People’s Republics: Summating the Donbass Socio-Political and Economic Experience

Small Logo By: Eduard Popov – translated by Jafe Arnold


The Center for Syncretic Studies is honored to present our Russian colleague, Dr. Eduard Popov’s recent article featured in the journal Post-Soviet States: 25 Years of Independent Development published under the editorship of the famous expert on the South Caucasus and Doctor of Historical Sciences, Alexander Krylov (Moscow) from the Institute of World Economy and International Relations of the Russian Academy of Sciences. We thank Dr. Krylov for generously allowing us the opportunity to translate and publish this article by Popov, supplemented and updated specifically for the Center for Syncretic Studies and Fort Russ. This article is based on the findings of expert and sociological surveys conducted by the author in the Donetsk and Lugansk People’s Republics in 2015-2016 mainly among the military, political, and business elites of both republics, as well as among trade union members.



Russian Spring: The Socio-Political Dynamics of the Donbass Independence Movement

old-english-calligraphy-alphabet-the rise of the protest movement in Donbass (and other regions of historical Novorossiya) which resulted in the proclamation of the People’s Republics, was a reaction to the coup d’etat in Kiev and aggressive Russophobic policies. It is no accident that the first legislative step of the new Ukrainian authorities was abolishing the language law, ratified in 2003 by the Verkhovna Rada in line with the European Charter for Regional or Minority Languages, which effectively pushed the Russian language out of the educational and cultural-information space of Ukraine. However, the popular movement in Donbass at the end of winter and spring 2014 also had deeper motives. The proclamation of the people’s republics of Donbass was a logical reaction to the dismantling of Ukrainian statehood as it had been formed in the framework of the Ukrainian Soviet Socialist Republic. The new Ukrainian authorities violated the tacit social contract of loyalty to the existing state in exchange for a guaranteed minimum of cultural-linguistic rights for the regions of the “South-East” (historical Novorossiya).

A protest in Donetsk in spring 2014. Signs from left to right read: “Fascism won’t pass”, “Donbass is with Russia”, and “The South-East is against fascists!”

Immediately after the coup d’etat in Kiev in February 2014, citizens associations began to emerge which were disturbed by the actions of the armed forces of the Euromaidan. Yet in post-Soviet Donbass, unlike Crimea, there were no strong traditions of Russian or autonomist movements. One of the reasons for this was the centralized operations of the Party of Regions, which aimed to subordinate all parties and movements oriented towards representing the interests of the Russian-cultured half of Ukraine and restoring economic and humanitarian ties with Russia. In Donbass, the Party of Region’s most fully asserted itself as a force monopolizing the interests of Ukraine’s Russian regions (the “South-East”).

This played a decisive role in the future state construction of the republics of Donbass. The Party of Regions “trampled” independent social movements, in particular the sprouts of Russian and Donbass autonomist movements. The Donetsk Republic social movement and the regional branches of the Russian Bloc Party did not play a significant role in the political life of Donbass, and there were no significant political projects under Russian slogans. Only the Communist Party of Ukraine posed some kind of competition to the Party of Regions in the regions of Donbass.

The movement in support of independence for Donbass arose as a spur of the moment, a knee-jerk reaction to the neo-Nazi/oligarchic coup in Kiev and to a considerable extent on the basis of grassroots (local) cells of the Party of Regions and left opposition forces, such as the Communist Party of Ukraine and Progressive Socialist Party of Ukraine.

It was by predominantly these forces that the referendum on independence was organized and prepared. In addition to them, social associations also played an active part in the independence movement’s inception. In particular, an enormous role was played, especially at the first stage, by the the organizations of “Afghans” (veterans of the fighting in Afghanistan in 1979-1988), who came to make up the core of militia units. In the Lugansk region, an important and at times decisive role was played by Cossack communities who possessed rich experience of self-organization and developed ties with the Don Cossacks in the neighboring Rostov region of the Russian Federation.

By the end of February and beginning of March 2014, Donbass’ social organizations were fighting over control of the municipalities, their opponents being the regional authorities. After the unsuccessful Kharkov Congress on February 22nd, 2014, at which the Party of Regions leaders of Kharkov and the Kharkov region, G. Kernes and M. Dobkin, essentially refused to oppose the Kiev putschists, the bureaucracies of the Donetsk and Lugansk regions were faced with the difficult choice of either submitting to the new, illegitimate Kiev government, or exposing themselves to the risk of repression alongside the regions’ population. They rather quickly made their choice and rushed to declare loyalty to the Kiev putschists. A convenient formula justifying this was found in the notion of preserving the unity of Ukraine under the condition that Kiev would expand the authority of the regions. At a forum on the development of local self-administration which was held in Lvov on March 27th, 2014, the Chairman of the Donetsk Regional Council, A. Shishatsky, outlined his idea of decentralizing government, according to which redistributing authority in favor of the regions was supposed to exclude Kiev’s economic and political diktat. On March 31st, 2014, the Donetsk Regional Council appealed to the Verkhovna Rada of Ukraine with the request to take measures to stabilize the situation in the country by amending the Constitution to empower local self-government.[1]

On April 17th, 2014, the Party of Regions held an extraordinary congress participated in by deputies of the Donetsk region’s local councils as well as 29 deputies from the Verkhovna Rada, which after the February 21st coup had lost its legitimacy. (Nevertheless, the Verkhovna Rada continued to operate until parliamentary elections were held on October 26th, 2014 literally at gunpoint). The Party of Regions’ leaders, B. Kolesnikov and N. Levchenko, announced that they alone represented the “South-East” in the capital. A resolution proposed at the congress contained demands for Kiev to grant fiscal autonomy to the eastern regions, provide state status for the Russian language, and grant full amnesty to all protesters. At the same time, the resolution called for all protesters occupying buildings in the eastern regions to lay down their arms. The latter demand was in fact the main one, yet the Party of Regions’ leaders admitted that they could not guarantee that Kiev would fulfill the points laid out on autonomy and the Russian language’s status.

Protesters saw in these actions of the Party of Regions an attempt to deceive the protest movement against the coup.[2] Characteristically enough, similar proposals for searching for compromise with the social movement of Donbass had been voiced by representatives of the new Kiev authorities. The governor of the Donetsk region appointed by Kiev, Sergey Taruta, also declared the need to hold a nationwide referendum on the status of the Russian language and decentralizing authority. As subsequent events showed, the Party of Regions’ statements and actions turned out to be a smokescreen, as amendments expanding regions’ rights were not entered into Ukraine’s Constitution or legal practice. And the Russian language was gradually pushed out of the socio-political and cultural-educational life of Ukraine.

The declarations and actions of the regional authorities of the Donetsk and Lugansk Regional Councils essentially legitimized the Kiev putschist government. The Party of Regions, having emerged as a political instrument of the Donetsk region’s financial-industrial elite, transformed into a party claiming to represent the entire South-East’s interests. The Party of Regions’ participation in the Verkhovna Rada after the coup d’etat, its representatives (M. Dobkin and O. Tsarev) running in the illegitimate presidential elections in spring 2014, and the activities of the Donetsk and Lugansk regions’ regional councils that legitimized the new authorities, demonstrated that the Party of Regions had mutated into one of the parties of the Ukrainian Euromaidan. Its main function thus became providing a veneer of legitimacy to the illegal government of the Kiev putschists for the South-East. 

Donbass thus entered the first stage of its state-political development deprived of its own political class. In the first phase, the state apparatus of the Donetsk and Lugansk regions (the regional administrations and leading personnel of the Party of Regions’ regional organizations) declared loyalty to the forces that had launched the coup d’etat in Kiev. The vast majority of the old economic, political, and administrative elites of the Donbass region (the Donetsk and Lugansk regions) thus supported the new regime in Kiev and left the territory of the soon-to-be republics. The “Russian Spring” in Donbass can thus be sociologically characterized by the phrase “people without an elite.” Alternatively, in the figurative expression of a veteran of the events in Lugansk, this was a slave revolt. The split between supporters of the new government in Kiev and the Russian movement fell along socio-proprietary lines.

The Formation of the DPR and LPR’s Political Party Systems: Between the Russian Spring and Ukrainian Statehood Experience

The birth of the people’s republics of Donbass took place under the banner of an ideological construct which was christened the “Russian Spring” (mimicking the “Arab Spring”) in the works of Moscow publicists. Skipping over the fact that this term does not fit the situation in Donbass (the young and growing population of the Arab Middle East vs. the old and declining population of Donbass), it is impossible not to recognize the immense mobilizing importance of this term at the initial stage of the movement.

The popular movement in Donbass began under slogans proclaiming the construction of a Russian state and/or socially just state. A most wide spectrum of socio-political forces supporting Donbass – from radical Russian nationalists and monarchists to left communists and anarchists – was united by a common rejection of Ukrainian neo-Nazism and the distinct characteristics of Ukrainian statehood such as bureaucratization, ultra-centralism, corruption, and oligarchic dictatorship. In the protest portion of their program, the Donbass popular movement’s activists declared solidarity with the slogans of the Euromaidan which dreamed of burying the “old” Ukrainian state. The “Revolution of Dignity” (the official name employed in Ukraine for the Euromaidan) ended in the complete collapse of all hopes, which even the most ardent supporters of the Euromaidan are now forced to admit. But what brought victory to the Russian Spring and the republics of Donbass?

On April 7th, 2014, the People’s Council of the Donetsk People’s Republic was established which declared itself to be the highest authority in the republic. The body consisted of around 70 people elected through co-opting a deputy from either a local labor collective or municipal social organization (depending on the size of the population) who thus became the representative of their city or district in the DPR’s highest organ of power. All the municipal organizations of the former Donetsk region (with the exception of the repressive organs that were actively loyal to the new Kiev regime, i.e., the Ministry of Internal Affairs and SBU) were represented in the DPR’s People’s Council. A significant part of the People’s Council consisted of existing deputies from city and district councils, i.e., people elected to local organs of power and possessing municipal experience. In addition to this group, the DPR’s People’s Council co-opted representatives of labor collectives and social organizations operating in the municipalities.

Thus, at the emerging stage of its statehood, the DPR and LPR realized the basic principle of popular sovereignty which found reflection in naming the republics “people’s republics.”

The deputies of the People’s Council carried out the main portion of the work on drafting the DPR Constitution and preparing the referendum on independence. On April 7th, 2014, the council issued the Declaration of Sovereignty of the Donetsk People’s Republic and the Act on State Independence of the Donetsk People’s Republic.


Despite increased political, informational, and military pressure and provocations, a referendum was held in the Donetsk and Lugansk regions which asked the question: “Do you support the Act on the Independence of the DPR/LPR?” In the Donetsk region, 89.7% of voters said “yes”, while 10.19% of the region’s residents voted against self-determination and .74% of ballots were recognized as invalid. Turnout was 74.87%.


“Referendum May 11th: YES for the Republic! For Novorossiya! For Donbass!”

In the Lugansk region, independence was supported by 96.2% of voters and opposed by 3.8%, with a total turnout of 81%. The referenda essentially legitimized what would become the second party to the inter-Ukrainian conflict, the People’s Republics, which opposed the illegal government in Kiev on ideological, political, and military grounds. On May 14th, the People’s Council of the DPR was transformed into the Supreme Council of the DPR consisting of 150 deputies (although the actual number was lower). Following the referendum, ministries and departments began to be formed, and on May 14th, 2014, the Constitution of the DPR was adopted.[3]

Elections to the constituent composition of the People’s Council of the Donetsk People’s Republic were held with observance of all democratic procedures, whereas the same could not be said about the extraordinary Ukrainian presidential elections held on May 25th, 2014, which were marked by gross procedural violations. The lack of equal competitive terms in the media and electoral commissions, and intimidation and violence against the candidates and voters of the “South-East” made the Ukrainian election campaign into sham democratic elections.

Social organizations became an important source for forming the DPR and LPR’s administrative apparatus and political class. In certain areas of the LPR and to a lesser extent in the DPR, a decisive role was played by Cossacks, primarily those tied to the non-registered (social, not state-subordinated) Cossacks of the Don. The leader of this military-political group was the famous field commander, Pavel Dremov. Plans for a “Stakhanov Cossack Republic” are attributed to him. (The headquarters of the Ataman Platov 6th Separate Motorized Infantry Cossack Regiment of the LPR’s People’s Militia, which counted upwards of 2000 men, was located in Stakhanov).

At the initial stage of the republics’ existence, charismatic local leaders (P. Dremov in Stakhanov, I. Bezler in Gorlovka, I. Strelkov in Slavyansk, A. Mozgovoy in Alchevsk, etc.) were essentially unaccountable to the republican leadership in Donetsk and Lugansk. The political leaders of the DPR and LPR (at that time D. Pushilin and V. Bolotov respectively) did not enjoy prestige in military circles.

At the first stage, under the banner of the Russian Spring, the formation and development of the Donbass republics unfolded along the principle of popular rule with great importance attached to local self-government or literally “authority on the ground.” In some cases, local authorities operated according to the laws of “military democracy” (for example, in P. Dremov’s “Cossack Republic”). This process had a downside which became apparent after the outbreak of the war. “Military democracy” often transformed into anarchy and a form of control by armed groups over certain territories and their local population. Meanwhile, the introduction of elementary order and security as well as improving the efficiency of armed forces demanded that the numerous militia brigades be transformed into a regular armed forces subordinate to a centralized command.


The process of centralizing armed groups thus affected both the military and civilian spheres. According to mid-level representatives of the DPR military command surveyed by us as well as civilian experts in both republics, this process can overall be considered to have been a success. Even the Ukrainian Armed Forces, “volunteer battalions”, and Western military experts have noted the improved manageability of the DPR and LPR’s armed forces. Like any complex social process, transforming the militia into a regular army did not take place without certain costs. For instance, experts have noted a decline in DPR and LPR soldiers’ ideological motivation and an increasing percentage of opportunists who serve merely for wages and privileges.

The armed forces of the DPR and LPR are currently the most important social institution whose political role does not correspond to their actual status. If the desire for a representative of the military can be seen in the leader of the DPR, Alexander Zakharchenko, a veteran of the Donetsk Oplot brigade, then in the LPR, since Ataman Pavel Dremov’s death, the military has been essentially deprived of representation in the supreme organs of power and political influence.

The republics have since developed their own organs of power and political party systems bearing a pronounced specificity. First and foremost, all Ukrainian parties were banned from operating on the republics’ territory, a decision motivated by Ukrainian parties’ agreement to work in the Verkhovna Rada after the February 2014 coup, a move which legitimized the new Kiev government and “Anti-Terrorist Operation.”

In the DPR, two real political forces formed which are represented in parliament. First, there is the Donetsk Republic social movement, which was founded by Andrey Purgin and then transformed into a party under the same name and is currently headed by the DPR leader, Alexander Zakharchenko, and People’s Council Chairman Denis Pushilin. The second party, or rather conglomerate of parties and movements, is Free Donbass. the programmatic differences between the two parties represented in the People’s Council of the DPR are minimal.


The Donetsk Republic social movement


“The Free Donbass social movement – A Land of Justice”

Two parties have also taken shape in the LPR, namely, the Peace for Lugansk movement, which is headed by the republics’ head, Igor Plotnitsky, and the Lugansk Economic Union. These political forces are active outside of the halls of parliament as well. Peace for Lugansk’s ideologues have proudly proclaimed a surge in the movement’s ranks, which number 87,500.[4] According to one of the movement’s leaders, the movement’s main ideological goals are fighting fascism and uniting the Russian World.


Peace for Lugansk


Lugansk Economic Union conference

Such a two-party system allows its leaders to rather stably control the political process in the republics. While communist ideas are popular among the Donbass population and the communist parties in the DPR and LPR could count on electoral support, in the conditions of a semi-wartime situation, the current leadership of the republics is not interested in creating a highly competitive political party environment. However, the “parties of power” themselves are increasingly resembling the banned Party of Regions, of which many of them are actually clones.

The high percentage of the new “party of power’s” representation in the managerial staff of both republics includes former functionaries of the Party of Regions. Over the course of our interviews with experts, almost all respondents noted a disturbing trend: the de-facto return of the Party of Regions and Ukrainian officialdom to the DPR and LPR’s political and administrative structures along with a deepening separation between the management class and the population. The former Regionalists occupy an increasing number of places not only in administrative organs, but also in the DPR and LPR’s party structures. This is the same process which Trotsky defined as the “bureaucratization of a backwards and isolated workers’ state and the transformation of the bureaucracy into an all-powerful privileged caste.”

Awareness of this ongoing process can even be gleaned from the official publications of the DPR and LPR. On January 14th, 2017, DPR head Alexander Zakharchenko “delivered a harsh ultimatum to unscrupulous leaders”, promising to personally oversee the work of the Donetsk Republic movement’s public receptions. His statement voiced a hard-hitting assessment of the activities of the “party of power” which has turned from a “liaison between the government and people” into a bureaucratic obstacle. Zakharchenko also highlighted an increase in the number of complaints from the population over the work of the Donetsk Republic movement.[5]

After the coup in Kiev, Ukrainian customs officers (one of the single most corrupt clusters of public servants in Ukraine) supported the new Kiev government and subsequently fled to Ukraine after the fighting started in Donbass. By the summer of 2015, however, they returned en masse to their service places, and customs offices in the DPR and LPR came to be staffed mainly by Ukrainian customs officers loyal to the Kiev government. The same applies to the leadership of the customs departments in the LPR. The high percentage of Ukrainian public servants that have returned to Donbass following the Minsk Agreements have settled into the Ministry of Internal Affairs and Ministry of State Security structures. Absurd cases are known in which graduates of Ukraine’s SBU academy born in the Donetsk and Lugansk regions have returned to their places of residence in Donbass to work for the state security ministries of the DPR and LPR. Ukrainian officials have likewise penetrated civilian agencies in the DPR and LPR, the only exception in this regard being the People’s Militia in the DPR and LPR which fulfills the functions of a defense ministry.

In some of the DPR and LPR’s government agencies, returning Ukrainian officials are already predominant, especially in tax and levy ministries which are particularly “ripe” for corruption. Fiscal functions are thus being carried out by specialists whose loyalty to the Donbass republics is in the very least questionable. It is only natural that in the opinion of interviewed representatives of the DPR’s business circles, all information on Donbass business activity is instantly known in Kiev.

Simultaneously with the return of Ukrainian officialdom to the political and administrative structures of the DPR and LPR, veterans of the movement for establishing the People’s Republics have been increasingly politically marginalized. Of the first members of the People’s Council and Supreme Council of the DPR, only a handful retain any significant posts in the political and administrative spheres. The Party of Regions, which lost the battle to supporters of establishing the DPR and LPR in spring 2014, is now consistently regaining its lost positions in a “cadre counter-revolution.”

Influential but informal institutions are also present alongside the DPR and LPR’s formal administrative and political elites. An especially significant and even decisive role in the Donbass region is still played by the oligarchs. This role has far from disappeared from the region’s economic life. It is well known that the Party of Regions was the political institution of the Donetsk financial-industrial oligarchy in post-Soviet Ukraine. In the Donetsk region and DPR, the “king of Donbass,” the oligarch Rinat Akhmetov, retains particular relevance. Akhmetov’s “private armies”, according to some accounts, even supported Russian Spring activists in Donetsk. With regards to the situation in the Lugansk region, one can speak of a behind-the-scenes role reserved for the oligarch Alexander Efremov (the head of the Party of Regions’ faction in Ukraine’s Verkhovna Rada from 2010-2014, and the leader of the party’s Lugansk regional organization).

De-oligarchization is currently underway in the Donbass republics, but this campaign has so far acquired only rather vague contours. It affects not only the economic sphere, but also political and social relations, to which we now turn in the next part of our article.

Economic and Social Processes in the Donbass People’s Republics

The tendency towards oligarchization, or the formation of large holdings of oligarchs over the course of unjust privatization and their active or decisive influence on state policy, was more pronounced in post-Soviet Ukraine than in any other former republic of the USSR on the European continent. The oligarchs received huge chunks of property not for merit, but thanks to their closeness to the government or even participation in government. For example, at one point the richest man in Ukraine was Viktor Pinchuk, the son-in-law of the second Ukrainian President, Leonid Kuchma. Overall, two large geographically-based clans of oligarchs developed in Ukraine: the Dnepropetrovsk and Donetsk clans. The Donbass region (the Donetsk and Lugansk regions of former Ukraine) is the region with the most concentrated oligarch property. The number one oligarch not only of Donbass but also all of Ukraine during the Euromaidan was Rinat Akhmetov, who comes from semi-criminal circles.

The preservation of oligarch property was contrary to the social slogans of both the Russian Spring and the Euromaidan. The question of nationalizing Ukrainian oligarch property arose at the first stage of the formation of Donbass’ independent state authorities. But at this initial stage of the Donbass people’s republics establishment, an absurd system evolved in which the DPR and LPR preserved the Ukrainian oligarchs’ property, i.e., enterprises which paid taxes into Ukraine’s military budget. According to the Ukrainian Ministry of Finance, between the beginning of May 2014 and the end of May 2016, enterprises registered on the parts of the Donetsk and Lugansk regions uncontrolled by Kiev paid taxes, fees, and social contributions (ESV) in the total amount of around 36.8 million hryvnia, or approximately $1.5 billion.

At first the tax payments to Kiev were a necessary measure, as can be seen in an example excerpted from an interview with one of the leaders of the city of Konstantinovka (at that time the territory of the DPR, but currently controlled by Ukraine), Vladimir Bugay. The interview was conducted in mid-June 2014:

Eduard Popov: How does the tax system of the city of Konstantinovka and the DPR as a whole work?

Vladimir Bugay: The Donetsk republic collects taxes which were previously paid into local budgets, while revenue taxes and other taxes are still paid to Kiev so that they’ll still pay out our pensions and benefits, because there is no pension system ready here yet.

Popov: That is to say that people receive all their benefits from Ukraine?

Bugay: Up until last [month] everyone received everything. For May [2014] everyone received 100%…I talked with the leadership of the Donetsk republic and they said that we need to move [towards an independent social payments system] gradually. If we cut off everything, then the economy will collapse. Most taxes, it turns out, we take for ourselves, but part of the taxes we give to Kiev so that they pay out our social payments. It works like this: we give them two rubles and they give us back one. So this suits them for now, and they of course pay us, but if they suddenly stop paying, then we’ll try to stop so that their taxes don’t arrive.

The “people’s mayor” of Konstantinovka, Vladimir Bugay, added: “We have many companies working in Donetsk which are registered in other regions and pay all taxes to Kiev, but now the question has arisen about reregistering these enterprises in the Donetsk republics since they’re here.” The owner of the majority of such enterprises is Rinat Akhmetov and, once again in Bugay’s words, “he is not interested in paying taxes to the Donetsk republic. He was proposed this and he refused. Now they’ve declared that if his enterprises are not re-registered in the Donetsk republics by the end of the month, then they’ll be nationalized. Pushilin announced this in one of his latest speeches.”[6]

In practice, however, the leadership of the republic was increasingly compelled to respect the business interests of the Ukrainian oligarchs. According to the experts we interviewed, creatures of the oligarchic groups are present in the leaderships of both republics. The nationalization promised in May 2014 by the then DPR leaders (Pushilin, etc.) did not take place. Similarly to the anti-oligarch promises of the Euromaidan, the Russian Spring’s slogans on fighting the oligarchs and building a socially just society did not come to fruition. Yet the reason behind this is deeper and much more complex than the mere presence of influential creatures of the Ukrainian oligarchs in the highest echelon of the DPR and LPR leaderships, although this aspect should not be discounted. Over the course of expert surveys in the DPR and LPR conducted with representatives of political and business circles, the notion was constantly voiced that such a radical dismantling of the existing economic model would have led to the standstill of Donbass’ large enterprises and would have thus deprived a minimum of dozens of thousands of people of work which, along with their families, would mean hundreds of thousands without a livelihood. However, all the interviewed political and business elites noted that the preservation of Ukrainian oligarch property and the continuation of payments into Ukraine’s war budget are a dead end road.

But the problem is not only that the Donbass republics are financing the war against themselves through the tax deductions for the Ukrainian budget from enterprises belonging to Ukrainian oligarchs. What’s more, the oligarchic capitalism which developed in Ukraine is economically unviable, is not competitive, and contradicts principles of social justice. Broad segments of the DPR and LPR population dream of building a more just state which might be called a form of new “Russian socialism” free from the doctrinal errors of the USSR and oligarchic/neo-Nazi Ukraine.


“DPR – Republic of a People’s Economy without Oligarchy and Corruption”

This situation began to change in February 2017. The President and Cabinet of Ministers of Ukraine supported the blockade of Donbass organized at the end of 2016 by Ukrainian neo-Nazi groups in the so-called ATO zone. Ukrainian President Petro Poroshenko ordered the temporary suspension of all goods, except those of a humanitarian nature, from being transported across the contact line between Ukrainian-controlled territory and the “pro-Russian separatist occupied” districts of Donbass. This was a direct violation of the Minsk Agreements, specifically Point 8 which provides for the full restoration of socio-economic ties between the Donbass republics and Ukraine.[7] This decision of President Poroshenko on March 15th, 2017 was formalized in a decree of the Council of National Security and Defense of Ukraine on the same day.

The blockade of Donbass, at first de-facto and then de-jure, provided the Donetsk and Lugansk People’s Republics’ authorities with grounds to introduce external management at Ukrainian enterprises located on the republics’ territory starting March 1st. Back on February 27th, during an extraordinary plenary meeting of the People’s Council of the DPR, deputies had adopted upon second reading a bill on amending the republic’s tax system.[8] A corresponding decision was adopted by the LPR’s parliament. The essence of these amendments boiled down to an ultimatum: Ukrainian citizens’ enterprises in the DPR and LPR must be re-registered to pay budgets into the people’s republics budgets by March 1st 2017. The ensuing decrees on introducing external management at recalcitrant Ukrainian enterprises in the DPR and LPR are being implemented, and enterprises belonging to Ukrainian oligarchs are continuing to work despite their owners’ resistance. Difficult and not always successful work on reorienting target markets is ongoing.

Here we intentionally put a period and will temporarily discontinue our analysis of the socio-economic situation in the republics, to which we hope to devote a separate article. How the social security systems in the DPR and LPR are structured is a separate issue altogether which we will discuss in our next piece.


In economic, social, and political terms, the Donbass republics represent a fragment of post-Soviet Ukraine bearing all the characteristics of its economic system and managerial caste, such as an obsolescent technological base and production equipment, corruption, an incompetent bureaucracy, incompetent political class, “African-style” income inequality between different social groups, etc. The preservation of Ukrainian oligarch property on the territory of the DPR and LPR in fact prevents one from speaking of real sovereignty of the republics. Until recently, Ukrainian oligarchs’ enterprises paid into the Ukrainian budget and, as follows, financed the war against the people of Donbass. Since February 2017, contradictory processes of de-oligarchization and building a more just economic model from the national and social points of view are underway. At the current moment, there is still not enough material to draw conclusions.

Towards what socio-economic system will the people’s republics of Donbass gravitate? Will a “national capitalism” variant be realized here (emphasizing the enterprises earlier belonging to the Ukrainian oligarchs) or will a new form of “Russian socialism” be built? Or will oligarchic capitalism, in some modified form, be retained? The nationalization of the oligarchs’ property cannot in itself guarantee successful socio-economic development, as one result of such could be the replacement of the old class of large proprietors with a new caste of oligarchs, which has already been forming in the Donbass republics.

The DPR and LPR have, in the most difficult conditions, succeeded in defending their independence from the current Kiev government and have successfully formed an armed forces of Donbass (the People’s Militias of the DPR and LPR). Since spring 2015, social services have started working, the threat of mass starvation has been eliminated, and the elderly population of the DPR and LPR has been receiving pensions. Thanks to Russia’s gratuitous aid, the republics of Donbass are in the very least no lower in socio-economic terms than the neighboring regions of Ukraine. What’s more, thanks to Russia’s help, the state is fulfilling its minimum commitments, including in issues of price-setting – utilities cost significantly less than in Ukraine, etc.

It is obvious that without Russia’s continued assistance, the Donbass republics, even assuming successful social and economic reforms, would be unviable entities. The only guarantee of their future successful development is economic, social, and humanitarian integration of the DPR and LPR into the Russian space along the South Ossetian and Abkhazian model.  The future of the republics of Donbass might be determined by the political processes and disintegration tendencies which are continually evolving in Ukraine. 




[3] Украина: война с собственным народом. Доклад Московского бюро по правам человека. 19/05/2014  // URL:






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