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Donbass will do without Ukraine, hardly vice versa - experts

May 13, 2014, 16:57 UTC+3 Alexandrova Lyudmila
Residents of Donetsk celebrate after the referendum

Residents of Donetsk celebrate after the referendum


MOSCOW, May 13. /ITAR-TASS/. After the independence referendums in eastern Ukraine’s self-proclaimed Donetsk and Luhansk People's Republics, which are part of the Donbass industrial and coal-mining area, quite a few Ukrainian analysts said Ukraine should let them go, as the regions are only a drag on the country’s development. Russian experts predict secession would lead to huge difficulties for Ukraine, which is already stuck in a prolonged and acute economic crisis. Meanwhile, the breakaway regions believe they have fair chances to stay afloat in the medium term.

Here is a couple of typical views. A journalist from Lviv in western Ukraine, Ostap Drozdov, believes the East has been a burden for the country, “an anchor that prevented Ukraine from making breakthroughs”.

“No more billions of dollars to be flushed down the drain for Donbass’s inefficient economy,” Yury Romanenko writes in an article on the analytical site Khvylya. “No more billions of hryvnias to be wasted for public sector employees. The problem of the Russian language and other far-fetched problems the Donetsk elite has been exploiting to blackmail Kiev are disappearing.”

In the meantime, Russian experts say Kiev should rather cry than celebrate.

Financially, both regions have already left Ukraine as Kiev refused to pay pensions and wages to Donbass’s state employees, Deputy Dean of the Faculty of World Economy and International Affairs of the Higher School of Economics, Andrei Suzdaltsev, told ITAR-TASS.

“These regions’ economic situation is far from brilliant,” the expert agrees, as many enterprises there “use almost slave labor and have remained afloat with the help of cheap Russian gas”. The situation in Donbass’s coal industry is mixed. While many mines are in poor condition, there are some deposits of high-quality coking coal in the area.

Even so, these regions have concentrated no less than a half of Ukraine’s export potential, and many of the most efficient companies successfully cooperated with Russia, the expert said.

Donetsk and Luhansk's secession would deliver a heavy blow to Ukraine’s budget, while the separatist regions will gradually start to feel better, albeit not immediately, if Russia provides energy support, Suzdaltsev believes. “In the medium term, the newly created republics will recover economically,” the expert said.

Drawing parallels with Transdniestria, Abkhazia and South Ossetia is inappropriate here, the expert added, as the Donetsk and Luhansk republics have a huge economic potential and economic ties with the entire world. Last but not least, their population totals almost 7 million. “If plans announced by Oleh Tsariov (a Ukrainian parliament member supporting secession) to establish a federation called Novorossiya in the southeast are realized, the population of such a state will be almost 20 million,” said Suzdaltsev.

“Speaking of tax collection, a large flow comes from the industry in the East,” an academician at the Russian Presidential Academy of National Economy and Public Administration Sergei Ulyukaev is quoted by the Komsomolskaya Pravda daily as sayng. “Eastern regions ensure energy security and yield the lion’s share of foreign currency revenue as 80% of metallurgical products are exported,” he said.

“If Donetsk and Luhansk secede from Ukraine, this will be only the beginning,” the director of the Center for Political Studies of the Financial University under the Russian government Pavel Salin was quoted by the Svobodnaya Pressa (Free Press) site as saying. “Self-reliance is possible only for the eight industrial regions taken together. Along with Luhansk and Donetsk, there are Kharkiv, Odessa, Zaporozhye, Mykolaiv, Dnipropetrovsk and Kherson. Besides, they are all economically reliant on Russia as the energy supplier and sales market. This industrial cluster has no one to turn to except Russia - the Western countries have no interest in its development,” the expert added.

What will be left for the rest of Ukraine, if the entire southeast breaks away? Central Ukraine is a breadbasket the Western countries have no particular need for, whereas Western Ukraine is a traditional labor force supplier for Europe.

Breakaway of the Donetsk and Luhansk republics will spell an economic disaster for Ukraine, believes economist and political scientist Nikita Maslennikov, who is in charge of finance and the economy at the Institute of Contemporary Development INSOR. “Economic stabilization under such circumstances would be hardly achievable," he said.


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