarmed Kazakh elites. The annexation of Crimea resurrected long-standing fears in Astana about the potential use of ethnic Russians in combination with TV propaganda to detach parts of Kazakhstan. After all, the majority (64%) in Kazakhstan supported Russia’s moves in Ukraine.
The declarations of Russian officials also feed into anxieties to do with succession. The Russian minority perceives Nazarbayev as guarantor of their rights, but “Will they still be loyal citizens when Nazarbayev is gone?” asks a leading Kazakh expert. The seriousness of this situation was confirmed by the president himself, who forecast stormy times in world politics and has not ruled out the dissolution of states unfit to sustain competition. Astana took several measures to pre-empt a Crimean scenario. As a reminder to Moscow, Nazarbayev announced celebrations to mark 550 years of Kazakh statehood. The government also raised sanctions against calls challenging the country’s territorial integrity, blocked access to websites recruiting volunteers to fight in Donbas, punished those who fought on side of pro-Russian militias in Ukraine, and mulled over plans to attract more ethnic Kazakhs living overseas by facilitating passport distribution. However, the most important measures to preserve social peace targeted the country’s economy.
Sinking Economic Boat
Military conflict and the consequent slowdown of the two biggest economies in the post-Soviet area have generated a negative spillover throughout the region. Geopolitical risks have scared off investors, with many opting to sit on the fence until the Russian-Ukrainian crisis is over. Russia is an important investor in the region. Short of cash, and with access to Western financial markets cut off, its investments in the post-Soviet world will probably decline. The Kremlin will pour money into its own banks and companies to save them. Russian external corporate debt in 2014 surpassed $650 billion. In 2015 Russian companies should pay back around $135 billion. A contraction of consumption in Russia and Ukraine reduced demand for imports from post-Soviet countries; in the first six months of 2014 (before the Russian embargo on fruit), Moldova’s exports to Russia dived by 29%, and to Ukraine by 14%. Georgia’s wine exports to Ukraine slumped by around 30%. Other countries, however, seized on this opportunity. In the food sector, Belarus and Kazakhstan took advantage of the situation to capture a bigger share of the Russian meat and dairy produce market following Moscow’s import ban against the West. However, an increase of food exports going to Russia might have unintended consequences for both sides. Potential domestic shortages will drive prices and inflation up. At the same time, Moscow is likely to punish its partners for taking advantage of the common customs area and re-exporting banned products (from the EU or Moldova) to Russia. For instance, in November Russia introduced a ban on food transit from Belarus to Kazakhstan, and conducted selective border checks in order to enforce it. In turn, reinstating controls for products transiting Russia from Belarus to Kazakhstan will undermine the Customs Union as such.
Economic slowdown in Russia and Ukraine, and the devaluation of their currencies, are set to reduce the volume and of remittances. Tajikistan, Kyrgyzstan and Armenia are highly vulnerable in this regard, owing to their reliance on remittances from Russia, and to some extent from Ukraine too (case of Armenia). For instance, transfers from Russia to Armenia declined three months in row: in June by 4.6%, in July by 6.6%, and in August by 7.7%. Downward dynamics have also been registered in the cases of Tajikistan and Kyrgyzstan. In October, remittances from Russia to Georgia dived by 15%. While Moldova and Georgia rely heavily on cash inflows from workers in Russia (68% and 51% respectively), both can still soften the impact of a potential decline in transfers from the east by remittances coming in hard currency from the wider diaspora spread around the world (for example in Europe, the U.S. and Israel). To various degrees, remittances contribute to social peace in the post-Soviet republics by keeping unemployment relatively low, helping many households to pay bills, and stimulating domestic consumption, which drives economic growth. The share of remittances in national GDPs is 52% for Tajikistan, 31% for Kyrgyzstan, 25% for Moldova and 21% for Armenia. Thus, significant drops in remittances will not only shrink economic growth in countries of destination, but could pose risks of social outbursts and disorder. The IMF estimates that the economic growth of Armenia, Kyrgyzstan and Tajikistan could have slowed down in 2014 by 1%, partially due to fewer money transfers coming in from Russia. At the same time, hydrocarbon producers such as Azerbaijan, Turkmenistan, Kazakhstan and Uzbekistan, are, also according to the IMF survey, much better positioned to weather the negative spillover from Russia’s economic underperformance.
The Russian-Ukrainian conflict has caused trouble in the energy sector. Experiencing a shortage of gas and coal, Ukraine cut electricity exports to Belarus in October, and then to Moldova in November. Deliveries of coal from Ukraine to Moldova have also diminished substantially. The dispute between Gazprom and Naftogaz, although provisionally solved, may leave Moldova, which receives 100% of its gas from Russia via Ukraine, a collateral victim in the event that the sides do not stick to the agreement, or if fighting resumes on bigger scale in eastern Ukraine.
Economic turbulence generated or amplified by the Russian-Ukrainian crisis has prompted various “survival strategies” in the post-Soviet area. Oil-rich Kazakhstan pledged to use its National Fund to cushion the effects of economic slowdown. President Nazarbayev, in an extraordinary address to the people, unveiled a stimulus plan totalling $9 billion for the period 2015-2017. Astana also sought closer economic relations with Europe by concluding, after four years of negotiations, its Enhanced Partnership and Cooperation Agreement with the EU.
Belarus, not without some success, sought to extract more subsidies from Russia in return for signing and ratifying the EEU treaty. At the same time, Minsk courted the EU and the U.S. in order to get some relief from the pressure of sanctions and expand economic ties with the West. In May, Belarus held a first round of consultations with the EU on modernisation issues. Moldova’s exports to the EU rose by 15% in the first nine months of 2014, and in consequence Romania displaced Russia as Chisinau’s main trading partner. In the second half of 2014, Moldova became the biggest exporter of apples to Ukraine, with a 56% share of market. Chisinau also signed an FTA with Turkey, discussed the prospect of an FTA with China, and sought new markets for its fruit and wine in the Middle East, Asia and North America. Meanwhile, Kyrgyzstan deepened its dependence on Russia. Following in the footsteps of Belarus, Bishkek obtained financial assistance from Russia in exchange for accelerating the process of accession to the CU. While signing the DCFTA with the EU, Georgia stayed on a pragmatic course regarding Russia, and worked to enlarge access to the Russian market for its wines, mineral water and agriculture products. As Georgia strived to regain a share of the Russian market, the Kremlin was quietly rebuilding trade leverage against Tbilisi.
While economic crisis in Russia gathers pace under the pressure of low oil prices and the accumulating effects of Western sanctions, post-Soviet states might import more economic pain, which in turn will require further readjustments in economic policy.
Conclusions
Overall, Russia’s actions in Ukraine and across the region in 2014 challenged the post-Soviet order that had existed for two decades.
If Ukraine gives up more land it is likely to encourage Russia to grab parts of territory elsewhere in the region. However, the failure of Russia’s revisionist agenda in Ukraine might actually stymie the Kremlin’s offensive mood and thus prevent further border changes. What is certain is that, without Ukraine, the EEU will remain an economic pygmy, and consequently Russia’s goal to secure its sphere of influence will be incomplete. Ukraine is also important for the EU’s eastern policy. If Ukraine advances on a path of European integration, a favourable setting for other euro-enthusiasts in the region could be assured. The most important impact of a modern, democratic and stable Ukraine will be its effects on Russia, where 41% of the population consider that there is deficit of free and fair elections, while 35% decry the unaccountability of government. Ukraine’s example of regular free elections and increasing accountability of government could be dangerous for Russia’s authoritarian regime and its elites. Alternatively, Ukraine might squander this new chance for reforms, as it did after the “Orange Revolution,” but this time with far higher costs. Ukraine is more vulnerable economically than it was in 2004, and the regional setting is less favourable than it was ten years ago. With the Kremlin ready to take advantage of any mistakes, the country might not survive another massive transformative failure. Any reform fiascos and consequent social and economic disarray in Ukraine will only amplify the magnitude of regional turbulence triggered by Russia’s annexation of Crimea.