[Four Years Into The Russia-Ukraine War] ① Ceasefire Mood in the Fifth Winter... Final Obstacle: Donbas

The final hurdle to a ceasefire: Donbas
Casualties near 2 million... mounting losses for Russia
Ceasefire mood spurs 1.171 quadrillion won reconstruction funding plan

Editor's NoteAs of the 24th, four full years have passed since the outbreak of the war in Ukraine, and for the first time since the war began, three-way talks among the United States, Ukraine, and Russia are under way, rapidly accelerating ceasefire negotiations. As cautious expectations emerge that a peace deal could be reached within this year, movements toward postwar reconstruction and restoration projects are also gaining momentum. At the same time, some observers predict that Ukraine's industrial structure, which has been reorganized around the defense industry in the wake of the world's first full-scale drone warfare fought in Ukraine, will drive major changes in the global defense industry. We took a multifaceted look at the situation in Ukraine, which stands at a crossroads of immense change that will begin after the war ends.

On the 24th of last month, a BM-21 Grad multiple rocket launcher vehicle of Ukraine's 24th Mechanized Brigade is seen firing rockets toward Russian forces. AP/Yonhap News

The Russia-Ukraine war, now in its fifth year, has recently raised expectations for a ceasefire as three-way talks among the United States, Ukraine, and Russia have been held. Analysts cautiously suggest that if the issue of sovereignty over the Donbas region, which has been at the core of the dispute since the early days of the war, is resolved, a peace agreement could be reached within this year. Fundraising for reconstruction is also visibly getting underway, led by the United States and Europe.

U.S. pressure for an early ceasefire accelerates three-way talks... "Wrap up negotiations by June"

The country currently driving the peace talks most forcefully is the United States. On January 23, it pressured Ukraine and Russia to sit down at the table for the first three-way meeting among the United States, Ukraine, and Russia since the war began. It is also pressing both Ukraine and Russia to complete ceasefire negotiations by June at the latest.

At a press conference on February 7 (local time), Ukrainian President Volodymyr Zelensky said, "The United States says it will do everything to end the war and wants everything wrapped up by June," adding, "The United States proposed this timeline with the November midterm elections in mind, and for the United States, the elections are clearly more important."

According to Reuters, the U.S. negotiating team recently proposed to the Ukrainian side that a peace agreement be concluded by March and that elections, including the Ukrainian presidential election, be held starting in May. President Zelensky's term ended in May 2024, but it has been extended without an election. This is because the ongoing war has prevented the lifting of martial law.

Reuters reported, "The U.S. negotiating team is pressuring Ukraine by warning that, as the November midterm elections approach, the time and resources it can devote to Ukraine ceasefire talks will diminish," adding, "At the three-way talks, Steve Witkoff, the U.S. President's special envoy for the Middle East, and Jared Kushner, former U.S. President Donald Trump's eldest son-in-law, also expressed the view to the Ukrainian side that it would be desirable to hold a national referendum soon after a ceasefire agreement is reached."

The final obstacle to peace: Donbas sovereignty... shifting public opinion in Ukraine

AP Yonhap News

There are also signs of change regarding the issue of sovereignty over the Donbas region, which has been seen as the final obstacle to a peace deal. According to an opinion poll conducted last month by the Kyiv International Institute of Sociology, a Ukrainian polling agency, 40% of respondents said they could give up Donbas in exchange for security guarantees from the United States and Europe. This represents a significant increase in support for territorial concessions compared with a survey in May 2022, right after the war broke out, in which 82% of respondents said they could never cede any territory.

The term Donbas refers collectively to Luhansk and Donetsk oblasts in eastern Ukraine. Luhansk is currently fully occupied by Russia. In Donetsk, Russia controls 83% of the territory. Russia has taken the position that if Ukraine hands over all remaining Donetsk territory, it will exchange it for other occupied areas, and Ukraine has consistently opposed this.

The U.S. government is putting forward a new mediation proposal to resolve the Donbas issue. CNN reported, "Since late last year, the U.S. government has been proposing to designate the parts of Donbas currently controlled by Ukraine as a free economic zone and turn them into a peace zone where both Ukraine and Russia can engage in exchanges," adding, "However, for this to become reality, Ukrainian forces would have to withdraw from the area, and Ukraine is therefore demanding compensation in the form of firm security guarantees."

The Ukrainian government fears that handing over the entirety of Donetsk to Russia without solid security guarantees would lead to the collapse of most of the eastern front. Samir Puri, a geopolitical expert at the British think tank Chatham House, said, "The remaining areas of Donetsk under Ukrainian control are the core of the so-called 'Fortress Belt,' a multilayered defensive line built by Ukraine," adding, "There are growing concerns that if Ukraine loses or cedes this area, the pace of Russia's advance will accelerate and even the capital could come under threat."

Ceasefire mood speeds up 1.171 quadrillion won reconstruction funding... largest since World War II  

Associated Press Yonhap News Agency

As the ceasefire mood gains traction, some quarters are moving to raise funds for Ukraine's reconstruction. The amount of reconstruction funding to be deployed is expected to be the largest since World War II.

According to the U.S. political outlet Politico, at the European Union (EU) summit on January 22, an economic prosperity plan for Ukraine was circulated. The plan calls for the United States and the EU to take the lead in attracting 800 billion dollars (about 1,167 trillion won) in large-scale reconstruction funding from both the private and public sectors.

It also states that over the next 10 years, the United States, the EU, and international financial institutions including the International Monetary Fund (IMF) and the World Bank (WB) have pledged more than 500 billion dollars in public and private capital spending. If this fundraising effort succeeds, it is expected to become the largest mobilization of reconstruction funds since World War II. Even compared with the Marshall Plan, the postwar European recovery program after World War II, which is estimated at 150 billion dollars in today's value, it is far larger in scale.

However, given the sheer size of the fundraising target, the actual raising of funds is expected to face considerable difficulties. The New York Times (NYT) pointed out, "The U.S. government previously tried to raise reconstruction funds through BlackRock but failed," adding, "In a document prepared in April 2023, BlackRock initially aimed to raise 50 to 80 billion dollars in reconstruction funds, but a year later it had slashed the target to 15 to 30 billion dollars, and by mid-2025 the project itself had ultimately been halted."