The main event of the last week was the so-called "nationalization" by the so-called "DPR" and "LPR" of enterprises with Ukrainian registration, i.e. almost all businesses in the occupied territories. What is behind this Moscow's gamble is discussed in the review of Public Radio of Donbass with Serhiy Harmash.
I must say that few people understand the reality of this expropriation because lots of twists, myths and manipulations were created. Moreover, few people understand what are Russia's goals in this special operation. As a minimum, Ukrainian Prime Minister Volodymyr Groysman does not understand that, because on March 2, after the announcement of the introduction of "the DPR administrations" at Ukrainian enterprises, he still continued to appeal to the participants of the blockade accusing them in all deadly sins. Although this blockade has a very indirect connection to this "nationalization", as we shall see.
So what is really happening in the occupied part of Donbass? Let us think together.
First of all, this is not nationalization, since the introduction of the enterprise's "temporary administration" does not imply a change of ownership.
I looked through all the regulations of the DPR, which are connected to the seizure. The word "nationalization" is nowhere to be seen, as well as the issue of owners' changing. This is the first thing that is important to understand. External administration entered Akhmetov's companies. That is, they belong to him, but will be managed by Kurchenko and Zakharchenko.
From the very beginning, even on February 27, it was read in the tangled words of the "DPR" leader Alexander Zakharchenko.
Zakharchenko: Well it is a whole procedure. The owners have to pay salaries, keep some social benefits, which they are obliged to keep in the event of closure of an enterprise or transfer of these people. They need to ensure a certain wage. This staff will see to the fulfillment of these conditions.
If the owner decides to close his business or not, as Zakharchenko says, it means that the owner remains the same. That is, external management means keeping owners and a transfer of the business to other operational management. In fact, they appointed overseers of mines and plants of Akhmetov. The same conclusion was done by the former Minister of State Security of the DPR, Vostok battalion leader Alexander Khodakovsky.
Khodakovsky: When we talk about the introduction of external management, there is no question of an ownership change. It becomes immediately clear that the owner will not change, but the company will be managed from the outside. Top managers will be put over the previous management. They will be in charge of payments' directions rather than of production processes.
With this we understand: there is no nationalization. But there are Akhmetov and other owners, who live in Kyiv, but they will be pulled by strings from Donetsk and Moscow, as their property will now depend on Moscow and Donetsk.
Khodakovsky: But, as the situation and the scheme are not entirely worked out and no clear and transparent mechanisms of work have been invented, I think that at some point they will conclude agreements with the owners. Their interests will be seriously strangled. But they may be involved into the process in the shadow mode. If they resist strongly, their involvement will be at minimum rate. If they give up soon enough, they will get a certain stake in all of these processes and, therefore, will participate in getting profit.
The next important question is: what will the separatists do with these companies? Where will they get the raw materials and where will they export the products?
Zakharchenko says that Russia will open its markets to the puppet republics.
Zakharchenko: These enterprises will be focused on the Russian market, on obtaining raw materials and production, so it is better to make a single management company for better coordination, which will manage these businesses.
At the same time, when he was asked specific questions about the logistics, customs benefits, ways of export, he talked about some other issues.
Zakharchenko: Will there be any favorable conditions in customs, logistics, raw materials and how will the DPR products be sold in the future? – The capacity of our railways allows to redirect these streams to the territory of the Russian Federation quite easy.
He does not only avoid the question, but also lies openly.
Zakharchenko: Secondly, you know very well that Vladimir Putin has already issued the decree that recognizes all our documents. Including documents of the quality of our products.
This is Putin's decree, to which Zakharchenko refers. There is no single word about the quality certificates of production, as there are no names of the “DPR” or “LPR”. This decree refers to the documents issued to individuals residing in certain areas of the Donetsk and Luhansk oblasts of Ukraine!
That is, at least for now there are no legal the mechanisms of selling products to Russia. Moreover, simple economic analysis shows that it will be extremely disadvantageous for Russia if the Kremlin cuts off part of its market in favor of Donbass. The energy, metallurgical and coke markets of Russia face serious difficulties with the realization of the products themselves, which leads to a decrease in GDP of that country.
Especially when you just cannot quickly reorient the economy of the region and the logistics of all the supplies. Zakharchenko says that it will happen in a month or two, but even from his words it is clear that he does not know these terms and does not understand the scale of the problem.
Correspondent – Zakharchenko:
– How long will it take to start the operation of these plants under our jurisdiction?
– You know, it is very difficult to define the precise terms, but according to our estimates, approximately one-two months. I think we can cope with it even quicker with the help of the Russian Federation, but these are the tentative terms.
Let us recall Donetsk Electro-metallurgical plant. It had to be launched by the new year. They have moved the launch time to the summer of 2017… So you should not expect the quick stabilization of the seized businesses.
Meanwhile, Russia already suffers losses. It is reported by the Russian newspaper Vzglyad, which refers to a "source in the Russian energy sector":
"After the Ukrainian side blocked railways, the DPR does not get special types of coal anymore, in particular from the Makiivka and Yasinovskiy Coke plants. Now it is necessary to deliver that coal from Russia to prevent furnaces from a shutdown. It is meaningless in terms of profitability. This is yet another Russian expenditure for the Minsk-2".
Only at the end of 2016, Moscow reduced the list of the LPR enterprises, which were provided incentives for import duties, by three times. And now what, the economic situation in Russia dramatically improved?
This "nationalization" gamble looks very economically doubtful. Especially because Moscow intends to transfer all these metallurgical and other plants under control of the former Ukrainian oligarch Kurchenko, with whom Zakharchenko has been tussling all three years and who had been banned to enter the "DPR". And Kurchenko made not a wise management and creation of enterprises from the capital, but the import of contraband combustive and lubricating materials under the patronage of Yanukovych and former Prosecutor General Pshonka. So Kurchenko will rather cut these enterprises into scrap metal than will be able to manage them effectively. However, it can and should spur on Akhmetov to put stronger pressure on the government of Ukraine to agree to Moscow's terms.
And now let us try to understand the Kremlin's goals. What tasks does it pursue, getting itself into such a dubious gamble at a loss? I propose to do together line by line analysis of the speeches and telephone conversations of Zakharchenko, intercepted by the SBU in order to prove my point.
Of course, many of you have already heard them, but you can listen and you can hear. Let us try to hear the essence of what is happening together.
The first thing that any analyst should do – assure himself of the authenticity of material which he analyzes. Here Alexander Zakharchenko himself will help us. He actually gave a positive response for a journalist's question whether the conversation is put on the Web.
Correspondent – Zakharchenko:
– There is a record of your intercepted phone conversations on the Web, - how will you comment?
– Well, firstly, this is not confidential information. And secondly, I advise the Ukrainians to get used to my voice.
The former Minister of State Security of the DPR Alexander Khodakovsky has also no doubt in the authenticity of the record, what he wrote on his VKontakte.
So we consider the document genuine and start to listen to what the leader of the DPR Zakharchenko and the head of the Domestic and Foreign Policy Department of his Administration Dmitriy Trapeznikov say to each other. The leader of militants asked the subordinate whether he is not confused with something in the text of ultimatum that Zakharchenko would do.
Trapeznikov: - Only one moment confuses me that it is written there in the form of ultimatum that if they do not lift the blockade till Wednesday, March 1, 00:00 – we will take these measures. And if they suddenly lift, then what – we will cave in?
Zakharchenko: - No. Well, damn, it was agreed that way.
What conclusions can be drawn from the heard?
- Firstly, that the so-called "nationalization" is unrelated to the blockade. The fact that it is presented as a response to the actions of Ukrainian veterans of ATO is only a game for the West, the justification of their gangster actions with a plausible excuse.
Secondly, we see that the decision was made not in Donetsk or Luhansk. And the head of the whole republic cannot answer the basic question, saying that "it was agreed that way".
Listen to the second fragment of the conversation:
Zakharchenko: – And why till 12? Is it tomorrow till 12 o'clock, will the statement be tomorrow till 12?
Trapeznikov: - They actually wrote that it urgently needs to be agreed. I said, "I will try to agree it now".
- We see again from this fragment that even the decision to publish the statement is adopted not in Donetsk, and Zakharchenko does not know when he would be given this command. Secondly, it is obvious that the operation is being developed in a hurry and has a short period of implementation. In other words, those who make decisions are limited in time of implementation. And this is important point, because the puppet republics earlier announced the nationalization from March 31. And then they suddenly extended a deadline for a whole month earlier - on March 1. Moreover, the corresponding statement of Zakharchenko was made on February 27, - the day before March 1, - that initially did the fulfilling of requirements of the militants not real. So, regardless of the blockade and reaction of Kyiv in generally, the decision of introducing the beholders at all objects of the economy in the DPR was already taken.
Zakharchenko: On Wednesday, up to zero o'clock, not only the blockade, this is not about the blockade in general, but about the reregistration of all Ukrainian enterprises located on our territory in the legal terrain of the DPR. If this is not done, then all these enterprises will come under our jurisdiction on Wednesday at zero o'clock… This applies to all enterprises under Ukrainian jurisdiction: stadiums, hotels, etc. – completely all.
Zakharchenko explains that the actions of Luhansk and Donetsk serve not to lift the blockade, but on the contrary - to declare it to Ukraine:
Zakharchenko: The main task is not to lift the blockade. I explain with today's statement, in fact, again that we will not sell them coal. We do not need their blockade. Let them stand there, freeze, build redoubts, block the roads. It is not interesting for us to trade with Ukraine. You see, this is the main task: it is not they who dictate the terms to us, but we who dictate the terms to them now… And we have nothing to agree with them.
And here we come to the moments that give us the key for understanding why Russia has started this gamble with "nationalization" at a loss. Listen to three fragments. The first of them was cut from the official video of Zakharchenko's press conference by the so-called Ministry of Information of the republic. And now you will understand why. – It is because the leader of the DPR practically let out Moscow's secret plan!
Zakharchenko: – Can you imagine how many billions of dollars will not get the budget of Ukraine? Where will they have to buy coal? Well, you understand that not only we will not sell coal, but also Russia will not sell them coal. Do you understand what I am talking about? – This is how you treat this issue.
So it is planned that not only "DPR-LPR", but also Russia will stop selling coal to Ukraine, putting it at risk of the energy crisis. But what is it for? After all, does Russia itself earn on supplies to Ukraine? – listen to Zakharchenko:
Zakharchenko: Now the situation changes radically and now Ukraine is blockaded by the DPR-LPR. Let them think now how to agree with us.
As we have heard, the energy shortage that Moscow is going to arrange for Ukraine is aimed at making Kyiv agree with DPR-LPR. But there is a nuance. If the supplies of coal from the puppet republics went earlier to Ukraine from Ukrainian enterprises, then now Kyiv will have to make arrangement with enterprises run by "the State Administrations of the DPR and LPR ". And this is the point! -
Zakharchenko: Transfer under our jurisdiction is equivalent to the fact that Ukraine recognizes our independence in general.
So nationalization is only a tool. The goal is to make Ukraine to go on unfavorable for Kyiv arrangements with the DPR-LPR. And since the enterprises are now managed by "the State Administrations" – arrangements with them actually mean the recognition of puppet republics by Kyiv! This is what Moscow hunts for! Otherwise, a threat of collapse of the Ukrainian economy is bring arisen by the blocking of coal supplies from the Donbass and Russia from which Ukraine, for some reason (!), continues to remain energy dependence.
Moreover, Russia has already made the first step on this path:
Groysman: Well, look, I said this at the very beginning: Russia banned the movement of Ukrainian goods on its checkpoints and territories. What does it mean? – We began to lose adjacent markets.
So now quite literally the turning point in the economic component of this hybrid war comes. Either the Ukrainian government will quickly diversify energy supply, eliminating the risks of blockade by Moscow and its puppet republics of the Donbass, or it will de facto sign the capitulation on the terms of the enemy, continuing to import coal from there. We must hold out! Even if there are rolling blackouts, even if the hryvnia falls, even if some enterprises stop, the managers of which have not understood yet that they cannot depend on the aggressor! We must hold out, eliminate the energy dependence on Moscow and terrorists - and then we will win! The enemy launched a strike. It is necessary to dodge it, so that he lost his balance and failed. Then we will dictate terms.
OstroV, Public Radio of Donbass