Ukraine ACTED

Supporting greater socio-economic resilience in the Sea of Azov region

The Azov Sea Area (ASA) in Ukraine spans Donetsk, Zaporizhzhia and Kherson oblasts in eastern Ukraine. In 2014, the ASA was affected by two major events: the illegal annexation of the Crimean peninsula by the Russian Federation and the onset of armed conflict in the eastern oblasts of Donetsk and Luhansk. As a result, the ASA is now bordered by the “Line of “Contact” (LOC) and non-government controlled areas in the east and the illegally occupied territory of Crimea in the west.

Following these events, in 2018, the Russian Federation inaugurated the Kerch Strait bridge to connect the temporally occupied Crimea with the Russian mainland, ignoring Ukrainian claims of illegality and international rebuke. Resulting tensions escalated into a confrontation during the Kerch Strait incident in 2018.

Disruption to international trade routes

The Kerch Strait is the only sea route between the Sea of Azov and the Black Sea and is therefore a strategic trade route for communities and exporters alike in and around the ASA. Since construction of the Kerch Strait bridge commenced in 2016, there have reportedly been increased difficulties in the transportation of cargo via this route to and from Ukrainian ports. The new bridge has imposed an additional size limit on vessels that may exacerbate existing restrictions on exporters using ports in the region. Moreover, movement of cargo bound to and from Ukrainian ports on the Sea of Azov has been slowed by arbitrary inspection by the Russian Federation coast guard. As a result, Ukrainian commercial bases located on the Sea of Azov, especially in Mariupol and Berdiansk, which rely on the Strait of Kerch to access the Black Sea and foreign markets, may be suffering economic impacts which further compound the effects of the conflict and which may have follow-on effects for the wider region.

A history of compounding shocks

The east of Ukraine, a highly industrialized area, was suffering economic and population decline prior to the conflict. The area is home to a large number of aging coal mines and processing plants specializing in chemical production, manufacturing, iron, and steel. Following the onset of conflict in 2014, the regional economies of Donetsk and Luhansk were negatively affected with large drops in regional gross domestic product and investment. According to a survey of small and medium companies in Donetsk and Zaporizhzhia, the main obstacles to business following the events of 2014 were reductions in demand and loss of markets (IMPACT, 2019). Additionally, enterprises reported a lack of personnel which is likely associated with the accelerated outflow of skilled labor following the outbreak of the conflict. In more recent years, the National Bank of Ukraine has linked shifts in global demand to decline in metallurgical industries, on which the Donetsk region of the ASA relies (NBU, 2019).

Environmental protection alongside industry

While providing an important value add to the regional economy and a large proportion of jobs in the area, heavy industry can pose serious risks to the environment if environmental protections are not strictly monitored and enforced. Examples of the ways in which industry could affect the environment include the discharge of chemicals, toxic products, or wastewater into water sources. In addition to environmental concerns regarding standard operations, the proximity of industrial and mining infrastructure near the Line of Contact and its quasi-daily shellings poses a potential risk of a major environmental disaster. Such an emergency could have disastrous consequences for the communities, fauna, and flora in the region.

Incorporating environmental analysis is therefore essential to more comprehensively assess the dynamics within the region given its reliance on heavy industry. It is therefore crucial that more information is made available about hazardous sites that threaten the environment and levels of environmental pollution – especially in industrial hubs like Mariupol located near the Sea of Azov.

Supporting economic and social recovery while preserving the environment

In this context, ACTED, IMPACT and the Center for Sustainable Peace and Democratic Development (SeeD) have partnered on a project to better understand and address the implications of recent geo-political and economic shocks on the community, business environment and ecology of the Sea of Azov region. Under the support of the European Union, this 18-month project aims to guide socio-economic, psychosocial, and environmental policy and programming in the Sea of Azov region.

Activities under the project will include:

  • Development of a regional recovery overview through the production of 5 quarterly factsheets and 1 interactive dashboard
  • Biannual reflection to explore current trends and the need for an ongoing ASA barometer, via workshops open to the various stakeholders active in the area
  • Assessment of socio-economic and psychosocial / civic dynamics in the area, captured through 2 narrative reports
  • Assessment of environmental hazards, through a comprehensive Area Based Risk Assessment (ABRA) of the Mariupol area, and
  • Provision of small grants to local environmentally-focused CSOs in Mariupol

In this way, the project will provide a better understanding of environmental risks and an overview of the capacity of local civil society organizations to engage in environmental protection actions. It will demonstrate the impacts of the conflict and trade restrictions on the socio-economic situation of the region, on the population, and on the environment, and thus provide concrete recommendations to support economic and social recovery.
This publication was produced with the financial support of the European Union. Its contents are the sole responsibility of ACTED and do not necessarily reflect the views of the European Union.

Factsheet: Support to Greater Resilience of the Sea of Avoz Region