Ukraine up for grabs by foreign investment funds

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January 12, 2015
Sergey Belov – Regnum
Translated from Russian by J. Hawk

Is it embarrassing to be an idiot? Ukraine’s European dream is starting to come true.

Ukraine is swiftly transforming into an impoverished Somalia with freezing temperatures and a population that hates everything and everyone. After the brief post-Maidan euphoria came the inevitable wave of disappointment.  It has become fashionable for Ukrainians to blame Poroshenko and the oligarchs for everything (and Putin—but that’s obvious enough). Likewise you are less and less likely to encounter anyone who will admit they voted for the current president. With every day there are fewer people who supported the Maidan last year. Is it embarrassing to be an idiot?

The suddenly wise Ukrainians are grumbling about the criminal government and the need for a “real revolution.” Many don’t want any democracy because they know that in an election they’ll be taken for a ride anyway. They don’t need freedom of speech because they don’t know what to do with it. Ukrainians need work, a piece of bread, and a Fuehrer who will guarantee their modest needs are satisfied. Where a year ago stood the leader of the proletarian world Vladimir Lenin, the nationalists are preparing to erect their own leader—Stepan Bandera.

One can already see, on the streets of Ukrainian cities, advertisements with symbolic prison bars and the slogan “they promised us”. It’s high time for Ukrainians to put together yet another Maidan and demand that the “people’s government” fulfill its promises. But nobody seems to be willing to stand on the Maidan until the inevitable victory. The majority of hyperactive Ukrainians already  figured out that the “people’s government” will not treat rebels with kid gloves. The most independent Ukrainian media will accuse the protesters of being Russian saboteurs, and the “reformed” police will swiftly send 10-20 activists to meet with the “heavenly hundred”. The West will support the government’s legal authority to use force and explain to the silly Ukrainians that governments ought to be changed only through elections. And that would be the end of the “Revolution of National Dignity 2.0.” It is not yet time.

The Kiev leadership has more important things to do. European-style reforms and Ukrainian-style democracy. This is what Yatsenyuk’s government is doing. Oddly, Yatsenyuk’s titanic efforts at reform are not gaining support among the society. Didn’t Ukrainians dream of living honestly, paying all taxes, like in a normal European country? And that is the point of all reforms. It is time for office rats to stop accepting envelopes filled with dollars, and the doctors, teachers, and other civil servants to live solely on their “frozen” salaries. Entrepreneurs will have to “come out of the shadows”, which will simplify doing business in Ukraine. Ukrainian retirees should love paying market prices for social services. In general, there are many brilliant ideas, if only there was time to implement them. Ukraine’s European dream is starting to come true…

While at the same time the “brilliant” minds of Ukraine are making trenchant pronouncements as to what kind of aid the West is obligated to render Ukraine. First, EU should make a binding promise to admit Ukraine. Second, visa-free travel to the EU. Third, special import duties on goods from Russia to serve as a “Crimea occupation tax.”  Fourth, direct military assistance to ensure the victorious conclusion of the counter-terror operation against the Russian bogey. Fifth, find alternative sources of energy so that Ukraine could end its energy dependence on Russia.

Ukrainians also want the IMF and other financial organizations to “forgive” all debts and issue new credits on improbably favorable terms. Some have gone so far as to requiring the US to develop something akin to the Marshall Plan for Ukraine. Granted, Ukrainian specialists have no clue what that might be, but you’ll have to agree, is sounds awesome. The list of demands toward the West is growing with every minute and depends on Kiev’s current needs and the imagination of the claimants. Really, Ukrainians ought to organize a Euromaidan somewhere in Brussels, but, alas, they cannot afford to pay for a Schengen visa in order to travel to the capital of united Europe.

But the insistent begging by the Kiev government is beginning to get old for Western partners. Ukrainian visitors simply have gone overboard with their merciless “give us money so that we may live well.” Why should EU solve Ukraine’s problems instead of its own? After all, Ukraine has tremendous hidden reserves which ought to be simply uncovered and used for the benefit of the people.

The new Ukrainian Minister of Economy of Lithuanian origins, Ayvaras Abromavichus, has a correct understanding of his own party and of the global government. He believes that the strategic enterprises still in the possession of the Ukrainian state ought to be transferred to American investment funds. A wise decision, and it might even earn Ukraine 1 dollar. After all, by the minister’s own admission, out of 3374 state enterprises only 1120 are still in operation, and even the best ones do not yield profits, only multi-billion losses.

Will Ukrainians be loath to give up their national heritage for 1 dollar? IMF is in no hurry. It can wait with the next credits until the pro-independence brains are enlightened by the imminent default. And where to the uncouth Ukrainians get off lecturing the specialists from Wall Street on how to buy up enterprises for pennies? They are, after all, unprofitable? And they will be even more so if, with the shouting about “Russian aggression”, their cooperation with Russian partners is completely shut down. War is, first and foremost, money. For the sake of money the Kiev government and those who stand behind them are perfectly capable of staging a provocation in the South-East and continue the war.

Somehow, unexpectedly, the leading Western media turned their attention to the fact that economic sanctions against Russia are hitting EU countries like a boomerang. Are they really so surprised by that? Or did the Western political elite mature to the point of considering an amicable solution to the Ukrainian problem with Russia? Recently the French President Hollande, appearing on the France Inter radio station, said that Russia’s economic crisis would not benefit the EU, and the sanctions ought to be stopped. He named the regulation of conflict in Eastern Ukraine as the main condition. Moreover, Hollande underscored that Putin has no intention of annexing eastern Ukraine, and his main goal is to prevent Ukraine from joining NATO.

So much unexpected honesty from the French leader! We remember how after the Georgian misadventure another gallant Frenchman appeared in Moscow on August 8, 2008, and struck an agreement on peace, friendship, and cooperation…Is history repeating itself? Nothing personal, just the business interests of Western companies which are pushing the politicians to improving relations with Moscow. And it’s not important when the “reconciliation” will take place. What is important is that people are talking about it. Today the president of France is speaking about the need to find an agreement with Russia, tomorrow others may find similar courage. Will Washington do the same? Who is to say?

In order to somehow justify its cynical policies toward Kiev, all the Europeans need to do is to open their eyes and notice fascists in Ukraine. And you’ll get what had already happened in Libya and Syria, when the freedom fighters suddenly became Islamists, terrorists, and bandits. The West is after all not going to support those who do not support their liberal-democratic values and exhibit tolerance toward sexual minorities. The armed Nazi formations can kill their own fellow Ukrainians without European financial assistance. “Just business.” The main objective is to get the Ukrainian government to “reform” Ukraine, privatize or kill enterprises, and after that if anyone wants to start a revolution, they can. A real revolution, not a pretend one, one that will become a civil war on the entire territory of Ukraine.

Translator’s Note:

 This is an important article, for of all the analyses that have appeared in recent weeks, it arguably does the best job of capturing the “big picture” that includes all the players and their interests. Let’s not forget that the original “Plan A” was EU association, under which Ukraine would become yet another captive market to EU’s manufacturers, while at the same time serving as a docile supplier of raw materials and cheap labor (evidently Eastern European countries, including Poland, are reaching the limit of their usefulness). That the implementation of the association has been shelved by the EU suggests its leadership has little faith in the continued viability of Ukrainian economy. Hence the “Plan B” outlined above, namely the takeover of Ukraine’s strategic industries by Western investment funds. These funds function in two ways, depending on which approach promises greater profitability. If the enterprise that it takes over only needs a small influx of cash in order to regain profitability, that’s the policy the fund adopts. If that prospect is missing, the fund engages in good old-fashioned asset-stripping: the workforce is quickly laid off and everything, all of its equipment down to office furniture that can be sold in the global marketplace is sold. This way the fund can make a pretty penny, while saddling the host country with the social cost and, of course, political consequences. Belov is entirely correct in his assessment that the Kiev regime has its backs against the wall which allows Ukraine’s “Western partners” to keep it on life support (just barely) long enough for “Plan B” to be implemented.


Not everyone in the West likes Plan B. George Soros is evidently still a believer in Plan A and presumably he has invested his money accordingly. Now all he needs to do is convince the West to throw billions of dollars at Ukraine so that he does not incur a stiff loss on his investment. That seems like a doubtful proposition, since the Plan B seems to have greater net profitability to Western firms than Plan A, even if George Soros loses billions in the bargain. Well, it could not have happened to a nicer oligarch. Soros is a loathsome, despicable creature who made his billions through currency manipulation and speculation, activity that benefits no-one (other than a small coterie of financiers) and hurts millions. Even though he had become the pet oligarch of various “third way” liberals for sponsoring their causes, in actuality his “charity” has the effect of skewing the political outcomes in affected countries in such ways that they increase the odds of Soros’ financial bets yielding profits. So now Soros is reduced to advocating policies that could lead to the deaths of tens, even hundreds of thousands, just so that he can recoup his investment.


Where does this leave the Right Sector? Belov’s assessment of Yarosh’s incentives is no doubt an accurate one: Yarosh is entirely correct in thinking it might be premature to try anything because the West still believes it stands to make billions on Ukrainian “reforms.” While Grishin/Semenchenko is advocating violence sooner rather than later, he is an opportunistic buffoon with the leadership skills of Mussolini. Yarosh, on the other hand, is a far more astute and capable (and, therefore, dangerous) leader. Yet even Yarosh probably does not want to wait too long, because who wants to take over a country (or even a chunk of a country) after it has been stripped bare by predatory investment funds?


Finally, what about Kolomoisky and other oligarchs? Remarkably, their assets are not even considered by Yatsenyuk as a “piggy bank” that could be broken to help Ukraine in its hour of need. One can imagine Kolomoisky sitting tight until Ukraine is stripped bare, then relying on the Right Sector to channel the “righteous anger” of the masses at Poroshenko and maybe even Yatsenyuk (and away from Kolomoisky’s wealth, naturally). That seems like a plausible scenario, except that Kolomoisky’s wealth, by then one of the few economic bright spots in the country, might prove too tempting a target for Yarosh who could easily lead a revolution in the name of “social justice”, as Belov implies.


So what is the survival plan for Yatsenyuk and Poroshenko? Apart from hoping for a miracle (hope springs eternal!) Yatsenyuk can always count on finding himself a cushy job somewhere at Harvard or Brookings or AIE if he can’t manage to convince Yarosh to make him the prime minister. Having made billions for his Western partners, he can count on their gratitude. Poroshenko, while frequently saber-rattling, seems like plausible “partner for peace” for both Novorossia and Russia, which makes him a target for the Right Sector and Yatsenyuk. Ironically, a lasting peace agreement with Novorossia and Russia that sticks, and the resumption of normal economic ties with Russia to the point of joining the Eurasian Union is at the moment the only plausible good outcome for Ukraine, though unfortunately an unlikely one. As noted above, accommodation with Russia threatens the interests of every other major Ukrainian player.


Belov is also correct concerning the implications of the “European dream” for Ukraine. It is not the first time that Ukraine looked West only to be bitterly disappointed. The Poles viewed the local peasantry and Cossacks as their social, religious, and even racial inferiors (an attitude that persists even today), which pushed the proto-Ukrainians toward recognizing their common cause with Russia. Every other Western power, be it Sweden, France, Austria-Hungary, and Nazi Germany, treated Ukraine exactly in the same shoddy fashion which only reaffirmed its ties with Russia. Ukraine’s experience with the West this time will end exactly the same way.

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