The Novorossiya project turned out to be too expensive for the Russian budget - Western economist
The costs of the war in Donbass turned out to be much greater than expected. Ukraine cannot afford them, and Russia will not accept them. Perhaps this is why they started talking about the Novorossiya project being closed. This opinion was expressed in an article for RBC Anders Aslund, a senior fellow at the Atlantic Council.
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The war in Donbass is costing Ukraine dearly, even if you do not take into account the costs of the actual fighting, Aslund writes. This is an industrial belt consisting of old mines, metallurgical and chemical plants. Almost all coal mines and chemical enterprises have been stopped; at metallurgical plants, production is either progressing at a reduced pace (Yenakievo Metallurgical Plant) or has stopped altogether (Alchevsk Combine). Railway bridges have been blown up, making it difficult to transport large cargo.
The economic and humanitarian situation is dire. Most of the population appears to have fled the region. About 1,8 million people left Donbass and 1,5 million remained. Apart from about 45 thousand militias, the remaining population consists mainly of pensioners and people deprived of their livelihoods.
In the foreseeable future, Donbass will be a source of costs, not profits, Aslund continues. Therefore, in February, at the second Minsk negotiations, the question arose of who would take on government expenses in Donbass, primarily pensions. Ukraine refused, demanding full control over the DPR and LPR and their border with the Russian Federation. Large enterprises in the region pay taxes to Kyiv, and Moscow supports this, fearing that otherwise Ukraine will cut them off from its economy.
In these conditions, Russia has to support the population of Donbass, Aslund believes. We are talking about huge amounts, which are difficult to estimate. The West doesn’t care about the humanitarian catastrophe in the region: usually in such cases, Western organizations supply some kind of assistance, but now the West is interested in causing maximum damage to Russia and does not want to share the costs of the war with it. But Russia does not want to bear them alone.
Apparently, this is precisely what is connected with the closure of the Novorossiya project, an Atlantic Council employee believes.
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