Who will finance the resurrection of Donbas?

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2014/09/17 • War in the Donbas

Article by: Anastasiya Moskvichova

Kyiv – Not a single penny from the budget for separatist Donbas, claims the Ukrainian government. It is proposed to finance the renewal of infrastructure on territories that are not under Ukrainian control with a special fund, to which representatives of big business and foreign donors would be able to make donations. Meanwhile, experts entertain the possibility that the ‘outline’ nature of the law creates reason for manipulation on all sides.

The government will not give money from the budget to Donbas territories that are under separatist control, states Prime Minister Arseniy Yatseniuk. To renew the infrastructure on this territory, which has been ruined in combat, the newly-approved ‘law on parts of Donbas’ proposes to create a special fund, which will be filled due to international donor assistance and charitable donations made by ‘Ukrainian oligarchs.’

“We can give money there from the state budget if we renew total control of this territory, the industries will start working again and pay taxes to the state budget. Therefore, a very clear formula is proposed: chip in and renew. All together. But not by cutting the expenses of all of Ukraine,” stated the Prime Minister.

Meanwhile Arseniy Yatseniuk emphasized that all social payments on the freed territories will be provided in full. Representative of the President for regulating the situation in the East Iryna Herashchenko confirmed that first and foremost the infrastructure will be renewed on the territories under Ukrainian control, meanwhile the financing of the rest of Donbas territories will be discussed at a donor conference in the end of October – beginning of November in Kyiv.

‘The special order of local government’ will mean that the local government will have power in the energy sphere, Energy Minister Yury Prodan told the journalists.

“If the local government wants to consider itself the local government, it should set up the heating season there, establish payments in order for everything to happen on legal terms in adherence to legislative acts established in Ukraine,” said he.

According to him, the majority of mines on territories under control of separatists and near the combat zone are currently out of service, some of them are not subject to renovation, there are reports that part of the extracted coal is being sent across the Russian border.

Lanovy: each side can interpret the law in their own way

According to preliminary data, the ‘resurrection’ of Donbas requires about 8 billion UAH for each oblast, says economist Volodymyr Lanovy. However, to his mind, these data are not certain, as it is practically impossible to conceive the scale of ruination on territories that are out of control by the Ukrainian government. Using the budget to finance the lands that don’t acknowledge the Ukrainian government and are not subject to our laws is strange, to say the least, meanwhile, nobody will ‘just give money’ to uncertainty. Therefore, a development strategy should be outlined for Donbas, Lanovy thinks.

Plus, according to the expert, the law passed on Monday really is an outline and creates grounds for manipulation by all sides of the conflict.

“There is a lot of uncertainty, such that Russia and the terrorists can interpret it in their way, and we may interpret it in ours,” Lanovy says.

The Russian MFA and ‘LNR’ gang approved the legislative initiative regarding the ‘special order of local government,’ meanwhile the ‘DNR’ group stated that they do not intend to adhere to Ukrainian laws.

Meanwhile, Ukrayinska Pravda website reports that the text of the law regarding special order of local government in Donetsk and Luhansk oblasts, penned by Petro Poroshenko, has been changed.

In reality, while before the registration it spoke about the determination of the territory subject to the law by the Verkhovna Rada, now the text posted on the Parliamentary website claims it falls under the jurisdiction of the head of the Anti-Terrorist Headquarters.

Translated by: Mariya Shcherbinina
Source: Radio Liberty

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  • Dave Ralph

    This is one of the most idiotic things i have heard from Yatseniuk. Instead of Ukraine’s oligarchs paying taxes into the national Ukrainian budget, they can instead “donate” directly to the Donbass. How stupid does Yatseniuk think people are?

    • LorCanada

      Well, I suppose that since the oligarchs are the owners of those defunct companies they ought to be responsible for its rejuvenation. Have I missed something? Maybe so.