The close source reported to informator.lg.ua about how RF supply insurgents with living force, heavy machinery and equipment for fightings and also with “cash” to contain population. According to our information, Russia provides the direct subsidy of budget of “republic”. It gives the resources for payments of social benefits. We remind that there was renewed issue of pensions and social benefits  on May in “LPR” after the 8 months pause.

informator.lg.ua decided to find out, what is the reasons for beginning of financing by RF the separatist “budget”. What is the volume of coming means? And the main thing — the next prospects — if Russia is going to allocate this means in a future?

The “economic suffocation” of separatism

From the beginning of 2015 Ukrainian authorities made a number of steps for strengthening of the economic blockade of temporarily uncontrolled districts of Luhansk and Donetsk regions.

This efforts have led to a break of any official economic connects with territory, controlled by insurgents in a complex with previously adopted resolutions of Cabinet of Ministers #595 “About the financing of public institutions in the territory , temporarily uncontrolled Ukraine” and also next legal documents.

The economy of Luhansk region already was in a bad condition before a war. After the capturing the power by separatists and cancelling of Ukrainian authorities to finance uncontrolled territories, it becomes obviously that economic situation in “LPR” and “DPR” takes the reasons of catastrophe.

The social preambles of it is the stopping of enterprises, migration of a big number of able-bodied people and entrepreneurs out of borders of “LPR”. Another one is the absence of possibility to hold the economic connections with Ukraine.

By the way, we don’t have the exact figures, but it’s obviously that ratio of quantity “idle” and “working” persons in “young state” is deplorably.

The coming of humanitarian aid from Russia got a big value against this background. But its volumes wasn’t enough for a territory with population more than 1 million of people. Except this, there wasn’t create any effective system of allocation of humanitarian aid. The biggest part of it was stolen. Something from the party was sold in local trade networks.

The most big part, who suffers from strategy of “economic suffocation” of separatists inside of the “republic”, is the pensioners and employees «of public institutions». actually this people stayed without livelihood, beginning from capturing the power by insurgents.

A number of international organizations stated the hard humanitarian situation on occupied territories in 2015. Appropriate statements sounded not only from representatives of the International Red Cross, OSCE, but also it was voiced by a number of diplomats. In particular, the ambassador of USA in Ukraine Geoffrey Ross Pyatt  judged the actions of separatists, come to humanitarian catastrophe.

The information about starving deaths of older people began to come from occupied side in this period. It happened because there was absence of livelihood in their mode of life. Miss of the monetary means in ordinary citizens “spoiled the picture” which was made by TV propaganda for inside and outside using , against the background of “military successes” of militants and the common “elation” in young republics. The calculation of Ukrainian authorities was perfect — obviously economic inadequacy of “republics” deprives their authorities a chance to be longer in power.

Russia from its side wasn’t hurried to solve the economic problems of “republics”. War business is not so cheap plus it’s a need to feed the pensioners and state employees. It’s understood that such costs weren’t in plans of Russian leaders.

In the same time it wasn’t really possible to make Ukraine to finance “rebel Donbass”. According to data of media, the question of financing of “republics” regularly become the subject of discussion and bargaining. Last time Kremlin tried to force Ukrainian authorities to finance “rebel Donbass” during Minsk negotiations on February 12, 2015.

Money for “republics”

At the beginning of spring Kremlin curators made a decision to subsidize the budget of “republic” directly. It can be supposed that such a decision was made on the most high level, because it’s a real serious sums. Kremlin didn’t have another choice after negotiations “Minsk-2” at the beginning of 2015. It was variant to “throw a bone” to population of “republics” or to divide with fighters the responsibility for scale humanitarian catastrophe.

The shot source reported to informator that “republic” had three tranches from Russian Federation from the beginning of the year. April 4 — 1 billion rubles, April 15 — 1,2 billion rubles, April 22 — 224 million rubles. There will be another talk low about the fourth tranche of dollars. This resources had the targeted appointment. It was for payment pensions and salaries for employees of budgetary institutions.

“The state officials of “LPR” smugly reported on April that they could “accumulate the necessary funds” and soon they would make payments to population. They kept modest silence about sources of supply.

The leader of “republic” Ihor Plotnitsky fall down on a week at this period. The one of the versions was his visit “on a carpet to…” Most likely that Ihor Plotnitsky gave the personal liabilities to his “masters” which were about payments in so-called republic.

At the same time with this process the “new registration” of institutions, opening of offices of “state bank” and “bank accounts” was made on a territory of “republic”.

First time for 8 months at the end May 2015 the pension began to issue to Luhansk pensioners. It consisted 2 000 of rubles. The troubles during a process of payment the insurgents explained by technical deficiencies.

However there still were a problems with salaries to employees of budgetary institutions. It was hard to finish “new registration” or to “open new bank accounts”.

2 million dollars to doctors and pensioners

Our source informed that at the end of May there was one more tranche of 2 million dollars to “LPR”. The source, closed to leaders of “republic” informed that a half of this sum will be spent on the payment of pensions and another will be direct to settlement of debts of salaries to doctors. “In this regard there will be opened the currency accounts” — explained the source. According to its words exchange will be made by “special rate of “LPR” — 25 UAH for 1 USD.

Proceeding to a “rate” inside of “republic” 2 million dollars is 50 million hryvnias or 100 million of rubles. If half of this means is for pensioners, the 2000 rubles (size of pension) will get only 25 000 of people. As for a payment of dept to medical workers it won’t be enough the 50 millions of UAH.

Exchange rate in the “republic” is deserved a special attention. It has abig difference with Ukrainian. It is 1:2 for hryvnia and ruble and 25 UAH is for 1 USD according to mercenaries’ opinion.

Who will pay?

However for such a big state as Russia sums is not a great number. It’s unknown who will pay them. The economic position of RF significantly complicated for the last 6 months, because of war and sanctions. The addition military salaries and necessity to finance “republics” brings to cutting the bonuses in salaries and pensions in a number of subjects of Russian Federation.

Also, Minister of Finance of RF spoke about necessity of increasing the pension age in the country.

Also, there is the info coming from some regions that locals are taken some payments “for help to Donbass”.

So, How long Russia will be ready to finance the social sphere of “young republic” is a question. Theoretically, the termination of financing could happen in every moment of time. We can only guess about social, economic and humanitarian consequences there after some time.

Aleksei Chernov for informator.lg.ua