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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Ukraine Live: Day 276

Publication: Ukraine Liveblogs
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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Joe Biden Arrives In Kiev, But Controversy Arrives With Him

Vice President Joseph Biden landed in Ukraine today to offer increased non-lethal aid to Kiev, but soon the headline in the Ukrainian media expressed the real message for Ukraine.

"US Has Not Offered Lethal Weaponry to Ukraine," said Ukrainska Pravda.

Biden said the US would provide Ukraine with Humvees and radar systems.

An official who spoke to Reuters on condition of anonymity said that US aid would not turn the course of the war.

In September, Petro Poroshenko visited the US and spoke before Congress, but was not promised any of the high-precision weapons he sought, despite some law-makers advocating such military aid to Ukraine

Reuters reported:

Officials in the Obama administration had said Washington believed Ukraine had enough lethal aid and the types of weaponry requested for Ukraine would be of only marginal value. They had also emphasized the need for a diplomatic outcome.

Joseph Biden's son Hunter Biden took a paid board position in May 2014 and was appointed head of legal affairs at Ukraine's largest gas producer Burisma Holdings, a move that was seen as raising question of a conflict of interests given close US involvement in Ukraine's affairs.

Devon Archer, one of Hunter Biden’s business partners, joined its board as well.

Burisma holds Ukrainian oil and gas companies including Esko Pivnich and Pari, and also assets in Dnepr-Donetsk, Carpathian and Azov-Kuvan basins.

An investigation by the Anticorruption Action Center in 2012 found that mines within the company were first related to deposed president Viktor Yanukovych's son Oleksandr, and then to Ukrainian oligarch Ihor Kolomoisky.

The involvement of the American vice president's son in a Ukrainian gas company is widely seen by Russian state propagandists as proof of a conspiracy by the US to take over Ukraine and turn it against Russia. The White House has declined to comment, fueling speculation.

It remains to be seen how well this company is doing in war-torn Ukraine with its damaged economy, such that Hunter Biden might personally benefit. In any event it is seen as the creation of the sort of "old-boy's network" between the US and Ukraine that will inevitably be seen as corrupt.

Interestingly, Kremlin spokesman Dmitry Peskov told Buzzfeed's Max Seddon in May that Russia "saw no conflict of interest in Joe Biden working to wean Ukraine off Russian gas - which makes up about 60 percent of the country’s energy supply - while his son worked in the Ukrainian gas industry."

Meanwhile, the pro-government Vzlyad claimed without substantiation that both Bidens expect to gain from shale gas exploration in Ukraine. Citing, the Kremlin propaganda outlet, and the Deutsch Türkische Nachrichten, Vzlyad said the Bidens hoped to "exploit the crisis in Ukraine for their personal aims, pursuing financial interests."

-- Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russian-Backed Separatist Commander Givi Denies Arrest, Heavy Losses in LifeNews Interview

The Russian-backed separatist leader named Givi, commander of the Somalia Battalion, was interviewed by LifeNews today, November 20, and denied he was ever arrested by Ukrainian military.

"I'm here before you, I'm armed, everyone can see, I'm at my post," said the separatist leader. "It's the latest plant," he complained, referring to the "information war" between Russia and Ukraine.

"There were losses, very, very minimal, two, three people," he said. He also referred to Motorola,  injured in battle earlier this week, but Givi said it was not serious.

Asked why the story about his arrest went out, Givi replied "they're already scaring little children with me and Motorola," he said "It's as if we practically set people on fire."

LifeNews, a pro-Kremlin station close to Russia's intelligence apparatus, interviewed Givi on what appeared to be a street in Donetsk near the apartment building the rebels have occupied near the airport, but this has not been confirmed.

He also denied that he was ever arrested by prosecutors of the self-proclaimed "Donetsk People's Republic" in a plot to turn him over to the Ukrainian army in exchange for the Donetsk Airport. The Ukrainian army has been under siege, waging battles for months to hang on to the airport, which has been largely reduced to rubble.

Engaging in psychological warfare himself, Givi said he had no prejudices to the Ukrainian people, for whom the fighters had become "anti-heroes," and that the friends and families of soldiers in the Ukrainian Army should "hate the commanders of the Ukrainian units and battalions of the National Guard."

Separatist propagandists often make this differentiation between rank-and-file soldiers, many of whom are Russian-speakers, who were drafted into the army or joined to get a job, and ultranationalist Ukrainians who are volunteered to fight from conviction.

"I understand they will never forgive us for Ilovaisk, ever. I understand they will never forgive us for the airport, ever. But it was war in general. And I can say honestly, to all the Ukrainian mothers and fathers and wives, half the soldiers of the Ukrainian Army in the Donbass were laid low by the Ukrainian artillery [itself]."

-- Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Explosion in Kharkiv Near Military Hospital

An explosion has been reported in Kharkiv, Ukraine's second largest city, this evening, reports.

The blast was said to take place at a military hospital on Pavlovo Pole in the Gosprom district on Trinkler Street. Several Twitter users have geolocated the site of the explosion here on Google Maps.

Eyewitnesses told that a transformer box or electrical substation near the military hospital exploded around 17:45 this evening. No one was reported injured.

The box has traces of soot on it. A piece of burnt wood was seen in front of the doors to the station, but there is no fire burning. Police and firemen are on the scene. Glass was smashed in the building across the street from the sub-station.

While it is not known whether it is an accident or a deliberate attack, it is already being reported as a terrorist act.

Last week a bomb went off in a rock club called Stena [Wall] in Kharkov, injuring 11 people.

-- Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Would Ukraine's Economy Be In Crisis If It Weren't for Russia's Invasions?

The Ukrainian economy has been foundering for quite some time. The country has gone through two revolutions in a decade, and at the heart of both of them are two issues: government corruption, and the struggling economy.  Last summer, before the Euromaidan protests began, Russia began to wage a trade war against Ukraine to force it to stay away from the European Union. After the Yanukovych government was ousted, the interim government quickly discovered that the situation was worse than they had feared. The military was in shambles, and significant amounts of money had been stolen. The government coffers were empty.

Then Russia annexed Crimea and invaded eastern Ukraine.

The IMF loan which has propped up the country has also meant that the Ukrainian government has had to simultaneously reform a government, fight a war, and cut spending. Austerity may mean that in the long-run Ukraine's debt-to-GPD ratio will improve, but many are asking what good that will do if the country collapses.

And there are red flags. The Economist recently took a detailed look at the problems which Ukraine is facing. First up, the numbers:

A year of revolution and war has taken a grim toll on Ukraine’s economy. GDP could fall by 10% this year. The currency, the hryvnia, has plunged nearly 50% against the dollar in 2014. Inflation has hit 19%; at the beginning of the year, prices were stable. The central bank raised rates this week, for the third time this year, to 14%. Consumer spending rose by 5% in the second quarter compared to the year before, but that probably reflects panic buying; it is likely to slump soon too.

But The Economist also sees that the conditions of the IMF loan have not met the demands of reality in Ukraine:

On the surface, Ukraine’s public finances, at least, seem reasonably sound. Public debt has risen in the past decade but it is no Greece. According to the IMF, the debt-to-GDP ratio will be around 70% by the end of the year (though this calculation includes the separatist regions). This year Ukraine’s interest payments will amount to 3% of GDP, which is low by international standards.

But Ukraine is running out of the money to service these debts. Few people, least of all the IMF’s technocrats, predicted that the fighting would be so fierce. As investors pull money out of Ukraine, the central bank has spent billions of dollars in a desperate attempt to prop up the tumbling hryvnia: foreign-exchange reserves are now at their lowest level in a decade. The central bank’s efforts have done little: this week alone the hryvnia fell 14% (see chart).

Things might improve in Ukraine, but the war is expensive. Journalist Maxim Eristavi recently analyzed Ukraine's economy and concludes that the war "breaks the spine" of the economy:

On July 31, in a last-minute vote, Ukraine’s parliament authorized an additional $743 million for the army, which otherwise would be left without a cent starting August 1. Lawmakers decided to finance these military expenditures with additional tax hikes, including a mandatory “war-tax” of 1.5 percent for all Ukrainians.

That won’t come close to covering all of the war’s costs, however. To repair the war devastation in Eastern Ukraine, the country needs at least $600 million, according to the Finance Ministry. Kyiv has, at most, half of that, and the fierce fighting in the region continues.

Why Is The Hryvnia Falling?

There is a problem with some of the analysis which has been done on Ukraine. At various times throughout the last 9 months, the Ukrainian economy looked as if it were stabilizing, or even slowly recovering. The hryvnia has stabilized multiple times. So while there were always going to be problems, a problem is not necessarily a crisis. What is really causing the hryvnia to sink and investors to flee?

First, let's look at the three year history of the hryvnia versus the dollar. What this shows is that there is a slow devaluation that has been going on for years. This underscores the point that there are fundamental weaknesses in Ukraine's economy (remember, on this chart up is bad for the Ukrainian economy).


Now let's zoom in. Obviously, the collapse of any government is not going to do wonders for the economy. But a more careful analysis shows that there are some surprising results. As things in Maidan Square turned violent the currency lost value. When Yanukovych fled the country on February 22, the currency lost value. But after the interim government took control and chaos did not erupt, the spike ended...

But the top of that first spike is February 26th, the day Russian forces began to position themselves in strategic areas across Crimea. In early March, after it was clear that Russian forces were taking over the peninsula, the currency began to plummet. As Russian interference became more readily apparent in eastern Ukraine, the currency appeared to be in free-fall. It was during this period in time that separatists began taking over government buildings all across eastern Ukraine.

But the currency improves between April 11 and April 16th? What happened during that period in time? On April 10th the Ukrainian government offered amnesty to those militants who were willing to leave government buildings, and on April 12 Acting Ukrainian President Oleksandr Turchynov announced the beginning of the "Anti-Terror Offensive," or ATO. After the Easter Sunday truce ended in violence, the hryvnia continued to dive.

In other words, during this period of time when the Ukrainian government showed strength the hryvnia improved. When it showed weakness or when Russia showed aggression, things got worse.

But then there is a period of time where the hryvnia moved little, and the conflict moved even less. The interim government was hesitant to confront the separatists directly. The hryvnia slowly got worse. After Petro Poroshenko was elected and took office in June, the Ukrainian government was more aggressive toward the separatists. The hryvnia slowly got better.

Until late July. After MH17 was shot down, and with more signs of Russian intervention in eastern Ukraine, and with Ukrainian aircraft regularly being shot down by Russian-supplied anti-aircraft missiles, the value of the currency declines significantly, spoking during the "Russian invasion" in August, and only stabilizing after a ceasefire was signed at the start of September.

When the ceasefire did not look like it was going to be permanent, and when the European Bank for Reconstruction and Development  revised Ukraine's GDP downward, the hryvnia fell to record lows in mid-September. But with fighting in eastern Ukraine only simmering, the hryvnia stayed relatively stable until November 3rd. Immediately after the Russian-backed militants held their elections, which Russia alone considered valid, Russian troops once again started to cross the border, fighting began to increase, and the world once again started to warn of a significant Russian escalation in eastern Ukraine.


So while Ukraine would have faced significant economic problems regardless, they may not have amounted to a crisis if Russia had not directly interfered by first annexing Crimea and then militarily supporting the militants in eastern Ukraine, culminating in several rounds of invasion.

-- James Miller

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
British Embassy Mocks Russia, Tweets Proof Of Russian Military In Ukraine

There is definitive evidence that Russia has been sending troops and equipment into Ukraine. The claims has been repeated by various governments and NATO. Journalists have snapped pictures and photographs of this equipment actually crossing the border. Russian soldiers keep posting selfies to social media websites from inside Ukraine. Russian bodies keep crossing the border to be buried back home.

But none of this evidence adequately captures the scale of Russia's involvement. However, but studying the weapons which turn up in Ukraine, we see that many of them would have to come from the Russian military.

Last week Armament Research Services released a report (discussed here) released a catalog of all the weapons which have been documented in use in this crisis. Many of them are not native to Ukraine, like the T-72BM which was never manufactured or exported outside of Russia. Therefore, many see the presence of the T-72BM as a smoking gun proving that not only is Russia supporting the separatists but that they are supplying some of their better weaponry.

Which led the British embassy in Kiev to send this tweet:

This is not the only time that the T-72BM has been mentioned by world leaders, and it is not the first time other governments have used social media to openly mock Russia. The Moscow Times reports:

"The presence of this [tank] variant in Ukraine therefore strongly supports the contention that Russia is supplying arms to separatist forces," Dempsey wrote in an article for the International Institute for Strategic Studies think tank in August.

Earlier this year, Canada's delegation to NATO tweeted a map, supposedly to "help" Russian military troops stay within the country's boundaries.

The map showed Russian territory highlighted in red and titled "Russia," and Ukraine, which was colored blue, labeled "Not Russia."

The T-72BM is not alone, however. Last week two advanced ground radar systems were discovered in Ukraine. One of them has never been used by the Ukrainian government.


-- James Miller