Written by Nikolaus von Twickel<\/p>\n
Summary<\/strong><\/p>\n Two years after Ukraine imposed a trade blockade and the separatists seized businesses in the \u201cPeople\u2019s Republics\u201d, fresh reports suggest that the economy is sliding into deeper crisis. Meanwhile, political leaders and official media were campaigning for a law on self-government, a precondition for holding local elections. And Donetsk leader Pushilin decreed that the \u201cDNR\u201d should aim to join the UN.<\/p>\n Signs of worsening economic situation in the \u201cDNR\u201d<\/strong><\/p>\n Media reports said in March that work at two plants in Donetsk is stopping because they cannot sell their products and\/or receive no raw materials. The Donetsk Metallurgy Plant, one of the city\u2019s biggest, is at the verge of closure, workers have been told to stay at home while receiving about two thirds of their pay, the Novosti Donbassa news site reported on March 10<\/a>, citing an unnamed worker. Staff at the plant have written a complaint to their management, which they blamed for the \u201ccatastrophic situation\u201d, the report said.<\/p>\n The plant, known by its Russian acronym as DMZ, is thought to employ some 4,500 workers, almost half of the 8,000-strong workforce<\/a> of 2014. In November, separatist leader Denis Pushilin promised<\/a> that the DMZ would work \u201cunder maximum steam\u201d through winter.<\/p>\n DMZ has been owned by Ukrainian businessman Vyktor Nusenkis and continued to operate under Ukrainian law after 2014. In March 2017 it was put under the control of Vneshtorgservis, the secretive holding believed to be based in South Ossetia in order to enable Russia to manage industrial assets in the \u201cPeople\u2019s Republics\u201d without attracting more sanctions.<\/p>\n Also apparently in severe trouble is the Donetsk Electrotechnical Plant (DEZ). The plant has stood idle since February and workers\u2019 pay arrears have grown to 6 million roubles (82,000 euros), former Industry \u201dMinister\u201d Alexei Granovsky wrote on Facebook<\/a> on March 15. According to him, the plant was hit by the decision to stop production of a tramway line launched under separatist leader Alexander Zakharchenko.<\/p>\n The \u201cYa Donetsky\u201d tram was launched with fanfare<\/a> on August 21, when Zakharchenko and his then \u201cminister\u201d Granovsky claimed that it was the first major industrial product manufactured in the \u201cDNR\u201d \u2013 while it was really a rebuilt Russian model based on an old Czechoslovak tram (see Newsletter 39<\/a>). Granovsky, who was sacked in the purges following Zakharchenko\u2019s August 31 assassination, said that the programme has been stopped and that the only tram built was mothballed. According to the anonymous Telegram channel Donetsky Aborigen, the programme was stopped in November. \u201cDonetsky Aborigen\u201d also claimed<\/a> that the DEZ was doing illegal business without documentation.<\/p>\n Low wages create labour shortages<\/strong><\/p>\n In another sign that deepening economic hardship is affecting all spheres of life, Donetsk separatist-appointed mayor Alexei Kulemzin admitted on March 11<\/a> that the city was losing communal workers because their wages were too low. \u201cPeople are looking for better paid work,\u201d he said according to the \u201cDNR\u201d official website<\/a>.<\/p>\n Another sector suffering acute labour shortages is health. The \u201cDNR\u201d alone needs more than 5,000 extra doctors and another 7.500 medical staff, health \u201cminister\u201d Olga Dolgoshapko said in February<\/a>, adding that the situation was worst in rural areas. Her Luhansk colleague Natalya Pashchenko said in March<\/a> that the \u201cLNR\u201d currently has 4,107 doctors but needed twice that number.<\/p>\n Wages in both \u201cPeople\u2019s Republics\u201d are extremely low, even compared with the rest of Ukraine and the neighbouring Russian region of Rostov-on-Don. In February, a junior doctor in the \u201cDNR\u201d on average earned some 4,500 roubles \u2013 just 60 euros – per month, according to<\/a> the Donetsk Health \u201cMinistry\u201d.<\/p>\n The \u201cPeople\u2019s Republics\u201d are believed to be greatly dependent on Russian subsidies. Moscow indirectly admitted its sponsor role last autumn when state media reported that senior Kremlin aide Vladislav Surkov had promised Pushilin to raise wages in the \u201cDNR\u201d (see Newsletter 46<\/a>).<\/p>\n \u201cDNR\u201d claims rising tax revenues <\/strong><\/p>\n During his annual account to parliament, Revenue \u201cMinister\u201d Yevgeny Lavrenov claimed on March 1<\/a> that tax income for the \u201cDNR\u201d had risen 30 per cent in 2018 compared to 2017. He did not mention any figures, stressing that the \u201cPeople\u2019s Republic\u2019s\u201d budget was secret. Lavrenov suggested that much of the rising revenue came from Vneshtorgservis, whose tax payments had risen more than threefold between September and December. \u201cIt is no secret that practically 70 per cent of our economy depends on this organization,\u201d he was quoted as saying<\/a> by Novosti Donbassa, a sentence that was conspicuously absent from the official transcript<\/a>.<\/p>\n After the seizures of 2017, Vneshtorgservis took control of nine enterprises in the \u201cDNR and another four in the \u201cLNR\u201d. Much of the remaining industry was handed to the \u201crepublics\u201d and is managed by its \u201cministries\u201d, who, in Donetsk, report to powerful Prime Minister Alexander Ananchenko, himself a former senior Vneshtorgservis official.<\/p>\n No Russian aid convoys<\/strong><\/p>\n However, the Russian government has not sent a single aid convoy to Donetsk and Luhansk this year. Kremlin spokesman Dmitry Peskov explained this in March<\/a> by saying that a needs assessment was ongoing. Russia sent 84 convoys to non-government-controlled Donbass between August 2014 and December 2018, amid Ukrainian suspicion that the Russian lorries contain military goods.<\/p>\n Since the separatists expelled most international aid organizations, the International Committee of the Red Cross (ICRC) and the United Nations are the only ones who deliver aid from Ukraine to the \u201cPeople\u2019s Republics\u201d. On March 6, however, the \u201cDNR\u201d refused entry to three of four ICRC vehicles who were bringing aid, according to<\/a> Ukrainian border guards. An ICRC convoy carrying 180 tons of aid was let through<\/a> on March 14. One day later, an UNICEF convoy carrying 108 tons of aid was also allowed to pass<\/a>.<\/p>\n Separatists plan local elections<\/strong><\/p>\n Politically, both People\u2019s Republics began another project in tandem, suggesting that it originated outside, most likely in Moscow. The ruling \u201cPublic Movements\u201d, Donetsk Republic<\/a> and Peace for Luhansk<\/a>, campaigned for a bill about local self-government. Such a law could sanction local elections held not under Ukrainian law. Earlier plans by the separatists to hold local elections were cancelled, presumably due to Russian pressure.<\/p>\n Holding local elections under Ukrainian law is a central element in the Minsk agreement. Faced with strong criticism from Ukraine and the West, Moscow has argued in the past that the leadership and parliamentary elections held in the \u201crepublics\u201d in November did not fall under this because they were held on a national rather than local level.<\/p>\n In January and February, separatist-controlled media in both Donetsk and Luhansk began campaigning to set up a Public Chamber and a Youth Parliament (see Newsletter 52<\/a>).<\/p>\n Pushilin wants \u201cDNR\u201d to join the UN<\/strong><\/p>\n Meanwhile, Donetsk separatist leader Denis Pushilin, who unlike his predecessor Zakharchenko is thought to have little say over the economy, published a \u201cForeign Policy Conception\u201d for the \u201cDNR\u201d. The nine page-long decree, published<\/a> on March 1, says that the \u201cPeople\u2019s Republic\u201d should strive to become a UN member and join the Collective Security Treaty, the Russian-led alliance often described as Moscow\u2019s answer to NATO.<\/p>\n While Pushilin regularly stresses that a future with Russia is the only way forward for his \u201cPeople\u2019s Republic\u201d, he rarely explains why progress is so slow and Moscow has not even recognized them as independent. In a March 18 interview<\/a> on the fifth anniversary of Russia\u2019s annexation of Crimea, he simply said that for Donetsk \u201cthe way home to Russia\u201d will be more winding and longer.<\/p>\n","protected":false},"excerpt":{"rendered":" Written by Nikolaus von Twickel Summary Two years after Ukraine imposed a trade blockade and the separatists seized businesses in the \u201cPeople\u2019s Republics\u201d, fresh reports suggest that the economy is sliding into deeper crisis. Meanwhile, political leaders and official media...<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[244,245],"tags":[132,133],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/posts\/1734"}],"collection":[{"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/comments?post=1734"}],"version-history":[{"count":1,"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/posts\/1734\/revisions"}],"predecessor-version":[{"id":1735,"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/posts\/1734\/revisions\/1735"}],"wp:attachment":[{"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/media?parent=1734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/categories?post=1734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/civicmonitoring.org\/wp-json\/wp\/v2\/tags?post=1734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}