Economic Annals-ХХI: Volume 184, Issue 7-8, Pages: 107-123
Ivanov, S., Yudina, S., Lysa, O., & Drahun, A. (2020). Classification and assessment of losses from the armed conflict in Donbas and annexation of Crimea. Economic Annals-XXI, 184(7-8), 107-123. doi: https://doi.org/10.21003/ea.V184-10
Corresponding Member of the NAS of Ukraine,
Honored Scientist of Ukraine,
Head, Department of Analytical Economics and Management,
Dnipropetrovsk State University of Internal Affairs
26 Gagarin Ave., Dnipro, 49005, Ukraine
ORCID ID: https://orcid.org/0000-0002-1205-3797
Head, Department of Finance and Accounting,
Dniprovsk State Technical University
2 Dniprostroevskaya Str., Kamenske, 51900, Ukraine
ORCID ID: https://orcid.org/0000-0001-8318-4172
Department of Finance, Banking and Insurance,
Oles Honchar Dnipro National University
72 Gagarin Ave., Dnipro, 49010, Ukraine
ORCID ID: https://orcid.org/0000-0002-1870-0481
PhD Student (Economics),
Department of Marketing and Logistics,
Ukrainian State University of Chemical Technology
8 Gagarin Ave, Dnipro, 49005, Ukraine
ORCID ID: https://orcid.org/0000-0002-8285-3378
Classification and assessment of losses from the armed conflict in Donbas and annexation of Crimea
Abstract. The authors classify and investigate the losses caused by the military conflict in the east of Ukraine and the annexation of Crimea, as well as the approaches to their assessment. The authors studied the results of scientific research, current legislation, and information-analytical materials and came to the conclusion that there are no common standards (approaches) or detailed approaches to loss assessment for different entities (state, individual enterprises, and citizens), and the mechanism of compensation for losses is undeveloped as well. This can cause many problems both for experts in substantiating the volume of damages and for courts in considering relevant cases for losses.
The authors considered the damage caused to Ukraine by the military conflict with Russia, which resulted in the annexation of the Crimean peninsula and the occupation of Luhansk and Donetsk regions, and interpreted this damage as assessed consequences of these events and classified them by place and time of manifestation on direct, indirect, complete and general, and by spheres of manifestation of consequences on medico-biological, military-political, socio-economic, external and internal political and ecological ones.
To characterize each of these types of damage, the authors have identified certain components that can have quantitative and qualitative forms of expression. Taken into account that the qualitative assessment of the consequences of armed conflict is subjective to some extent and depends on the coverage of expert opinions, the authors focused on those components that can be quantified (in monetary terms). To assess them, in the article there were formed certain groups of indicators that have a quantitative form of expression. At the same time, first of all, the authors take into account indicators that make it possible to assess the direct damage from the armed conflict.
The authors, based on the analysis and generalization of the values of these indicators in the dynamics, determine the estimated amount of direct damage caused to Ukraine during the conflict (2014-2019), and give a forecast of its growth if this conflict continues. Also, we propose the option of calculating the lost benefit from the impossibility of using a part of the country’s territory (currently uncontrolled) based on its potential.
Keywords: Loss; Military Conflict; Crimea; Donbas; Temporarily Uncontrolled Territories; Damage Assessment; Lost Benefit
JEL Classіfіcatіon: E62; E65; H56; H72
Acknowledgement and Funding: The authors received no direct funding for this research.
Contribution: The authors contributed equally to this work.
- AgroPolit.com. (2019, September 05). Land value in Europe and Ukraine – from the smallest to the largest per 1 ha.
https://agropolit.com/spetsproekty/615-vartist-zemli-v-yevropi-ta-ukrayini–vid-naymenshoyi-do-naybilshoyi-za-1-ga (in Ukr.)
- Ash, T., Gunn, J., Lough, J., Lutsevych, O., Nixey, J., Sherr, J., & Wolczuk, K. (2017). The Struggle for Ukraine. Chatham House Report. London, Royal Institute of International Affairs.
- Biersack, J., & O’Lear, S. (2014). The Geopolitics of Russia’s Annexation of Crimea: Narratives, Identity, Silences, and Energy. Eurasian Geography and Economics, 55, 247-269.
- Blyznyuk, V. V. (2014). Human life value: measurement theory and practice. Ukrainian society, 50(3), 101-112.
https://ukr-socium.org.ua/wp-content/uploads/2014/07/101-112__no-3__vol-50__2014__UKR.pdf (in Ukr.)
- Buckley, C., Clem, R., Fox, J., & Herron, E. (2018, April 9). The War in Ukraine Is More Devastating than You Know. The Washington Post.
- Chabaray, A. (2018, June 29). War compensation.
https://tyzhden.ua/Society/215769 (in Ukr.)
- Chabaray, A. (2018, October 23). Pensions for Donbass.
https://tyzhden.ua/Society/221604 (in Ukr.)
- Chalyy, A., & Malynowski, A. (2015, February 13). Strategy of legal resistance to Russian aggression. ZN.UA.
https://zn.ua/ukr/internal/strategiya-yuridichnogo-oporu-rosiyskiy-agresiyi-_.html (in Ukr.)
- Coalition «Justice for Peace in Donbas». (2020). Chronology of prisoner exchanges: 2014-2020.
- Coupé, T., & Obrizan, M. (2016, February). Violence and Political Outcomes in Ukraine-Evidence from Sloviansk and Kramatorsk. Journal of Comparative Economics, 44(1), 201-212.
- Coupé, T. (2016, July 18). And the Lights Went Out-Measuring the Economic Situation in Eastern Ukraine. Vox Ukraine.
- Davidyuk, Т. V. (2012). Human capital as the object of valuation in accounting. Theory problems and methodologies of accounting, control and analysis (Series: Accountong, control and analysis), 23(2), 73-80.
http://repository.kpi.kharkov.ua/handle/KhPI-Press/23870 (in Ukr.)
- Defense-industrial courier: news agency. (2020). Non-combat losses of all power structures in Donbass for 5 years exceed combat losses – Matios.
http://opk.com.ua/небойові-втрати-всіх-силових-структу (in Ukr.)
- Ekonomichna Pravda. (2019, September 30). Land rental rates per 1 ha will double after the market introduction – government program.
https://www.epravda.com.ua/news/2019/09/30/652109 (in Ukr.)
- Feighery, T. J., Gibson, C. S., & Rajah, T. M. (2015). War Reparations and the UN Compensation Commission: Designing Compensation After Conflict. New York: Oxford University Press.
- Fischer, S. (2019). The Donbas Conflict: Opposing Interests and Narratives, Difficult Peace Process. SWP Research Paper 2019/RP 05. German Institute for International and Security Affairs.
- Garkushenko, О. М. (2010). Evaluation of Economic damage to life and health of Donetsk region population, caused by air quality. Strategy and mechanisms for regulating industrial development, 2, 252-264.
http://dspace.nbuv.gov.ua/bitstream/handle/123456789/39662/21-Garkushenko.pdf?sequence=1 (in Ukr.)
- Giuliano, E. (2015). The Social Bases of Support for Self-Determination in East Ukraine. Ethnopolitics, 14(5), 513-522.
- Gumenyuk, R. P. (2019). World experience of financial support mechanisms of the armed forces. Finance, accounting, banks, 24(1), 39-47.
https//doi.org/10.31558/2307-2296.2019.1.4 (in Ukr.)
- Hahn, G. M. (2018). Ukraine Over the Edge: Russia, the West and the «New Cold War». Jefferson, North Carolina: McFarland Company, Inc.
- Head of Department of Statistics at Donetsk region. (2020). Official web-site.
http://www.donetskstat.gov.ua (in Ukr.)
- Head of Department of Statistics at Lugansk region. (2020). Official web-site.
http://www.lg.ukrstat.gov.ua (in Ukr.)
- Information and analytical portal of the AIC of Ukraine. (2020). Official web-site.
https://agro.me.gov.ua/storage/app/sites/1/optovi%20ziny_2019/ivelni-ta-tsini-virobnikiv-seredni-10072020.pdf (in Ukr.)
- Ivanov, S. V. (2015). Influence of armed conflict (war, fighting) on the value of the enterprise. Dnipropetrovsk: Gerda (in Ukr.).
- Ivanov, S. V. (2016). Restoration and development of the potential of the enterprises of the East of Ukraine. Dnipro: Gerda (in Ukr.).
- Iwański, T. (2015, February 6). Still Together, but Apart? Kyiv’s Policy Towards the Donbas. OSW Commentary. Centre for Eastern Studies.
- Kirilenko, О. (2019). Current trends in defense expenditures from the state budget of Ukraine. The world of finance, 60(3), 179-188 (in Ukr.).
- Kramar, A. (2014, September 12). «Speczone» of Ukraine. What we are losing on Donbass.
https://tyzhden.ua/Politics/118905 (in Ukr.)
- Kuzio, T. (2015). Competing Nationalisms, Euromaidan, and the Russian-Ukrainian Conflict. Studies in Ethnicity and Nationalism, 15(1).
- Land Ukraine. (2020, February 07). Mushak told, how land prices are going to change.
https://land-ukraine.com/land_prices/mushak-rozpoviv-yak-zminyatsya-cziny-na-zemlyu (in Ukr.)
- Lasocki, J. (2019, September 24). The cost of five years of war in Donbas. New Eastern Europe, 5.
- Main Department of the State Fiscal Service (SFS) in Donetsk region. (2020) Official web-site.
http://dn.sfs.gov.ua (in Ukr.)
- Main Department of the State Fiscal Service (SFS) in Lugansk region. (2020) Official web-site.
http://lg.sfs.gov.ua/dfs-u-regioni/golov-upr (in Ukr.)
- Mazur, I. I., & Shapiro, V. D. (2001). Project management: the handbook. Мoscow: High school (in Russ.).
- Memorybook. (2020). Power structures losses resulted by the Russian invasion of Ukraine.
http://memorybook.org.ua/membooks/membookstart.htm (in Ukr.)
- Miller, C. (2019, February 26). 13 thousand: official UN data on killed in the war in Donbass. Radio Liberty.
https://www.radiosvoboda.org/a/29792144.html (in Ukr.)
- Mykhnenko, V. (2020). Causes and Consequences of the War in Eastern Ukraine: An Economic Geography Perspective. Europe-Asia Studies, 72(3), 528-560.
- National institute for strategic studies. (2016). Tax security in the strategy of post-war reconstruction of Donbass.
http://old2.niss.gov.ua/content/articles/files/podatkova_bespeka-d233d.pdf (in Ukr.)
- News Agency «Vchasno». (2017, July 16). Environmental damage from the war in Donbass is about 15 billion hryvnia.
https://vchasnoua.com/donbass/52047-ekologicheskij-ushcherb-ot-vojny-na-donbasse-okolo-15-mlrd-griven (in Russ.)
- Pavlyuchenko, T. (2008, July 30). How much is the life of a Ukrainian?
https://delo.ua/business/skolko-stoit-zhizn-ukrainca-83420 (in Russ.)
- Payne, C. R., & Sand, P. H. (2011). Gulf War Reparations and the UN Compensation Commission: Environmental Liability. New York: Oxford University Press.
- Polchanov, A. (2017). Losses of the Ukrainian economy from the military conflict. Agrosvit, 11, 40-46.
- Prokaza, D. (2019, May 3). Ukraine’s economic losses due to Russian occupation of Donbas. Euromaidan Press.
- Raik, K. (2019). The Ukraine Crisis as a Conflict Over Europe’s Political, Economic and Security Order. Geopolitics, 24(1), 101-113.
- Richey, M. (2018). Contemporary Russian Revisionism: understanding the Kremlin’s hybrid warfare and the strategic and tactical deployment of disinformation. Asia Europe Journal, 16, 101-113.
- Röpcke, J. (2016, January 16). How Russia finances the Ukrainian rebel territories. Bild.
- Sakhnenko, O. I. (2017). Methods of the Human capital assessment. Economy and society, 10, 24-27 (in Ukr.).
- Single register of damage to the Donbass infrastructure. (2020). Official web-site.
http://www.xn--e1aa5aceg.xn--j1amh/o-proekte (in Ukr.)
- Slovo i Dilo. (2020, April 14). The sixth anniversary of the beginning of anti-terrorist operation: figures and facts.
https://ru.slovoidilo.ua/2020/04/14/infografika/bezopasnost/shestaya-godovshhina-nachala-ato-cifry-i-fakty (in Russ.)
- State Statistics Service of Ukraine. (2020). Official web-site.
http://www.ukrstat.gov.ua (in Ukr.)
- Stockholm International Peace Research Institute. (2020). Official web-site.
- TSN. (2014, May 14). The annexation of Crimea resulted in one trillion of UAH damage to Ukraine.
http://ru.tsn.ua/groshi/anneksiya-kryma-nanesla-ukraine-uscherb-v-odin-trillion-griven-365462.html (in Ukr.)
- Ukraine Crisis Media Center. (2018, June 08). Ukraine lost 100 billion dollars due to Russian aggression in Crimea and in the East – Atlantic Council research.
- Verkhovna Rada of Ukraine. (2016, September 22). About the Recommendations of the parliamentary hearings on the topic: «Strategy of reintegration into Ukraine of the temporarily occupied territory of the Autonomous Republic of Crimea and the city of Sevastopol: problematic issues, methods and ways». Decree, No. 1602-VIII.
https://zakon.rada.gov.ua/laws/show/1602-19#Text (in Ukr.)
- Verkhovna Rada of Ukraine. (2017, April 6). On amendments to some legislative acts of Ukraine about improving legislation on the activities of healthcare facilities: Law of Ukraine, No. 2002-VIII.
https://zakon.rada.gov.ua/laws/show/2002-19#Text (in Ukr.)
- Verkhovna Rada of Ukraine. (2017, September 9). On approval of tariff calculations for tertiary (highly specialized) medical care services by the participants of the pilot project: order of the Ministry of Health of Ukraine and the National Academy of Medical Sciences of Ukraine. Resolution No. 1123/64.
https://zakon.rada.gov.ua/laws/show/z1356-17#Text (in Ukr.)
- Vinokurov, Y. (2019, March 01). Naftogaz may exact $8 million from Russia for lost actives in Crimea. Hromadske.
https://hromadske.ua/posts/naftogaz-mozhe-styagnuti-z-rosiyi-do-dollar8-mlrd-za-vtracheni-v-krimu-aktivi (in Ukr.)
- Vinokurov, Y. (2019, March 05). Ukraine is initiating the creation of a special group to calculate the loss from Russian occupation – Accounting chamber. Hromadske.
https://hromadske.ua/posts/ukrayina-iniciyuye-stvorennya-specialnoyi-grupi-dlya-pidrahunku-zbitkiv-vid-rosijskoyi-okupaciyi-rahunkova-palata (in Ukr.)
- Voice of America. (2019, April 29). World military expenditures grew by 2,6%, and Ukrainian – by 21%, – SIPRI.
- ZN.UA. (2020, February 06). Government approved tariffs on medical care in 2020.
https://zn.ua/UKRAINE/pravitelstvo-utverdilo-tarify-na-medicinskie-uslugi-v-2020-godu-344310_.html (in Russ.)