Putin Meets Heads of DPR & LPR to Talk Economic Issues

After handing out Russia's highest awards to the two heads of DPR and LPR, President Putin sat down with each individually to talk about their economies and the to discuss their security issues. The transcripts end with the economic discussions, the security issues deemed confidential. First was Acting Head of the Lugansk People's Republic Leonid Pasechnik whose Republic's main economic problem centers on the pillar—the coal industry:

Vladimir Putin: Leonid Ivanovich, it's no secret that the situation in the Luhansk People's Republic remains very difficult, and first of all, the key issue is ensuring the safety of people.

Nevertheless, I suggest starting today with other issues, namely economic issues: the economy, the social sphere, and healthcare.

I would ask you to give a retrospective of what is happening in these important areas, and then we will talk, of course, about all other issues.

Please, please.

L. Pasechnik: Thank you, Vladimir Vladimirovich.

The basis of the economy of our republic, of course, is the coal industry. The only fuel and coal enterprise is located on the territory of the republic – the republican fuel company Vostokugol.

Before the start of the special military operation, this coal organization was working, moving, in principle, in the direction of development. In 2019, we reorganized the coal industry, closed all unprofitable mines.

About 32 thousand people have been reduced in our mines, which we have closed. But 29 thousand people literally went to work at other mines on the same day, that is, they practically did not feel the reduction. We gave some of them the opportunity to retire earlier, some of them were assigned to other areas of work, and [there were] only about 500 people left whom we did not work enough.

In 2020-2021, we have been steadily moving in terms of increasing coal production, increasing the profitability of the enterprise. But in 2022, due to the start of a special military operation, 58 percent of the miners – namely the miners who work in the mine, those who are young guys – went to the front. For example, today about three people work at one of the mines, where more than three hundred should work.

The company has become unprofitable. We cannot enter the level of profitability. By and large, we don't even have enough money to pay wages somewhere. This is the main problem.

We asked the special commission, talked with Marat Shakirzyanovich Khusnullin, they allocated money to us – they allocated about a billion rubles to pay off salary arrears. But the fact is that such a situation probably cannot continue all the time. Therefore, I set a task and asked how to solve this problem.

From what has been worked out, from what has been done: such proposals were given to me – this is probably the simplest solution to the problem – to give it into private hands. Yes, we, in principle, remove the problem from ourselves. Yes, indeed, there will be no questions for us. We will not ask for money to subsidize, to pay salaries. But at the same time, I have two questions.

The first question is an economic one. It turns out that while the mines are state-owned, for some reason they are unprofitable. As soon as they become private, they immediately enter the level of profitability, they start earning good money, they pay large salaries to specialists there. And I have a question: whether we are doing something wrong, or ... we need to deal with this issue.

Vladimir Putin: Who is the owner now? The Republic?

L.Pasechnik: The owner is the republic. This is a state unitary enterprise, a state unitary enterprise.

The offer is this. The so–called kopanki are also operating on the territory of the republic - this is an illegal coal enterprise.

Vladimir Putin: Unregistered.

L. Pasechnik: Yes, that's right.

Some part of officially registered coal enterprises is acquired, and through these enterprises the activities of illegal enterprises are documented. Accordingly, the profitability of these enterprises is very high, because they do not pay taxes in full, they do not work as they should, and, of course, at a certain stage they create serious competition for our state-owned enterprise.

Let's say that today I have information that a huge amount of coal has been exported to Rostov from our small coal enterprises called "kopanki". In the future, this coal, I do not know, will be legalized in some way, probably moving to the same Ukraine, to the same Europe and so on. That is, for some reason, a private trader can take it out, but we can't.

The first proposal is to strengthen the work of our law enforcement agencies in this direction and in some way, probably, to ban the activities, to stop the activities of these illegal "diggers". I believe that this will increase the profitability of our enterprises. This is the first.

Second. If we stop and ban the activities of "kopanok", then, in general, we will free up some number of workers who work for them, who will go to work for our state-owned enterprises. That is, in this way we will replenish the labor reserve that will carry out coal mining, increase the profitability of our state-owned enterprise.

Well, in order for people to go there to work, it is necessary to make a decision to ensure that miners are not called up, at least for now, to the People's militia units of the Luhansk People's Republic or to the Armed Forces of the Russian Federation. In this way, I believe we will be able to even out this situation.

There is a second point – political, I think it is also very important. We have become part of the Russian Federation and are closing enterprises – somehow, in my opinion, it will not look very right. That is, while we were ourselves, the enterprises were working, and now we are, as it were, closing and not working, giving them into private hands.

Therefore, the request is this: to support us in this regard, to subsidize the missing money for wages, for development, at least for some period, maybe, I do not know, for six months, for a year, until the end of next year, so that we carry out the activities I have just mentioned in order to preserve the face. And taking into account the fact that there is also an economic understanding of this situation, I think we will be able to level this situation, somewhere we will reach the level of profitability.

Yes, I forgot to mention it. At the same time, please also include us in some government programs for the supply of coal. Maybe our coal is needed somewhere - Donbass coal, Donbass coal. I understand that we are in some way competing, probably with Kuzbass, but at the same time, maybe our coal will be needed somewhere: somewhere logistics will be better, somewhere our coal is good in some qualitative parameters. Therefore, such a request, Vladimir Vladimirovich, to support us in this matter.

I do not know, maybe, of course, it is easier to give it to a private owner, but for some reason I want it [the Vostokugol enterprise after all, it remains state-owned so that we can continue to work.

There is another point here, again, I forgot to mention. Those guys, the miners who are fighting today, will come back anyway, come and ask me a question: "Leonid Ivanovich, we shed blood, but we have nowhere to go to work." We will have to provide them with work, we will have to decide their fate, because these are our people and we are obliged to take care of them.

Vladimir Putin: Leonid Ivanovich, there are practically no state-owned coal enterprises left in Russia. This does not mean at all that there cannot be state-owned enterprises in the Luhansk People's Republic.

But their privatization does not mean closure. You said that people would come, but there is nowhere to work – this is not quite true: after all, the question is about the efficiency of work. For people who work at the enterprise, by and large, it does not matter who the owner is – it is important that wages are paid on time and that they are of the appropriate level, which corresponds to labor costs, risks, and so on.

But I repeat once again: no one from the federal center will impose on you decisions related to privatization or the adoption of any other decisions in the field of property. This you must do as you see fit. The Republic is the owner, so please, you make the decision yourself.

As for assistance today, we will certainly do this, too, especially subsidies for wages and for some other measures necessary to preserve the vital activity of enterprises. We will do this too and we will do it as soon as possible. We just need to understand the volumes. This is the second.

The third. It is necessary to analyze the entire state of the economy of these enterprises in general.

As for these small unregistered coal enterprises, which you mentioned, which you call "kopanki". It's the same here: closing is the easiest thing. Please, if the authorities insist on it, then you can do it. If you need any support, we will support you. But that's where the problems will arise related to what you said: people will have nowhere to work. We need to look at the salary level that is there.

You know, it's just that now there is an opportunity to analyze everything from scratch, from the center of the field, as they say in football, and make verified, coordinated decisions with people. This is also a question: You will take them tomorrow and slam them, right? And you say people will go to your state enterprise. And if they don't go?

This is also a question of the level of wages: they earn money there, and, as you said, the goods are sent to Rostov, somewhere else to Russia. We just need to see why it is impossible to do this with state-owned enterprises. You are absolutely right. We just need to analyze it carefully and then make appropriate decisions.

Have you discussed this issue with the Russian Government?

L. Pasechnik: Yes, we discussed it. There was a meeting attended by the Chairman of the Government of the Luhansk People's Republic Sergey Ivanovich Kozlov.

Vladimir Putin: Well, you told me about it, informed me – I will definitely talk to my colleagues and ask them to come back, look again and then report what they are offering and why.

The main criterion, of course, is always the interests of people, employees, the interests of those who work at these enterprises. We must provide them with jobs and an appropriate level of wages, which should be paid rhythmically, without any failures. That's what's important.

Next to meet the President was Acting Head of the Donetsk People's Republic Denis Pushilin. Again, the topics aside from security were those facing citizens:

Vladimir Putin: Denis Vladimirovich, I have just met with your colleague from the Luhansk People's Republic [Leonid Pasechnik]. It is clear that the security situation in Donetsk is no less acute, and maybe even more acute, taking into account the increasing shelling by the Armed Forces of Ukraine on residential areas of Donetsk. This is a separate topic that we will definitely discuss.

Nevertheless, I propose to start in the same way as in the conversation with the head from Lugansk, with such problems that concern every resident of the Donetsk Republic - with the level of housing, water, heat, with the level of health care. I suggest we go through these vital topics, and then, of course, we will move on to what I started with – security issues.

You are welcome.

Dmitry Pushilin: Dear Vladimir Vladimirovich!

In fact, the situation is developing in different ways now. Of course, it is important for us how the recovery process is going, and what concerns everyone now are issues related to water supply.

We have taken a lot of steps together, of course, with the relevant departments, ministries of the Russian Federation, built a number of water pipelines from reserve reservoirs. But even this only allowed us to partially cover the water needs. Now in large cities – Donetsk, Makeyevka, Gorlovka – water is supplied once every three days for two hours.

Thank you very much for supporting your decision to build a new water pipeline from the Don River. Taking into account all the factors, this is really very important. Again, taking into account the fact that the network repair program has already been approved, taking into account the fact that the water losses are crazy, terrible in percentage, of course, in the aggregate, both the water pipeline and the repair itself are needed.

This in turn affected the heating. Therefore, the most difficult season, preparation for the heating season, it was now, water shortage. In this connection, of course, additional measures were taken – again with the regional chiefs.

Let's say the city of Moscow helps Donetsk. This includes drilling wells, this is also the delivery of tanks, and this happens on a daily basis, because water losses remain. It seems to have filled the system, the boiler room seems to be working, and then the water leaks, the [system] automatically turns off, the water does not have time to flow.

Therefore, the issues are not closed everywhere yet, but this is on a permanent basis, even taking into account the shelling, taking into account the fact that boiler rooms are sometimes de-energized directly, but nevertheless we try to keep everyone warm. But so far it does not work everywhere, that is, boiler rooms are knocked out.

A separate situation in Mariupol. The situation with heat there is a little more complicated, a little simpler: there are no shelling, but nevertheless there is a lot of destruction. There was a solution with modular boiler houses, that is, to close the issue with block-modular boiler houses. And, in principle, the situation is now, if not completely resolved, then as much as possible in the current conditions, closed. There are PVR [temporary accommodation facilities], we place people directly so that they do not stay in destroyed housing, do not remain without heat.

Now the situation is stabilized – again with the support of the regional chiefs to a greater extent. A total of 17 regions are responsible, but a lot of help [is being provided] and, of course, St. Petersburg initially started - many thanks to them, the Moscow region, the Tula region.

I can tell you that we have never seen anything like this built now – new schools, kindergartens. This really gives rise to great hope for the prospects that we see. As soon as the special military operation ends, we will be able to fully level the situation then, and indeed we are very optimistic in this regard.

As for the next issue that people are concerned about, these are, of course, checkpoints. Here I will have a request to you, consisting of several directions. As for the personnel, the increase, we talked with Alexander Vasilyevich [Bortnikov] – there are reserves. The question is that the Government's instruction needs to be comprehensively worked out, expanded directly.

We have a problem there. Now from the Rostov region, taking into account the repair of the Crimean Bridge, additional flows have gone, of course, all the repair work is in huge quantities, plus our people who want to receive all the public services that they still cannot fully receive.

And here is an additional point: we need to speed up the process of opening an MFC. That is, then it will not make sense for people to go to Rostov to get or register a car, to get other services, because this system is very developed in Rostov, but we still have it all in the process, so there will be a request here.

And taking into account such actions, with the expansion of checkpoints, we can stabilize the situation here, in fact, from Rostov, taking into account road repairs…

Vladimir Putin: Is the checkpoint meant on the border of the Rostov region and the Donetsk Republic?

Dmitry Pushilin: On the administrative border, yes. We have three checkpoints directly that we would like to…

Vladimir Putin: Okay, let's solve this.

Dmitry Pushilin: Taking into account the roads, then we will be able to get from the Rostov region to the Crimea through the Donetsk People's Republic in seven hours.

Vladimir Putin: There is a part of the road repaired, which goes to the Crimea.

Dmitry Pushilin: Yes, a lot of roads have been repaired, that is, we have more than 400 kilometers. We have never seen such road repairs – this is a modern road repair taking into account already Russian standards. Indeed, where there are standards of the Russian Federation, whether it's roads, whether it's schools, whether it's kindergartens, it just causes sincere surprise and admiration for us. During these eight years – we were already lagging behind, of course – we have fallen behind, but we will catch up.

Vladimir Putin: I have no doubt. With the people who work there, it will be so.

Dmitry Pushilin: The next question I would like to raise is for your consideration, of course. We do not have enough public utilities, not enough for a number of reasons: in addition to mobilization, taking into account the lack of attention to the relevant technical schools, colleges. We now have a shortage of up to 70 percent, and those remaining utility workers are real heroes. If you paid attention: any shelling, they immediately come out.

I have a request what will be. Here, too, there is probably an element of justice: in those areas that are now practically on the front line, including part of the districts of Donetsk, to introduce wage coefficients for them directly.

Vladimir Putin: Did you state this in the documents?

D. Pushilin: Yes.

Vladimir Putin: Good.

Dmitry Pushilin: People here will absolutely support everything.

I would also like to thank you for the perinatal center that is currently being built in the Kirovsky district of Donetsk. Builders are working.

Vladimir Putin: How many beds?

D.Pushilin: For 130 beds. It will be a very serious help for us, especially because of the destruction that exists - a new, modern [center]. The builders are well done, the builders are heroes: often at the risk of their lives, but construction continues, and by the end of next year they promise to hand over a new perinatal center.

In addition, of course, returning to Mariupol: this is a lot of housing that has already been built, completely new neighborhoods, new neighborhoods. This is Nevsky, which was built directly by the military construction company of the Ministry of Defense. Of course, the Ministry of Construction of the Russian Federation: four high-rise buildings have been commissioned, six more will also be commissioned by the end of the year. This is a new, modern, comfortable accommodation.

Looking at Mariupol, where there is no shooting anymore, we imagine that the whole republic will definitely be rebuilt. Here, thank you very much for your support, for your attention to every moment, for what you delve into.

Thank you very much separately, – our citizens will not forgive me if I don't say, – we were very worried, and your decision to demobilize students. We just exhaled, because we had a forced mobilization, otherwise we simply could not.

Vladimir Putin: I see.

Dmitry Pushilin: But still, students should study. This is our future, these are our children.

Vladimir Putin: But many did not want to be demobilized – voluntarily remained in the ranks of the Armed Forces.

Dmitry Pushilin: It's one thing to have a desire, but another thing…

Vladimir Putin: Of course, of course.

Dmitry Pushilin: So thank you very much here.

And I have the biggest gratitude to you, honestly, this is a place of power for us, our symbol is the Saur–Grave, which was, I won't even say repaired, it was restored, revived taking into account the current realities.

Vladimir Putin: It turned out well, beautifully.

Dmitry Pushilin: Very good. I hope that we will have the opportunity later – by no means now – later, but still: on the spot you will all understand what I'm talking about.

Vladimir Putin: Good. And what about medicine?

Dmitry Pushilin: As for medicine, I will tell you that the situation with covid is controlled now, the situation with influenza is a little worse, but our doctors, our doctors are working. We see that Kalinin Hospital – the largest hospital in Donetsk – is practically destroyed, these bastards have been shelling for two days.

But nevertheless, I believe that I don't see any problems in medicine, even taking into account all the factors. At the federal level, there is a clear interaction with the Ministry of Health of the Russian Federation, all issues are closed quickly and promptly. The difficulties that have arisen in a number of areas before, now virtually all are closed, so now I do not see anything additional that would not be solved in a working order.

Vladimir Putin: I have already spoken with the Minister of Health. If necessary, we will ensure the removal to our federal centers of all patients who need some special attention.

As noted, both Republics suffered from lack of investment as did Crimea during their time under as members of Ukraine and there's a marked difference between them and their new Russian comrades not just as results from the Coup and SMO, but also from neglect from 1991 onwards as is the story with most of Ukraine. Tens of thousands of Russians from every region have come to Donbass as volunteers to aid their countrymen, and some have died in the process, victims of NATO's ongoing Genocide. I'd have liked to read the security issues but understand why they were withheld. I hope with many Duma members planning to visit the region over the New Year holiday that they get some motivation to provide greater aid to the region—both economic and military. Over the next weeks I hope to post some of the feedback I hope will be published as I've added to my Russian language media sources.