Echo of Donbas: how Tatarstan is addressing Western sanctions

Enterprises of the republic are creating an import substitution strategy, while tourists are expecting help to return to their homeland

On Monday, Tatarstan enterprises demonstrated their readiness to make a stand against the European Union’s sanctions, while Kazan prepared 350 seats for Livadia health centre and Kvart hotel to accommodate refugees from the Donetsk and Luhansk People’s Republics. Local restaurateurs and road workers have faced a rise in prices for feedstock and construction materials, but if the forward have already found other suppliers, the latter claim the growth rise is insignificant at the moment. Read more in Realnoe Vremya’s report.

“The airline is looking for solutions to supply spare parts”

The Monday morning brought new sanctions of the European Union: the EU demanded Russian airlines to return all leased aircraft within a month, banned European Airbus planes and their components from being supplied to Russia. Also, plane insurance and repair Russian companies own are also banned.

This directly influences Tatarstan airlines too. As Realnoe Vremya was told at UVT AERO JSC, now the company has several foreign planes that are leased, and though sanctions haven’t affected the planes themselves, there is a problem with components for them in case of repair:

“Nowadays the fleet of UVT Aero has seven Canadian Bombardier CRJ 200 planes, a Bombardier Challenger 604 and two Bell-429 helicopters. The leasing company hasn’t imposed sanctions on planes. The airline is looking for solutions to supply spare parts. This problem will be solved considering the current situation.”

Planes of Russian companies started to be delayed on Sunday. Nordwind Airlines Boeing 777-300ER didn’t manage to take off in Mexico — its insurance was annulated, the plane itself was detained to hand it over to the leasing company. Boeing 737 leased by Pobeda didn't manage to return from Turkey to Mineralnye Vody: the plane was arrested in Istanbul on an Irish leasing company’s request.

UVT Aero’s planes will not be arrested. Though the company claimed international flights a few years ago, it performs domestic flights, one subsidised flight to Yerevan is an exception.

Tourists expecting being back

Due to the closure of the EU airspace for Russian planes, there has appeared a problem for tourists, including from Tatarstan, who got stuck abroad to return. But the Tatarstan State Committee for Tourism doesn’t have accurate information about the number and location of our compatriots.

The Russian Agency for Tourism and Federal Air Transport Agency made a statement on 28 February that the lists of people who need to return weren’t created yet, but “the work to organise the transfer of Russian citizens from European states is done, and there will be created a schedule after the capacity is specified.” Russians who are abroad now are recommended “to stay in touch with their tour operator or carrier and mandatorily register in the app Help Abroad. Also, they are offered to call hotlines of the Russian Ministry of Foreign Affairs and Russian Agency for Tourism, write to a special email address of the Foreign Ministry.

However, Russians complained the app Help Abroad didn’t run, while it was hard to get through the hotlines.

KAMAZ: “The suspended cooperation isn’t our decision”

KAMAZ, Kazan Helicopters, Tupolev PJSC, which are a part of the Gorbunov Kazan Aircraft Engineering Association and KAPO-Composite JSC, are on the sanctions list of the EU. These enterprises are limited the access not only to the market but also new technologies. On Monday, Handelsblatt wrote that Daimler Truck (according to open sources, it holds 15% of KAMAZ shares) suspended all the cooperation with KAMAZ.

“We work as usual,” the press service of KAMAZ PJSC commented on this news for Realnoe Vremya. “Nothing has changed in the operation of the enterprise. As for the suspended cooperation, no comments. It is not our decision.”

Meanwhile, Director General of the enterprise Sergey Kogogin announced that all commitments made to the suppliers would be met, the workers wouldn’t be affected because large-scale reorganisation had taken place in the enterprise in the last years, the product line had been updated and other measures designed to eliminate and soften the impact of restrictions had been taken.

“Our legendary company has already faced challenges in its history we decently addressed. I can assure you that now the administration of the company knows what to do, how to save the production and support the staff,” he told his employees.

Kazan Helicopters also refuses to comment on the sanctions. But Realnoe Vremya has been unofficially given to understand that the enterprise was running as usual.

Representatives of Tupolev are also keeping silent. Earlier, the company answered journalists’ questions about sanctions saying that such measures “are always counterproductive, including for those who support them.”

Let’s build the economy according to plan

The imposition of new sanctions made Tatarstan entrepreneurs to again start discussing strategic long-term import substitution plans. Particularly head of Alabuga Special Economic Zone Timur Shagivaleyev told Realnoe Vremya that the residents of the zone took a wait-and-see approach and were sitting out but he gave us to understand that he was ready for any scenario and reminded us that after the refusal of Germany’s BASF petrochemical concern to produce protective equipment in the SEZ, Russian Avgust holding occupied the niche.

Shagivaleyev stressed that Alabuga SEZ set course for import substitution a long time ago, however, one should choose a strategy first of all:

“It is necessary to decide if we create a clearly market economy. And if we create a clearly planned economy, let’s make a planned economy. Then it is necessary to readjust the financing system of the industry, which we have been talking about for many years. The country needs to start financing its own industry without looking at what Fitch and Moody’s will say (Earlier, Moody’s international rating agency said that it was going to reconsider Russia and Ukraine’s ratings with the possibility of reduction due to the special operation in Donbas).

“We’ve faced suppliers’ panic”

Meanwhile, Tatarstan owners of food establishments have had certain difficulties. Co-founder of Cho Pho Bo Vietnamese restaurant in Kazan Sergey Matyushenko told Realnoe Vremya that he had already faced “some suppliers’ panic who assured them they would raise prices by 20-30%.”

“Some are sensible, they warned a 2-5% rise was expected,” he noted. “Somebody said the prices wouldn’t change. Of course, we expect a price growth, delayed imports of some goods and other unpleasant things. But the soon end of this global situation is key for us now,” Matyushenko emphasises.

“Anti-COVID-19 measures” of the republican government will help the restaurant business in this situation or, more precisely, a decision of the Tatarstan Ministry of Economy to extend a programme designed to subsidise public catering establishments’ costs on food delivery expenses until late 2022. It has been implemented since the middle of 2020 within business support measures during the spread of the COVID-19 pandemic, and more than 200 entrepreneurs have received 76 million rubles in two years.

There will be some rise, but insignificant

Avtodor forecasts more expensive construction of the toll road M12 from Moscow to Kazan, which is underway, due to the sanctions against Russia. Board Chairman of the public company Vyacheslav Petushenko said on 28 February that the construction of the highway might become more expensive because of the currency rate changes caused by the events in Donbas, but insignificantly.

He expressed his confidence that the sanctions wouldn’t seriously influence the cost of the project because foreign supplies for the construction were carried out at the beginning, when the dollar cost some 70 rubles, while supplies from abroad accounted for just 5% of all the volume.

Without player but with contract

Foreign players of UNICS basketball club said they wanted to leave Russia because of concerns about their own safety. US basketball player Jarrell Brantley was the first to “evacuate.” Now Italian Marco Spissu wants to follow his example. Moreover, it isn’t yet discussed if Spissu’s contract will be terminated.

The Ministry of Foreign Affairs of Italy recommended its citizens to leave Russia and cancel scheduled trips there — because of no flights between Russia and the EU.

Meanwhile, the Euroleague Basketball Advisory Council suspended the participation of Russian teams in the tournament for an uncertain period, including UNICS from Kazan.

Euroleague will return to this issue when the situation caused by the conflict between Russia and Ukraine improves, the organisation said.

In expectation of new round

The third round of talks between Russia and Ukraine, which started a day later because of the late arrival of the Ukrainian delegation, ended in Gomel, Belarus, on 28 February. The meeting began at 2 p.m. Moscow time and ended more than five hours later. It included three rounds. Moreover, this isn’t the end of the discussion. There is another round of Russian-Ukrainian talks ahead, the sides chose the Polish-Belarusian border for this, said head of the Russian delegation, Aide to the country’s president Vladimir Medinsky. It is scheduled to take place these days. The exact date isn’t named.

“The talks with the Ukrainian side that lasted about five hours have ended. During this time, we have discussed all items on the agenda in detail, found some points where common positions can be forecasted and, most importantly, we agreed to continue the talks. The next meeting will be in the next few days on the Polish-Belarusian border, there is a corresponding agreement. Before this time, each delegation, the management of each of the delegations will consult the administration of the country on all items of the talk,” Medinsky commented on the meeting.

Another member of the Russian delegation, head of the State Duma’s Committee for International Affairs Leonid Slutsky said that the sides discussed ceasefire, demilitarisation and “other issues on the agenda.”

“But let’s not discuss certain results, the sides need to consult them in the capitals, I can say the discussion was very detailed, we worked for more than five years. Now it is necessary to consult, indeed, in Moscow and Kyiv. It is important that the sides hear each other. It is the main result of the talks today, the foundation without which it would be impossible to say this format took place but it did. The second round is about to come. Indeed, every day is crucial today, therefore we are in contact with the Ukrainian delegation in the format of talks. We will analyse it with our administration today at night, not even tomorrow, when we return to Moscow and we will be ready to continue the work in this format if Kyiv is ready. I personally express my hope that this format will turn out effective,” Slutsky claimed.

The other side also commented on the results of the talks:

“The Ukrainian and Russian delegations have had the first round of talks today, their main goal was to discuss ceasefire on the territory of Ukraine and military actions. The sites determined a number of priority themes where certain decisions have been outlined. To make sure these solutions are used logistically, the sides go to their capitals for consultation. Also, the sides discussed the possibility of the second round of talks soon where these themes will specifically develop,” Adviser to the head of the Ukrainian president’s office Mykhailo Podolyak told journalists after the talks.

However, President Volodymyr Zelensky of Ukraine already claimed he didn’t really believe in the success of the talks. But according to him, they needed to try. He thinks it is a chance, though slim.

At the same time, Russian leader Vladimir Putin has already repeatedly said that Russia is always ready for dialogue with Ukraine, open for talks. According to him, the situation can be regulated under three conditions: firstly, undoubtedly considering Russia’s legal interests in safety, secondly, recognition of Russian sovereignty over Crimea, thirdly, considering the tasks of demilitarisation and denazification of Ukraine and providing it a neutral status. At the moment, Russia’s special operation in Ukraine goes on. Realnoe Vremya is staying tuned for the events.

Inna Serova

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