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Apr 2, 2021
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Donbass: What’s going on behind the front lines?

Photo: Alchevsk Iron and Steel Works

In the photo: Alchevsk Iron and Steel Works (Photo: Valentin Sprinchak / TASS)

Blast furnace No. 5 was shut down at the Alchevsk Metallurgical Plant in the LPR. According to media reports, this happened due to a lack of raw materials. According to the press, the warehouses have accumulated a lot of products that they cannot sell in any way. No one needs it on the domestic market, and although it is needed on the foreign market, there is no way to establish cooperation with other countries.

For this reason, the financial situation of the plant is becoming more and more sad every day. It is noted that the plant loses workers every day, who quit due to non-payment of wages and debts in general.

At the same time, prices for the same rebar are growing in Russia. Why not buy it cheaper in Donbass? Moreover, if Russia undertook to help the region, its citizens, then it would be good to save the city-forming enterprises from closing, and people from unemployment …

– This raises the question: who owns the Alchevsk plant today, and who really controls it? A similar question can be addressed to other enterprises of the LPR.

After all, initially, what did people assume when they first went to the barricades, and then to the trenches? That instead of Ukrainian sub-oligarchic capitalism, something like the Soviet version of socialism will be established in the people’s republics, with command-administrative methods of managing the economy – in the Soviet Donbass this scheme has shown itself perfectly, with the social obligations of the state and, in general, to some extent with the power workers and peasants, – comments on the current situation editor-in-chief of the FORUM portal. Moscow time Anatoly Baranov

– And we got, in fact, no-man’s territory, in which some temporary people, connected only and exclusively with momentary interests – to snatch something and hide with “honestly earned”.

Even by the standards of Russian capitalism, many of the schemes here are strictly criminal.

Why are there no raw materials? Because – they could not deliver. Why are warehouses overwhelmed? Because – they could not realize it. Who to ask? And not with anyone! This is a market where there are no rules at all, no responsibility and no interests, except for someone’s momentary.

“SP”: – And what is the threat to Donbass of stopping such strategic giants as AMK?

– Stopping the giants of industry threatens mass unemployment and the transformation of large cities into post-apocalyptic ghettos. People have to work somewhere. If factories fall, cities will begin to empty without any war, like Detroit or the cities of the same Donbass even before the war – Perevalnoye gaped with empty windows of houses in 2012, like Dzhankoy, by the way, in the Ukrainian period.

“SP”: – Where could Donbass send its products in the current state?

– Products can be sent anywhere and to anyone – to those who take cheaper than the market, that is, before dumping. Low salaries and virtually no depreciation costs make local industrial products cheap but of poor quality. Supply schemes, I repeat, are wild. But the market is the market – there are always those who want to buy something cheaper, albeit bypassing some rules and regulations. In the same Ukraine, they willingly buy Donbass coal – in any case, it is cheaper than transporting it from Africa, especially since Donbass coal is technologically oriented towards the Ukrainian consumer. In Russia, too, they will gladly buy what is bad. China is also very tolerant in this regard, especially if it is necessary to provide industrial facilities outside the borders of the Celestial Empire.

“SP”: – Why can’t you do direct deliveries? Because of fears that the West will blame Russia again?

– I believe that for direct deliveries and “white” contracts, another party is needed, not burdened with sanctions and criminal cases in different countries. Can’t any NLMK (Novolipetsk Metallurgical Plant, an international steel company with assets in Russia, the USA and the EU – ed.) Conclude a supply agreement, say, with some “Vasya Rezany” that Interpol is looking for.

There is only one solution – the complete nationalization of industrial facilities, the creation of real ministries of industry in the LPR and DPR with the right of direct directive management of enterprises, the appointment of state managers to each facility, and then everything follows a well-known scheme: plan, supply, control, tariff scale, Quality control department, procurement department, firm state purchases with firm state supplies. And Gossnab, which must conclude direct and “white” contracts both inside the LPNR and in the external space. True, for this it is necessary to recognize the republics …

“SP”: – In the same Alchevsk, warehouses are overwhelmed with products, in Russia, on the contrary, the deficit of the same fittings. And what prevents Russia from buying these products?

– What’s in the way? Yes, the fact that no one needs it in Russia! Snatching is yes, of course. But to systematically organize the work of industry and work for a salary and a bonus, without helicopter pads in the country and palaces in Liguria – this is not possible … So towards real nationalization in the LDNR there should also be a counter process in the Russian Federation. To begin with, create a ministry “for the Eastern Territories”, which tasked with the economic integration of the LPR.

The LDNR economy is disintegrated today. She self-destructs and dies, as during the Civil War in Soviet Russia. And the measures for restoration are needed similar. Tough and rational. Big bolt on international law. People’s Commissars of the Stalinist type, kaganovichs and tsurup, krzhizhanov and dzerzhinsky. But not with a revolver, but with a ledger … and with a revolver. The ruling party in Russia does not have these cadres, while the opposition still has it. Maslyukov he was able to raise the industry after 1998. Some of his team is still alive … Look for people.

– Firstly, blast furnaces at the Alchevsk Combine have been shut down several times after 2014, – reminds Director of the EAEU Institute Vladimir Lepekhin.

– Secondly, if the work at the enterprise is once again stopped, then it is not at all because of the lack of raw materials – there are deeper reasons for this. On the one hand, AMK receives scrap metal for processing from the former Dnepropetrovsk, which is considered by many to be the capital of “dobrobats”, which means that you cannot rely on this supplier.

On the other hand, when a plant complains about a shortage of raw materials, it means that its top managers have failed to work, they have relied on the wrong suppliers.

And, thirdly, the point is not in the lack of raw materials, but in the uncertain status of the enterprise, in connection with which it is constantly in a fever. The plant is registered in Ukraine and pays taxes to Kiev, despite the fact that its employees do not receive the required pensions from the Ukrainian authorities. Lugansk introduced external management over the enterprise, but the question has not yet been settled – who is its real owner: Kerimov, Kurchenko or the Industrial Union of Donbass. In such a situation, it is surprising that the plant is still in operation.

“SP”: – This problem existed before, but solutions were found, and now the situation has worsened even more. Why?

– After 2014, the old ties continued to work, and the Donetsk-Ukrainian oligarchy, tied into a single commercial knot (Taruta, Akhmetov and others), tried to maintain his business, and despite the war, he ensured the supply of raw materials and the sale of finished products.

But today this knot is partly torn apart, partly dissolving “thanks” to Kiev and its militant Western friends, interested in the destruction of the industrial sector in Ukraine and in the economic strangulation of Donbass. Now other nodes are being formed – already in the Russian direction, and therefore it is impossible to deploy a giant plant that supplies its products to 60 countries of the world overnight. New investments are needed, which Russia is not yet capable of.

“SP”: – And how are the production and economic schemes in the LPNR built in general? Where and how do factories and mines send their products – coal etc.

– AMK has its customers in 60 countries of the world, but it is not engaged in sales itself. This happens through companies owned by ISD, partly by businessmen from Dnipro, partly by someone else. Therefore, when there is a change of owners and a redistribution of the market, the loss of the established connections is inevitable. So sanctions and “non-recognition” of the LPR by some countries are not a problem at all: you can draw up agreements even through Zimbabwe.

The problem is, firstly, in the controversial legal status of both AMK and its many partners, and secondly, in the fact that some of its owners and top managers continue to look towards Ukraine. T.N. ATO cut the economy of Donbass alive, it is impossible to glue the cut because of the war waged by Kiev, and it has not yet been possible to add the torn-off half to something new.

“SP”: – What prevents Russia from buying the company’s products directly?

– Of course, it is reasonable to buy cheap fittings in the Donbass, and not abroad. But the Russian Federation has a different problem. Who sits on external purchases? As a rule, they are legalized bandits. And why should they look for cheap suppliers, if on expensive orders it is possible to get usedaboutthe biggest profit? So Donbass is in a stretch today: if you go to Ukraine, you will be robbed, or even killed, but in Russia entrepreneurs from Donbass are not heard.

“JV”: – The construction boom in China has led to an unprecedented rise in world prices for iron ore. To what extent do you think this can play into the hands of Donbass? Can it occupy a niche in the global economy?

– Alchevsk already occupies a niche in foreign markets and theoretically can not only preserve it, but also expand it. But for this, the plant needs to resolve its legal issues. I see only one way – its integration into the Russian economic system as quickly as possible without any illusions about preserving the AMK’s integration into the Ukrainian economy. Unfortunately, this depends not only on the position of the owners of the plant and the authorities of Lugansk, but also on the Ministry of Economic Development of Russia, and there everything stalls. Will hope that To Putin will manage to cut the Gordian knot of Donbass.

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