Donbass nationalises Ukrainian enterprises: what's behind?
Donetsk and Lugansk People's Republics take Ukrainian enterprises under control in response to Ukrainian coal blockade, further distancing themselves economically from Ukraine as they re-orient towards Russia.
With the coal blockade still underway, the Donetsk and Lugansk People’s Republics have acted on their threat and have effectively nationalised all remaining Ukrainian owned factories and economic facilities on their territories, though it is being described as a taking of the enterprises into ‘temporary administration’.
There is now also increasing talk of the two Republics re-orienting their trade even further towards Russia, with their coal exports and machinery being exported to Russia instead of Ukraine. Meanwhile the Russian rouble is already the de facto currency in both Republics.
If the intention of those behind the coal blockade was to strangle the two Republics economically, then what they have achieved in fact is simply to cause the two Republics to re-orient their economies even further towards Russia whilst causing further damage to the economy of Ukraine.
If the intention was instead to rally Western support behind Ukraine by talking up the nationalisation as a further act of ‘Russian aggression’, then those behind it should know that the Western media is barely reporting the story, and Donald Trump failed to mention Ukraine once in his speech to Congress.
The episode actually highlights an important truth about the Ukrainian crisis.
Though Russia is constantly accused in the West of seeking to sever the Donbass from Ukraine, Russia’s policy has in reality always been to preserve a constitutional link between the two People’s Republics and Ukraine. It is Ukraine which by refusing to talk to the leaders of the two Republics (as the Minsk Agreement requires it to do) and by its constant attacks on the two Republics, is driving them away.
This point has been made repeatedly by the Russians including by President Putin himself. He has for example repeatedly pointed out that Ukraine’s refusal to pay social security benefits to the people living i the territories of the two Republics is not merely a dereliction of its duty to its citizens and a clear violation of the agreements reached in Minsk in February 2015, but is also completely counter-productive since it severs these people’s connection to Ukraine, making them feel less like Ukrainians. He is absolutely right and I understand that informal polls carried out amongst the people of the two Republics shows that most of them now think of themselves as Russians.
Putin has also pointed out that Russia never made this mistake in Chechnya, where it always paid social security payments to the people there, even when Chechnya was under secessionist control.
Ukraine is now demanding that the US and EU impose sanctions on anyone benefitting from the two Republics’ “seizure” of Ukrainian property.
Whether the US and EU will be in any mood to agree to this remains to be seen. They may feel they have to given that that is what they have done in relation to the “seizure” of Ukrainian property in Crimea, and would be inconsistent for them now to refuse to do the same.
If so they will be quietly furious at put in a position where they are being forced to do something because they have been manoeuvred into doing it because of a crisis Ukraine itself has created, all the more so because they now know that any further sanctions they impose will be completely ineffective.
Germany’s new foreign minister Sigmar Gabriel – an SPD politician with a record of wanting better relations with Russia – is now flying to Kiev to meet Ukraine’s leaders. It could be an uncomfortable discussion.