April 7, 2016 | Issue Brief on International Conflicts
Two years after Russia’s annexation of Crimea and invasion of the Donbas region, Ukraine remains a nation in peril. Russia considers its annexation of Crimea a fait accompli, has taken steps to consolidate its position in the Black Sea, and has created a frozen conflict in eastern Ukraine.
Despite an official cease-fire, war is a day-to-day reality in the Donbas region, and Crimea remains under Russian occupation. Ukraine’s economic reforms remain incomplete; corruption continues to be a virulent and hardy foe. The U.S. needs to stay engaged in Ukraine. This means implementing policies that help the Ukrainians to defend themselves from Russian aggression, promoting economic and political reform, and keeping international pressure on Moscow to fully implement the latest cease-fire agreement, concluded more than a year ago.
When Kremlin-backed Ukrainian President Viktor Yanukovych failed to sign an association agreement with the European Union in 2013, months of street demonstrations led to his ouster in early 2014. Russia responded by violating Ukraine’s territorial integrity, sending troops, aided by pro-Russian local militia, to occupy the Crimean peninsula under the pretext of “protecting Russian people.” This led to Russia’s eventual annexation of Crimea. Such annexation by force is unprecedented in the 21st century.
Backed, armed, and trained by Russia, separatist leaders in eastern Ukraine declared the so-called Lugansk People’s Republic and the Donetsk People’s Republic. Since then, Russia has continued to back separatist factions in the Donbas region of eastern Ukraine with advanced weapons, technical and financial assistance, and Russian conventional and special operations forces.
Two cease-fire agreements—one in September 2014 and another in February 2015, known as Minsk I and Minsk II—have come and gone. Since the most recent agreement went into effect, hundreds of Ukrainian soldiers have been killed and hundreds more have been wounded. EUCOM Commander General Philip Breedlove calls Minsk II “a cease-fire in name only.”
Speaking at the Munich Security Conference two months ago, Lamberto Zannier, Secretary-General of the Organization for Security and Cooperation in Europe (OSCE), which is charged with overseeing the cease-fire, warned that the situation is the worst it has been since September 2015. In particular, he cited systematic cease-fire violations and poor access for OSCE monitors to areas held by Russian-backed separatists, with no access to the border between Ukraine and Russia where weapons and materiel enter the country.
Russia’s ultimate goal is to keep Ukraine out of the transatlantic community. Russia will also want to consolidate the gains made by separatist forces in eastern Ukraine. Politically, Russia will do everything it can, especially through proxies and propaganda, to discredit the democratically elected government in Kyiv.
Russia’s primary short-term goal in Ukraine will be to keep the conflict in eastern Ukraine frozen—meaning that even if bullets stop flying, there will be no real effort on Russia’s part to bring a conclusive end to the conflict. This equates to victory for Moscow and defeat for Kyiv, because it leaves Ukraine unable to control all of its territory. Russia can also use the frozen status of the separatist-controlled Donetsk and Luhansk regions as bargaining leverage in future talks with the West on other issues, such as accepting Russia’s annexation of Crimea or applying pressure on Syrian president Bashar al-Assad to step down.
Russia’s destabilization efforts are not relegated to the Donbas region. Russian hackers are widely suspected of being behind a series of cyberattacks in December 2015 that took down power stations in Kyiv and in regions of western Ukraine. The malware used in the attack has its origins in Russia and was so destructive that it knocked out call centers where Ukrainians could report outages, as well as internal systems that power companies use to get power networks back online. The attack is believed to be the first cyberattack to target a power grid.
Corruption remains a serious problem. In February 2016, Ukraine’s economic development and trade minister resigned over frustration with how deeply rooted corruption ran in the economy, saying that “systemic reform is decisively blocked.” The resignation triggered a new period of political instability.
Ukraine’s Prime Minister Yatsenyuk survived a parliamentary no-confidence vote in February only when MPs from an opposition party linked to oligarchs left the chamber before the vote, leading some to speculate that an underhanded deal had been struck. Following the vote, two parties withdrew support from the governing coalition, leading to its de facto fall.
In April, Ukrainian President Petro Poroshenko, who is seeking to form a new ruling coalition and replace Yatsenyuk with an ally from his own party, was listed in the so-called Panama Papers, accused of using an offshore company as a tax haven for his confectionary business. While wrongdoing may or may not be proven, the episode complicates already tortuous coalition bargaining and makes snap parliamentary elections more likely.
Ukraine is ranked 162nd out of 178 countries in the 2016 Index of Economic Freedom and has the lowest level of economic freedom in Europe. Its economy shrank by 10 percent in 2015, in part due to the continuing war in the East. Concerns that the government has not moved quickly and firmly enough to put in place economic reforms have led the International Monetary Fund to delay—since October—the next $1.7 billion disbursement of $17.5 billion in loans earmarked for Ukraine. Further complicating its financial situation, Ukraine is currently embroiled in a legal battle with Russia over restructuring and repayment of a $3 billion loan dating from 2013.
While the conflict in Ukraine has faded from the headlines somewhat, Ukraine still needs U.S. support as it faces significant economic and security challenges. In addition to publicly condemning Russia for its invasion of Ukraine and its annexation of Crimea, the U.S. should:
Russia’s goals in Ukraine are both geopolitical and imperial. Without Ukraine, or at least without considerable influence in Ukraine, Russia sees itself only as an Asian power, not as a European power. Now is not the time for the United States to abandon the people of Ukraine. Rather, the U.S. should continue to increase assistance to the Ukrainian military, champion economic reforms, and support the reformers in Ukraine who are fighting corruption.—Luke Coffey is Director of the Douglas and Sarah Allison Center for Foreign Policy, of the Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy, at The Heritage Foundation. Daniel Kochis is a Research Associate in the Margaret Thatcher Center for Freedom, of the Davis Institute.
 “Ukraine Ceasefire Is ‘In Name Only’: NATO,” Reuters, September 20, 2014, http://www.reuters.com/article/us-ukraine-nato-ceasefire-idUSKBN0HF0K320140920 (accessed April 5, 2016).
 Lawrence Norman, “Situation in Eastern Ukraine at Worst Point in Months, Says OSCE Official,” The Wall Street Journal, February 14, 2016, http://www.wsj.com/articles/situation-in-eastern-ukraine-at-worst-point-in-months-1455464333 (accessed April 5, 2016).