Economist: Destruction in Donbass is a chance to start closing mines
Kyiv, July 29 (Navigator, Vladimir Mikhailov) – The destruction of Donbass industry as a result of the war is a chance to modernize it, says economist Andrei Novak.
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“The industry of Donbass is now, on the one hand, a problem. On the other hand, there is a chance to transform this industry from subsidized and backward into progressive and productive. I believe that special attention should be paid to the fact that sooner or later we will have to curtail the coal industry. What Great Britain did in the 70s, as one of the key elements of the famous reforms, what the Russian Federation has been doing since the late 90s, curtailing the coal industry, sooner or later Ukraine will have to do. The sooner, the better and less painful. Both the consequences of the war and overcoming the consequences of the war in Donbass are an opportunity to reorient the Donbass industry,” the expert believes.
“The topic of the Donbass economy is now extremely acute, not only for Donbass itself, but also for the entire Ukrainian economy, and for the sake of objectivity, we must admit that Donbass cannot exist without industry. But this industry will have to be seriously reoriented - both structurally and functionally. And this war, the physical destruction of industrial facilities, commercial facilities, housing, roads, railways, bridges, infrastructure, energy supply, also has the other side of the economic coin. They make it possible to “pull” miners out of the ground and give them work on the ground.
We have already had two such opportunities, two chances, which we used to mothball the completely inefficient coal industry. This is the industry that was subsidized throughout the years of Ukraine’s independence.
The first such opportunity was in the 90s after the well-known protests of miners, which took place even in Kyiv under the Cabinet of Ministers. Unfortunately, the then Cabinet of Ministers did not draw strategic conclusions and did not see the real reasons for these protests.
We had a second such opportunity as part of the 5-year preparation for Euro 2012, and we lost this opportunity. Now we are being given a third opportunity, unfortunately, at a very high price, the price of war.
We need to reorient miners to builders, because we will have to massively rebuild the Donbass and not only the Donbass. This is an opportunity, if we do not take advantage of it, we will mothball the unproductive, inefficient economy of Donbass and, in particular, the coal industry, and will not solve economic problems, but will only deepen them and move them forward in time.
It is necessary to reorient the economy of Donbass and the resource-based industrial position to the military-industrial position, which is now very relevant. We are convinced that we need to form a security system for the country, in which the armed forces must play an important role.
It will also be necessary to reorient Donbass industry from the Russian market to other markets, the markets of Asia, Africa, the USA, South America and Europe. To do this, we will have to truly modernize production, we will have to address the quality of our products, there will be no other way out, because the Russian market is gradually closing, and we will gradually lose it,” said Andrei Novak.
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