The war in Donbas has raged for almost seven years. The conflict, fought between the Ukrainian Armed Forces and ‘pro-Russian’ separatist groups and primarily affecting the eastern Ukrainian regions of Donetska and Luhanska, has continued since 2014. The war has been waged over a 427km contact line separating the Ukrainian government-controlled area of the Donbas from areas administered by separatists. At least 3,367 civilians have been killed in the conflict with over 7,000 injured, 1.5 million have been internally displaced, and 3.4 million people need humanitarian assistance near the contact line. Peace negotiations have consistently failed and, although ceasefires have been regularly negotiated, the conflict continues, and the humanitarian catastrophe deepens.
In tandem with the increasingly violent war in Donbas, International Financial Institutions (IFIs) have deepened their engagement with conflict-affected Ukraine. The International Monetary Fund (IMF) and the World Bank are the two main IFIs who have long been involved in the political economy of independent Ukraine. The war in Donbas has presented further opportunities for the IFIs to intensify their work within the country, as the Ukrainian Government faces multi-pronged humanitarian, economic, and military crises, and is desperate for financing and access to capital markets. The involvement of the IFIs within countries actively affected by conflict is a relatively recent phenomenon, though they have been involved in post-conflict economic restructuring since the 1990s. Both the IMF and World Bank have expanded their interests to active warzones, as both the United Nations and powerful member states continue to legitimise their role as important ‘partners’ in economic stabilisation and rebuilding during war. As such, the pathway toward ‘peace’ and reconstruction has been thought of in neoliberal terms set by the IFIs and mainstream political economy scholarship.
My article in the Review of International Political Economy challenges neoliberal assumptions through analysing IFI-influenced gas reforms during the war in Ukraine as a case study. My theoretical lens, which I explain in my article, allows for a more complete understanding of the everyday work and actions of Ukrainians who reproduce and revitalie themselves under conditions of war. This everyday work is often disproportionately completed by women. It is the contention of my paper that ‘seeing’ the impacts of IFI-influenced gas reform on the everyday, mundane work of, primarily, women (such as housework, caring for dependents) during war, can help us further understand the depth of these impacts while challenging neoliberal assumptions of reform during war that privileges abstract macro-economic indicators that are often divorced from reality.
Gas reform is the focus of the investigation. This is because gas reform has been a central aspect of both the IMF and World Bank in Ukraine since the dissolution of the Soviet Union. It has also been the most economically and politically contentious economic restructuring program during the war in Donbas. Additionally, gas is a vital component of people’s everyday lives, constantly used throughout mundane, daily practices, and is the primary source of energy use in Ukrainian households. This means that analysing gas reform can help reveal the impacts of IFI-influenced economic restructuring on the everyday lives of Ukrainians affected by war. The empirical data informing this research is drawn from face-to-face, semi-structured interviews completed in Ukraine in late 2018 as part of my doctoral dissertation.
Fuelling violence: Gas leaking through the fault lines of conflict
Through an exploration of the historical progress of gas reform in Ukraine, my paper demonstrates that, since the war in Donbas began in 2014, household gas prices have increased approximately 650 per cent under IMF-backed economic restructuring. However, the question remains, what are the direct and indirect impacts on Ukrainians from this radical, IFI-influenced gas reform?
My research has three main findings that are presented in detail within the paper, though I will outline them in brief here. First, the direct impacts of gas reform are vastly increased household costs during war. In the first two years of the War in Donbas, household costs increased nine-and-a-half times mainly due to gas expenses. This is in the context of increasing poverty in the country, with 42 per cent of Ukrainians experiencing material deprivation and 27 per cent deep material deprivation as of 2017. A worker at a Non-Government Organisation (NGO) that assists Internally Displaced Persons (IDPs) from the war, told me that, for many of her clients, ‘utilities [are] usually half [the cost of] rent’. Interview participants often expressed exasperation and desperation from the pressure of increasing gas bills in an economically strained context, which was exemplified by a worker at a faith-based NGO who said, with resignation, that, ‘for gas, all I can say is…we will have to pay’.
Second, I highlight the indirect impacts of gas reform from increased household costs, especially related to fuel switching and water costs. I primarily focused on households in rural Ukraine, which were at the coalface of both gas economic restructuring and the war in Donbas. The unaffordability of gas, along with other standard energy sources, in rural regions is deepened by the general, economic depression experienced in the Ukrainian countryside, especially for the quarter of households headed by women, who are generally more affected by poverty. One interviewee described the economic and energy situation affecting her elderly parents who lived in a rural region, explaining that they ‘only have pension, and it is nothing. One ton of coal costs more than the entire pension for a month, and they need three tons of coal for the season for heating’.
Indeed, the inability to afford gas and other standard, alternative energy has pressured rural households from modern to simple fuels. Locally sourced biomass has become prominent in rural areas near the War in Donbas, particularly foraged wood, paper, or plastics. However, there are two major concerns stemming from the increased reliance on biomass fuel, especially near the war zone. First, biofuel carries health concerns; when these fuels are burned inside, black carbon and particulate matter are inhaled by the household, particularly by women and children who spend more time around a fire/stovetop. Second, there are major personal security concerns. Women who collect biofuel near the Donbas warzone are exposed to potential violence from the dangers of encountering military personnel and the risks of landmines and unexploded ordnances. Further, water costs have also skyrocketed on the back of gas reform, as water is often purified through gas-fuelled energy sources. Because of the increasing cost of water, between 40 to 50 per cent of rural families near the frontline have transitioned from using piped water to relying on water trucks and dug wells. This is highly problematic as the ground water is often polluted due to toxic agricultural run-off, flooded mines, and violent incidents affecting water facilities, which has contributed to the spread of communicable disease.
Third, there are increased demands on Ukrainian women’s everyday labour, along with widespread unemployment and hollowed out social services. Radical restructuring has also occurred across healthcare, childcare, education, and aged care, which has cut these services and pressured women to ‘take up the slack’ of this work in the home. Indeed, Ukrainian women spend an average of 49 hours a week caring for dependents and 29 hours a week performing household labour, primarily because more family members are disabled, sick, pensioners, and/or children requiring care, from either war-related violence or a lack of social services. Of course, this household work is increasingly expensive to perform, as much of it is facilitated by gas. However, only 51.4 per cent of women have formal employment, not just due to mass redundancies but also because of their heightened commitments to dependents at home. This struggle contributes to the impoverishment of women-headed households, because ‘they take care of parents and children…and so women are in worse conditions than men’, as described by a worker at a peacebuilding NGO.
Making War Safe for Capitalism
There is thus a violent and relentless circuit – women have predominantly borne the brunt of mass layoffs from radical economic restructuring while also caring for dependents, who are increasingly sick or injured from the war, without state- and/or communal-based social services. However, it is gradually more difficult to perform household labour because gas is exceptionally expensive. As such, more money is needed to pay utility bills, but waged work is difficult to find in a depressed economic environment, and the care of dependents in the home demands a high time commitment. This contradictory and ceaseless circuit has made ‘women vulnerable, [though the] criteria of vulnerability is not met…and [they] can’t get employment or help, and struggle’, as explained by the director of an international NGO. Indeed, by 2021, women constitute the majority of the 3.4 million people in need in Ukraine.
Since my field research in 2018, IFI-influenced reform in Ukraine has continued, despite the deteriorating humanitarian situation from the war and, as of 2020, the COVID-19 pandemic. By June 2020, the Ukrainian government negotiated another loan with the IMF, with the Ukrainian state promising to further increase household heating tariffs and to remove the legal obligation for Naftogaz to supply households with gas regardless of debt owed. This latter development removed an important safety net for the population and concurrently ‘freed up’ over six billion cubic meters of gas, which traders could now sell on the market. This was enacted by August 2020, just prior to winter and amid a worsening COVID-19 pandemic and escalating battlefield conflict, with the Ukrainian Government promising higher fines and simplified legal enforcement to collect gas payments. From a legacy of practically complete social support for utility expenses in the Soviet Union, gas costs in Ukraine are now some of the highest in Europe as a proportion of citizen income. Relatedly, Naftogaz’s operations have become extremely profitable, where surplus income has gone to management and added to the state budget for military expenditure and debt servicing, while Ukrainian oligarchs have been able to accumulate previously state-owned energy assets, fuelling a cartel that has exacerbated rent seeking.
Evidently, even in the context of pervasive war and disease in Ukraine, the IMF privileges the health of international and Ukrainian capital over the wellbeing of everyday Ukrainians. Rather than centring the conditions of people’s lives or the health and well-being of the most vulnerable during war, the IMF has instead ensured that war is safe for capitalism. To conclude, if the guns fall silent in Ukraine, violence and inequality will continue to perpetuate throughout households across the country, much of which has been determined by IFI-influenced gas reform.
Thank you to Monica Keily, Madeline Kelly and Jacinta Quattrocchi for their invaluable reviews of the blog article.