Can Ukraine's Richest Man Prevent a War?
It's looking less likely that Russian President Vladimir Putin will choose to invade eastern Ukraine. The key to a peaceful denouement, though, may be in the hands of people such as Ukraine's richest man, Rinat Akhmetov.
Two days after pro-Russian separatists seized government buildings in eastern Ukrainian regions such as Donetsk, Kharkov and Lugansk, the political calculus for a full-scale invasion is looking very different than it did in Crimea. Secession and especially inclusion in the Russian Federation is not popular enough in the southeast of continental Ukraine, and the weak Ukrainian government in Kiev has had some early success in restoring control. In Kharkov, which has a population of 1.4 million and was once Ukraine's capital, police loyal to Kiev managed to retake the administration building and arrest 70 pro-Russian activists without firing a shot.
Acting Interior Minister Arsen Avakov, who once was Kharkov governor, warnedthat separatists in other cities would also face "a tough reaction." It's a promise that will be hard to keep without inciting a larger war. Protesters in Lugansk and in Donetsk, center of the Donbass industrial region, are heavily armed. Police have aided the pro-Russian activists without actually going over to their side. In Nikolayev in the south of Ukraine, pro-Russian and pro-Ukrainian activists have already fired shots at each other, and more than 10 people have been wounded. Moscow has been issuing warnings against the use of military force to evict the protesters -- warnings that Kiev must heed, given that Russian troops are still massed along Ukraine's borders.
Negotiations offer the best way out. Washington has proposed four-way talks among Ukraine, Russia, the U.S. and the European Union. Russia, which doesn't recognize the Kiev government, is surprisingly willing to take part -- on the conditionthat the talks include representatives from the south and east of Ukraine, by which it probably means the local Russian speaking elites. So far, the Ukrainian Foreign Ministry has insistedthat only officials can take part in any talks.
Enter Akhmetov, for whom Donetsk is almost a feudal seat. The Russian-speaking industrialist, who many Ukrainians think is unofficially behind the pro-Russian protests in Donetsk, has actually played a complex role. In the wee hours of Tuesday, the usually reclusive Akhmetov came out to speak with protesters in Donetsk, cursing in Russian and explaining to protesters that he felt for them but that "Donbass is Ukraine." Akhmetov promised government forces would not storm the administration building and took some activists for talks with a deputy prime minister sent from Kiev.
Akhmetov's agenda differs from the government's. When a protester complained about the Kiev-appointed governor, Akhmetov replied, "When we have an elected governor, the people will elect one. Now, unfortunately, there is a different situation. So we need to change the constitution." The billionaire, who is still a member of the Regions Party, until recently headed by deposed President Viktor Yanukovych, wants broader autonomy for his home region, something in which Russia supports him and something the Ukrainian government is loath to grant.
"Federalization" is a curse word in Kiev, because it would allow Moscow to keep the political situation unstable by making separate deals with corrupt local elites. Making concessions to people like Akhmetov, however, might be the only way to avoid the much less desirable outcome of outright war. Putin doesn't want to send in troops, so Moscow will bargain and accept any concessions that will allow it to keep some influence in eastern Ukraine. The West, too, should be interested in a compromise that will keep Ukraine intact, defuse the tension and allow the Kiev government to start an overhaul of the economy as Western aid comes in.
In the end, it falls to Kiev to build an amicable relationship with the east so it can gradually erode Moscow's power.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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