Like many of the old Soviet countries, Ukraine is both independent from and dependent on Russia after the breakup of the former U.S.S.R. After the breakup, Russia formed the Commonwealth of Independent States (CIS) which are composed of the former Soviet countries including Ukraine. The intention of the CIS was to create an economic zone that was dependent on Russia, created a buffer zone of control between Russia and the EU and NATO states, and to continue to have access to the Black Sea and Mediterranean Sea (Allison, 2014, pp. 1255-1256). For Putin, the CIS was a way to keep control over the former U.S.S.R. states (Allison, 2014, p. 1257). This created a situation where both politically and economically, the CIS countries were being controlled by Russia and the political corruption was high. In Ukraine, the people saw this corruption and rejected it and their countries’ corrupt political elites that were under control of Putin starting a political shift now referred to as Euromaiden (Averre & Wolczuk, 2016, p. 551).

Euromaiden represented a nationalism and identity movement for Ukraine and a desire to control their own economy and grow ties with the EU (Averre & Wolczuk, 2016, p. 551). The protests, demise of the corrupt Ukrainian President Vitor Yanukovych and his government, and Ukraine’s movement toward the EU prompted Russia to assert control over parts of Southern Ukraine where Russian military interests are located and Russian culture overlaps (Allison, 2014, pp. 1255-1257). The populous Euromaiden movement wanted Ukraine to have a more European political orientation which renewed the NATO nation’s efforts to bring Ukraine closer to them, something Russia would not allow (Allison, 2014, p. 1257). Russia would not have a NATO nation on its border. Russia’s invasion of parts of Ukraine has hardened the relationships between Russia and the NATO nations resulting in further sanctions and a lessening desire to do business with Russia (Allison, 2014, p. 1259). 

In the short term, Ukrainian economy and trade remain closely linked to the CIS but in the medium to long-term, Ukraine is unlikely to create close ties with EU nor do the EU and NATO countries want to provoke a fight with Russia, who has clearly drawn a line (Allison, 2014, p. 1296). For companies, the opening of Ukraine to a Western oriented political structure and populous desire to create ties with the EU can open new markets but comes with great risks. Russia still asserts great economic control over Ukraine through the CIS (Allison, 2014, p. 1257). So to deal with Ukraine, a company must look at the CIS and Russia for ways to create business relationships. One emerging economic area in Ukraine is socially responsible businesses which are companies that are socially active in society with goals to align business strategies with socially responsible activity that improve the lives of society (Kornilova & Karashchuk, 2017, p. 446). Socially responsible companies can align well with the Euromaiden movement and carve out a niche in an uncertain future for Ukraine. There are still great risks with Russia’s assertion of control over parts of Ukraine and over its economy through the CIS. With international sanctions in place on Russia, doing business within the CIS may be difficult. 

References

Allison, R. (2014). Russian “deniable” intervention in Ukraine: how and why Russia broke the rules. International Affairs (London), 90(6), 1255–1297. https://doi.org/10.1111/1468-2346.12170

Averre, D., & Wolczuk, K. (2016). Introduction: The Ukraine Crisis and Post-Post-Cold War Europe. Europe-Asia Studies, 68(4), 551–555. https://doi.org/10.1080/09668136.2016.1176690

Kornilova, O., & Karashchuk, O. (2017). Socially responsible business in trade: further development in Ukraine and Russia. Problems and Perspectives in Management, 15(3), 445–452. https://doi.org/10.21511/ppm.15(3-2).2017.12

Ogirenko, V. (2015). A boy wrapped is a Ukrainian flag. [Photograph]. Atlantic Council. https://www.atlanticcouncil.org/blogs/ukrainealert/ukraine-two-years-after-euromaidan-what-has-been-accomplished/