Russia economically integrating Donbas region, abandoning Minsk Accords, Bloomberg reports

The Russian government is currently taking measures to integrate the occupied territories of Donbas with the Russian economy, the Bloomberg News agency reported on April 20, citing “three people close to the leadership in Moscow.” At the same time, it has no plans to recognize or annex the self-declared Donetsk and Luhansk People’s Republics, collectively known as “Donbas.” With this strategy, Russian President Putin has given up any hope for the Minsk Accords or removing Western sanctions, the report noted. This also marks the end of any hope for U.S. President Trump to improve relations with Russia, despite being among his chief foreign policy goals during his presidential campaign.

Zenon Zawada: The logic behind the Russian strategy alleged by Bloomberg’s anonymous sources makes perfect sense. For the last week, we’ve reported on the Russian effort to integrate economically the Donbas region, thereby undermining the Ukrainian government’s trade blockade on the region. Indeed it’s an ideal strategy for Russia to enhance its control of the region, while not having to assume direct responsibility (and expenses) for its governance. This strategy also enables Moscow to continue to use Donbas as a lever of pressure on not only the Ukrainian government, but Western governments as well. So we expect Russia to fully employ the model described in the Bloomberg report, which is a Donbas that is de jure part of Ukraine but de facto controlled by Russia. A Ukrainian diplomatic referred to this as the “Transnistria scenario” in the Bloomberg report, but we see the potential for integration far tighter.

The Poroshenko administration resisted imposing the trade blockade but relented after it came under fierce public resistance. Yet unfortunately for Ukraine’s well-meaning patriots, the trade blockade has played entirely into the Russian government’s hands. The more Donbas integrates economically with Russia, the less chance it has to reintegrate with Ukraine. We’ve already the death of the Minsk Accords, but these developments of the last week further confirm it. What now remains to be seen is whether Russia pursues a frozen conflict, or a low-level perpetual war. While the former would be preferable for Ukraine, we see the latter as more likely.