By Eric Livny (ISET, Georgia) and Tom Coupe (KSE, Ukraine)
It
 now seems more and more likely that Eastern Donbass (the area currently
 controlled by the self-proclaimed Donetsk and Luhansk People’s 
Republics) will become a frozen conflict zone, a territory in which the 
Ukrainian government will have little power to enforce its laws and 
where slowly a parallel governance system, an unrecognized 
‘quasi-state’, will emerge. In the absence of a viable military 
alternative, one option likely to be considered by Ukraine and its 
Western allies is to exercise ‘strategic patience’. As discussed in a Foreign Policy article by Lincoln Mitchell and Alexander Cooley,
 this approach has been until recently employed by Georgia and the US in
 their dealings with Abkhazia and South Ossetia. ‘Strategic patience’ 
consisted, according to Mitchell and Cooley, of: “helping Georgia 
develop into a prosperous and democratic country under the assumption 
that once this happened the people of Abkhazia would naturally want to 
rejoin Georgia. In practice, therefore, StratPat meant doing nothing – 
certainly not building relationships with anyone in Abkhazia.”
‘STRATEGIC PATIENCE’ OPTION ASSESSED
An
 important assumption behind ‘strategic patience’ thinking is that 
quasi-states (QS) emerging in contested frozen conflict zones will not 
do well either politically or economically, fueling a sense of 
frustration with the corrupt regime and the breakaway status quo.
Prima
 facie, there are good reasons to expect QS, such as Transnistria, 
Nagorno Karabakh, Abkhazia, South Ossetia, and, potentially, also 
Eastern Donbass, to implode in the absence of international recognition 
and economic isolation. In his 2006 article “The Sustainability and Future of Unrecognized Quasi-States”, Pål Kolstø lists some of the obvious reasons for their difficulties.
First, QS are typically off to a bad start, with much of the infrastructure lying in ruins
 after a ferocious civil war fought (mostly) on their territory prior to
 secession. While there is considerable empirical evidence suggesting 
that wars do not necessarily inflict long-term damage to a country’s 
economic development, a crucial condition is that war really ends and is
 followed by stable peace (see, for example, “Civil War” by Christopher Blattman and Edward Miguel (2010)).
Second, like any new states, QS at least initially lack in governance machinery and skills,
 and are unable to collect taxes and perform the basic functions of 
government, ensuring personal security, let alone property rights. These
 initial difficulties (often shared by the parent states – Ukraine, 
Georgia and Moldova) are compounded by the lack of international 
recognition. As argued by Kolstø, the QS status “puts a damper on normal
 legal trade with the outside world, and encourages illegal business”. 
While enriching the political elite of QS (through cuts and kickbacks), 
smuggling and other types of illegal business do not help QS emerge from
 the post-civil war institutional limbo and develop a normal, business 
friendly institutional framework.
Third, non-recognition carries additional economic cost as foreign investors will be reluctant to invest
 in a jurisdiction where legal contracts are not internationally 
binding, international conventions have limited applicability, and 
investment may be wiped out through an outburst of hostilities (such as 
the 2008 war between Russia and Georgia over South Ossetia).
Yet, 
despite these less than auspicious circumstances, neither Abkhazia nor 
any other QS on the fringes of the former USSR have succumbed to more 
than 20 years of isolation and non-recognition. Rather than crumbling 
and crawling back, these “frozen economies” appear to be doing 
sufficiently well to establish a reasonable degree of internal 
legitimacy and sustain themselves over time.
In part, this has to do with the unenviable condition of the parent states’ own economy and politics.
 Both Georgia and Moldova were failed states for much of the 1990s – 
corrupt, criminal, plagued by brain drain and, as a result, not 
attractive enough for the ‘strategic patience’ policy to work. The other
 major factor for the economic and military sustainability of 
unrecognized QS has been the existence of a powerful external patron.
 What Russia is for Abkhazia, South Ossetia and Transnistria, Armenia is
 for the Nagorno Karabakh Republic (NKR). The same pattern is also to be
 found elsewhere: EU and NATO ‘patronize’ and protect Kosovo; US and 
Turkey do the same for Taiwan and the Turkish Republic of Northern 
Cyprus (TRNC), respectively. The presence of these two factors – an 
(initially) weak parent and a strong patron – are hardly incidental. 
Both are at the root of the secession phenomenon in the first place.
While
 none of the post-Soviet QS are star performers, the scanty evidence 
that is available to us suggests that the policy of ‘strategic patience’
 has not been very effective so far. Despite very bad initial conditions
 and the high toll on investment and quality of institutions exacted by 
the lack of international recognition, QS do well enough to generate a 
sense of loyalty and patriotism among the local population that chose 
(or ‘was chosen’) to remain under their control. At least in the case of
 Transnistria, the parent state (Moldova) failed to decisively 
outperform its former territory. While, arguably, Georgia has 
accomplished a great leap forward since 2003, this did not translate 
into a change in perceptions and political preferences on the Abkhazian 
or South Ossetian side of the divide. Moreover, an economically stronger
 and modern Georgia may be perceived as more of a threat (particularly, 
after the 2008 attempt at forceful re-unification with South Ossetia).
Public
 perceptions have been a subject of a very interesting set of parallel 
surveys conducted in 2010 by John O’Loughlin of the University of 
Colorado at Boulder, together with several colleagues. Simultaneously 
held in Georgia and Abkhazia as well as in Moldova and Transnistria, 
these surveys suggest that people in QS are not necessarily unhappy 
about their existence. In “Divided Space, Divided Attitudes? Comparing the Republics of Moldova and Pridnestrovie, O’Loughlin et al argue that while being richer (according to ‘official’ per capita income data) people in Transnistria feel
 richer. Moreover, a higher share of people in Transnistra think that 
their country is better off than Moldova compared to the share of 
Moldovans thinking that Moldova is better off than Transnistria. The 
findings of O’Loughlin et al for Abkhazia and Georgia (“Inside Abkhazia: a survey of attitudes in a de facto state) are quite similar, lending little support for the ‘strategic patience’ doctrine.
LESSONS LEARNED FOR UKRAINE
With
 a population estimate of 3mln, the eastern part of Donbass (not 
controlled by the Ukrainian government) is much larger than all other 
post-Soviet QS. In terms of its size and economic structure, it is 
closest to Transnistria (about 500,000 citizens). Both Donbass and 
Transnistria have been the mining and industrial centers of their parent
 states and have rather similar human capital and factor endowments. 
Designated for manufacturing by the Soviet planner, both have been 
magnets for internal migration by (mostly Russian) engineers, 
technicians, miners and steelworkers. This Soviet legacy puts them at an
 advantage relative to three tiny ethnic enclaves in the South Caucasus 
which have been historically specialized in tourism (Abkhazia) and 
agriculture (South Ossetia and Karabakh).
Like Transnistria, 
Eastern Donbass is likely to be on the receiving end of Russian 
subsidies, trade contracts and infrastructure investment, and last but 
not least, military protection. Eastern Donbass’ size and the fact that 
it directly borders on Russia further weakens the case for isolation and
 ‘strategic patience’ as a means of achieving re-unification.
WHAT
ARE THEN THE OPTIONS FOR UKRAINE AND EASTERN DONBASS?
While
 the pain is all too fresh for both sides in the recent conflict, the 
only viable strategy for reunification is mutual political engagement 
and economic integration. The rationale to re-integrate economically (in
 all frozen conflict areas) will only get stronger over time, and will 
undoubtedly play a role in bringing divided people together, once the 
memory of war and human loss recedes into the background. What may 
support a move towards greater economic (and, eventually, political) 
integration is the fact that despite years of separate existence, people
 in divided areas continue to share the same values. Such is another 
finding from the survey work conducted by O’Loughlin et al in 
Transnistria and Moldova, Abkhazia and Georgia.
Despite the lack 
of recognition and years of hostility, economic integration has 
eventually made it to the agenda of Transnistria and Moldova. A sizeable
 share of Transnistria’s exports goes to the EU (through Moldova); 
discussions are underway concerning construction of additional bridges 
over Dniester to improve communication and trade linkages.
After 
more than 20 years, Georgia is also gradually coming to realize that 
negative rhetoric (branding secessionists as “Russian puppets” and 
“terrorists”) and continued military and political confrontation are 
counterproductive in the sense of keeping the borders sealed and 
preventing mutually beneficial trade and human connections. Back in 
2012, Bidzina Ivanishvili made economic linkages (e.g. reopening the 
railway connection to Russia via Abkhazia, and restoring the famous 
Ergneti market straddling the border with South Ossetia) a key subject 
of his election campaign. While yet to be realized, Mr. Ivanishvili’s 
pragmatic vision of using mutual economic interests in order to overcome
 the trauma of recent bloodshed, is worth of serious consideration by 
Ukraine and all other parties to frozen conflicts in the region.
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This post is also available at ISET.
 
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