A local resident stands among the wreckage at the site of the crash of a Malaysia Airlines plane carrying 298 people from Amsterdam to Kuala Lumpur in Grabove, in rebel-held east Ukraine, on July 19, 2014. Ukraine and pro-Russian insurgents agreed on July 19 to set up a security zone around the crash site of a Malaysian jet whose downing in the rebel-held east has drawn global condemnation of the Kremlin. Outraged world leaders have demanded Russia's immediate cooperation in a prompt and independent probe into the shooting down on July 17 of flight MH17 with 298 people on board. AFP PHOTO/ ALEXANDER KHUDOTEPLY (Photo credit should read Alexander KHUDOTEPLY/AFP/Getty Images)

Can Good Come From Ukraine's Tragedy?

Mohamed El-Erian is a Bloomberg View columnist. He is also the chief economic adviser at Allianz SE. His new book is "The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse."
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Can anything good emerge from the tragedy in Ukraine? That is what many are hoping after last week's dreadful downing by a ground-to-air missile of a Malaysia Airlines passenger jet. It's possible, but it's not likely.

The loss of hundreds of innocent lives has taken the Ukraine crisis global in a way that few could have imagined. With mounting evidence showing that the missile originated from rebel-controlled territory, the event has discredited the rebels and -- at least in principle -- placed in jeopardy Russia's support for them.

The hope is that a tragedy of this magnitude would do more than force all parties to the bargaining table. It would facilitate major concessions from the rebel side, energize the West's involvement and force Russia to see the error of its ways -- all of which would allow the new Ukrainian president to reimpose Kiev's authority on the eastern part of the country.

Such an outcome would bring relief well beyond Ukraine's borders. By removing the threat of a vicious cycle of sanctions and countersanctions, it would brighten the prospects for global growth and lower the risk of financial market disruptions.

Several historical examples illustrate how a big tragedy can fundamentally alter the dynamics of a crisis and facilitate a lasting solution -- either directly or by serving as a catalyst for decisive external involvement. Think of the Balkans, where acts of genocide triggered decisive military and humanitarian interventions.

In Ukraine, three sequential developments are required to achieve a lasting solution and maintain the country's territorial integrity. First, the rebels must become convinced, with the help of pressure from Russia and the West, that their quest for secession is futile. Second, any solution reached at the negotiating table must be put into force on the ground. Third, credible mechanisms must be established to verify and enforce the peace agreement.

Tragedy notwithstanding, none of these seem likely in today's Ukraine. There is little to suggest that the rebels are nearing either an exhaustion point or a recognition of defeat. The cultural drivers of their insurrection are hard to reconcile, especially given the political weakness and financial fragility of the government in Kiev. Ukraine's Western allies have limited appetite for bankrolling a solution, and certainly are not interested in using military force to impose it.

Then there is Russia. President Vladimir Putin's policies in Ukraine have contributed to his popularity at home. It's thus hard to see how he can save face if he pulls back and imposes defeat on the rebels.

If anything good emerges from the disaster in Ukraine, it is more likely to take the form of a pause -- one that stops things from deteriorating further for now -- rather than a durable solution.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Mohamed Aly El-Erian at melerian@bloomberg.net

To contact the editor on this story:
Mark Whitehouse at mwhitehouse1@bloomberg.net