Ukraine: trapped in a war zone

Michael Roberts, 10 dni pred rusko invazijo na Ukrajino.

Ukrajina, takrat pod vplivom nacionalistične vlade še razpeta med zahodnim imperializmom (in pohlepom zahodnih korporacij) in ruskim pokvarjenim kapitalizmom. Zdaj je zadeva še bistveno slabša. In gre še na slabše.

“Above all, the IMF is insisting, with the support of the latest post-Maidan government, to carry out substantial privatisation of the banks and state enterprises in the interests of ‘efficiency’ and to control ‘corruption’. “The authorities remain committed to downsizing the SOE sector. Adopting an overarching state ownership policy would be a key step. Ultimately, corporatization and the concomitant improvement in performance of non-strategic SOEs should lead to their successful privatization. Preparations are also underway to execute the authorities’ strategy to reduce state ownership in the banking sector. Updated in August 2020, the strategy envisions a reduction in state ownership to below 25 percent of banking sector net assets by 2025.”

Most significant has been the move to privatise land holdings. Ukraine is home to a quarter of the fertile “black earth” soil (Chernozem) on the planet. It is already the world’s biggest producer of sunflower oil and the fourth-biggest producer of corn. Along with soybeans, sunflowers and corn are among the main crops grown in the Sunflower Belt, which stretches from Kharkiv in the east to the Ternopil region in the west.

The government is resisting allowing foreigners to buy land. But in 2024, Ukrainian legal entities will qualify for transactions involving up to 10,000 hectares and will apply to an agricultural area of 42.7 million hectares (103 million acres). That is equivalent to the entire surface area of the state of California, or all of Italy! The World Bank is positively drooling at this opening up of Ukraine’s key industry to capitalist enterprise: “This is without exaggeration a historic event, made possible by the leadership of the President of Ukraine, the will of the parliament and the hard work of the government.” So Ukraine plans to open up its economy even more to capital, particularly foreign capital, in the hope that this will deliver faster growth and prosperity.

The so-called Minsk accords of 2014-5, signed by the major powers and by a previous Ukraine government, cannot reconcile this division. So the Kiev nationalists, encouraged by the US, continue to press and the Russians continue to prepare for a possible invasion to force an agreement to divide the country permanently. Ukraine is trapped between the interests of Western imperialism and Russian crony capitalism.”

Michael Roberts Blog

As the drums of war sound for Ukraine, what will be the impact on Ukraine’s economy and the living standards of its 44m population, whether war is avoided or not? I’ve posted on Ukraine several times before during the intense economic crisis that the country experienced in 2013-14 culminating in the collapse of incumbent government, the Maidan uprising and eventually the Russian annexation of Crimea and the predominantly Russian-speaking eastern provinces. The situation was dire for the people then. It improved a little for a while afterwards, but economic growth remains relatively low and living standards have stagnated at best. Average real wages have not risen in 12 years and collapsed severely after the 2014 crisis.

Source: EWPT 7.0 series

Ukraine was the hardest hit by the collapse of the Soviet Union and the ‘shock therapy’ of capitalist restoration in Eastern Europe and Russia itself. All the former Soviet satellites…

View original post 1,475 more words

%d bloggers like this: