Written by Nikolaus von Twickel


The Kremlin’s announcement that Russian passports will be issued in the “People’s Republics” were greeted with enthusiasm by separatist leaders while Ukraine and her allies reacted with sharp criticism. While the move was clearly directed at Ukraine’s president-elect Volodymyr Zelenskiy, experts warned that it might boost the ongoing brain drain. Meanwhile, the influence of Vneshtorgservis in the „DNR” grew further after the secretive holding company’s CEO, Vladimir Pashkov, was appointed a deputy Prime Minister.

Russia announces “passportization” for “DNR” and “LNR”

Separatist leaders reacted euphorically to the Kremlin’s April 24 decree that residents of the ”People’s Republics” will be eligible to receive Russian passports on a fast-track basis. “We have long been waiting for this step and are immensely glad that the day has come. Thank You!”, “DNR” leader Denis Pushilin said in a statement. “LNR” leader Leonid Pasechnik tweeted that this was “an extraordinary moment, which has been long awaited by all of the LNR’s citizens.”

The decree states that residents of the “certain districts of Ukraine’s Luhansk and Donetsk regions” are entitled for a fast-track procedure when applying for Russian citizenship and that they should present passports issued by the DNR or “LNR” . Russia has recognized these passports since February 2017 (see Newsletter 19).

The Russian Interior Ministry later clarified that applicants won’t be required to travel to Russia. Instead they should submit documents to authorized personnel inside the “Republics” (i.e. Ukraine) while the applications would be processed within a three-months period in the neighbouring Russian Rostov Region. Russia also won’t require applicants to renounce their Ukrainian citizenship. Dual citizenship is illegal under Ukrainian law and Ukraine’s deputy Minister for the Occupied Territories Yuriy Hrymchak warned that those who take up the Russian offer could lose their Ukrainian citizenship.

Ukraine and her allies denounced the decision as illegal and counterproductive. The Foreign Ministry in Kiev said that the decree undermines the Minsk agreements and intends to destabilize Ukraine after the April 21 presidential election. It published a collection of western government criticism as a Twitter Moments series. The OSCE Chairmanship, currently held by Slovakia, warned that this was an “unilateral measure” by Russia that could undermine efforts for a peaceful resolution.

While Russian President Vladimir Putin said that the decision was a “purely humanitarian” one, the step was widely seen as a reaction to Volodymyr Zelenskiy winning the presidential election on April 21. Russian media had actually reported back on April 16, when Zelenskiy’s clear victory had been predicted by polls, that the passport decree was ready to be signed right after the second round of voting.

Maria Snegovaya, a political scientist from Columbia University in New York, suggested that Russia was afraid of the showman’s popularity in Donbass (his best result, almost 90 per cent, was in the Luhansk region). Zelenskiy’s “victory in democratic elections creates competition for (the) Kremlin’s project in DPR/LPR. Distribution of passports (is an) PR-attempt to pull the region’s residents to (Russia’s) side”, Snegovaya wrote on Twitter.

Alexei Chesnakov, a political consultant closely linked to Vladislav Surkov, the Kremlin adviser responsible for eastern Ukraine, openly warned that Russia would employ “more political tools” to protect the local population if Ukraine does not make concessions: “If Kiev really wants to restore a common constitutional order with Donetsk and Luhansk, it needs to demonstrate its readiness soon,” he said.

It was unclear what long-term consequences passportization will have for the “People’s Republics”. While many experts suggested that it will increase the brain drain to Russia and make it less attractive for young men to join local armed formations. Low wages and a bleak economic outlook have been blamed for a brain drain that is increasingly affecting key areas of the local economy (see Newsletter 53).

However, others argued that the decision might ultimately make reintegration with Ukraine easier by lowering barriers for the pro-Russian population to migrate to Russia. And while some warned that Moscow could use the presence of significant numbers of Russian citizens as a pretext for future military incursions, others pointed out that the Russian military presence was already sufficiently big and a Ukrainian military offensive was highly unlikely.

Much will depend on how fast and efficient the passportization will be implemented. Alexander Zhuchkovsky, a former Russian volunteer fighter and writer, suggested that Russian authorities could issue up to 30,000 passports per month. He added that priority would be given to fighters, security service staff and people working for the separatist de-facto authorities.

Vneshtorgservis CEO joins “DNR“ government

Donetsk separatist leader Denis Pushilin on 18 April appointed Vneshtorgservis CEO Vladimir Pashkov as a deputy Prime Minister overseeing the economy. During a meeting four days later, Pushilin tasked Pashkov with making idle factories work again, repairing roads, boosting agriculture and to purchase buses, ambulances for communal services – thus basically asking him to solve all the “DNR’s” economic problems .

Pashkov, a Russian citizen and former vice governor of the Irkutsk region, has headed Vneshtorgservis since 2017, when the secretive holding company took key industrial assets seized from their Ukrainian owners. Vneshtorgservis officially controls ten of 43 factories seized in the “DNR”, plus a handful in the “LNR”, but the company’s role vastly expanded after the assassination of separatist leader Alexander Zakharchenko on 31 August. The hitherto culmination was the appointment of Alexander Ananchenko, a former Vneshtorgservis adviser, to the newly created powerful post of Prime Minister last autumn.

With Pashkov, the separatist government consists of four deputy Prime Ministers, the others being Vladimir Antonov (responsible for social policies), Igor Martynov (macroeconomy) and Tatyana Pereverzeva (finances). The separatists even released an official photo of Pashkov, who has rarely been seen in public. There was no suggestion that he will resign as Vneshtorgservis CEO. During his meeting with Pashkov, Pushilin said that Vneshtorgservis was “a cornerstone” in the economy employing tens of thousands of workers and making big contributions to the budget. Revenue “Minister” Yevgeny Lavrenov has said that the holding controls 70 per cent of the “DNR” economy.

No photo was ever officially published of Ananchenko, except for one in which he is seen only from behind (see Newsletter 47). However, the Ukrainian Novosti Donbassa news site on April 23 published a photo showing Ananchenko’s face which was taken at the Yalta Economic Forum in Russian-annexed Crimea, which Ananchenko attended together with Pushilin.

Pashkov’s appointment looks like a desperate measure, since Ananchenko’s government was already given extraordinary powers over running the economy upon its formation in December (see Newsletter 49). But recent reports from Donetsk suggest that promises to restart production at key factories have not been kept and that workers have been sent home (see Newsletter 53).

Rumours of production stops in coal mines

Unconfirmed social media posts on April 21 and 22 suggested that coal miners in the “DNR” are being sent home, some without pay, because of “temporary production difficulties”. The “DNR” has said that its coal production rose to 7.5 million tons in 2018, 20 per cent more than 2017 and has recently announced the opening of new coalfaces in at least three mines.

However, coal production inside both “People’s Republics” greatly exceeds demand and there is evidence that significant shipments have been made through Russia back to Ukraine (see our Annual Report 2018, p 7). On the other hand, strong public criticism of such shipments inside Ukraine and efforts to re-equip power stations so that they can operate without anthracite coal are likely to reduce the country’s demand for Donbass coal and negatively affect the “People’s Republics” coal industry.