Economic decline is destroying occupied Donbas even faster than the armed conflict at this point
In ORDiLO, people are saying this winter is the worst in recent years and are comparing it to the first winter of the war, 2014-2015. But this time, it’s not about the intensity of the fighting but the overall state of the economy and public services. Since the beginning of 2019, everything has somehow gone down the tubes in the two “people’s republics.”
Heavy snowfall in the first days of January suddenly turned into a real natural disaster as it drove municipal services off track for the entire month. Trash was collected only sporadically and streets were not being cleaned all through January and into early February. One after another, the roofs of old factory shops began to collapse as no one bothered to clear the snow off them, even killing two people, one in Horlivka and one in Debaltseve, during January. Not one major snowfall had had such a damaging and tragic impact in Donbas in pre-war times.
Social nets filled with angry commentary and photographs of overflowing garbage bins and uncleared roads that were impossible to drive. The scale of the problems was so huge that even one of the top Donetsk separatists, Andriy Purghin, was critical of things. Speaking about the city of Donetsk, he admitted that the catastrophic state of municipal services was the result of lack of funding—as well as the bad attitude of the “DNR government” towards the people.
“Today, the attitude of those in power to the rest of the population is disgusting,” wrote Purghin. “And that’s what’s getting in the way of those people who maintain our metropolis working properly You can see how badly trash is being collected: mountains of it, covered in snow. Yet there are tons of vacancies: 200 just for tram and trolley-bus drivers. It’s time to figure out why no one is applying for these jobs. It’s not just the miserable pay, but the way people are treated by those in power. Half the city is jobless but no one’s willing to apply for jobs at those wages and those working conditions”
The same situation can be seen all across the “republic.” But you won’t find any proper analysis of the situation with industry in ORDiLO: censorship will prevent anything from being written about that. Still, bits and pieces of information manage to get into the press, which offers at least some general picture. It’s depressing and wretched.
On February 1, the official DNR press published an interview with Denys Pushylin in which he admitted that all their plans to relaunch the Stirol plant in Horlivka, ORDiLO’s biggest chemical plant, had fallen through. For several years, the militant leaders had been assuring everybody that they would be able to relaunch the giant, which had stopped operating in 2014. Announcements of that production was about to be revived at Stirol came in 2017 and 2018. The person responsible for the project at that point was Oleksandr Zakharchenko ally and the second in command in DNR, Oleksandr Tymofeyev. After the former was assassinated and the latter fled to Russia, all talk of relaunching the plant died as well. And so Pushylin finally admitted that the plant would not start operations for the foreseeable future.
“Yes, there really were plans to launch Stirol,” Pushylin told the press. “But given the escalation of conflict, the chances of a man-made catastrophe due to artillery fire or a terrorist act are too high as it would likely lead to a large-scale ammonia leak and a cloud of dangerous chemicals that could affect hundreds of hectares of territory. That’s why we decided to stop preparations to launch large-scale production of ammonium nitrate and urea. There is a slew of other difficulties tied to the delivery of sufficient volumes of gas and the lack of a reliable source of electrical power.”
In reality, Stirol has not been in the way of fire for quite some time. The factory is located in a part of Horlivka that is relatively far from the front and shells do not reach that area. What’s really making it difficult to restore operations are, in fact, the problems with natural gas deliveries and a reliable power supply that Pushylin mentioned in passing. Yet these are issues that could easily have been resolved in the four years since the signing of the second Minsk ceasefire. Only someone either didn’t want to or could not do it.
Given that Stirol depended on gas from Russia prior to the war, it’s not entirely clear what is stopping the Russians from organizing supplies to the plant today, given that Russia is pretty in charge of the occupied territories. The same is true for electricity, which could come to Stirol from the DNR power station—the occupied territory has two powerful cogeneration plants or thermal energy stations: the Zuyivska TES and the Starobeshivska TES – or even directly from the RF. Not only that, but there has been more than enough time to install some high-voltage lines – only no one thought it necessary. Russia has wasted billions of dollars on the war in Syria but somehow never found the budget to help “fraternal Donbas.”
For Horlivka, relaunching the plant would be a major event as it was a company town. Instead, the company went into idle mode while jobs were cut in large numbers. All that remain today are essential workers to keep the equipment and the workshops intact.
Lack of support from Russia makes it impossible to get production up and running on LNR as well. Not long ago, LNR militant leader Leonid Pasichnyk met with “administrator of Antratsyt and Antratsyt County” Serhiy Sayenko, during which they talked about reviving the Slavsant piping plant, which hasn’t been operating for quite some time already. According to Sayenko, production was halted because they have no markets to sell their product on.
“We have a piping plant, but it’s idle,” the self-declared mayor complained to Pasichnyk. “It could be producing plastic and metal pipes. The plant is completely functional, but there’s a problem with sales markets.”
To hear this kind of statement from LNR leadership is strange, indeed, given that Antratsyt is about 50 km from the Russian border, beyond which a huge market of 147 million resides. Precisely this nearness to the Russian Federation’s borders was given as the main reason why the local powers-that-be and oligarchs did not want to sign an Association Agreement with the EU back in 2013. In the spring of 2014, the separatist leaders brought locals out for rallies, persuading them that their goods were not needed in Europe, but fraternal Russia was eager to buy them. And so when the militants got things their way and traded Ukrainian flags for Russian ones in ORDiLO, suddenly it turned out that Russia had no interest in helping anyone there and products made in the “people’s republics” was not really needed, after all. The only exports that keep moving actively across the Russian border are coal and metals, that is, cheap raw materials that Russia buys at depressed prices. Finished product from Donbas nobody needs.
The irony is that, despite the dire predictions of pro-Russian politicians, the last four years have seen many new companies launched in Ukraine that are focused on EU markets. In Lviv Oblast alone, several factories making spare parts for cars have been greenfielded. By contrast in the Russia-controlled parts of Donbas, not only have no new plants been built in the last five years, but even the facilities that were operating well outside the immediate conflict area have not been put back on track.
In this kind of situation, everyone who can is trying to bring their manufacturing facilities out of the grey zone – but it clearly isn’t always possible. An industrial giant can’t simply be picked up and moved anywhere else, although smaller facilities sometimes can and do move. For instance, it recently became known that the Metals & Polymers plant that was operating in Alchevsk until 2014 has moved production to Pervomaisk in Mykolayiv Oblast. Director Denys Rysukhin announced that operations would be launched in the spring under its new name, TOV Metipol. Moreover, the same team that was operating in Alchevsk will be servicing production at the new location. Thus, for the sake of the “protectors of the Russian-speaking population,” Alchevsk lost specialists, taxes and jobs. Now people will be producing goods and paying taxes in Mykolayiv Oblast, in so-called that “fascist Ukraine” so despised by the fans of LNR and DNR.
Despite countless examples of people and production fleeing from supposedly “free Donbas” to territory controlled by “fascists and punishers,” the militants in the east continue to wage war. Of course, it’s not clear to most of them what it’s all for, at this point. This meaningless conflict will only lead to the further degradation and decay of the region. As long as certain counties of Donbas remain under the control of the Russian proxies who call themselves “separatists,” there’s little reason to believe that anything will improve.
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