Economic connectivity across the line of contact in Donbas, Ukraine

15.09.2017

Natalia Mirimanova

Escalating political and military manoeuvres on both sides of the conflict in Eastern Ukraine led, in early 2017, to a full commercial cargo blockade across the line of contact. As a result, several industrial, energy production and transport cycles that spanned the conflict divide were disrupted, and hundreds of thousands of jobs have been jeopardised on both sides. Support for the incorporation of Donbas’ industry into Russia from some public figures in Russia has deepened uncertainty and fears of further military escalation and a potentially creeping annexation.

This study builds on previous research from 20151 on economic connectivity between small and medium businesses from Non-Government Controlled Areas (NGCAs) and their suppliers, customers, and partners across the line of contact. The present report is expanded to include larger businesses and additional variables of economic activity, such as bank loans and longer-term business plans. The data was collected between July 2016 and January 2017, employing surveys, focus groups, and semi-structured in-depth interviews and presents a baseline analysis of economic and political positions of private businesses beginning with the introduction of the full blockade between Kiev and NGCAs.