After Ukraine gained independence from the Soviet Union, state-owned assets were privatized, giving rise to a powerful class of business leaders known as oligarchs. Like Russia's transition to capitalism, Ukraine's transition enabled these politically connected individuals in Ukraine to amass tremendous wealth as they acquired and monopolized assets, including metals, chemicals and energy distribution industries, among others. But because Russia has a long tradition of centralized power, the Kremlin eventually either subsumed or eliminated these wealthy individuals. The Ukrainian government never did, and the oligarchs' power only grew. As a result, Ukraine's political system still depends on the patronage and support of oligarchs.
Indeed, there are close ties between Ukraine's oligarchs and the evolution of the country's political crisis. This was most recently illustrated in Donetsk on March 9, when Ukrainian presidential hopeful Vitali Klitschko met with Rinat Akhmetov, the country's richest man, to discuss the ongoing situation. Figures such as Akhmetov, who holds a dominant position in the country's steel and coal production, and Dmitri Firtash, a major player in the power and chemicals industry, have been leading financiers of former Ukrainian President Viktor Yanukovich's Party of Regions.
Notably, the fidelity of the oligarchs has proved to be fluid. They are most concerned about preserving their lucrative business interests rather than pursuing an ideological or political line. In some cases, they have backed rival parties to make sure they would not be targeted in the event of a political upheaval.
Prime Minister Arseniy Yatsenyuk and other members of the interim government have reached out to figures including Akhmetov and Firtash, assuring them that their businesses will not be targeted. Kiev has even appointed key oligarchs such as Igor Kolomoisky, a banking and industrial magnate, and industrialist Sergei Taruta as governors in the eastern regions of Dnipropetrovsk and Donetsk, respectively.
The new government's urgent challenge is to keep mainland Ukraine together. Eastern Ukraine is crucial to this — the region is a stronghold for pro-Russia sentiment and the main site of opposition, after Crimea, to the Western-backed and Western-leaning government. The oligarchs are key to keeping control over eastern Ukraine, not only because Ukraine's industrial production is concentrated in the east — thus anchoring a shaky economy — but also because many of the oligarchs have a stronger and more manageable relationship with Russia than the current government, which Moscow sees as illegitimate.
