In a country marked by extreme paradoxes, changes happen quickly. Beyond its being an arresting symbol, when we see a statue of Lenin being pulled down in Odessa under “de-Sovietisation” laws only to be replaced by another statue... of the mythical evil hero of Star Wars, Darth Vader, we know that Ukraine is beckoning us to tour a veritable laboratory of unbridled capitalism |1|.
In the continuity of the famous pirated telephone call between Victoria Nuland, Under Secretary of State for Europe and Eurasia under Obama, and US Ambassador to Ukraine Geoffrey Pyatt, |2| the new Ukrainian president, Petro Poroshenko, working closely with George Soros |3|], pursues his rapprochement with the USA and the business milieu at the expense of the Ukrainian people – who, meanwhile, are sinking into destitution under merciless austerity policies.
Billionaire Poroshenko takes power
On 25 May, 2014 a presidential election, marked by an abstention rate of over 40%, was finally held, bringing billionaire businessman Petro Poroshenko to power. He is one of the main sponsors and organisers of the “Orange Revolution” and is also thought to have given financial support to the EuroMaidan movement |4|]. The newly-converted statesman built his fortune by taking advantage of the wave of privatisations between 1996 and 1998, during which he bought up several public confectionery companies, which he then merged into the Roshen group – a reference to his surname (which explains his nickname, the “Chocolate King”). In an irony of history, the Roshen group also produces “Kiev cake”, a hazelnut-based confection, in the former Karl Marx plant in the capital.
A former director of Ukraine’s central bank
The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.
ECB : http://www.bankofengland.co.uk/Pages/home.aspx (2007 – 2012), then Minister of the Economy, in 2012 under the Azarov government, Petro Poroshenko practises ultra-neoliberal politics: the free trade agreement between Kiev and the European Union is to enter into force in January 2016, and another with Canada is about to be concluded |5|. In 2014, according to Forbes magazine, his fortune was estimated at 1.6 billion dollars (some 1.5 billion euros), making him one of the richest men in the country. Poroshenko heads an empire that includes the Leninska Kuznya shipyard, taxi fleets, automobile factories, and media |6|, including the Channel 5 (5 Kanal) television channel. One of his campaign promises was to bring the average wage of all Ukrainians in line with that of his employees – approximately 7,000 hryvnia: “If we can do it for 45,000 employees, we can do it for 45 million Ukrainians” is a favourite pronouncement of his |7|. And yet Ukraine’s minimum wage has become Europe’s lowest, at approximately 1,300 hryvnia per month, or not quite 50 € at November 2015 exchange rates |8| – less than Ghana’s.
Echoes of the Cold War
The new Poroshenko government has begged Ottawa, Washington and other Western capitals for high-performance weaponry to use in the struggle against the pro-Russian separatists in the country’s industrial East – weapons that have left 8,000 dead in 18 months. So far the White House has agreed to send all-terrain military vehicles and unarmed drones |9|. In addition, based on announcements by the Commander of the US Army in Europe, Donald Renn, the Pentagon plans to train battalions of Ukrainian aerospace forces beginning on 23 November 2015 |10|.
A new government of oligarchs and financiers
Under the Poroshenko government, a new “Ministry of Information Policy” has been formed. On the day it was approved, 2 December 2014, around forty journalists demonstrated in front of the Parliament with placards reading “Hello, Big Brother” – a reference to the Ministry of Truth in George Orwell’s novel 1984. This propaganda ministry – which, to bring the irony to its paroxysm, harks back to certain aspects of the former Communist regime which is a favourite target of criticism by the Ukrainian government – is directed by Yuriy Stets, the producer of Channel 5, which is owned by President Poroshenko. The creation of this ministry comes just after the publication of reports by several Ukrainian journalists and human-rights defence groups pointing to possible war crimes committed in East Ukraine by the fascist-like nationalist militias as well as separatist groups supported by Russia |11|.
President Poroshenko has granted Ukrainian citizenship by decree to three foreign personalities who were immediately appointed ministers |12|:
After working for Hansabank in Estonia and the Swedish investment fund
Investment funds Private equity investment funds (sometimes called ’mutual funds’ seek to invest in companies according to certain criteria; of which they most often are specialized: capital-risk, capital development funds, leveraged buy-out (LBO), which reflect the different levels of the company’s maturity. East Capital in 2002, then serving as a member of the Board of Directors of OAO Federal Hydrogeneration Company, Aivaras Abromavičius had to give up his Lithuanian citizenship to become Minister of Economy and Trade in Ukraine. While he speaks Russian, Lithuanian, Estonian and English fluently, he admits to understanding only 85% of what is said in Ukrainian in the Parliament |13|.
Aivaras Abromavičius is not alone in adopting Ukrainian nationality in order to hold a political position. After a career in the US State Department in Washington and a stint at the American embassy in Ukraine from 1992 to 1995, Natalie Jaresko started the investment firm Horizon Capital and is now Ukraine’s Finance Minister. While keeping her US citizenship, she was granted Ukrainian nationality the day of her appointment, on 2 December 2014. On 16 September 2015 she signed an agreement for a loan of close to 500 million dollars with the World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.
It consists of several closely associated institutions, among which :
1. The International Bank for Reconstruction and Development (IBRD, 180 members in 1997), which provides loans in productive sectors such as farming or energy ;
2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;
3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.
As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.
Demonstrating that a minister can successively hold appointments in several countries, Alexander Kvitashvili has become the new Minister of Health, the post he held in his own country, Georgia, for two years (2008-2010) |15|.
But that’s not all. Mikheil Saakashvili |16|, the former Georgian president who now faces several criminal charges, in particular abuse of authority and embezzlement of public monies (he is charged with pocketing nearly 5 million dollars out of the budget |17|), is a friend of George W. Bush —the road from the airport in the capital, Tbilisi, was even renamed “George Bush Street” in 2005 after the then US president’s visit to Georgia– and a supporter of the EuroMaidan movement; he became Governor of Odessa Oblast in May 2015, after having refused the post of Vice-Prime Minister. Saakashvili, then living in New York, where he was out of reach of legal proceedings stemming from a criminal investigation in his home country, answered a call from Poroshenko to join his team in the summer of 2014. To take the job, he had to give up his Georgian nationality to become a Ukrainian citizen |18|. This is the first case of a former president leaving his own country to assume a political post abroad. Saakashvili has declared that he is in Ukraine to fight the war against Putin: “I hate Vladimir Putin. I am in Ukraine because this is my war, the destiny of my life is being decided here.” |19|
The key post of Minister of Energy has gone to Volodymyr Demchyshyn. Before taking on the post of Minister, he was Executive Director of the investment fund Investment Capital Ukraine. He served as vice-president of ING Bank Ukraine and was chief economist of Ernst & Young in Kiev (2003 – 2006)... the perfect profile for conducting a policy of rate increases and privatisation of the energy sector.
Arsen Avakov, who was put on Interpol’s list in 2012 for illegally transferring 55 hectares of land near Pisochyn in Kharkiv Oblast, where he held the post of Governor (between 2005 and 2010), has remained Minister of the Interior.
Dmytro Yarosh, the Nazi leader of the Right Sector (Pravy Sektor) movement, was appointed adviser to the Ministry of Defense in April with the task of facilitating the integration of the Right Sector volunteer battalions into the army.
The new government of the oligarch Poroshenko, with close ties to both the extreme Right and NATO
North Atlantic Treaty Organization NATO ensures US military protection for the Europeans in case of aggression, but above all it gives the USA supremacy over the Western Bloc. Western European countries agreed to place their armed forces within a defence system under US command, and thus recognize the preponderance of the USA. NATO was founded in 1949 in Washington, but became less prominent after the end of the Cold War. In 2002, it had 19 members: Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the UK, the USA, to which were added Greece and Turkey in 1952, the Federal Republic of Germany in 1955 (replaced by Unified Germany in 1990), Spain in 1982, Hungary, Poland and the Czech Republic in 1999. , does not appear to want to tread the path of peace in the region. Looking at these appointments, interference by the business milieu into political and economic decisions appears unavoidable, and the revolving-door phenomenon between the financial world and key positions of power is flagrant.
Translation Snake Arbusto and Vicki Briault
|1| The candidacy of a man dressed as Darth Vader, from the Ukrainian Internet Party (UIP) in the 2014 presidential election was rejected by the country’s central election commission. Many statues of Lenin have already been taken down in Ukraine, sometimes causing indignant reactions from part of the population. http://www.lepoint.fr/insolite/une-statue-de-lenine-en-ukraine-transformee-en-dark-vador-23-10-2015-1976330_48.php
|3| See, for example, Soros’s letter to Poroshenko: http://cyber-berkut.org/docs/Poroshenko,_Petro_and_Yatsenyuk,_Arseniy_23DEC14.pdf
|4| Tadeusz A. Olszański, Agata Wierzbowska-Miazga, “Poroshenko, President of Ukraine”, 2014-05-28. http://www.osw.waw.pl/en/publikacje/analyses/2014-05-28/poroshenko-president-ukraine
|5| Trade between Canada and Ukraine totalled an average 347 million dollars between 2011 and 2013, according to Canadian government officials, but slowed to 244 million in 2014. See: http://ici.radio-canada.ca/nouvelles/economie/2015/07/14/003-ukraine-canada-libre-echange-harper-iatseniouk.shtml
|6| In Ukraine, the great majority of the major television channels are owned by oligarchs. For example, Rinat Akhmetov is the owner of Ukrayina TV.
|8| Exchange rate as of 6 November 2015: 26 hryvnias = 1 euro.
|10| See: http://fr.sputniknews.com/defense/20151102/1019257279/usa-entrainement-bataillons-ukraine.html To do this, Decree No. 626/2015, adopted on 6 November 2015, authorises units of the United States armed forces, members of NATO, and other States participating in the “Partnership for Peace” program (with a maximum of 2,500 military with weapons and military equipment) to participate in multinational military manoeuvres within Ukraine for up to 61 days, in November-December 2015.
|11| Charles Recknagel, 3 December 2014, “‘No Big Brother!’ Ukrainian Journalists Oppose Kyiv’s New Ministry Of Information.” http://www.rferl.org/content/ukraine-ministry-information-journalists-protest/26723352.html
|12| As ministers of the Economy, Finance, and Health. “Un gouvernement ukrainien ouvert aux étrangers”, Stéphane Siohan, Le Figaro.fr, 04/12/2014 (in French) http://www.lefigaro.fr/international/2014/12/04/01003-20141204ARTFIG00390-un-gouvernement-ukrainien-ouvert-aux-etrangers.php
|13| Leonid Bershidsky, Bloomberg, 6 January 2015. “Can This Man Save Ukraine’s Economy?” http://www.bloombergview.com/articles/2015-01-06/can-this-man-save-ukraines-economy
|14| “Ukraine’s Bright Horizon: An Interview with Natalie A. Jaresko, Managing Partner, Horizon Capital, Kiev”; Leaders Online http://www.leadersmag.com/issues/2007.3_jul/jaresko.html
|15| See: “‘Foreigners’ land top minister posts in Ukraine”, Financial Times, 2 December 2014.
|16| Mikheil Saakashvili was president of Georgia from 2004 to 2007 and from 2008 to 2013. He left the country after the current president, Giorgi Margvelashvili, took office in November 2013.
|18| Georgian legislation prohibits holding dual nationality. A person loses Georgian citizenship if he or she lives outside the country full-time.
is staff member of CADTM Belgium and member of the Spanish Citizen’s Debt Audit Platform (PACD)
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