MS Risk Blog

Understanding Events in Ukraine

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What started as a domestic political and economic dispute in November 2013 has escalated into an event with international implications. Upheaval in Ukraine began in November when pro-Russian president Victor Yanukovych’s government decided to abandon closer ties with the EU in favour of Russia (see timeline below). Protests against this move swelled, culminating in last week’s decision by Ukraine’s parliament to foribly eject former pro-Russian President Victor Yanukovych and to install a coalition government. Moscow has not recognised the interim government which took power on 26 February.

In fact, Since last week, Russian troops have been consolidating their hold on Crimea, home to Russia’s naval base on the  Black Sea. On Friday, Putin’s government authorised use of Russian military forces within Ukraine to “protect the lives of Russian citizens there.” Interim President Olexander Turchynov, only a week into new role, has issued full military mobilisation of Ukrainian forces in response. Western forces have condemned Russia’s moves; US Secretary of State John Kerry has warned Russia that these actions could case the nation to be ejected from the Group of Eight (G8) developed nations. Moscow has not heeded calls to return troops to their stations.

Further complicating matters, on Sunday the newly appointed head of Ukraine’s navy, Rear Admiral Denys Berezovsky, swore allegiance to Crimea and its unrecognised pro-Russian leader, pledging to “strictly obey the orders of the supreme commander of the autonomous republic of Crimea” and “defend the lives and freedom” of Crimea’s people. Berezovsky said 1 March would go down in history as the birthday of the “navy of the autonomous republic of Crimea”. He held his Ukrainian post for only one day before being fired and charged with treason.

The Ukrainan issue is not a “cut and dry” matter. Ukraine, which literally translates to “Borderland”, is a nation with two distinct but powerful identities. There are 45 million people living in Ukraine; in the west, the Ukrainian population largely identifies as ethnic Ukrainian, or European. In the eastern part, the population identifies largely as ethnic Russian. The 2010 Ukrainian election was heavily divided between these two regions.  The eventual winner of the election was Viktor Yanukovych, who hailed from the Donetsk Oblast province of eastern Ukraine. Citizens in western Ukraine were dissatisfied with the results, perceiving Yanukovych as a corrupt leader.

Economic Slowdown

Yanukovych’s image worsened in the face of Ukraine’s stunted economy, which has particularly weak over the last two years. The nation’s GDP in 2013 was 0%; in 2012 it was 0.2%. Industrial production fell by 5 percent due to decreases in demand for steel and engineering exports and Ukraine’s energy inefficiency. The unemployment rate is approximately 7.5 percent. There is a shortage of skilled workers; many college graduates are unemployed or underemployed. Insufficient income and an unstable economic environment have resulted in mass migration of skilled and unskilled workers. This resource drain is exacerbated by one of the fastest aging populations in Europe. At the current rate of aging and migration, the workforce is expected to shrink by at least 15% over the next 20 years. Since 24 December, Ukrainian currency (the hryvnia) has dropped 15%. In early January, the National Bank of Ukraine limited individual purchases of foreign currency, and imposed a waiting period of six days on companies purchasing foreign currency.

Yanukovych, hoping to strengthen the stalled economy, met with the EU in November to develop an agreement which would open borders to goods and set the stage for travel restrictions to be eased. However, he backed out of the agreement, citing that the EU’s offer would not be enough to stimulate the economy, and that Ukraine could not afford to sacrifice trade with Russia.


Russia has been particularly eager to assist Ukraine because of its interests in one particular region of the nation. The Crimean Peninsula, which rests between the Sea of Azov on the east and the Black Sea on the west, is home to Russia’s Black Sea naval fleet, Russia’s only warm water port. The desirable region is known for producing tobacco and wine, and its warm climate has made it a thriving tourist area with many seaside resorts. The peninsula has been invaded and occupied as far back as the 7th century.

In February 1954, Crimea was gifted to Ukraine from Nikita Khrushchev to mark the 300th anniversary of Ukraine becoming a part of the Russian Empire. When the gift was given, the region was still under Soviet control. However, after the dissolution of the Soviet Union, Russia found itself with a naval base in an independent nation, causing long-term tensions between the two nations since. Despite negotiations leading to Russia’s lease of the naval port, Russia has not been pleased with terms of their lease, or their reliance on a foreign nation to host their port. The annexation of Crimea would greatly benefit Russia.

Citizens of Crimea largely identify with Russia as well. Crimea’s population is nearly 60% ethnic Russian, 24% Ukrainian, and 12% Tartar. The dominant Russian population is wary of pro-Western leadership in Kiev. Following the removal of pro-Russian president Yanukovych last week, residents have called for the autonomous republic to secede from the rest of Ukraine.

It is unlikely that Russia will give up the opportunity to annex Crimea. Democratic options do not seem likely to be successful. While the standoff between Russia, the Ukraine, the EU and the US is complicated, this complex shift also affects other parts of the world. On Wednesday, Russia’s defence minister announced that Russia would expand its military projection abroad, including in Cuba, Venezuela and Nicaragua. In January, Russia docked a spy ship in Cuba. In the Middle East the fallout could particularly affect Syria, which relies on Russia’s support to maintain the Assad government.




21 November: President Yanukovych’s cabinet announces it will abandon an agreement to strengthen trade ties with the EU, opting to seek closer co-operation with Russia. Protests begin that same night.

24 November: Protests gain momentum. In Kiev, 100,000 people attend demonstrations, making it the largest Ukrainian protest since the 2004 Orange Revolution.


8 December: The number of protesters surpasses 800,000. Demonstrators occupy Kiev City Hall and Independence Square

17 December: Russian President Vladimir Putin agrees to buy $15bn of Ukrainian debt, sharply cuts the price of Russian gas supplies.

January 2014

16 January: Ukraine’s parliament passes restrictive anti-protest laws.

22 January: Three people are killed, in clashes with security forces, the first since the start of the unrest.

23 January: After his reported abduction, the body of prominent activist Yuriy Verbytsky is found in a forest.

24 January: Protestors storm regional government offices in Western Ukraine.

28 January: Prime Minister Mykola Azarov resigns. Parliament annuls anti-protest laws.

29 January: Parliament passes a conditional amnesty bill to drop charges against all arrested during the unrest, if protesters leave government buildings. The bill is rejected by opposition.


14 February: All 234 protesters who have been arrested are released. Charges against them remain.

16 February: Protesters temporarily evacuate Kiev City Hall and other public buildings. A day later, arrested protesters are granted amnesty.

18 February: At least 18 people are killed, including seven policemen. Protesters re-take Kiev’s City Hall. Riot police encircle Independence Square, which contains nearly 25,000 protesters.

20 February: From the 18th to 20th, the death toll from clashes reaches 77, with hundreds injured. Three European Union foreign ministers are dispatched to Ukraine broker a deal.

21 February: France, Germany, and Poland broker a compromise between the government and opposition leaders. The deal involves a new national unity government, constitutional changes, and early elections, to be held by December. In western Ukraine, protesters defiantly continue to occupy government, refusing to recognise Kiev authorities.

22 February: Demonstrators take control of presidential administration buildings. Opposition leaders call for elections on 25 May. President Yanukovych is missing; believed to have fled to Kharkiv. Parliament votes to remove him from power, setting new elections for 25 May. In a televised appearance, Yanukovych denounces the “coup d’etat”.

23 February: Olexander Turchynov is named interim president. Turchynov gives MPs until 25 February to form a new unity government. A day later, an arrest warrant is issued for Yanukovych.

26 February: The proposed new coalition government is revealed. The acting interior minister disbands elite Berkut police unit, blamed for deaths of protesters. Rival protests are held in Crimea.

27 February: In the Crimean capital, Simferopol, pro-Russian gunmen seize key buildings. The gunmen raise a Russian flag outside the Simferopol regional parliament building.

28 February: Unidentified gunmen, appear outside Crimea’s main airports. Interior Minister Arsen Avakov declares the move an “armed invasion” by Russia.

 Speaking from a news conference in Russia, Yanukovych insists he is still president and will oppose any military intervention or division of Ukraine. Ukraine’s central bank limits daily foreign currency cash withdrawals to the equivalent of 15,000 hryvnia (£820).



1 March: Russian parliament approves Vladimir Putin’s request to use Russian forces across Ukraine. Ukraine’s acting President Olexander Turchynov puts his army on full alert. Pro-Russian rallies take place in several Ukrainian cities outside Crimea. US President Barack Obama urges Putin to pull forces back to bases in Crimea. Putin says Moscow reserves the right to protect its interests and those of ethnic Russians.

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