Creeping decentralization of Ukraine

While looking for the next topic to consider, I have come upon a curious post that attracted my attention. Certain contributor to Facebook, Borys Filatov, wrote addressing to unknown persons in Kyiv “Do not forget that we've got a real decentralization here”. Even though Mr. Filatov qualified his statement adding “Within the framework of a unified Ukraine”, I interpret this incident as a serious indication that this country is in the process of imploding for internal causes.

There are two reasons to come to this conclusion. First, Mr. Filatov is a deputy governor of Dnipropetrovsk region and his opinion is likely to be supported by Dnipropetrovsk governor Ihor Kolomoyskyi. Second, the phrase was uttered in the context of a financial conflict that revolved around the question of who controls the financial flows in a large part of Ukrainian territory stretching from Odessa to Dnipropetrovsk. This is exactly the area that was formerly called “Novorossiya” and which is largely pro-Russian.

The conflict itself needs to be explored in more details. Certain Georgy Yaroshenko arrived in Dnipropetrovsk and explained to the custom brokers – invited by the local office of Ukrainian security service – how to pay bribes to avoid problems with custom authorities. Such a meeting itself was not extraordinary in the local context as Ukraine is known to be a highly corrupt country. However, the reaction of local authorities was shocking given the political positioning and personality of Mr. Kolomoyskyi.

Arguably, Mr. Kolomoyskyi is the most active participant in the “anti-terrorist operation” (ATO) against the pro-Russian separatists. He is known for organizing several “self-defense battalions” paid for with his own funds and actively involved in the ATO combat operations. Incidentally, Mr. Kolomoyskyi runs Privat Group that is known for its aggressive hostile takeovers, in which Mr. Filatov presumably took part as a lawyer.

Given that Mr. Yaroshenko belongs to the group run by Mayor of Kyiv Vitali Klitschko who happens to be the key political ally of President Petro Poroshenko, the phrase “we've got a real decentralization here” acquires particularly menacing sense. With this phrase, Governor Kolomoyskyi states that he does not consider necessary to share money originating in Novorossiya with the central authorities. It is even more interesting that his team considers appropriate to use their fighting against “separatism” as an argument in their battle against Kyiv. Essentially, Kyiv is asked to leave Dnipropetrovsk alone or to face a popular revolution against "corrupt practices."

As a result of this demarche, the central authority finds itself in a no-win situation. If Kyiv denounces Mr. Yaroshenko and the practices he represents, Mr. Kolomoyskyi succeeds in his hostile takeover of financial flows from illegal custom operations. Then, because such operations are highly lucrative (some say that legal export-import trades are close to be impossible to do), he will make a fortune that pays back for his war expenses. If Kyiv sanctions Mr. Kolomoyskyi, it will lose a powerful ally who is in a position to stall the ATO in Donbass.

From my perspective, I find Mr. Kolomoyskyi’s covert coup being as much separatist to the idea of “unified Ukraine” as the battles waged in the fields by Donbass militias. If this tendency persists, other governors may wonder if they should stop sharing with Kyiv in largesse as well. Luckily, they have now “self-defense battalions” to show people organizing meetings with the help of Ukrainian security service who are the boss there.