Now Putin Has to Figure Out What to Do With the Separatists (BusinessWeek)

By Joshua Yaffa May 14, 2014

Denis Pushilin, the public face of the self-proclaimed People's Republic of Donetsk, addresses a rally marking Victory Day in Donetsk, Ukrainian on May 9

The seat of government of the Donetsk People’s Republic is an 11-story building—once the headquarters of the regional administration until it was stormed by pro-Russian fighters in early April—that houses everything from a press-accreditation office to a medical dispensary. Young men roam the hallways in fatigues with Kalashnikovs slung on the backs. The front steps have been turned into a tribune for impassioned speeches against the “fascist” government in Kiev and its backers in the West.

On Monday, from a conference room on the top floor of the occupied administration building, Denis Pushilin, the public face of the self-proclaimed separatist leadership, declared a sovereign state and appealed to join Russia. He based his proclamation on the results of a makeshift referendum carried out the day before, in which, according to the separatists, 89 percent voted in favor of a vaguely worded call for self-rule. (The neighboring Ukrainian region of Luhansk held a similar referendum the same day, though it has yet to ask to be annexed by Russia.) “Based on the will of the people and on the restoration of an historic justice, we ask the Russian Federation to consider the absorption of the Donetsk People’s Republic,” Pushilin said.

At first glance, events in eastern Ukraine may seem a repeat of Crimea—the seizure of administrative buildings and police stations, followed by a hastily organized referendum. But the history and politics of the two regions are incredibly different, and Moscow’s ultimate aims in the east are far from what it hoped to achieve in its annexation of Crimea. This split in attitude is obvious: In Crimea, in a sign of its approval, the Kremlin sent official election observers to the referendum—and within days of the result, Putin had called on the Duma to incorporate Crimea into Russia.

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But in eastern Ukraine, Putin urged separatists to postpone their referendum, and when they held it anyway, he made no personal comment on the results of the voting. The Kremlin issued only a vague statement in support of the “popular will” of the people of eastern Ukraine, a far cry from legally recognizing the referendum. The hopes of Pushilin and others seeking Russia’s direct intervention are not likely to be realized soon. So what sort of future, then, awaits the fledgling Donetsk People’s Republic?

For starters, Putin has “no appetite or readiness to absorb eastern Ukraine,” said Dmitri Trenin, director of the Carnegie Moscow Center. Moscow does not relish the idea of being responsible for the region’s disaffected coal miners and Soviet-era industrial infrastructure. Nor does it want to bear the costs of a civil war among the local population—or even worse, find itself in the quagmire of a real war if the Ukrainian army were to resist Russia’s land grab. It also wants to avoid the hardship of sectoral economic sanctions that the U.S. and European Union would introduce if Russia were to invade or annex Ukraine’s eastern regions.

Instead, Trenin explained, the Kremlin would like to exploit the uncertainty and instability of eastern Ukraine to ram through its ultimate, and most important, strategic aim: a so-called “federalization” plan that would see eastern regions handed a wide degree of autonomy, thus keeping the country from moving closer to the EU or NATO and ensuring a powerful countervailing voice for a pro-Russian elite. With these interests in mind, Russia views Ukraine’s eastern territory more as a bargaining chip than as a potential territorial acquisition. In future rounds of negotiations with the Ukrainian government and Western officials, the Kremlin can wield the unresolved status of eastern Ukraine and the appeal by the separatists to join Russia as an ever-present threat: Give us what we want, or we’ll break Ukraine apart. If no grand bargain can be found, or if Russia decides it prefers permanent instability in Ukraine to a diplomatic solution, the Kremlin could keep eastern Ukraine as a perpetually contested territory, a grander version of the political and security headache posed by the breakaway republic of Transnistria.

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It is clear that Russia considers unrest in eastern Ukraine—at least in a form it thinks it can manage—in its interest. After weeks of inconclusive protests across the Donetsk region, the fact that several local government buildings and police stations have been taken over in a coordinated fashion by men with clear military training suggests a degree of logistical and operational support from Moscow, at least in the beginning of the armed uprising. (Although these fighters did not appear to be the same “little green men” from Russia’s special forces who appeared in Crimea.) Moreover, what is undeniable is that a nonstop information campaign overseen by Russia’s state-run media serves to confirm every worst conspiracy about the interim government in Kiev and the motives of the West, hardening attitudes among the local population and stoking hatreds that can turn into violence.

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It would be a mistake, though, to see the unrest and dissatisfaction spreading throughout eastern Ukraine only through the prism of Kremlin manipulation and subterfuge. The Donetsk referendum may have been a farcical piece of political theater—with no voter registration lists, for example, people could vote as many times as they liked simply by presenting their identification—but the diffused sense of grievance and fear that pushed many people to voice their disapproval with the authorities in Kiev is quite real. And these feelings, more than plots hatched in Moscow, may be driving events now.

People may not “have understood exactly what they were voting for” in the referendum, said Ihor Todorow, a professor of international relations at Donetsk National University, but they were drawn to vote by a number of sincere reasons: “deep internal sympathy” to Russia, nostalgia for the Soviet past, and a distrust of western Ukrainians and their motives, especially now that a government of pro-Maidan protest leaders has taken power in Kiev. A Ukrainian military offensive against separatist militia groups in recent days has sharpened the sense of mistrust. Much of the fighting is done by recently formed pro-Kiev paramilitary brigades, meaning that accidents and civilian casualties are practically unavoidable. At the same time, rebel attacks—such as an ambush on Tuesday that left eight Ukrainian soldiers dead—only locks in the cycle of violence and bloodshed.

Both sides are projecting an air of unjustified confidence, which makes dialogue difficult and, so far, largely fruitless. A day after the Donetsk separatists announced their independence, the acting governor of the Donetsk region, Serhiy Taruta, announced that the “Donetsk People’s Republic does not exist”—even though Taruta is forced to work out of a hotel, seeing as his official governor’s office is occupied by separatists. He also said the Kiev government will carry out its presidential vote in eastern Ukraine as planned on May 25, a difficult task considering that pro-Russian forces control many of the administrative buildings that would function as polling places.

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At the same time, Pushilin, an accidental and unpolished leader, has quickly adapted to the trappings of power that come with being a head of state—even one of a country that is more imagination than reality. He declared no voting will happen on May 25, as the self-proclaimed Donetsk authorities are not inclined to assist in “the presidential elections of a neighboring state.” He and other separatist leaders are especially vague in their plans for economic self-reliance, which is in practice impossible, given the the east’s dependance on sales of its industrially produced goods to other parts of Ukraine and foreign markets.

Most dangerously, the events of recent weeks have stirred up an atmosphere of chaos, violence, and antagonism that will be hard to reverse. The region’s many loosely organized militias will not disappear simply as a result of officials in Kiev, Moscow, or anywhere else saying so. Many anti-Kiev fighters are driven by a sense of hatred and mistrust that has taken on its own localized momentum. The armed separatist movement has also given cover to criminal groups that would not readily give up their new status and impunity. The dark contours of a civil war are taking shape—one fought over not ethnicity or religion but political allegiance and, in the eyes of its combatants, historical destiny. For many residents of the east, nursing decades of social and economic grievances, the pull of the gun is simply too strong to ignore. As a local journalist in Donetsk who has gone into hiding said, “a Kalashnikov is the first form of social lift many of these people have received in their lives.” They won’t give it up easily.

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Yaffa is a Bloomberg Businessweek contributor.