Lebensraum 2.0: Ukraine’s Economic Folly

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2/5/2015

Opinion: By putting its emphasis on agriculture, Ukraine fell into a trap.

Translated from Russian by J.Hawk

EU countries are reducing their purchases of Ukrainian products,
in spite of the announced preferences and “open” borders. According to the
economist Vasiliy Koltashov, the director fo the Center of Economic Studies of
the Institute of Globalization and Social Movements, Kiev lost everything by “betting”
on agriculture and eurointegration.

Export of Ukrainian goods to the EU increased by only 2.1%.
The National Bank of Ukraine acknowledged this fact in a report on the country’s
balance of payments for 2014. In monetary terms, Ukraine’s export losses
amounted to $55.5 billion. NBU notes that the reduction of trade hit all types
of products: machinery, metallurgy, chemicals, and food.

EU unilaterally opened its markets to Ukrainian products as
part of its “preferential” trade regime with Ukraine, starting with April 2014.
The Ukrainian government estimated that the removal of customs dues will
increase the overall Ukrainian exports to the EU by a third.

“Ukraine, of course, did not experience the level of export
growth that was promised. There is slight export growth, but I fear that by
year’s end even that will drop. Because the situation over there is pretty bad,
since the EU has not managed to fix its own economic problems. And Ukraine, to
put it bluntly, “detonated”  a second
wave of crisis in Eurasia,” Koltashov said in an interview with Radio Sputnik.

In his words, Ukraine found itself in a situation where it
cannot expect that the European market will increase its demand for Ukrainian
products.

“Rather to the contrary, European producers need to sell to
Ukraine, but their national currency is collapsing, the Central Bank is afraid
to adopt the actual exchange rate, because it can lead to another extreme jump,”
added Koltashov.

Moreover, according to Koltashov, Ukrainians are so
impoverished they cannot afford to buy European products.

“Everything was smooth on paper, but they forgot about the
kinks. And there are many kinks. One of them is the fall in salaries which
discourages workers since the salaries are too low to live on. This is a
situation with no way out. How are they going to solve this problem? I don’t think
they have an answer, due to the model that they have chosen. They have no
options. They fell into a trap,” says the economist.

In his opinion, Kiev and EU put their emphasis on
agriculture and the elimination of industry. This would have been consistent
with EU doctrine. But the bet failed.

“This is a losing bet, and that’s Kiev’s main problem. They
have no ideas, except for Yatsenyuk’s “super-idea” concerning agriculture: we
can do without industry, we’ll have agriculture. Maybe it’s enough for
Yatsenyuk. But what about the population with grew up in entirely different conditions,
lived off industrialization, lived in cities? But once the industry is gone,
you lose a big service sector. Without it, big finance is also not going to
make a nest for itself in Ukraine. So the situation for them is very bad. They
are going backwards, into some sort of debris,” believes the economist.

J.Hawk’s Comment: I think Koltashov hits the nail on the
head, inasmuch both the emphasis on agriculture is both the lynchpin of
Yatsenyuk’s economic policy and a major (though not the only) reason for the
uprising in the industrial Donbass. More disturbingly, the desire to destroy
Ukraine’s industry is eerily consistent with Germany’s earlier interest in
Ukraine that dates to the 1940’s Lebensraum project. Then, too, Ukraine was
supposed to simply be the Third Reich’s granary, worked by millions of slave
laborers. Today Ukraine seems to play a similar role in Angela Merkel’s new,
improved Lebensraum project in which the Wehrmacht is replaced by the European
Central Bank as a means of controlling the unruly subhumans on Germany’s
periphery. Just as Greece is supposed to serve a specific role in Germany’s new
economic empire (though the jury is still out which organization had done more
damage to Greece, the Wehrmacht or the German-dominated European Central Bank),
so is Ukraine, led by a group of docile German collaborators. It boggles the
mind why anyone to fashions himself a patriotic Ukrainian would embrace a
program that presupposes Ukraine’s deindustrialization and therefore permanent relegation
to the status of a third-world country, unless they are driven less by love of
Ukraine than by hatred of all things Russian. The fact that we see Ukrainian
soldiers wearing “slave owner” patches on their uniforms or, worse,
Bundeswehr-issue camouflage uniforms complete with German national flags (!)
suggests this might really be the case. But that means that the Ukrainian national
project had failed once again. Its rallying point is not so much love for
things Ukrainian but the desire to destroy all reminders of its connection to
Russia. Even if it means national suicide.  

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