Uncertain future turns east Ukraine rebels into rivals

Analysis

Clashes since January 29 around Avdiyivka, in Ukrainian government territory close to the DNR boundary, have raised fears of a return to war. Whatever the truth of recriminations about who started the fighting, the breach of a December truce and the longer-standing September 2015 ceasefire highlights lack of progresss on the Minsk 2.0 peace process.

A rapprochement between Moscow and Washington may shift the balance towards Russia but not necessarily in favour of its DNR and LNR clients (see UKRAINE: Talks will stumble on without clear end point - October 26, 2016).

The DNR and LNR militaries are dependent on covert Russian defence supplies, and since September 2015 both entities have received transfers from Moscow to pay public-sector wages, pensions and benefits.

End of statehood project

Russian intentions have shifted. In 2014, the rhetoric was about a separate entity called "Novorossiya" consisting of the DNR and LNR and either claiming sovereignty like Abkhazia or being absorbed into the Russian Federation like Crimea.

That idea appears to be dead, and Moscow appears committed -- for now -- to reincorporating the DNR and LNR into Ukraine, but with as much autonomy and Russian influence as possible.

In the interim, Moscow will try to manage DNR and LNR politics and weed out uncooperative leaders including those it now sees as 'too nationalist'.

Rival fiefdoms

Despite their apparently common interests in pursuing a Moscow-aligned separate status, the DNR and LNR are as much rivals as allies, and suspicions that they are no longer a central focus for Russian ambitions have intensified the competition.

The DNR's head, Alexander Zakharchenko, and his LNR counterpart Igor Plotnitsky conceal their differences and appear amicably disposed in public.

They disagree on the viability of a peace deal with Kyiv and on trade with the rest of Ukraine, although less on the morality of dealing with their enemy than about who benefits.

Unification on hold

The DNR favours unification, whereas the LNR fears subjugation. Memories of domination by Donetsk-based oligarchs prior to 2014 are still fresh, and the LNR would not want to lose the direct financial support it gets from Moscow.

LNR's coal mining, metals and other businesses are wary of having to pay new levies to a government in Donetsk in the event of a merger.

Unofficially, there is some sympathy in Moscow for the strong DNR taking over its neighbour through unification. Moscow takes no official position as this would derail the Minsk peace agreement (the DNR and LNR are only sections of larger Donetsk and Luhansk administrative regions).

Hard line in Donetsk

The DNR's self-declared president, Alexander Zakharchenko, is a robust advocate of separation from Ukraine, he is sceptical of Minsk 2.0 and his abler military is more prone to confrontation with government forces.

While Zakharchenko is a stronger Russian ally than Plotnitsky, his intransigence could prove an obstacle to an eventual deal.

Luhansk more inclined towards peace

Plotnitsky is less popular than Zakharchenko primarily due to his efforts to distance the LNR from the Kremlin, but has stayed in power since August 2014 in the absence of a suitable alternative.

A recent dispute with the Russian economic development ministry over the control and distribution of resources in LNR concluded with Plotnitsky saying his administration would no longer provide economic production data to Moscow, nor would he keep the Kremlin informed of his schedule. In comments to the media on January 25, he asserted that "Putin can no longer issue orders to the LNR".

His administration is keener on peace talks with Kyiv because of its relative military weakness. LNR forces only narrowly repelled a Ukrainian incursion in January.

The LNR leadership is more amenable to reverting to Kyiv's control, with special autonomous status. In November, Plotnitsky proposed a nationwide Ukrainian referendum on creating a federal state modelled on Germany or the United States.

Responding to Plotnitsky's statement that "Ukraine must be given another chance", Zakharchenko said he would prefer independence or unification with Russia

Internal control

Zakharchenko's strong position allows him to be more tolerant of political opponents such as Alexander Khodakovsky, head of the Patriotic Forces of Donbas, who occupies a more extreme Russian nationalist position.

Since abandoning its early enthusiasm for ragbag militias fighting for Novorossiya, Moscow has worked to sideline nationalists such as Khodakovsky who might obstruct an eventual deal with Kyiv (see UKRAINE: Rebels' independence hopes will fade - August 9, 2016).

With the Kremlin's blessing, Zakharchenko transferred most of Khodakovsky's men to the control of the DNR's interior ministry in December.

Plotnitsky similarly distances himself from more radical voices but has adopted a harder line, not just because they might obstruct a peace settlement but because they might favour a merger with the DNR.

Local support for Plotnitsky appears to be limited. In an opinion poll conducted in December, fewer than 30% of respondents expressed confidence in him -- down from over 60% in 2015.

Political and military leaders, particularly in LNR, have often met violent ends. Assassinations are often blamed on Ukrainian special forces, but other commentators see them as Moscow trying to eliminate the less tractable leaders, or as the fallout from political and business rivalries within the rebel entities.

In two recent incidents, former LNR Prime Minister Gennady Tsyplakov died in local police custody in September and DNR militia commander Arsen 'Motorola' Pavlov was killed by a bomb in October.

Trade competition

The DNR continues to trade with Ukraine regardless of the conflict. The LNR is even more dependent on this trade, importing raw materials and spare parts and sending coal, metals and other items in the other direction.

Due to inadequate rail and road connections, most of the LNR's trade with Ukraine passes through DNR-controlled territory. In 2015, the DNR authorities started taxing this trade.

DNR customs officers and paramilitaries extort bribes from LNR-based businesses to allow goods to pass through, and sometimes seize goods and then resell them to Ukraine.

Under pressure from local industries, Plotnitsky last year called on the DNR to stop interfering in LNR's economic ties with Ukraine. DNR officials retorted that the LNR preferred to trade with Ukraine rather than with them.