In Ukraine, blockade threatens to force issue at heart of civil war

Something very unusual is happening along the frozen line of contact between the Ukrainian Army and Russian-backed rebels in the Donbass, where almost three years of bitter fighting has killed about 10,000 people. More than 74,000 train cars laden with anthracite coal from the rebel regions and bound for Ukrainian power stations have been halted for the past month by armed men beyond the control of either side.

Backed by a coalition of oligarchs, nationalist militias, and opposition politicians, the aim of the blockade is apparently to compel a beleaguered President Poroshenko to abandon hopes of integrating the self-proclaimed republics of Donetsk and Luhansk back into Ukraine, as called for under the Minsk II agreements, and officially declare them "occupied territories" of Russia. By graphically drawing attention to the trade that has for three years seen billions of dollars worth of iron ore, coal, and finished steel products pass easily along the rails in both directions – even as armies were slaughtering each other – they are forcing the most painful issue at the heart of the civil war: Can Ukraine reintegrate itself economically and politically, perhaps on new terms, or is it doomed to break up? 

The blockade is fast precipitating a political and economic crisis that could conceivably bring Mr. Poroshenko down, or at least trigger early parliamentary elections that would almost certainly change the complexion of power in Kiev. A pivotal moment has suddenly arrived, without having been introduced through negotiations or any democratic political process, but because radicals have forced the issue. 

A dangerous slide

The growing tensions in Ukraine, which has seen a sharp spike in fighting over recent weeks, have so far been mostly ignored in Washington. But Europeans have started to take notice of Ukraine's dangerous slide into fresh crisis. Last week Ukrainian Prime Minister Volodymyr Groysman declared a state of emergency in the energy sector, and warned that 300,000 jobs were at risk and that the already weakened Ukrainian currency could nosedive if the blockade continues much longer.

"Ukraine cannot go on without Donbass coal," says Vadim Karasyov, director of the independent Institute of Global Strategies in Kiev. "Poroshenko opposes the blockade, because it's a serious blow against him personally and [his vision of the way forward in] Ukraine."

On Monday the leaders of the two rebel regions issued a statement declaring that if the blockade is not lifted by Wednesday morning, they will take control of the coal mines and steel mills on their territory, and sell their production to Russia instead.

"Effectively, the Donbass is separating itself from Ukraine economically. Now our coal and metal products will be exported to Russia," says Dmitry Posrednikov, deputy dean of Donetsk University, in the rebel region of Donetsk. "Unfortunately, we see that Ukrainian authorities don't want to have any political dialogue with the Donbass.... Psychologically, we are breaking away from Ukraine."

That may be just what the blockaders want. They insist that the ongoing trade between the two Ukraines should be declared treasonous, and that there be a complete break in any relations.

"The goal is to end our dependence [on Donbass coal], because it's impossible to go on with reforms and integrate with Europe when someone can switch off the lights at any moment," says Vladimir Omelchenko, an energy expert at Kiev's Razumkov Center, who says the situation can accelerate Ukraine's efforts to attain energy independence through greater reliance on nuclear power and gas. "They want the financial burden of supporting these territories to be switched to Russia. In fact, these territories are already controlled by Russian troops and their puppets."

Not in power, but exercising a heavy hand

Though no one knows exactly who stands behind the armed men who are blockading the rail lines and highways along the battle front, everyone names the disgruntled oligarch Igor Kolomoisky as the most likely financial backer. Mr. Kolomoisky has lost a lot of ground at the hands of President Poroshenko over the past couple of years, including being stripped of his governorship of Dnipropetrovsk region in a battle over control of state energy properties, and more recently seeing his most lucrative property, PrivatBank, Ukraine's largest bank, nationalized by the government.

A range of opposition forces, most prominently former prime minister and "Orange Revolution" heroine Yulia Tymoshenko and ex-Georgian president-turned-Ukrainian-loose-cannon Mikhael Saakashvili, have come out in support of the blockaders.

The chief target is the multibillion dollar business arrangement that has seen Ukrainian iron ore shipped to steel mills in rebel-held territories, and coal and steel shipped back. Mr. Omelchenko says that Ukrainian power stations last year consumed 9 million tons of Donbass coal, or about 30 percent of the total. At least six of Ukraine's 12 coal-fired power stations were designed in Soviet times to run exclusively on the black anthracite dug out of the Donbass mines that are now almost completely under rebel control. Some sources say that trade across the dividing line has been worth up to $8 billion annually.

Most of the mines and mills on both sides of the front line are owned by Ukrainian oligarch Rinat Akhmetov, who has managed to maintain good relations in both Kiev and Donetsk, and presumably pays his taxes in both places.

"It certainly looks like the primary victim in this blockade is Akhmetov. And it's definitely good for Kolomoisky, who might obtain some revenge against the Ukrainian government," says Alexander Parashiy, an analyst with Concord Capital, a leading Kiev brokerage.

Profound splits between east and west

"What looks so strange to all of us is that Poroshenko has declared this blockade to be illegal, which means those carrying it out are criminals, right?" he says. "But he doesn't take any steps to arrest them, perhaps because the idea of the blockade is popular with the public. I think Poroshenko fears a new Maidan [revolution] if he makes any serious effort to end the blockade."

But some analysts fear that fresh political shocks in Kiev could lead to more than just isolating the relatively small Donetsk and Luhansk rebel regions. Three years after the Maidan Revolution, opinion polls continue to show a profound split between the attitudes of western Ukrainians and the more russified populations in Ukraine's south and east.

A December survey by the Kiev Internation Institute of Sociology, Ukraine's top pollster, found that 51 percent of respondents in the country's south, and 57 percent in the Kiev-controlled but restive east continue to regard the revolution that brought the current Kiev authorities to power as an "illegal armed coup." In the more nationalist west of the country, and mixed central regions, from 80 percent to 60 percent regard the Maidan revolt as a "popular revolution."

"What we see with this blockade is that people who are not in power are succeeding in imposing their agenda. They are getting the upper hand," says Sergei Strokan, foreign affairs columnist with the Moscow daily Kommersant. "And they are playing with dynamite. There is growing potential for very serious political crisis to emerge from this."