Wednesday, March 5, 2014

Ukraine SITREP March 5, 09:38 EST

  • The situation in the city of Donetsk is becoming unstable again.  The local people have elected a "people's governor", but the local police forces seem to be loyal to the oligarch appointed as governor by the insurgents.  The local people had been occupying the local governor's offices and parliament building until this morning when the police told them that there was a bomb threat and that they needed to evacuate.  The people did evacuate but apparently no bomb was found.  The Russian flag on the building was replaced with Ukrainian one.
  • Demonstrations have continued in the city of Odessa where the local population wants to follow the examples of Crimea, Donetsk and Kharkov and have a referendum on the future of the region.  
  • There are also unconfirmed reports of pro-Russian demonstrations in the city of Nikolaev.  Should this city also break away the Ukraine would lose its last major port on the Black Sea and, if the anti-insurgent movement gains strength in the south, the rump Ukraine could become a landlocked country.
  • Contrary to earlier Russian reports, some military units in Crimea seemed to have remained loyal to the authorities Kiev.  They present no military threat to the peninsula.
  • The OSCE has announced that it will be sending military monitors to Crimea.  Considering the role these so-called "monitors" have played in Chechnia and South Ossetia, this is bad news for Russia.
  • Russia has announced that it will built a bridge between the Taman peninsula and the Crimean peninsula thereby providing a high speed communications node between the Crimean cities of Kerch and Fedosiia and the Russian cites of Novorossiisk and Krasnodar (see map).
  • The US State Department has announced that it plans to give one billion dollars to the Ukraine.  The EU and the IMF are talking about a 600 million dollars.  Total: 1,6 billion dollars.  Just to remind: Russia had promised 15 billion dollars plus another 5 billion or so in gas price cuts, for an approximate total of about 20 billion dollars.  The Ukrainian insurgents claim that they need 35 billion dollars while the total debt of the country is estimated 170 billion dollars.  Let's do some math: + 1,6 - 20 = - 18.4.  Now add to that the Crimea will stop paying federal taxes staring in March, the costs of the burning down of the city center in Kiev, the breakdown of the economy (there are shortages in all insurgent controlled areas), the very real risk that all of the rich eastern Ukraine could follow the example of the Crimea, the free fall of the Hrivna, and the effect on the economy of the stopping of payment of pensions and salaries and you will immediately see that the West's 1,6 billion is but a tiny fraction of what the Ukraine needs.
  • Putin had hour long press conference yesterday which was one of the best ones he ever made.  As soon as I can get it, I will post either a subtitled video or a full transcript.
  • The President of Tatarstan has visited the Crimea and two regions have signed a number of economic cooperation agreements.  He also met with local Tatar leaders.  Me feeling is that thanks to the immediate and wise intervention of the Parliament in Tatarstan, the President of Tatarstan and the Tatar World Congress the Tatar issue in the Ukraine will be peacefully solved to the satisfaction of all parties.  Kudos to the Tatars and the wisdom of their leaders!
Stay tuned.

The Saker