The ongoing COVID-19 pandemic, which has inflicted a heavy blow on the world economy, will also affect Russia’s financing of its proxy war against Ukraine in the Donbas, according to Oleksiy Reznikov, Ukraine’s minister for the reintegration of the temporarily occupied territories.
“It is beyond doubt that the whole world is now facing the challenge of the economic crisis inflicted by COVID-19,” the official said on July 1 during an online discussion called “Reintegration and Reconciliation in the Donbas,” hosted by the Atlantic Council, a Washington D.C.-based think tank.
“Before the pandemic, according to our data, the Russian Federation used to spend $1.3 billion a year on sustaining budget-funded institutions in the occupied Donbas.”
Additionally, the Kremlin normally spends approximately $3.7 billion a year to continue waging the prolonged static war that has dragged on since 2014, Reznikov said. The figure does not include Russian expenses on the occupation of Crimea, he added.
According to Ukrainian authorities, Russia finances and controls a full-fledged force of between 35,000 and 40,000 militants equipped with armor and heavy weapons and divided into two combined arms corps in occupied Donetsk and Luhansk oblasts, respectively.
Reznikov added that Russia had also scored some gains from mass plundering in the occupied Donbas, particularly by extracting locally produced coal. In this manner, he said, certain Russian “private entities” managed to earn some $4.7 billion in the last 5 years.
As of July 1, Russia remains number three on the list of nations most affected by COVID-19, with 654,000 confirmed COVID-19 cases and 9,536 deaths. Moreover, the situation there is not improving significantly: In the previous 24 hours, the country registered 6,693 new cases and 154 fatalities.
In its World Economic Outlook report published on June 24, the World Bank predicted that the Russian economy will contract by at least 6.6% in 2020, largely due to the coronavirus pandemic, which triggered a drastic drop in crude oil prices.
“Of course there will be an economic impact,” Reznikov said during the conference.
