By Richard Giragosian, Director of Regional Studies Center
As mounting unrest and violence now rages in Ukraine, instability now seems to be spreading throughout the so-called “near abroad,” Moscow’s descriptive term for the former Soviet space. Clearly, Ukraine now stands as a pivotal arena of confrontation and conflict, on several levels.
First, the divide between President Viktor Yanukovych and the demonstrators has only deepened, with the recent wave of violence claiming at least 25 dead and more than 240 injured. And the current intensity of violence makes a return to normalcy, or even dialogue, ever unlikely.
But there is also a second, more fundamental dimension of this divide, as Ukraine itself faces a new danger of virtually splitting apart, as cities and region are now taking firm stands and aligning with competing sides.
And third, Ukraine is also now subject to a broader divide, between Putin’s Russia and the West. This also makes Ukraine more of a test for each side. It is a test for Russian President Putin, and whether he can continue to rely on force to coerce and capture Ukraine.
But it is also an equally important test for the West, and a challenge to Western resolve and unity. And the West has not performed very well so far, as the Europe Union (EU) seems more divided than divisive. And Russia has already succeeded in pushing back and pushing out the EU from engagement in the “near abroad,” thereby asserting Moscow’s “sphere of influence,”
But despite the significance of the conflict in Ukraine, Kiev is not the only “center of gravity” for instability in the former Soviet space.
In fact, regional unrest seems spreading even further, as demonstrated in the Balkans in recent weeks, for example. The Balkans now faces a degree of social unrest not seen since the end of the war in 1995. The drivers of the Balkan unrest, which has seen thousands in Bosnia-Herzegovina going into the streets in protest over rising unemployment, poverty and corruption has also assumed its own momentum as protests expanded to Sarajevo and five other cities.
There have also been surprising developments in other parts of the near abroad.
In one of the more unexpected cases, the traditional perception of a stable and energy-rich Kazakhstan has been shaken by a new wave of unrest. After a sudden falling the value of the Kazakh currency, demonstrators have staged protests outside the National Bank as hundreds of others sparked a “run on the banks” after attempting to withdraw their deposits.
The crisis in Kazakhstan, which featured a serious 19 percent fall in the value of the national currency, the tenge, has already affected the prices of nearly all commodities, goods and services. The crisis has been exacerbated by the already high level of imports of most food and consumer products. It also prompted the Kazakh government to immediate access some 1 trillion tenge (or about $5.4 billion) from the country’s State Oil Fund.
Aside from the surprising outbreak of instability in energy-rich Kazakhstan, there is another consideration for other former Soviet states, and especially for Armenia. The concern stems from the outlook for the Russian ruble, which now appears to have been a primary trigger of the fall in value of the Kazakh currency. More specifically, the value of the ruble also plummeted, falling by some 10 percent in value against the dollar last month.
For Armenia, the pronounced economic vulnerability to any such devaluation of the ruble is a significant challenge. It also adds yet another economic argument against Armenia joining the Russian-led “Customs Union” project.