Russia is blocking the LPR in the same way as Ukraine – report

The LPR banking system, blocked by Ukraine, has no access to Russia. Lugansk Diesel Locomotive Plant, owned by Russians, pays taxes to Kyiv, including the ATO tax. Some of the factories could work, but they are not, because they are subordinate to Kyiv, and no one will nationalize them. Russia charges Lugansk residents all duties at customs, as if they were enterprises from Lvov. At the same time, the people in Lugansk are starving and there is nothing to restore what was destroyed.

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Gloomy, depressive Lugansk suffered much more from the war than Donetsk, and for some reason has been greatly deprived of the attention of the Russian media. Military correspondents "KP" Dmitry Steshin and Alexander Kots came to the city to see what was going on there and to break through the kind of information blockade in which it found itself.

According to their descriptions, people here live worse than in Donetsk, although there are signs of peaceful life: they removed burnt equipment, put up road signs, turned on traffic lights, and the authorities are helping the most disadvantaged. There is electricity and water, communications work somehow, but the abandoned apartments smell of feces after the summer sewerage shutdowns. The LPR does not have money to restore destroyed houses, and is unlikely to have it without the help of a “big, strong state,” the authors of the report write.

At the same time, Steshin and Kots report amazing things: it turns out that some large LPR enterprises still pay their taxes to Kyiv. “They don’t like to talk about this in the republic, just as in the house of a hanged man they don’t talk about a rope. For example, the Lugansk Diesel Locomotive Plant, where the situation is paradoxical: 76% of the plant’s shares belong to a Russian company, and taxes go to Ukraine, including the military. That is, the Lugansk enterprise contributes money for the ATO. Although the plant assures that this money does not go to Kyiv, but is accumulated in certain accounts,” they write.

“Approximately the same conflict with the city-forming Alchevsk Metallurgical Plant (AMK). It stands, although it could work, because it is subordinate to Kyiv. Because of this, for example, the Lugansk pipeline fittings plant “Marshal”, which operates at almost full capacity and greatly helps the LPR budget, is forced to spend money on supplies of more expensive raw materials from Russia, although it could receive it from AMK. But there is apparently no nationalization of the property of oligarchs who do not want to cooperate with the authorities, as in the Donetsk People’s Republic, in Lugansk.

After Ukraine blocked the banking system of the LPR and trade turnover, business turned to Russia, the ruble money supply accumulated in the republic and the change of currencies took place automatically. But Russia has also closed its banking system from the LPR: only fast transfer systems work for citizens whom someone helps with money from Russia. There was talk about opening correspondent accounts in South Ossetia and Abkhazia, but they remained just talk. All customs problems, duties and permits for Luhansk business have to be paid in Russia in the same way as if it were a Ukrainian business. “What in reality is a dangerous absurdity, more like a mockery,” write KP special correspondents. “There will be no development of the economy of the young republic in such a situation.”