The economy of southern Ukraine gets a new lease of life

FEEL THE CRUNCH In this file photo taken on June 14, 2022, workers pour metal at a private foundry in Berdyansk amid ongoing Russian military action in Ukraine. AFP PHOTO

BERDYANSK: Little seems to have changed for Alexei Andrusenko, the boss of a foundry in Berdyansk, southern Ukraine, who is happy to have kept all his staff since Moscow took control of the city.

Andrusenko and his 50 or so employees continue to report to work each morning in the gray building on the outskirts of the port city on the shores of the Sea of ​​Azov.

But now the plant’s products – once sold to Ukrainian or international steel groups – will likely be destined for Russia and Kremlin ally Belarus.

Since Russia sent troops to Ukraine on February 24 and captured territories in the south of the pro-Western country, Moscow has sought to strengthen their economic ties.

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“We don’t have any other supply chain,” Andrusenko told Agence France-Presse (AFP) during a press trip organized by the Russian military.

He also raised concerns about the depletion of stocks of their raw materials which previously came from nearby Mariupol, another key Ukrainian city on the shores of the Sea of ​​Azov.

Andrusenko says he is “interested” in working with the Alchevsk Steelworks, a large plant with more than 10,000 employees which since 2014 has been under the control of pro-Russian separatists in the Luhansk region in eastern Ukraine.

Before Russia sent troops to Ukraine, these agreements would never have been possible.

“The most important thing is to build the right supply chain and be able to work,” Andrusenko said.

Port ‘100% ready’

Ukraine’s southern regions of Kherson and Zaporizhzhia have been largely under Russian control since the first weeks of Moscow’s military campaign and are now forcefully integrated into the Russian economy.

Berdyansk’s main economic asset is its port, which has remained largely intact unlike that of Mariupol, the scene of a devastating siege.

In late March, an attack attributed to Ukrainian forces reportedly sank a Russian warship in Berdyansk waters, but today the port is “almost 100% ready” to ship grain, said Alexander Saulenko, the chief of Berdiansk installed in Moscow.

Ukraine has accused Russia and its allies of stealing its wheat, contributing to a global food shortage caused by grain exports blocked at Ukrainian ports.

According to Saulenko, the grain will soon be shipped from the port, as the silos will have to be freed up for the new harvest.

“We have prospects for contracts with Turkey. Russia is an agricultural country, it has enough grain that it is more profitable to trade elsewhere,” Saulenko said.

But Moscow’s most tangible influence on the local economy is the introduction of the Russian national currency since last month.

“Now you can buy everything in rubles and hryvnia,” the Ukrainian currency, added the pro-Russian official.

According to him, Berdyansk received some 90 million rubles ($1.7 million) from Russia, but state employees are still paid in hryvnia, and it is impossible to withdraw rubles in cash from ATMs. tickets.

Ties with Russia resume

Neighboring Melitopol, about 100 kilometers (60 miles) west of Berdyansk which came under Russian control on March 1, also uses the Russian ruble which is delivered from Crimea, the Black Sea peninsula which Moscow annexed to Ukraine in 2014.

“It’s a two-currency zone. The ruble is delivered, thanks to the open route to Crimea. Trade relations with Russia, interrupted after 2014, are resuming,” says the pro-Russian mayor of Melitopol, Galina Danilchenko.

“People are happy to accept the rouble…I don’t see any problem,” she added, but for the journalists on the press trip, it was difficult to speak freely with the townspeople.

Back at the Berdyansk foundry, 41-year-old worker Sergey Grigoryev says he just hopes to get paid.

“Cash, not on my card, because you can’t withdraw from it. In hryvnia or rubles, I don’t care.”

Christi C. Elwood