Previous posts have looked at the history of Russian-backed separatism in Ukraine. Over the last century, Russia—whether in the form of the tsarist or Soviet imperial state—has launched many initiatives to dismember Ukraine and crush its aspirations for independence. This site has examined some of these devastating events (see here, here and here). In the current era, apart from the creation of pro-Russian puppet states in southeastern Ukraine (‘Donetsk People’s Republic’ (DPR) and ‘Lugansk People’s Republic (LPR)), and the annexation of Crimea by Moscow, there have been attempts to create pro-Russian ‘people’s republic’ movements in other traditionally Russian-speaking regions, such as Kharkiv and Odessa (sometimes transliterated ‘Odesa’ from Ukrainian). Odessa is a district particularly coveted by the Russian regime, since it represents the independent Ukrainian state’s last major outlet to the sea. The Russian annexation of Crimea has limited Ukrainian access to the Black Sea from the Sea of Azov, because the Kerch Straits are now effectively under Russian maritime control, and Moscow is planning to construct a bridge to Crimea from the Russian mainland. Russia is actually attempting to quietly effect a total blockade of Ukraine by sea, and this could be finally achieved by detaching the valuable Odessa port district from Kyiv’s control.
Following are accounts of two alarming separatist developments. One is an attempt by the Moscow-friendly ‘Opposition Bloc’ party in the Ukrainian parliament to create, through legislation, an ‘Inter-regional Territorial Administration’ (ITA) in eastern Ukraine that would legalize and legitimize the puppet regimes now in place in Donetsk and Luhansk, both of which are occupied by Russian tanks, artillery and troops. The other is an attempt to subvert Ukrainian control over Odessa through the ushering-in of a ‘porto franco’ (free port) regime in the coastal region, which would effectively lead to the region’s detachment from the Ukrainian economy. Both initiatives are forms of ‘soft’ separatism, since the efforts at fomentation of armed pro-Russian separatist rebellions among local agents outside of the Donbas have thus far essentially failed. The fire in Odessa on May 2nd, 2014, which resulted in the deaths of over 40 people following street clashes between pro-Russian and pro-Ukrainian activists, was in retrospect very likely an attempt by the Russian security services to spark wide-scale violence designed to spiral into a separatist war such as that which occurred in the Donbas, and which resulted in Russian control. As this did not have the intended effect, other means are apparently being pursued, aided and financed from the Kremlin.
The bill envisions the concentration of executive power in the hands of the head of the Donbas ITA, who is to be elected for 5 years.
The ‘Opposition Bloc’ has proposed within the framework of the ‘special status’ to unite the occupied territories of the Donetsk and Luhansk regions into a single inter-regional territorial association (ITA) Donbas. This is stated in the draft law No. 4297 on the peculiarities of the individual areas of management of Donetsk and Luhansk regions, reports Ostrov.
As noted in the document, the Donbas ITA has a special legal status, allowing local authorities to establish units of people’s militias on territories under their control, and to give consent to the appointment of the heads of the Ministry of Internal Affairs, prosecutor and the Ukrainian Security Service (SBU).
In the opinion of deputies, the supreme legislative organ of the ITA should be a Representative Assembly headed by a Chairman.
In addition to the organization and management of property, land and water resources of the de-occupied territories, organizing and conducting local referendums also fall within the purview of the Representative Assembly of the Donbas ITA. The Assembly, according to the bill, will decide on granting special status to Russian and other languages of national minorities on a par with the state language.
Executive power should be concentrated in the hands of the head of Donbas ITA, which is elected for 5 years. He will be responsible for the economic sector development in the region and attracting investments. The document notes that the head of the ITA will cooperate with the Ukrainian authorities and to enter into agreements with foreign countries, especially the Russian Federation.
‘The ITA chief represents the Donbas ITA in foreign economic and trade relations, concludes agreements on cross-border cooperation in the economic sphere with subjects of the Russian Federation, other countries and other administrative-territorial units of those States,’ says the document.
The bill was registered on 24 March 2016, but in its very text it is stated that the announcement of elections of local authorities on the territory of the Donbas ITA are planned for 25 October 2015.
A couple of years after the events of May 2nd, 2014, Odessa remains one of Ukraine’s most unstable regions, one to which the agents of the Kremlin remain focused tirelessly, steadfastly, but the manifestation of separatism has morphed from an aggressive and active form to a latent one—which is no less dangerous. And one of these elements of separatism is the constantly-spun theme of a ‘porto franco’ [‘free port’ ~ Ed.] special economic zone.
What is most depressing in the current situation is the fact that, against the background of this very idea of a ‘free port,’ which is being diligently developed and actively spun into a PR exercise by its creators, is that there is absolutely no informational work to oppose it. That is to say, the ideas of Sergei Kivalov, Vadim Rabinovich and Mykola Skoryk—or more accurately, not their ideas, but those assigned to them in furtherance of the goals of the Kremlin curators—have lots more informational support than does the disclosure to Odessans of the actual meaning of a porto franco.
Well, all the ‘i’s’ must be irrevocably dotted in this matter, and for this we will examine two eras of development of the porto franco—imperial and modern.
During the period of the Russian Empire, the porto franco regime was not unique, and on Odessa was not alone in receiving the corresponding privileges on its territory, so when someone speaks—for political purposes—of the uniqueness of this system, they are brazenly and shamelessly lying. Although to these people lying is not of paramount importance… But let us continue.
A porto franco first appeared in Feodosia [Crimea ~ Ed.] and lasted from 1798 to 1799. Then, in chronological order, the free port regime, facilitating the duty-free import and export of goods, was introduced in Odessa from 1819 to 1858, in Vladivostok from 1861 to 1909, in Batumi from 1878 to 1886, and even at the mouths of the Ob and Yenisei [rivers ~ Ed.] from 1870 to 1879.
But, as we have seen, it would seem that with all the advertised advantages of the ‘porto franco,’ the regime has always had its temporal limitations. That is, already one fact should raise the question that, if a free port regime is manna from heaven—filling the sky with diamonds—then why did it last less than a year in some cities?
Disadvantages of free ports in the Russian Empire
In most cases, the industrial sector of the city or region under the sway of a free port regime found itself in a very difficult situation with respect to the state, because for the export of goods outside the borders of the city-region, they were subject to the same taxes as on foreign goods. Of course, foreign goods were far more in demand than domestic ones, and that is why local production in the free port area slowly but surely died.
The state in the free port area was not able to control trade, which led to an increase in smuggling, and a lack of centralized accounting contributed to the growth of corruption. In particular, by 1858, the decline of the free port in Odessa, Russian Empire was incurring losses of nearly half a million rubles from the regime’s adverse effects!
A negative factor should also be noted in the form of sharp growth in the phenomenon now known as raiding. After the free land in the free port area was gone, more influential businessmen began to crowd out competitors with fewer connections and, bluntly speaking, without reliable protection, as evidenced by the numerous statements in the archives of the city about the crime situation in Odessa during that period. Over time, land in the area became prohibitively expensive and concentrated in the hands of certain groups, and free competition was nipped in the bud.
The porto franco in Odessa lasted longer than its counterparts not because it was successful, as the heralds of the idea are now declaring. The problems were obvious and loomed from the first days of the ‘free port.’ The fact that the regime in the city was controlled directly by Prince Vorontsov, who was interested in the duty-free opportunities of Odessa, can be thanked for it having lasted for a decade… Do I think it’s not worth talking about a prince’s profit?
The modern period of the free port
Considering all the above drawbacks, a free port with a modern twist poses a greater threat and danger to the region.
First of all, if during the period of the Russian Empire we are talking mainly about the interests of certain individuals in the flow of contraband and profits from corruption schemes, today we have the threat of separatist manifestations in the region. Yes, according to the ideas of the same Kivalov, Rabinovich and Skoryk, customs freedom is not confined to the port and the port area, or even the city, but to the borders of the entire area, which is clearly analogous to a ‘people’s republic.’ The free port regime will not only carry out uncontrolled transportation through Odessa, into which weapons can be included with total freedom along with drugs, human trafficking and illegal migration, but will also open the border with Transnistria, which will also provide access to the region as representatives of pro-Russian views from an unrecognized republic, and directly as agents of the Russian Federation and, of course, the flow of arms.
As for the economic benefit, looking back at the historical experience we can expect not only the death of Odessa’s industry, which will not be able to compete with its foreign counterparts yet will be in the same price range for customers all over Ukraine. We can predict the uncontrolled rise in property prices. But if someone hopes to gain a fabulous sum in the future for a rusty garage near the port and revel for the rest of his life in a new building in Kyiv, he is deeply mistaken. Because the increase in real estate prices will be followed by hard times of displacement of the inconvenient from tasty portions.
In fact, a free port is a mild form of separatism, the Kremlin’s Plan ‘B’ for Odessa, at which money and resources are being thrown, and which may well be realized. And for the period before the region slides into the abyss of another ‘republic,’ interested persons will squeeze the maximum out of the established criminal regime. Although residents of Odessa are not fully aware of the nature and destructiveness of this regime for their city, no one can be bothered to explain it to them, to finally put all the dots on the ‘i’s’.
~ Alexander Kovalenko