Why the economic crisis is deepening in the occupied Donbass
As long as the fate of ORDILO is resolved in international negotiations, the economic situation in the territories under control of the militants is inevitably worsening. And according to the feelings of people living in unrecognized “republics”, the fall rate accelerated this year. If in 2015-2016 there was even a certain revival of the economy, then from 2017 began a protracted recession that after coming to power the group of former MMM functionaries, led by Denis Pushilin, only gained momentum. Of course, there is no sensation in this. It is exactly what Ukrainian journalists, politicians and experts have long warned about. The gray economy is not viable. The industry may not fully operate in an area of uncertain legal status. Therefore, the collapse of the economy is absolutely natural. As for helping Russia, it is clearly not provided to the extent expected, and is largely reduced to handouts, such as humanitarian convoys or new ambulances, which are situational in nature and can alleviate the situation in certain narrow directions. But, of course, they do not save ORDILO’s economy. And the effect of them on the background of total unemployment and the growth of debt on the wages of the population almost does not feel.
The end of 2019 was marked by a severe crisis in the coal industry. It has happened not only for internal but also external reasons: coal prices have collapsed, Europe is abandoning this type of fuel, which is why companies simply have nowhere to sell coal. Problems arose even in the Russian miners. The mines began to settle in Kuzbass, where coal is much easier and cheaper to mine than in the Donbass. And ORDILO, with its gray prey, was hit first by the crisis.
In the fall, serious disruptions began with payments to the Miners. A number of mines were put into downtime and drainage, and people were sent on unpaid vacations. The situation has deteriorated so much that the women in the ORDILO have organized themselves and set up a Committee of Mining Wives to beat the pay of their breadwinners. This situation is not new for Donbass. In the 1990s, when miners were afraid to strike on their own and demand a salary, their wives also came together and demanded money from their bosses. This phenomenon was called “Baba riots”. Such riots seemed to have faded into the past in the early 2000s, but as we can see, they have returned.
In late November, the miners’ wives sent a letter addressed to Russian President Vladimir Putin asking them to intervene in the situation and help resolve the issue of payment. Characteristically, they know well who to turn to, and they also do not believe too much in the Russian mantra “we are not there”. Tales of “independent republics” can be told to anyone, but not to the people who live there.
In a letter, the women accused the company of “Vneshtorgservice” Sergiy Kurchenko, and it was their responsibility for the accumulated debts: “All coal and other riches” DNR “are exported by looters, such as CJSC” Vneshtorgservice “. On demand, they repay many months’ worth of wage arrears by the representatives of the Vneshtorgservice marauders – the head of Pushilin, the coal minister Dubovsky and other officials – begin to tell our men tales of the gravity of the martial law, and themselves grow fat and rich every day. Earlier, they published in social networks appeals to Pushilin himself, as well as to the “Minister of Coal Industry DNR” Dubovsky, but did not receive answers. Putin didn’t answer them either. The letter was sent to the Kremlin’s official network address and registered. But, of course, the debt problem has not been solved.
It has been written long ago that Vneshtorgservice Kurchenko does not pay for the delivered products and puts all existing ORDILO companies into bankruptcy. What to do in this situation is unclear. Apparently, the fall in coal and metal prices has finally made the PTS unprofitable. And the only opportunity for Kurchenko and his curators to make money today is to banally not pay salaries or pay for raw materials.
In November, the Russian edition of RBC published information that Sergiy Kurchenko’s company received a two-year deferral of debt to enterprises and coal mines of LDNR. And there is no accrual of interest on this debt. Thus, Kurchenko was actually allowed to plunder the territory of the Donbas controlled by the Russian Federation. How long such a deriban economy can withstand is unknown, but the situation is very serious. It seems that the Russians are just trying to squeeze everything out of the ORDILO territory. According to the RBC website, the MTS debt to the mines is about 8 billion rubles, of which the Komsomolets Donbass mine is responsible for more than 5 billion, Makeevugol – more than 700 million, Torezantracit – more than 500 million, the Zasyadko mine – more than 300 million rubles. In general, the budget and “LDNR state enterprises” Kurchenko’s company owed about 25 billion rubles!
Economic problems in the uncontrolled territory are caused not so much by its uncertain legal status as by the deliberate harmful actions of the Russian side. Instead of the help from the “brotherly people”, which was so much counted on by supporters of Russia in Donetsk and Lugansk, they received a heavy blow to the back. Taking advantage of the situation in the region, the Russians began brazenly plundering “Nazi-liberated” areas, inciting any discontent and declaring bandmates all those who were trying to deny anything.
The problems are not only exacerbated in the coal industry. The entire industry collapses. The fighters did not manage to start a chemical plant “Stirol” in Gorlovka, whose employees also sit without money and write appeals to Pushilin. Vladimir Pashkov, Deputy Prime Minister of the DNR Government, responded succinctly to these requests: “Today, the financing of the State Enterprise“ Stirol ”is suspended. The Ministry of Industry and Trade of the DPR and the management of the State Enterprise “Stirol” are working out ways to resolve the issue of wage arrears. ” Considering the fact that these issues are being “worked out” by the energy companies since 2014, there is no doubt that no positive changes are envisaged here.
The Donetsk plant of high-voltage supports (DZVO) also ceased to exist. His employees were thrown outside just before the New Year. The reduction order stated that it was being carried out in connection with the “decline in production volumes and the suspension of economic activity”. In reality, most of ORDILO’s enterprises have been suspended for a long time, and the prospects for its revival have not yet been observed.
In all these circumstances, it is not surprising that Russia is now trying to force negotiations on the Donbas. It seems that the Kremlin has decided to totally rob ORDILO, and then quickly squeeze Volodymyr Zelensky in negotiations in the “Norman format” and merge this problematic, destroyed territory of Ukraine on its own terms. However, the last meeting showed that the new president is in no hurry to go to Moscow. Zelensky was unyielding, and it annoyed the Kremlin. Such a reaction is quite understandable. Due to the huge economic problems of ORDILO, time is now working for Ukraine. It will be more and more difficult for the nominal leaders of the militants to explain to the local population why the standard of living continues to deteriorate. Sooner or later there will be a complete collapse, the consequences of which will be rattled by Russia if the occupied Donbas is not disposed of in time.