Transcarpathia, Transnistria and Gagauzia SitRep 10 Nov - 16 Nov

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Transcarpathia

ATO

Only two individuals from Transcarpathia have been reported as killed at the front. The first served volunteered in AUgust and received two weeks training. He joined the 128 Mechanised Infantry Brigade and was killed by a sniper near Debaltsevo. The second was described as a Major, killed in an unreported location. A third solder, a resident of Mukachevo, who died of burns in a hospital in Dnepropetrovsk was commemorated this week.

The latest reports from the regime indicate that a total of 1654 individuals from Transcarpathia have served at the front. This presumably excludes the members of the militias who come and go as they wish. Of these, 24 are reported dead, 54 wounded and 15 have been released after being held prisoner in the east. Currently there are about 200 official combatants at the front from bases in Transcarpathia. The overall official loss figures are 1052 Ukraine military killed, more than 4000 injured and more than 400 are held prisoner. These figures contrast dramatically with those estimated by the Novorossian forces. They calculate the death toll at 20904. This includes 11590 regular Ukrainian military soldiers and 3382 from the various militias and special battalions.

The trickle of police officers rotating to and from the front continues. They seem to have been been based near Debaltsevo. One group of 50 returned after one month at the front whilst another group of 10 returned after 40 days. The Crimean Tatar spokesperson, Dzhemilev is reported claiming that 450 Crimean Tatars are serving in various battalions. He also claims that the relatives of these individuals in Crimea are at risk and are held hostage to local authorities. He seems to be doing a good job as a propaganda agent for the regime.

One recent development ids the appearance of videos in the local press of Transcarpathians serving at the front. As an example, this one shows a substantial camp located near residential buildings. The soldiers are filmed using these abandoned houses for shelter and cooking facilities. They also decorate the places with their symbolism. The local Hungarian press still refer to the Novorossians as pro-Russian dissidents rather than the term 'terrorist' ubiquitous in Ukrainian media.

The lustration process is still under way. This process of removing 'tainted' individuals has a couple of loopholes, allowing those who served under Yanukovich to continue in their posts. One loophole relates to those who have served in the ATO forces. A popular cam involves an affected person finding a quiet spot near the front to serve for a short while, gaining them exception to the process.

The Pravy Sektor (PS) forces have established a training camp in Transcarpathia. This allows those PS fighters who have seen enough of the reality of war to train other gungho individuals to take their place. A small number of individuals have been trained and form part of a so-called '1st battalion DYK'. Reports claim the PS fighters at Donetsk airport have left because their work is done there. The close combat work is being left to the Ukraine military. It appears that these PS 'cyborgs' have left without notifying the military authorities and have gone to parts unknown.

Economy

The Ukraine national bank has ceased trying to hold the Hryvnia exchange rate at about 13 UAH/$. This support was provided during the election period to mask the true state of the economy from the voters. Following the election, the central bank abandoned a fixed exchange rate policy and expected the rate to rise to 15-16. It did this almost immediately, running at 15.4 to 16.1 by mid week. To put this in context, the exchange rate was 6.99 UAH/$ at the beginning of the year and some analysts expect it to reach 20, certainly before the end of the year. In February this year, the Ukraine reserves included ~21 tons of gold, now there is only about 0.2 tons. It is not known publicly where this gold went. Possibly some of it was sold recently to support the UAH exchange rate stabilisation.

In parallel, the bank base rate has risen from 6.5% in April this year to 14%. The public are reported to have withdrawn 110 billion UAH of savings from banks since the beginning of the year. Local media report that banks are 'unwilling' to return depositors funds, and queues of 500 have been mentioned forming outside banks in Mukachevo. The central bank has refinanced several such banks, not specifically identified, to prevent a run.

The dominant local economic statistics for the regions produce including grain, wheat, barley, potatoes, fruit, berries, timber, milk, cattle, sheep, pigs and poultry typically show yields a few percent down on last year. Hungary is still the dominant local trading partner. Incomes are stead or falling. Prices are rising locally; the price of heating gas has increased 63% since Dec 2013. Similarly electricity is 11% higher, medical costs are 24% higher, fuels and oils for transport 55% higher. The costs of burials have increased 18%. The official local inflation figure is 2.3% for October, effectively around 19% for year to date.

A local helicopter production company is on the verge of bankruptcy. It owes about 1.3 million UAH in unpaid wages. It had a contract to supply some equipment to India, but India cancelled the deal, reasons unspecified.

Russia holds about $3.1 billion of bonds from Ukraine. The terms of the deal allow for immediate repayment should government debt exceed 60% of GDP. Putin has said that Russia will not make a call on the bonds as that would destroy the Ukraine economy. No doubt Putin bashers will see this as weakness. This is not the case. It is a strong hint to those in power who clamour to own Ukraine that the whole pack of cards could be demolished at a stroke. By not doing so, Putin also precludes explicit blame for the collapse on Russia. The Ukraine economy will collapse on its own anyway, unless things change rapidly and dramatically for the better.

Election

The results of the election have more or less been determined. Of the 421 MPs, 225 are members of party lists and 196 are from the majority districts. The party "Bloc Petro Poroshenko" has won 132 seats, the "Popular Front" (Yatsenyuk) has won 82, the "Self-Help" (Semenchenko) party 33, the "Opposition Bloc" - 29, Lyashko's "Radical Party" - 22, "Batkivshchyna" (Tymoshenko) - 19, and Svoboda (Tyahnybok) - 6 seats. In addition, one deputy was elected for each of the "Strong Ukraine", "Spade", Svoboda and Pravy Sektor parties in the majority districts. Election results are still pending from two districts. The Central Election Commission has given District 38 (Novomoskovsk, Dnipropetrovsk oblast) and District 63 (Berdychiv, Zhytomyr oblast) 15 days to comply with court decisions regarding recounts.

Energy

Slovakia continues to supply gas via reverse feed. It claims to have supplied 20% of the needed volume and to have saved Ukraine $500 million.

Mobilisation

In spite of speculation of a fourth wave of mobilisation after the election, the regime says this is currently not necessary.

Politics

One of the local clan of politicians, Viktor Baloha, is in favour of a referendum in the east. The question would be for them to stay or go. This would avoid a long drawn out drain on Ukraine's resources. I suspect Ukraine's resources are close to zero anyway so this is a moot point.

Propaganda

The current invocation of the Carpathian Sich, an organisation aimed at fostering nationalist spirit and protecting the interests of the Ukraine nation, was founded in 2010. The organisation aims to educate new Ukrainians - to be "strong, fair, people of Faith and Honour. We must break the stereotypes of patriotism in Transcarpathia. People will understand that the nationalists are not 'thugs'". The organisation was founded in reaction to Hungarian aggression in 1938 and no responds to Russian aggression [for some obscure meaning of the word 'aggression']. To celebrate the 70th anniversary of the founding of the original organisation, a torchlight march was held in Uzhgorod. The poor lighting makes it difficult to tell how many participated, but judging from the evidence of attendance at other meetings, it is probably only 20 or so members, including some from Lviv and Ivano-Frankivsk. The leader of the Carpathian Sich favours a unification of all nationalist movements, which possibly reflects the low support for individual groups. The Carpathian Sich trains for military action with members of the Aidar battalion. The local head of the executive committee, Thomas Deak, has left supposedly to serve in the east.

Sanctions

Hungarian ministers report that Hungary now supports EU sanctions, providing everyone else does. It also is still committed to a balanced relationship with Russia. I guess the Hungarian government hope this will be sufficient to keep the Nuland regime changers off it's back. We will see.

Separatism

On 11th November, the Transcarpathian SBU arrested the chief editor of a local newspaper, "Workers' and Peasants' Truth". The editor is said to oppose the central government and support the calls for separatism in the east. The paper contained images representing Communist ideology and an article said to create a negative image of Ukraine, humiliate its national dignity and denigrate the honour of the Ukrainian and individual representatives of national minorities. ALl copies of the newspaper were confiscated. The editor faced two charges i) violation of the territorial integrity of Ukraine and ii) violation of citizen's equality based on their race, ethnicity, religious beliefs. The prosecutors sought preventative detention. The judge allowed the editor to go free on bail. The offences carry a 5 year prison sentence for anyone found guilty.

Transnistria (aka PMR) and Gagauzia

Economy

As a result of the financial blockade, PMR foreign exchange reserves have dropped by about ~ $5 million to ~$37 million.

A survey of business in PMR shows that about 70% have been affected by Ukraine sanctions, with 17.5% having their supply chain broken. Exports to Ukraine have declined between 40 and 90%. This may reflect the dramatic collapse of the Ukraine economy itself as much as the direct effects of the sanctions.

Currently, about 40 trucks destined for the PMR are held up at Ukraine border crossing points over alleged paperwork problems.

The Moldovan Minister of Agriculture sees the possibility of more sanctions from Russia relating to Moldovan agricultural produce.

Elections

A pre-election survey in Moldova asked 1005 respondents from 75 settlements how they would vote in the election to be held on 30 November. The sample size gives a survey error of around 3%. About 60% had decided how they would vote. The results were 'Party of Communists of the Republic of Moldova' - 21.2%, 'Liberal Democratic Party of Moldova' (Liberal Conservative) - 17.8%, 'Democratic Party of Moldova' (Social Democrat) - 12.9%, for the 'Rodina Party' - 9.6% and 'Liberal Party' (Conservative liberalism) is 7.3%. The 'Party of Socialists of the Republic of Moldova', supposedly favoured by Russia, would not pass the electoral threshold, gaining only 3.9% and the electoral bloc 'Select Moldova Customs Union' would gain only 1.1% of the votes. A summary of the position claims that the main protoges of the US/EU position are the Democrats and the Liberal Democrats. Given the likely outcome will be a coalition, some suggest this may allow third parties to create instability, whilst others suggest this would make it difficult to run a Euromaidan or run a scenario as seen in Ukraine.

Energy

The negotiations between Gazprom and Moldova over the supply of gas were conducted quickly and without the apparent histrionics observed in Ukraine. The gas price was set at $380 per thousand cubic metres by the end of 2013. The new deal resulted in a price of $332, $45 less than current price. this is based on the purchase of 3 billion cubic metres (bcm) of gas per year by Moldova and allows for the transit fees for 19 bcm for gas supplied to Turkey, Bulgaria and Albania.

Politics

On 10 November, the PMR Prime Minister Yevgeny Shevchuk travelled to Moscow for a meeting. On arriving at Chisinau airport in Moldova, he was held up by a group of 20 or so aggressive men who tried to prevent him travelling. The group were identified as current and past members of the Moldovan police, associated with the 1992 war against PMR. The leader is associated with the far right national Liberal party. The trouble makers were blocked by Shevchuk's unarmed bodyguard. The PMR government regarded the act as a pre-planned provocation aimed at prevent free movement of PMR politicians. The severity of the act is described as unprecedented. The PMR government demanded the Moldovan authorities take action against the provocateurs. The provocateurs in turn claimed they were the victims. This sort of action supports PMR claims for its own airport at Tiraspol.

Whilst in Moscow, Shevchuk signed five Memoranda of Cooperation with Russia, covering the financial sector, health, communications, consumer rights, and human welfare.

The Parliamentary Assembly of the Council of Europe (PACE) has expressed concern about corruption in Moldova, especially the influence of oligarchs. In a recent visit to assess electoral procedures, members of the committee formed the view that the process did not meet EU standards. There was a lack of transparency, the presence of 'dirty money', much of the media is under control of oligarchs, who have close ties with political parties. A member on the committee noted that the report was not disclosed publicly to avoid complicating elections.

The Moldovan Democrat Party is controlled by the oligarch Vladimir Plahotniucom. This party at one time had a two-track approach advocating the development of relations with both Russia and the West. Its representative in Gagauzia argued the party was the most pro-Russian party. However, 10,000 participants of the war against the PMR have recently joined, probably including those involved in the provocation against SHevchuk. A member of the Moldovan government considers this action as a show of force directed against those who disagree with him (Plahotniucom) According to the MP, "This scumbag [Plahotniucom] imagines himself Moldovan "Kolomoisky" and he is "ready to go on provoking a new war with Transnistria. This "plan B" to remain in power by imposing a state of emergency and postpone the elections".

Ukraine wants to open a consulate in Tiraspol for the benefit of Ukrainians living in PMR. This is at odds with the recent closure of nine consulates elsewhere. Russia has also sought to open a consulate in Tiraspol, but unsurprisingly, this has been blocked by Moldova.

The EU parliament ratified the Association Agreement with Moldova. The vote was 535 in favour, 94 opposed and 44 abstained. The pro vote amounted to about 80% of the full vote.

Serbia and Russia have quietly signed an agreement on military cooperation. They will hold their first joint military exercise named SREM 2014. This may lead to the presence of Russian forces west of Romania.

Propaganda

The young Gagauzian male, a supposed terrorist caught with clothing bearing a label 'G. E. Army' was released without charge 72 hours after being detained. He is being kept under watch by the Moldovan security services.

The NGO 'Youth of Moldova' has been displaying banners promoting the supposed benefits of reunification with Romania.

Sanctions

There is ongoing decline of trade from Moldova to Russia as a result of reverse sanctions. The trade is down 30% to about $345 million. The sanctions have al;so resulted in a negative trade balance for Moldova (imports > exports) of $140 million in the first nine months of 2014. Romania is now the leading export trade partner for Moldova. The Moldovan government petulantly insists that Russia's sanctions are unnecessary.

Separatism

The Government of PMR is ready to hold a rerun of the 2006 referendum on independence, subject to international acceptance of the results. In the earlier referendum,97% supported independence. This may be a precursor to Russian recognition of PMR as an independent state. Russia has reiterated its support for PMR and is keeping course towards formal recognition of PMR.

The Moldovan government continues to block the formal 5+2 JCC process for a negotiated settlement. It even ignores supposedly mandatory emergency meetings. A formal statement of the PMR position is listed in the resources section below. The PMR government insists on continued bilateral progress. The Russian and Transnistrian governments struggle to find ways to unblock the process. The PMR member of the JCC group holds the view that Moldova is preparing to withdraw from the 1997 agreement on how to resolve the dispute. This view is strengthened by Moldova's insistence that RUssian troops withdraw from the peacekeeping mission. Moldovan security service has searched the home of Paul Grigorchuk, who is publicly critical of the regime. A search warrant was issued, and his computer and phone were sized during the search. He is a forceful critic of the oligarch running the country and the far right supporters. The Moldovan government claim they suspect him of planning to destabilize the election and of illegal participation in the election campaign.

Resources

The site Regnum Ru provides a wealth of articles, either commissioned or syntheses with additional commentary clarifying or correcting the main text. It has filtering options allowing fairly specific topics to be monitored.

"Dialogue" EU - TMR: a hot meal in exchange for the surrender a view by a former PMR finance minister of the implications of the Moldova - EU Association Agreement for PMR.

Statement of position by the PMR government regarding the status of the JCC 5+2 negotiations.