Everyone Loses: The Ukraine Crisis and the Ruinous Contest for Post-Soviet Eurasia

The wrecked airport serves as an apt symbol for the gestalt we observe in the Ukraine crisis. Game theorists classify the result of a dispute or negotiation in one of three main categories. In a zero-sum game, one party gains from the interaction and the other correspondingly loses, with the respective winnings and losses adding up to zero. Hypothetical illustrations would be a competition between two unemployed persons over a single desirable job, or between two passengers in a sinking yacht over the one available life raft. In a positive-sum game, both actors benefit. For instance, negotiations over shares in a fixed pie of resources could produce insights into how to enlarge the pie so that both parties get more valuable slices than before, or the yacht passengers could find a way to activate a second life raft so that both of them survive. In a negative-sum interaction, by contrast, the pie or pool of available benefits shrinks, because of contextual changes or choices made by the parties involved, and each of them ends up worse off at the end of the day. In the theory of games, negative-sum interactions are appreciated as the ones that will generate the most severe discomfort and discord as the players work their way through them.

In our estimation, the best metaphor for the conflict in and over Ukraine is that of the negative-sum game, a ruinous scenario in which every major player loses.[3]

As far as Ukraine is concerned, its overall condition has degraded markedly since the crisis erupted in 2014. No one can be sure exactly how many Ukrainians have died in the fighting in the Donbas. The United Nations Office for the Coordination of Humanitarian Affairs puts the toll at about 10,000 as of August 2016. Almost 3m people have been forced from their homes. Much of the Donbas’s vaunted stock of mines and industrial assets has been destroyed. Countless dwellings in the towns and cities of the region have been razed or smashed by indiscriminate shelling, as have electricity, water, sewage and other utilities.

Nationwide, the country has a new president (Petro Poroshenko, elected in May 2014) and a new parliament (elected in October 2014). But politics have become radicalised, and the state has been weakened, including by loss to volunteer paramilitary battalions of its monopoly over the use of force. The authorities are committed rhetorically to economic and political reform; results have been dilatory and quarrels over policy and patronage have abounded. Ukraine did sign the agreement with the EU that Yanukovych put on ice in 2013, but any pay-offs lie well in the future and there is no possibility of Ukraine becoming a full member of the bloc for many years to come, if ever. Ukrainian GDP slid by 7% in 2014 and another 10% in 2015, and that is counting production in areas no longer controlled by the central government.

The other actors in the ongoing saga have suffered less, but are certainly worse off than they were before the crisis began. Russia has gained some territory, true, but has paid dearly in economic terms and in international standing. The war footing and Western sanctions have weakened liberal impulses and strengthened conformist pressures within the polity while adding to the hyper-personalisation of political life around Putin. The economic downturn that has ensued, while not an exclusive result of Ukraine-related turbulence and Western sanctions (falling oil prices have been more debilitating), has only made things worse. Russia shows no inclination to annex the Donbas but has had to shell out tens of billions of roubles to ease its misery. Crimea, now de facto incorporated into the Russian state, will burden the treasury in the coming years, and Western sanctions and cut-offs in trade with and supply of irrigation water and electric power from the Ukrainian mainland have made life difficult for inhabitants of the peninsula.