The Conflict in Ukraine Causes and Consequences Mikhail A. Molchanov, Ph.D. Professor, St. Thomas University, Canada

Where is Ukraine? ... 2

… in europe and eurasia Ukraine in Europe Ukraine in Eurasia 3

… in the former USSR 4

Ethno-linguistic divisions In 1991: 11.35 mln strong Rus. diaspora in Ukraine (22.1% of the pop.) and 4.36 mln strong Ukr. diaspora in Russia. Constitution: one state language (Ukr.). Ukrainization campaign: in 1994-95, >500 Rus. schools closed. In 1996-98, the share of students educated in Russian schools went down from 41 to 36 percent nationally, decreasing by 10-12% in the mostly Russophone oblasti of the East. Throughout the West and the Center, at the end of the 2-year period there were 1.6-1.8 times less Russian-educated schoolchildren than it was at the beginning. By 1998, not a single kindergarten or a daycare facility continued using Russian in Kiev or in eight westernmost provinces of the country. By 1999, the number of Russian schools in Ukraine was cut by more than 1/3 against the year 1991/92, which prompted minority protests to the Council of Europe. As many as 82 % of the Russian population in the West and 42 percent in the South-West reported witnessing ethnic enmity in day-to-day situations. 5

the unrecognized majority language Ukrainophone Ukrainians ~44% Russophone Ukrainians ~30% Russophone Russians ~20 % Ukrainophone Russians ~0.5% others 0.5% (Russo- and Ukrainophone Jews, Poles etc.). Source: KIIS, 1994-2004 omnibus polls In 1995, ethnic-based discrimination was reported by 15% of the Russian respondents. In 1992-97, 1.2 mln people emigrated to Russia to avoid it. This, plus ethnic reidentification resulted in 50% drop in the number of people reporting their nationality as “Russian,” from 22% in 1989 to 11% in 1997 (back to 18% in 2001 census). Autonomous rights of the Crimean Republic were curtailed, & the Crimean Presidency abolished in 1995, ex-President went into exile to Moscow. Half of the Russian TV programs phased out by mid-1990s. By the turn of the century, the number of Russian schools was cut by >1/3 nationally, and to the point of virtual extinction in the country’s western regions. In the city of Lviv, which used to boast 24 schools with Russian language instruction, only five remain today. Not a single Russian school survived in Ivano-Frankivsk, Kyiv, Rivne, Vinnytsia, Volyn, and Ternopil oblasti, where more than 170,000 Russian-speaking Ukrainians lived at the time of the last census. For the Cherkasy, Chernihiv, Chernivtsi and Khmelnytsky regions, with an average population of 1.0-1.3 million each, only one Russian-language school exists per region. Meanwhile, 30% of the pop., including 15% of ethnic Ukrainians reported their native lang. as Russian in the last census. 6

Political divide ELECTIONS 2004 ELECTIONS 2012/VR 7

REGIONAL DIVIDE - I 8

REGIONS REGIONAL DIVIDE - II What is your attitude to Yanukovych’s plans to: REGIONS Western Central Southern Eastern -- drop the idea of Ukraine joining NATO? 28.5 29.8 51.3 59.1 -- make Russian the second state language? 29 44.8 75.9 84.4 -- allow citizens of Ukraine to have dual citizenship? 35.8 45.4 69.3 71.5 Numbers indicate the percentage of the “agree” and “fully agree” answers. Source: V. Paniotto, 2005. 9

Regional integration struggles Focus on Russia Focus on Ukraine The CIS: “civilized divorce” or a new beginning? Eurasian Economic Community CSTO: a security community? RBK CU-CES-EAEU GUAM vs “Russian Four” “European” vs “Eurasian” identity “Colored revolutions” and GUAM-ODED “European choice” The role of the US, ENP RBK CU-2010, CES – since 2012, Eurasian Economic Union – since 2015 10

Economic interests 11

Current conflict I -- Maidan 21 November 2013 – 23 February 2014. 21 Nov – gov’t announces delay. EU Vilnius meeting: 28-29 Nov, attempts to disperse – 30 November. 12

Current conflict II – eastern revolt On 16 March, 97% of voters reportedly backed the proposal to join Russia. That figure was later disputed, with leaked documents showing only 60% support for the move. The EU and US condemned the annexation of Crimea and imposed a first round of sanctions on Russian officials and high-ranking Moscow allies in Ukraine. On 7 April protesters occupied government buildings in the eastern cities of Donetsk, Luhansk and Kharkiv. Although Kharkiv was retaken the following day, the occupations spread to other cities, and a number of pro-Russian leaders declared that referendums on granting greater autonomy to eastern regions would be held. On 11 May pro-Russian separatists in Donetsk and Luhansk declared independence after the referendums, which were not recognised by Kiev or the West. A build-up of Russian troops on the shared border in April sparked concern that another annexation could take place. Elections for a new president in Ukraine were held on 25 May resulting in Petro Poroshenko being elected with over 55% of the vote, although no polling stations were open in Donetsk city and several other locations. 13

Current conflict Iii – THE Russian threat With a government offensive including heavy artillery and bombardments of the cities, on 5 July rebels abandoned strongholds in the north of Donetsk region, withdrawing to a smaller area of insurgency in the south. Meanwhile, Russia amassed close to 40,000 troops on the borders with Ukraine, reduced to 18,000 by the end of the summer. 14

“antiterrorist operation” 6700 killed, 30,000 wounded, >1.2 mln refugees (800,000 to Russia, 400,000 to other Ukraine) 15

The threat of fascism 16

Russian narrative 17

Western narrative 18

Economic interdependence RF – the largest investor (Cyprus, Netherlands, RF) In 2011, RF took 30% of Ukraine’s total exports of goods (more than the whole of the EU) In 2014 – took 22% exports and provided ~ 30% imports Near 80% of oil and gas consumption are covered by imports (68–75% from RBK Customs Union) Russia absorbed 2/3 of Ukraine’s heavy machine-building exports and 1/2 of all of its machinery exports until 2014 19

ECONOMIC DECLINE Ukraine’s GDP (constant 2005 US$, bln) Source: The World Bank. 20

TRADE WITH THE EU 2008 2009 2010 2011 2012 2013 2014 2015* exports 22,384 12,539 16,039 21,396 20,688 20,159 20,383 8154.9 imports 32,783 18,488 22,004 28,642 29,675 30,970 24,208 9841.5 balance -10398 −5949 −5965 −7247 −8987 -10811 −3825 −1687 Ukraine’s foreign trade with EU-28 (goods and services; USD million). *Jan-August 2015 21

TRADE WITH RUSSIA 96 98 00 02 04 06 08 10 11 12 13 14 Exp. 38.1 31.3 30.8 29.0 23.8 24.9 27.6 24.3 29.5 28.0 26.3 20.3 Imp. 47.0 45.8 39.2 35.5 22.0 34.7 34.2 31.5 28.9 22.3 Total 41.0 38.5 30.0 23.3 32.2 32.7 29.8 27.7 21.3 Russia’s share in Ukraine’s foreign trade (goods and services; % age of the total) 22

THE “MAIDAN’S” AFTERMATH Eurasian Union Eurasian Community contributed to 4x growth in trade (2000-2008), RBK +11% (2011-2013) Ukraine desirable but Russia can do without it The road to EAEU is now closed European Union Ukraine’s riding of two horses was not helpful West represented the Eurasian Union as a “geopolitical project;” provoked a new cold war with Russia A “split country” (Huntington) forced to pick sides: a civil war The road to the EU is now closed No more than 15% of Ukraine’s exports destined for the EAEU before 2014 can be moved elsewhere. The expected annual revenue loss might reach $15 billion in lost trade alone. Suspension of Ukraine’s privileges under the CIS free trade agreement will cost an extra $3 billion a year. Bearing in mind that negative effects go beyond trade wars, and may include cessation of investments, gas price disputes and cut-offs in energy supplies, disruption of tourism and transportation links, reduction in labour migration and remittances to Ukraine and so on, the country may stand to lose up to $33 billion annually, or 19% of its 2013 GDP. 23

Between economics and geopolitics Regional integration should not be a zero-sum game for regional predominance Ukraine could have implemented its partnership with Europe in a way that would let the door open to trade cooperation with Russia and the EAEU Instead, Ukraine, “like a weathercock, changed foreign policy priorities” (Nazarbayev, 2014) Results: 20% slump in GDP in 2 years; war in the East; deindustrialization; corruption “№1 security threat;” living off IMF money; collapsing economically and politically; threat of default in 2016 Poroshenko’s Panama funds (hidden offshore investments); Yatsenyuk’s “first billion” 24