Plundering Ukraine for Profit
by Stephen Lendman
On March 27, an IMF press release headlined “IMF Staff Level Agreement with Ukraine on US $14 – 18 billion Stand-By Arrangement.”
Nikolay Gueorguiev is IMF Mission Chief for Ukraine. He’s loan shark chief in charge of plundering it for profit. He issued a statement, saying in part:
“The mission has reached a staff-level agreement with the authorities of Ukraine on an economic reform program that can be supported by a two-year Stand-By Arrangement (SBA) with the IMF.”
“The financial support from the broader international community that the program will unlock amounts to US$27 billion over the next two years.”
“Of this, assistance from the IMF will range between US$14-18 billion, with the precise amount to be determined once all bilateral and multilateral support is accounted for.”
Gueorguiev ludicrously said Ukraine “achieved some stability.” It “faces difficult challenges,” he added.
He lied claiming IMF’s goal is “restor(ing) macroeconomic stability and put(ting) the country on the path of sound governance and sustainable economic growth while protecting the vulnerable in the society.”
IMF policy is polar opposite. It’s financial terrorism. In July 1944, it was established to stabilize exchange rates linked to the dollar.
It was to bridge temporary payment imbalances. It’s hugely exploitive. It mandates debt entrapment. It does so to transfer public wealth to Western bankers and other corporate predators.
It obligates indebted nations to obtain new loans to service old ones. Doing so assures greater indebtedness.
Structural adjustment harshness is mandated. Debtor nations have no choice. Previous articles explained. Dystopian measures include:
- paying bankers and other Major Western investors first;
- privatizing state enterprises;
- selling them at fire sale prices;
- mass layoffs;
- deep social spending cuts;
- wage freezes or cuts;
- unrestricted free market access for Western corporations;
- corporate-friendly tax cuts;
- tax increases for working households;
- trade unionism crushed or marginalized; and
- harsh crackdowns against non-believers.
Doing the right thing is verboten. A race to the bottom follows. Economies are strip-mined for profit. Countries are transformed into zombies.
Human needs don’t count. Workers are ruthlessly exploited. Debt service comes first.
Poverty, unemployment, underemployment, hunger, homelessness, untreated illnesses, loss of public services, and deprivation follow. Numerous examples explain.
Gerald Celente calls the IMF “the loan shark of last resort” for good reason. It’s an “international Mafia Federation,” he explains. Reverse Robin Hoodism is policy.
Western people “live under the illusion of democracy,” he said. None exists. “Political Mafia” bosses run things. “Whether raping a woman or a nation, that’s what the IMF does.”
They’re “money junkies.” They’re “raping every country on earth” they can trap into debt bondage. It’s longstanding IMF practice.
Nations are hollowed out into dystopian wastelands. Middle class societies are destroyed. Workers become serfs. Debt bondage crushes freedom.
Megalomaniacal money masters run things. What they say goes. An elite few alone benefit. Neoliberal harshness is enforced.
It’s neo-Malthusianism writ large. It’s hugely destructive. Its holy trinity mandates unrestrained corporate empowerment, using state resources for bottom line profits, and eroding social spending en route to eliminating it altogether.
In July 2011, Christine Lagarde replaced Dominique Strauss-Kahn as IMF managing director. Fraudulent rape allegations forced him out.
He was targeted for supporting more responsible lending policies. He endorsed employment and equity.
He called them building blocks of economic stability. They enhance prosperity, political stability and peace.
Bankers abhor these notions. Strauss-Kahn had to go. Largarde is a walking conflict of interests. She’s a player. She’s a neoliberal hardliner.
She puts bankers’ interests above public ones. She’s ideally suited to serve them. Her mandate is entrapping nations in debt bondage.
It’s destroying nations to save them. It’s strip-mining everything of worth. It’s causing unconscionable human suffering. Money masters take no prisoners.
They demanded immediately ending Ukraine’s gas subsidies. They did so after Kiev putschists announced 50% higher heating gas prices beginning May 1.
Ukraine’s national oil and gas company Naftogaz announced 40% higher gas prices starting July 1. Expect more increases later on, it added.
Ukraine’s central bank began limiting currency interventions. Since January 1, the state currency hryvnia lost over one-fourth of its dollar value. Expect more deterioration ahead.
Washington pledged $1 billion in loan guarantees. Another $150 million in direct aid appears forthcoming.
Japan promised up to $1.5 billion. Illegitimate putschist prime minister Arseniy Yatsenyuk expects EU nations to supply about $2.2 billion.
Loans of course aren’t giveaways. They come with strings. They do more harm than good. Amounts announced are short-term measures only.
A previous article explained. Economist Jack Rasmus was cited. He believes Ukraine’s currency collapse is virtually certain. At least $20 billion in aid may be needed “well before May 1,” he said.
Ukraine’s current debt is about $80 billion. By summer, it’ll top $100 billion.” Capital flight compounds Ukraine’s problems.
Its foreign exchange reserves are dwindling at the rate of about $4 billion a week. Deepening black hole indebtedness entraps Ukraine. No end to its financial crisis looms.
Ukrainian aid won’t come in amounts needed, said Rasmus. Nothing beyond short-term injections ahead of May elections.
He thinks $50 billion minimum is needed. Mandating structural adjustment harshness with it does more harm than good.
Longer term expect Ukraine’s economy to be much worse off than now. Its currency may end up worthless. Rampant inflation alone will destroy it.
Western bankers “will have a field day,” said Rasmus. Ukraine is low-hanging fruit. It’s ripe for plundering.
Ukrainians are just beginning to learn they were conned. They’re being left high and dry on their own. They losing pension and other social benefits.
They face skyrocketing food and energy prices. Most Ukrainians are deeply impoverished already. They struggle daily to get by.
The worst of all financial harshness awaits them. Fascist rule assures repressive governance. Western diktats assure harder than ever hard times.
Earlier IMF loans extended Ukraine included $16.6 billion on 2005 and another $15.1 billion in 2010. They didn’t help. Ukraine’s economy remained troubled.
After 2008 economic crisis conditions erupted, it declined 15% through 2009. Ukraine hoped 2010 aid would help generate recovery.
It didn’t happen. Demand for its exports to Western Europe didn’t materialize. It’s been in recession since mid-2013. IMF diktats inflict more harm than good.
Getting in bed with loan sharks assures trouble. Not according to illegitimate putschist prime minister Yatsenyuk. “(W)e have no other choice but to accept the IMF offer,” he claimed.
IMF aid won’t help. It’s economically destructive. It’s not stimulative. It’s not meant to be. Troubled EU economies have their own unresolved issues.
Expect most forthcoming IMF/EU/US aid going straight to bankers. Ukraine’s troubled economy will get worse, not better.
Debt entrapment works that way. Ordinary Ukrainians will suffer most. Lost social benefits alone will crush them. Economic decline will follow.
Expect Greece 2.0. Zombie status reflects it. Official unemployment tops 28%. Real unemployment is much higher.
Around two-thirds of youths have no jobs. An entire generation has no future.
The more Athens borrows, the greater its debt burden. The harder it is to repay. The tougher to begin recovering. The way things are going, it may be light years away.
Expect Ukraine faring no better. Expect further political unrest. Expect deeper economic crisis.
Expect escalating East/West tensions. Expect potential conflict. Economic troubles will pale by comparison if it erupts.
Ukraine is a tinder box. Flashpoint conditions risk global war. Fascists in charge make it possible. Imagine the unthinkable. Imagine what hopefully won’t happen.
A Final Comment
On March 27, General Assembly members voted on a March 24 dated “Territorial integrity of Ukraine” non-binding resolution. Washington bullied 100 to vote “yes.”
They disgracefully called legitimate Crimean/Russian reunification illegal. Eleven voted responsibly.
They included Armenia, Belarus, Bolivia, Cuba, the Democratic People’s Republic of Korea (DPRK), Nicaragua, Russia, Sudan, Syria, Venezuela and Zimbabwe.
They affirmed Crimea’s legal choice. Another 58 abstained. They included Argentina, Brazil, China and India.
Russia reacted responsibly. It did so in the General Assembly. Its UN Ambassador Vitaly Churkin said:
“Russia opposes the proposed General Assembly draft resolution. It is of a confrontational character.”
“The draft attempts to cast doubt on the significance of the referendum held in Crimea, which has already played a historical role. It is counter-productive to dispute this.”
“At the same time, the draft resolution has ‘some right provisions.’ For instance, the appeal to refrain from unilateral action and seditious rhetoric, which could lead to tension escalations.”
“We believe that it is not necessary to pass any resolutions in order to hear these appeals. It is just necessary to follow the interests of the Ukrainian people and the interests of the normal flow of international relations.”
“We hope that this understanding will prevail during today’s discussion as well and continuing dialog regarding Ukraine. Russia is participating in it in a most constructive way.”
Russia recognizes UN Charter principles. They affirm the right of all people to self-determination. Crimeans legally proclaimed theirs. Nations are obligated to respect it.
Deputy Foreign Minister Gennady Gatilov said “Russia is extremely negative about” an irresponsible resolution. “We think (it’s) politically motivated and detached from reality.”
China’s UN Ambassador Liu Jieyi said:
“In the context of the ongoing diplomatic mediation efforts by the parties concerned, an attempt to push ahead with the UNGA vote on the draft resolution on the question of Ukraine will only further complicate the situation.”
“We believe that the actions taken by the United Nations on the question of Ukraine should reflect the consensus by all parties and should be conducive to the relaxation of tension and to the achievement of a political settlement of the crisis.”
“The question of Ukraine involves the interests and concerns of various parties. There should be a balanced approach to address the question.”
“All parties should exercise restraint and refrain from exacerbating the situation and continue the efforts to iron out their differences through political and diplomatic means and to solve the question of Ukraine within the framework of law and order.”
The battle for Ukraine’s soul continues. Crimeans chose to go home. It’s their legal choice.
Stephen Lendman lives in Chicago. He can be reached at firstname.lastname@example.org.
His new book is titled “Banker Occupation: Waging Financial War on Humanity.”
Visit his blog site at sjlendman.blogspot.com.
Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.
It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs.