Ukraine loses the occupied territories due to the blockade of Donbas
January 25th the group of people who call themselves “Headquarters of trade blockade with occupiers” blocked territory of the Luhansk oblast where railway tracks located, leading to the part of the Luhansk oblast which is controlled by illegal armed groups. Among the MPs who took part in this activity, there are Semen Semenchenko, Volodymyr Parasyuk, Pavlo Kostenko and Taras Pastukh. The coordinator of legal receptions of Charitable Foundation “East-SOS” in eastern Ukraine Levon Azizyan made an analysis of economic and political component of the blockade, according to the conclusions of which such actions would significantly worsen the communication between controlled and uncontrolled parts of the Donetsk and Lugansk oblasts and may lead to economic difficulties and social unrest.
Firstly, the uncontrolled territories of the Donetsk and Luhansk regions (ORDLO) border with the front line in the west and north, that connects with controlled territories of the Donetsk and Lugansk oblasts, and have long border with Russia in the east and south. The blockade can not be effective if it goes without closing the border with Russia, which the latter, of course, wouldn’t do. So this is not a blockade, but only: a) another break of ties with Ukraine; b) loss of leverage to ORDLO; c) reduce of dependence of ORDLO from Ukraine; d) the impetus for further drift, this time for already working under Ukrainian law companies of ORDLO towards Russia.
Secondly, three million people live on the territory of ORDLO, and Ukraine lost this sales market due to the counterproductive activity of the state. Instead of Ukrainian production that entrepreneurs bought seamlessly on the territory controlled by Ukraine and sold in ORDLO, all the supplies coming from Russia, in addition, the leaders of illegal armed groups monopolize all major deliveries of Russian products. Illegal armed groups managed to monopolize the majority of the supply of products to ORDLO from Russia, and now Ukraine is unwittingly giving the additional trump into the hands of illegal armed groups by its effort to create a negative humanitarian consequences for the residents of ORDLO;
Thirdly, Ukraine is forced to buy coal of “Anthracite” brand because seven large power plants can run only with the coal of this brand, production of which remained on the uncontrolled territories. This coal is mined in ORDLO, Russia (for some period of time Ukraine was buying more expansive coal in Russia instead of coal from ORDLO, supporting the economy of Russia directly), and South Africa (Ukraine also was buying coal there, but the logistics of delivery is quite complicated and expensive). However, the fact remains that without such brand of coal these power stations will not operate. Moreover, the controlled Luhansk oblast is entirely dependent on supplies of coal of “Anthracite” brand. The only existing large power plant of the region, the Luhansk power plant, is located on controlled by Ukraine city of Shchastya and has its railway line to uncontrolled Luhansk, and Russia only. Unfortunately, due to the hostilities in eastern Ukraine, the line remained cut off from the general system of railways of Ukraine. Similarly, the Luhansk oblast was cut off from the central energy system, as all high-voltage power lines come through uncontrolled territory. Thus, in case of termination of the supply of coal to Luhansk power plant located in the city of Shchastya, all the Luhansk olast would remain without electricity because it is impossible neither to organize transportation of coal, nor the transfer of electricity from other regions.
Additionally, 90% of employees of industrial enterprises in ORDLO continue to work under the Ukrainian legislation with all the subsequent consequences, including payment of all taxes, fees and export duties to the budget of Ukraine. They have been working according to this scheme since 1991 and continue to work now. The remaining 10% of companies do not pay any taxes to Ukraine and found illegal schemes how to export their products through Russia without paying Ukrainian taxes. To prohibit the export of products produced in the enterprises of ORDLO means to willingly transfer all that income to Russia. For example, only for 2016 the enterprises in ORDLO paid 32 billion UAH of taxes to the budget of Ukraine, and 777 million UAH of military duty. In addition, it would reduce orders to railroad workers (up to Chop), port workers (Mariupol, Berdyansk, Odessa, Mykolayiv and Kherson) and logistics workers, who would have to be reduced.
“In my opinion, it is important to make clear difference between three million of civilians living on the uncontrolled territories and twenty thousand members of the illegal armed groups. However, I understand that this attitude of people occurs from the lack of awareness and due to the propagandistic media that stigmatize the civil population of ORDLO. Anyway, I am not able to treat without contempt those who are gloating that the Ukrainians in ORDLO, who have become hostages of the situation, may get even worse conditions” – says Levon Azizyan.
