What future for Ukraine?

Kindly translated by Anne-Marie de Grazia

The situation in Ukraine keeps degrading, politically, with the now probable perspective of a secession of Crimea, as well as economically. We can only reiterate here comments already made on this blog, be it on the conditions of legality of the referendum on Crimea [1] or about the conditions in which an independent and united Ukraine can hope to survive [2]. We must repeat, the breaking up of Ukraine is in nobody’s interest, but keeping up a united Ukraine is no longer a natural solution and it does not come by itself economically.

About the interruption of constitutional continuity in Ukraine.

The preservation of the unity of Ukraine is no longer a natural, or « legal » solution, which would allow to qualify the separatist moves as “illegal,” because constitutional rule has been interrupted in Ukraine beginning on February 22. There had been, following the dramatic incidents of the preceding days which have caused numerous dead and in which one can see in part a provocation from the extremist segments of the Ukrainian opposition [3], an accord signed between President Yanukovich and the said opposition. Several European countries had countersigned this accord as guarantors. But this accord was never applied. Whence the interruption in the constitutional continuity.

All those who pretend that the referendum which the federal authorities in Crimea want to hold is illegal, and they are numerous, in France President François Hollande, the Minister of Foreign Affairs M. Laurent Fabius, in Germany the Chancellor Mrs Merkel, in Great-Britain the Prime Minister M. David Cameron, and finally the President of the United States of America, M. Barack Obama, are making an incomplete and biased reading of events. They pretend to ignore the principles of Law which state that a person who is regularly elected can only be deposed following a legal procedure, if one wants constitutional continuity to be maintained.  They cannot do “as if” constitutional legality has prevailed, which would have been the case if we were within the framework of the application of the accords of February 21st. It is to be remenbered that it was exactly the position taken by the late Slobodan Milosevic on Kosovo, saying that the uprising following the cancellation of Kosovo special status had NOT interrupted constitutional continuity. By then NATO countries had considered that constitutional continuity was no more existing. We can see then a direct contradiction between the position taken during the Kosovo crisis and now. NATO countries are therefore adopting in reality an attitude where right derives from might, which they want to present to us as being respectuous of the Law. This is impossible, and these leaders will have to accept the consequences, particularly as concerns the future legitimacy of their actions. One might consider that these leaders have constituted themselves, on the international scene, as Tyrannus ab Exercitio[4].

From February 22nd, we have seen the replacement of the regularly elected Ukrainian President by a de facto power, and the dissolution of the Ukrainian Constitutional Court, an event of equal importance and relevance in this context. As it happens, this court alone had the power to verify the eventual forfeiture of the President and to propose an interim solution. This was not done and therefore there is an interruption of the constitutional continuity. One can consider this as a good or as an evil, but one must understand what it implies. Nor is it a judgement on the person and action of M. Yanukovich. If he can be denounced for something, then he must be prosecuted, and this could have been done within the framework of the destitution procedure. This is not what has happened and we are therefore confronted with a brutal interruption of the constitutional power. This is indeed the attitude assumed by these leaders, who talk of about a “revolution” in Kiev. We know that the characteristic of a revolution is the end of a constitutional order and the birth of a new order. But, if this is the case, it implies that all entities in Ukraine, and in particular the Autonomous Republic of Crimea, should have been associated to the birth of this new order. A constituent assembly is needed. Yet, the power in place in Kiev continues to pretend to finds itself within the constitutional continuity, while violating it in the facts. It is impossible for any person truly in love with democracy to accept this. The same thing cannot be just in Kiev and wrong in Simferopol, the Crimean capital. If the leaders of Western countries consider that the de facto power in Kiev is indeed the legitimate representative of Ukraine, as indicated by the encounter which the head of this government is going to have with the President of the United States of America, they abdicate all right to emit a judgement about the legality of the referendum procedure in Crimea, and why not, elsewhere.

The economic divisions of Ukraine.

For, and this is one the most severe problems with which the crisis in Ukraine confronts us, the country is not only divided linguistically and culturally, it is also deeply divided economically. If we consider the administrative map of the regions of Ukraine, with the list of said regions, and if we looks at the production levels obtained there, we will notice enormous differences.

Figure 1

Map of administrative regions











Tchernivtsi (Bucovine)




Rep. Autonome de Crimée-4






































Chart 2

GDP per capita and per region

 Ukr-PIB Angl2

This map shows enormous differences in production between the Eastern, industrial part, close to Russia, and in fact tied in with it, and the Western part, which is largely agricultural. It also shows that, contrarily to what is too often maintained, there are not “2” countries but “3” in the case of Ukraine. A median Ukraine also appears, which is different as to production as well as to ethnic composition. It is a zone where inhabitants speak simultaneously Ukrainian and Russian, and where the spontaneous language would be the “mixture” which is known as “Surzhik.”

Average incomes also attest to this divergence. Granted, the city of Kiev, as a capital, attracts high incomes, but it must be pointed out that this is possible only through the existence of important fiscal transfers from the rich regions of the East of Ukraine to the capital.

Figure 3

Distribution of regions according to average salary (in US Dollars)


 We find this situation again in the import and export fluxes of Ukraine with other countries. We notice that the exports as well as the imports of Ukraine are occurring with the CIS much more than with Europe. Russia represents actually between 70% and 75% of the relations with the CIS. When one knows that the total GDP of the European Union is of the order of 11,000 billion euros and that the one of Russia does not exceed 1,300 billion, one must agree that the attraction of Russia and the CIS is much stronger. The Ukrainian products find much more easily a market in the CIS and in Russia than in Europe. This implies that the closing up of markets of the CIS and of Russia would have dramatic consequences for Ukraine, and that maintaining, even reinforcing the integration with the CIS represents the way of economic reason.

Figure 4

Exports and Imports of Ukraine

Import-Ukr Angl

Exports-Ukr Angl

Carte Ukr exptREG-Angl

The problem is made more complicated by the fact that the volumes of exports and imports vary according to the regions. The situation in 2013 is perfectly clear on this point. One can see that a small number of regions export much more than they import, and that a large share of the commercial deficit originates in the city of Kiev.

Figure 5

 ForTrade regions

Note : The city of Kiev is distinct from the region of Kiev.

This makes it possible to recalculate the balance of trade of Ukraine taking into account the weight of the different regions and grouping them by “zones” corresponding to this tripartition of Ukraine which we have mentioned.

Table 1

Regrouping by zone

Donetsk EAST Kyiv-Ville CENTER Lviv WEST
Dnipropetrovsk EAST Mykolayiv CENTER Cherkasy WEST
Zaporizhzhya EAST Kyiv CENTER Vinnytsya WEST
Luhansk EAST Odesa CENTER Volyn WEST
Poltava EAST Sumy CENTER Zhytomyr WEST
Kharkiv EAST Kirovohrad CENTER Zakarpattya WEST
    Rep.Aut. de Crimée CENTER Rivne WEST
    Chernihiv CENTER Khmelnytskiy WEST
    Sevastopol CENTER Ivano-Frankivsk WEST
    Kherson CENTER Ternopil WEST
        Chernivtsi WEST


In fact, the “Centre” zone appears as being very largely in deficit, the “West” zone clearly less so, due to the weakness of its excess trade, as for the “East” zone, it is largely in excess. In fact, without the expenses of the city of Kiev, the external trade of Ukraine would be in balance, as the exports of the “East” zone cover the imports.

Table 2

Repartition by zone of the external trade in billion US dollars


Total export

Total import










In the contrary, if the regions constituting the “East” zone came to secede, the trade deficit of Ukraine would be much worse than it is today. This is one of reasons why the preservation of the unity of the country, and its economic integration with the CIS and Russia should be a common objective of the European Union as well as of Russia.


[1] Sapir, J., « Crimea and International Law ,»La Crimée et le Droit, note published in RussEurope, le 7 mars 2014, URL : http://russeurope.hypotheses.org/2066

[2] Sapir J., « A reasonable solution for l’Ukraine », note publiée dans RussEurope, le 8 mars 2014, URL : http://russeurope.hypotheses.org/2073

[3] Sapir J., « Provocation à Kiev ? », note publiée dans RussEurope, le 5 mars 2014, URL : http://russeurope.hypotheses.org/2051

[4] Or « a person who, having arrived at power in a just way, becomes a tyrant through the unjust use of this power. »


Jacques Sapir

Ses travaux de chercheur se sont orientés dans trois dimensions, l’étude de l’économie russe et de la transition, l’analyse des crises financières et des recherches théoriques sur les institutions économiques et les interactions entre les comportements individuels. Il a poursuivi ses recherches à partir de 2000 sur les interactions entre les régimes de change, la structuration des systèmes financiers et les instabilités macroéconomiques. Depuis 2007 il s'est impliqué dans l’analyse de la crise financière actuelle, et en particulier dans la crise de la zone Euro.

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