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The Role of Ukraine's Leading Oligarch Grows amid Crisis



Rinat Akhmetov speaks during a press conference in Kiev on March 30, 2006 after legislative elections.(SERGEI SUPINSKY/AFP/Getty Images)

Summary


Rinat Akhmetov is Ukraine's richest man and arguably the most powerful oligarch in Ukraine's eastern industrial heartland. As clashes rage between Ukrainian security forces and pro-Russian separatist fighters, Akhmetov is becoming an increasingly important player in the country's crisis, given his influential position in eastern Ukraine and his working relationship with the Russian and Ukrainian governments.

In a May 19 statement, Akhmetov called for regularly occurring peaceful rallies in opposition to the separatist groups in eastern Ukraine. Akhmetov's careful balancing of opposing forces in Kiev and Moscow will be key to any potential resolution in Ukraine, both in addressing the immediate separatist threat in the east and in determining the country's broader political course.

Analysis


After separatists seized and occupied administration and security buildings in cities throughout the Donetsk and Luhansk oblasts, the Ukrainian government launched anti-terrorist operations to take down the separatists. The operations have almost exclusively concentrated on Donetsk oblast, particularly the separatist strongholds of Slovyansk and Kramatorsk.

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The Victory Day celebrations from May 9-11 marked a turning point. With pro-Russian and pro-Soviet sentiment high, as is generally the case during this holiday, clashes spread to Mariupol, a key industrial city in Donetsk where many of Akhmetov's steel and mining assets are concentrated. More than two dozen people died as Ukrainian security forces fought rebel groups in the city that weekend; five of them were civilians not directly involved in combat.

Before Victory Day, Akhmetov had expressed a nuanced position as the crisis unfolded. Though Akhmetov was a financial backer and political supporter of former Ukrainian President Viktor Yanukovich, he quickly abandoned his support after Yanukovich was ousted in February and pledged to cooperate with the new Ukrainian government. At the same time, he called for the decentralization of the Ukrainian government and for greater powers to be given to the regions. Akhmetov served as a middleman between pro-Russian elements in eastern Ukraine and the Ukrainian government, backed by the West. He offered to mediate in the eastern regions between the separatist groups and the government.

However, deteriorating security throughout eastern Ukraine directly threatens his business interests and assets, forcing Akhmetov to more actively oppose the separatists. After the Mariupol clashes, Akhmetov announced the formation of security patrols by workers at his steel and industrial plants in the city and in nearby areas to counter the security threat posed by separatists. In his most recent announcement, Akhmetov called on his workers to hold peaceful protests daily until separatists vacate occupied buildings.

So far, these plans have proven relatively effective. According to Akhmetov-owned firm Metinvest, more than 18,000 people have joined the citizen patrols in Mariupol, including steelworkers, miners and community leaders, and the patrols are conducted jointly with local police. These patrols have cleared barricades put in place by separatist groups, and in some cases participants have persuaded separatists to leave occupied buildings in the city without open clashes -- something security forces were unable to do. However, any success has so far been limited to Mariupol and its immediate vicinity, and clashes continue in the more entrenched separatist strongholds of Slovyansk and Kramatorsk. Protests in those places so far have drawn modest participation, with around 1,000 people gathering in a stadium in Donetsk to support Akhmetov and oppose separatism.

Akhmetov has earned praise from Petro Poroshenko, the leading candidate in Ukraine's upcoming and controversial presidential elections, but this has generated greater animosity from the separatist groups, who oppose the elections and held their own polls in Donetsk and Luhansk to establish alternative governments in each region: the Donetsk People's Republic and Luhansk People's Republic. On May 20, gunmen associated with the Donetsk People's Republic stormed nearly a dozen district election commission offices in the region. They demanded officials turn over ballots and other documents pertaining to the upcoming May 25 elections. In addition, a representative from the Donetsk People's Republic, Denis Pushilin, said that Akhmetov's businesses in the Donbass region would be nationalized due to his payment of taxes to what Pushilin called the "terrorist government" in Kiev rather than to the Donetsk People's Republic. As these episodes show, despite Akhmetov's ample resources, he faces manifold challenges in trying to physically contain separatist activity.

More important than the position of Poroshenko or the separatist groups is that of Russia. Akhmetov's purported strong ties with Moscow go back decades. But this hardly means that Akhmetov and Russia are in complete alignment. Russia has called for the federalization of Ukraine, which Akhmetov opposes, and Moscow also wields considerable influence over the separatists, some of whom are using increasingly aggressive rhetoric against Akhmetov.

Russia and Akhmetov do share some important goals. Both would like to maintain the strong economic ties that exist between Russia and Ukraine -- particularly in Ukraine's industrialized east, which is highly integrated into Russia's own industrial infrastructure and production. Both sides would also like to prevent a strong Ukrainian orientation toward the West -- Russia for geopolitical reasons and Akhmetov to preserve his business interests. And while Russia and Akhmetov disagree on federalization, the specifics are less important to Moscow than the need to keep the government in Kiev weak in order to prevent greater integration with the West.

Akhmetov and the other powerful oligarchs in Ukraine's eastern industrial heartland will have to play an important role if any resolution is to be reached between Russia and Ukraine. So long as Akhmetov reliably counters Kiev's Western drive, Moscow will probably be careful to limit the threat separatist groups pose to Akhmetov and his assets. Moscow and Akhmetov will have to maneuver carefully to make any such compromise possibile, and there are other important factors, such as the position of the West and the actions of rogue separatists, to consider. But it is clear that in the broader negotiation over Ukraine's future, Akhmetov and the oligarchs will continue to play a crucial role in shaping Ukraine's political evolution, just as they have since the crisis erupted.


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