Nikolaus von Twickel<\/p>\n
Summary<\/strong><\/p>\n Industrial production in the \u201cpeople\u2019s republics\u201d has widely ceased after local leaders took control of all Ukrainian-run plants in their territory, officially in response to the trade blockade on government-held territory. The separatists downplayed fears over the economic fallout and even launched a campaign to woo the people living in the government-controlled parts of Donetsk and Luhansk regions. In a positive move, a fresh ceasefire attempt began on April 1.<\/p>\n <\/p>\n Reports in both Ukrainian and separatist-controlled media suggest that much of the remaining industrial production in both the Donetsk and Luhansk \u201cpeople\u2019s republics\u201d has ground to a halt after 1 March, when the separatists began to force local plants under their own control.<\/p>\n The move was meant to improve the separatist \u201crepublics\u2019\u201d finances because the plants continued to pay taxes in Ukraine, where their owners, first and foremost influential oligarch Rinat Akhmetov, are based. But it might turn out to be a Pyrrhic victory for the separatists, because they must find new markets in recession-hit Russia, capable management in their isolated and deprived regions and, first and foremost, cash to keep operations going.<\/p>\n Managers at the Yenakiieve Metallurgy Plant told staff on March 30 that production won\u2019t be resumed before the end of August, according to social media posts<\/a> picked up in Ukrainian media<\/a>.<\/p>\n To restart the huge plant with more than 5,300 workers would cost 584 million Russian rubles (about 10 million US dollars) per day, according to a report by the Donetsk \u201cMinistry\u201d for Industry and Trade that was published by the official DAN news site on March 25. After being widely<\/a> quoted<\/a> by Ukrainian media, the report vanished<\/a> from DAN\u2019s website but remains accessible<\/a> via Google cache.<\/p>\n The reasons for the article\u2019s removal is not hard to gauge \u2013 even locals will find it difficult to believe that the Donetsk \u201cpeople\u2019s republic\u201d (\u201dDNR\u201d) can currently afford such costs, let alone those for the other 42 plants on its territory affected by the move. Both the \u201cDNR\u2019s\u201d and the neighbouring Luhansk \u201cpeople\u2019s republic\u2019s\u201d (\u201cLNR\u201d) finances are thought to depend almost totally on Russia (see our Annual Report<\/a>, p. 9) and it is unlikely that Moscow is ready to step up its already considerable subsidies in the near future.<\/p>\n In Luhansk, the separatists even decreed<\/a> that executives\u2019 salaries at \u201cstate\u201d enterprises must not exceed 30,000 rubles (500 euro) per month.<\/p>\n Amid reports<\/a> of wage arrears and non-payment of salaries in the areas controlled by them, the separatists are playing down fears of economic crisis. At a March 22 meeting with workers of the Yenakiieve Metallurgy Plant, trade union leader Maxim Parshin promised that the \u201cDNR\u201d will make first salary payments in April and that all jobs are secure, DAN reported<\/a>.<\/p>\n On March 31, a city official told workers<\/a> at the Donetsk Metallurgy Plant that they will get their salaries for March \u201csoon\u201d. The official, Oleg Belyayev, added that it was unclear when production at the plant could start again, because it lacks raw materials. The plant\u2019s reopening has been postponed several times since the separatists took control of it back in June 2016.<\/p>\n Speaking in Donetsk the same day, Industry and Trade \u201cMinister\u201d Alexei Granovsky said that the process of bringing plants under control of the \u201cDNR\u201d was going smoothly. \u201cAll state enterprises have agreed, confirmed and installed (new) executives,\u201d he was quoted as saying by DAN<\/a>. It was unclear, however, what Granovsky meant with \u201cstate enterprises\u201d. Officially, \u201coutside administration\u201d does not mean nationalization, i.e legal ownership does not change. Instead, the plants get a new management, must register in the \u201cpeople\u2019s republics\u201d and re-orientate production (to Russia).<\/p>\n While severing economic ties between Ukraine proper and the separatist-held areas is a clear violation of the Minsk agreement, there are serious doubts that the separatists\u2019 declared aim, economic integration with Russia, can be achieved any time soon, given the ongoing economic downturn in that country (see Newsletter Nr. 19<\/a>).<\/p>\n <\/p>\n Ukraine is calling the \u201coutside administration\u201d a forced nationalization. During the latest round of talks of the Trilateral Contact Group on March 29 in Minsk, Kiev said that \u201cthe seizure of state private and foreign enterprises\u201d was a serious violation of the Minsk agreement and demanded<\/a> an immediate return to Ukrainian law, according to Darya Olifer, the spokeswoman of Ukraine\u2019s chief negotiator Leonid Kuchma.<\/p>\n Olifer explained that the nationalization and other recent violations like Russia\u2019s recognition of separatist-issued passports had forced Ukraine to impose a trade embargo against the separatist territories. However, the embargo, announced on March 15, was widely seen as a result of Kiev\u2019s three months-long struggle with nationalist activists, who had imposed their own blockade to prevent Ukraine trading with the separatists.<\/p>\n Both the \u201cDNR\u201d and \u201cLNR\u201d had cited the blockade<\/a> as the reason for putting local industry under \u201coutside administration\u201d.<\/p>\n The Minsk meeting had been clouded by these developments. Kuchma himself said two days earlier<\/a> that progress had become so difficult that another summit of the \u201cNormandy Four\u201d (Russia, Ukraine, Germany and France) was necessary to break the deadlock.<\/p>\n Speaking after the Minsk talks, Martin Sajdik, the chief negotiator for the Organization of Security and Co-operation in Europe (OSCE), said<\/a> that \u201crecent events intensify tensions between the sides and have an unambiguously negative effect on the process of mutual rapprochement.\u201d<\/p>\n However, the parties in Minsk did achieve a minor success in brokering yet another ceasefire commitment for the upcoming Easter holidays. Whether that agreement, which came into force on April 1, will be successful, remains to be seen. The OSCE Monitoring Mission\u2019s report of April 4<\/a> speaks of mixed results \u2013 fewer ceasefire violations in the Luhansk region, but a marked increase in the Donetsk region.<\/p>\n <\/p>\n Despite facing the biggest economic challenge since their inception, both \u201cpeople\u2019s republics\u201d launched a campaign to win over Ukrainians living in the government-controlled parts of the Donetsk and Luhansk regions by offering seemingly better social services.<\/p>\n The \u201cHumanitarian Programme for the Reunion of the People of Donbass<\/a>\u201d is heavily promoted by official media outlets in Donetsk<\/a> and Luhansk<\/a> and includes offers<\/a> to move to the \u201cpeople\u2019s republics\u201d for work, education or medical treatment or even for a Russian-language quiz known as Totalny Diktant<\/a>.<\/p>\n Especially the programme\u2019s healthcare part<\/a> has been criticized as being a mere propaganda tool. \u201cDNR\u201d leader Alexander Zakharchenko said during a call-in show<\/a> on March 23 that Donetsk clinics are offering priority treatment for patients from government-controlled parts of Donbass. However, Zakharchenko admitted<\/a> in the same show that his \u201crepublic\u201d is in a difficult financial situation, but added that fellow Slavs should always help each other. \u201cWe are a family,\u201d he said.<\/p>\n Ukrainian journalist Serhy Garmash pointed out in his video blog<\/a> that Zakharchenko is calling sick people to come to the \u201cDNR\u201d for treatment that he cannot even provide to his own population.<\/p>\n Also part of the programme is the opening of \u201cservice centres\u201d at crossing points along the \u201ccontact line\u201d with government-held areas. Their staff is supposed to help people to sign up for social payments from the \u201cpeople\u2019s republics\u201d, although the blue containers primarily function as post offices, selling stamps and offering to forward mail into separatist-held areas, as explained by<\/a> \u201cDNR Communications Minister\u201d Viktor Yatsenko during the opening of one centre at the Olenivka crossing point.<\/p>\n During the March 23 call-in show<\/a>, Zakharchenko made it once again clear that for him those areas are a part of his \u201cpeople\u2019s republic\u201d under \u201ctemporary Ukrainian occupation\u201d.<\/p>\n When a caller from the government-controlled town of Volnovakha pointed out that Ukrainian authorities are likely to retaliate harshly against anybody cooperating with the separatists by using those centres, Zakharchenko told him to stand up and fight for his homeland: \u201cI have no problem when they arrest you, because you live in Volnovakha (and) Volnovakha is a city of the Donetsk People\u2019s Republic … each of us needs to be at his battlefield position, including those in Volnovakha. The war continues.\u201d<\/p>\n The programme is the biggest attempt yet to extend the \u201cpeople\u2019s republic\u2019s\u201d reach into government-controlled areas. Previous examples include claims that a cell of the \u201cDNR\u201d ruling party, Donetsk Republic, has started work in government-controlled Sloviansk (see Newsletter Nr. 14<\/a>).<\/p>\n <\/p>\n Meanwhile, the wave of assassinations in Donbass continued. However, for the first time in many months the victim was not a separatist commander but a senior Ukrainian officer. Oleksandr Kharaberyush, the deputy head of the SBU\u2019s counterintelligence operations in the Donetsk region, was killed when a bomb ripped through his SUV on March 31 in Mariupol<\/a>.\u00a0 Ukrainian police quickly pointed fingers<\/a> to the separatists, who denied any involvement.<\/p>\n The Donetsk \u201cSecurity Ministry\u201d, known under its Russian acronym MGB, said in a statement<\/a> that it does \u201cnot employ terrorist methods unlike the Ukrainian special services,\u201d adding that the \u201cDNR\u201d will \u201csooner or later\u201d restore its territorial integrity \u2013 i.e. conquer all of Donetsk region.<\/p>\n The MGB was referring to captured Ukrainian soldiers who were shown on videos by the Luhansk Security Ministry last month, where they confessed in carrying out the assassination of \u201cLNR\u201d military commander Oleg Anashchenko (see Newsletter Nr. 19<\/a>). Anashchenko was killed by a car bomb on February 4. Four days later, prominent Donetsk field commander Mikhail Tolstykh was killed in his office by yet unidentified attackers. The separatists blame Ukrainian special forces for both killings.<\/p>\n","protected":false},"excerpt":{"rendered":" Nikolaus von Twickel Summary Industrial production in the \u201cpeople\u2019s republics\u201d has widely ceased after local leaders took control of all Ukrainian-run plants in their territory, officially in response to the trade blockade on government-held territory. The separatists downplayed fears over...<\/p>\n","protected":false},"author":3,"featured_media":586,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[202,2,210],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/posts\/948"}],"collection":[{"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/comments?post=948"}],"version-history":[{"count":2,"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/posts\/948\/revisions"}],"predecessor-version":[{"id":952,"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/posts\/948\/revisions\/952"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/media\/586"}],"wp:attachment":[{"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/media?parent=948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/categories?post=948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/civicmonitoring.org\/de\/wp-json\/wp\/v2\/tags?post=948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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