When Serhiy Kaplin, the secretary of the parliament’s national security committee, said on May 29 that 60 percent of enterprises in Donbas are not working, this came as a shock since Ukraine’s three eastern oblasts – Donetsk, Luhansk and Kharkiv – contribute 20 percent to the nation’s gross domestic product. They are also home to 20 percent of Ukraine’s population of 45 million.
Businesses with complex production cycles were halted! This includes machinery, metallurgy, food industry and coal mining,” Kaplin said.
Not surprisingly, the International Monetary Fund expects Ukraine’s economy to shrink by 5 percent this year, while the European Bank for Reconstruction and Development thinks contraction will reach 7 percent.
Violence in the region, instigated by Moscow-backed separatists, has pushed energy and chemicals mogul Dmytro Firtash to shut down two of his chemical giants in Donbas – Stirol in Horlivka and Azot in Severodonetsk – on May 7-8, respectively.
Borys Krasnyansky, CEO of Firtash’s Group DF, in a May 27 interview with Interfax-Ukraine news agency said that the conglomerate may consider selling those plants, while chemical industry experts are pessimistic about the sector’s prospects this year.
The region’s key business player – billionaire Rinat Akhmetov, owner of the System Capital Management conglomerate with major energy and metallurgical assets – on May 19 called on some workers in his plants in the Donbas to strike daily until the crisis ends.
The so-called Donetsk People’s Republic, a Russian-backed separatist movement, threatened to take over Akhmetov’s assets for his refusal to pay a tribute to them.
Igor Kolomoisky, another Ukrainian billionaire oligarch who is the Dnipropetrovsk Oblast governor, has incurred substantial losses as well. He has beefed up security with civilian groups attached to police patrols, checkpoints and neighborhood watches. On March 3, he denounced Russia’s intervention in Ukraine and publicly called President Vladimir Putin a “short-statured schizophrenic.”
On May 19, separatists caused a blackout at Kolomoisky’s Stakhanov Ferroalloy Plant in Luhansk Oblast. Also the owner of Privatbank, Ukraine’s biggest privately-owned bank by assets, he has had to close 74 branches in Luhansk and 117 in Donetsk Oblasts in May due to heavy looting and theft of armored money trucks.
Overall, Kolomoisky’s Privat Group has incurred at least Hr 15 million in losses in the east. The latest theft took place on June 4 in Makiyivka where separatists robbed a delivery truck of Hr 3.7 million.
Almost all of Privatbank’s cash delivery vehicles have been stolen by separatists, said the bank’s chief security officer Stanislav Kryzhanovsky. “Possibly, these vehicles are being used by the militants of terrorist organizations for armed attacks on Ukrainian army and civil population in Donetsk and Luhansk Oblasts,” he said.
Raiffeisen Bank Aval, the Ukrainian subsidiary of Austria’s Raiffeisen Bank International, closed 15 branches in Luhansk and 47 in Donetsk oblasts. As of June 3, Donetsk and Luhansk each had 11 Raiffeisen branches still in operation.
Meanwhile, such banks as Fidobank, Finansy ta Kredyt, Pivdenny, Platinum, Unicredit also reported operating problems caused by Kremlin-backed separatist militants.
Terrorists twice robbed the Donetsk headquarters of Industrial Union of Donbas, a local steel company owned by a pool of Russian investors, who hold a major stake, and Donetsk Governor Serhiy Taruta along with his partner Oleg Mkrtchan. The incidents took place on May 3 and June, 3 according to UNN.
Ukraine’s First Deputy Energy Minister Yuriy Zyukov on May 29 reported that four state-owned coal mines are not functioning. “Every day we are losing 7,000 to 10,000 tons of coal,” he added.
Retailers in Donbas are also experiencing difficulty. Pro-Kremlin terrorists ransacked the German-owned Metro Cash & Carry store located near the Donetsk International Airport overnight on May 29. Expensive alcohol was one of the key products that attracted the marauders’ interest, while some of them started drinking it inside the store while police failed to stop them, according to Metro’s Ukrainian office spokeswoman Olesya Olenytska.
Separatists also occupied the ATB supermarket in the village of Verkhnyotoretske in Donetsk Oblast on May 27, reported Donetsk Oblast State Administration’s press service. They did so in order to provide food for their needs. ATB spokesperson Anna Lichman denied this on her Facebook page.
“Cars disappear, this is something regular now. Today I had a walk around the city (of Donetsk) and saw very few people on the streets,” says Anatoliy Akimochkin, deputy head of Independent Miners Trade Union.
“The city is becoming a no-man’s land, a new Chornobyl. Most of my friends… have already left for Kyiv or are planning to do so in the nearest future,” Olesya Ostafieva wrote on her Facebook page regarding Donetsk.
Donetsk Mayor Oleksandr Lukyanchenko said that up to 15,000 people have fled the city of 1 million in the last month because of lawlessness and mayhem.
Kyiv Post staff writer Iana Koretska can be reached at [email protected]
