The Wartime Donbas Economy: Can It Be Saved?

The economy of the Donbas suffered greatly from wartime damages and interrupted trade flows on both sides of the frontline. Companies on the Russia-controlled side are isolated from the global economy by blockade and mismanagement by separatist authorities. Brian Milakovsky discussed the importance of restoring economic connectivity in the region as President Zelenskyy carefully pursues a resolution to the six year conflict.

Selected Quotes

Brian Milakovsky

“The government controlled areas, their industrial economy is functional but in deep crisis. I would say it’s experiencing a much more sharpened, heightened version of the same general crisis of the Ukrainian industrial economy right now, which I call industrial drift.”

“For those Ukrainian nationals who bought into separatism, a lot of it was about freeing, finally, their economy from the hated Ukrainian oligarchs.”

“I think we’re in a situation in which Ukraine is forced to operate in a scenario the basic conditions of which are set by Russia, and especially of late, Russia has just shown intransigence and escalatory character that forces Ukraine to just constantly react. Ukraine is just always reacting to Russia’s latest move, and this really limits Ukraine’s economic policy-making agency in the Donbas. And I really think Ukraine needs to do everything it can to reclaim it, and that’s very difficult.”