Russian President Vladimir Putin and Chinese President Xi Jinping attended in July 2019 the presentation of an investment project already implemented—an automobile plant built in Russia’s Tula Region / credit: Kremlin.ru
Editor’s Note: This analysis was produced by Globetrotter.
On January 21, 2022, Vice Admiral Kay-Achim Schönbach attended a talk in New Delhi, India, organized by the Manohar Parrikar Institute for Defense Studies and Analyses. Schönbach was speaking as the chief of Germany’s navy during his visit to the institute. “What he really wants is respect,” Schönbach said, referring to Russia’s President Vladimir Putin. “And my god, giving someone respect is low cost, even no cost.” Furthermore, Schönbach said that in his opinion, “It is easy to even give him the respect he really demands and probably also deserves.”
The next day, on January 22, Ukraine’s Foreign Minister Dmytro Kuleba summoned Germany’s ambassador to Ukraine, Anka Feldhusen, to Kyiv and “expressed deep disappointment” regarding the lack of German weapons provided to Ukraine and also about Schönbach’s comments in New Delhi. Vice Admiral Schönbach released a statement soon after, saying, “I have just asked the Federal Minister of Defense [Christine Lambrecht] to release me from my duties and responsibilities as inspector of the navy with immediate effect.” Lambrecht did not wait long to accept the resignation.
Why was Vice Admiral Schönbach sacked? Because he said two things that are unacceptable in the West: First, that “the Crimean Peninsula is gone and never [coming] back” to Ukraine and, second, that Putin should be treated with respect. The Schönbach affair is a vivid illustration of the problem that confronts the West currently, where Russian behavior is routinely described as “aggression” and where the idea of giving “respect” to Russia is disparaged.
Aggression
U.S. President Joe Biden’s administration began to use the word “imminent” to describe a potential Russian invasion of Ukraine toward the end of January. On January 18, White House Press Secretary Jen Psaki did not use the word “imminent,” but implied it with her comment: “Our view is this is an extremely dangerous situation. We’re now at a stage where Russia could at any point launch an attack in Ukraine.” On January 25, Psaki, while referring to the possible timeline for a Russian invasion, said, “I think when we said it was imminent, it remains imminent.” Two days later, on January 27, when she was asked about her use of the word “imminent” with regard to the invasion, Psaki said, “Our assessment has not changed since that point.”
On January 17, as the idea of an “imminent” Russian “invasion” escalated in Washington, Russia’s Foreign Minister Sergei Lavrov rebuked the suggestion of “the so-called Russian invasion of Ukraine.” Three days later, on January 20, spokeswoman for Russia’s Foreign Ministry Maria Zakharova denied that Russia would invade Ukraine, but said that the talk of such an invasion allowed the West to intervene militarily in Ukraine and threaten Russia.
Even a modicum of historical memory could have improved the debate about Russian military intervention in Ukraine. In the aftermath of the Georgian-Russian conflict in 2008, the European Union’s Independent International Fact-Finding Mission on the Conflict in Georgia, headed by Swiss diplomat Heidi Tagliavini, found that the information war in the lead-up to the conflict was inaccurate and inflammatory. Contrary to Georgian-Western statements, Tagliavini said, “[T]here was no massive Russian military invasion underway, which had to be stopped by Georgian military forces shelling Tskhinvali.” The idea of Russian “aggression” that has been mentioned in recent months, while referring to the possibility of Russia invading Ukraine, replicates the tone that preceded the conflict between Georgia and Russia, which was another dispute about old Soviet borders that should have been handled diplomatically.
Western politicians and media outlets have used the fact that 100,000 Russian troops have been stationed on Ukraine’s border as a sign of “aggression.” The number—100,000—sounds threatening, but it has been taken out of context. To invade Iraq in 1991, the United States and its allies amassed more than 700,000 troops as well as the entire ensemble of U.S. war technology located in its nearby bases and on its ships. Iraq had no allies and a military force depleted by the decade-long war of attrition against Iran. Ukraine’s army—regular and reserve—number about 500,000 troops (backed by the 1.5 million troops in NATO countries). With more than a million soldiers in uniform, Russia could have deployed many more troops at the Ukrainian border and would need to have done so for a full-scale invasion of a NATO partner country.
Respect
The word “respect” used by Vice Admiral Schönbach is key to the discussion regarding the emergence of both Russia and China as world powers. The conflict is not merely about Ukraine, just as the conflict in the South China Sea is not merely about Taiwan. The real conflict is about whether the West will allow both Russia and China to define policies that extend beyond their borders.
Russia, for instance, was not seen as a threat or as aggressive when it was in a less powerful position in comparison to the West after the collapse of the USSR. During the tenure of Russian President Boris Yeltsin (1991-1999), the Russian government encouraged the looting of the country by oligarchs—many of whom now reside in the West—and defined its own foreign policy based on the objectives of the United States. In 1994, “Russia became the first country to join NATO’s Partnership for Peace,” and that same year, Russia began a three-year process of joining the Group of Seven, which in 1997 expanded into the Group of Eight. Putin became president of Russia in 2000, inheriting a vastly depleted country, and promised to build it up so that Russia could realize its full potential.
In the aftermath of the collapse of the Western credit markets in 2007-2008, Putin began to speak about the new buoyancy in Russia. In 2015, I met a Russian diplomat in Beirut, who explained to me that Russia worried that various Western-backed maneuvers threatened Russia’s access to its two warm-water ports—in Sevastopol, Crimea, and in Tartus, Syria; it was in reaction to these provocations, he said, that Russia acted in both Crimea (2014) and Syria (2015).
The United States made it clear during the administration of President Barack Obama that both Russia and China must stay within their borders and know their place in the world order. An aggressive policy of NATO expansion into Eastern Europe and of the creation of the Quad (Australia, India, Japan and the United States) drew Russia and China into a security alliance that has only strengthened over time. Both Putin and China’s President Xi Jinping recently agreed that NATO’s expansion eastward and Taiwan’s independence were not acceptable to them. China and Russia see the West’s actions in both Eastern Europe and Taiwan as provocations by the West against the ambitions of these Eurasian powers.
That same Russian diplomat to whom I spoke in Beirut in 2015 said something to me that remains pertinent: “When the U.S. illegally invaded Iraq, none of the Western press called it ‘aggression.’”
Editor’s Note: The following report and the above video were originally published by MintPress News.
In November 2018, I became aware of the case of Kirill Vyshinsky, a Ukrainian-Russian journalist and editor imprisoned in Ukraine without trial since May 2018, accused of high treason.
Soon after, I interviewed Vyshinsky via email. He described his arrest and the accusations against him as politically-motivated, “an attempt by the Ukrainian authorities to bolster the declining popularity of [then] President [Petro] Poroshenko in this election year.”
Vyshinsky noted that his arrest was advancing the incessant anti-Russian hysteria now prevalent among Ukrainian authorities, as he holds dual Ukrainian and Russian citizenship. He noted that the charges against him, which pertain to a number of articles he published in 2014 (none of them authored by Vyshinsky), became of interest to Ukrainian authorities and intelligence services four years after they were published. To Vyshinsky, this supports the notion that neither the articles nor their editor were a security threat to Ukraine, instead, he says, they were a political card to be played.
In early 2019, I traveled to Kiev to interview Vyshinsky’s defense lawyer Andriy Domansky about the logistic obstacles of his client’s case. Domansky viewed the Vyshinsky case as politically motivated and expressed concern that he could himself become a target of Ukraine’s secret service for his role in defending his client, an innocent man.
Domansky told me at the time:
The Vyshinsky case is key in demonstrating the presence of political persecution of journalists in Ukraine. As a legal expert, I believe justice is still possible in Ukraine and I will do everything possible to prove Kirill Vyshinsky’s innocence.”
To the surprise of those following the case against Vyshinsky, in late August 2019 he was released with little fanfare after serving more than 400 days in a Ukrainian prison but still faces all of the charges brought against him by the Ukrainian government and is “obliged to appear in court or give testimony to investigators if they deemed it necessary.”
By early September, Kirill Vyshinsky was on a plane to Moscow. Despite never being tried or officially convicted, he found himself the subject of a prisoner exchange between the Russian and Ukrainian governments.
I interviewed Vyshinsky in Moscow in late September. He told me about his harrowing ordeal, the Ukrainian detention system, other persecuted journalists, and what lies ahead for him.
He also touched on the inhumane conditions he experienced in Ukrainian prisons. He noted that a pretrial detention center as we know it in Western nations is a very different entity in Ukraine and that Ukrainian prisons were so over-crowded that it was common for inmates to sleep in three shifts in order to allow enough standing room for inmates crammed into a cell.
Ukrainian Prisons Like a ‘Concentration Camp’
Aleksey Zhuravko, a Ukrainian deputy of the Verkhovna Rada of V and VI convocations recently published photos taken inside of an Odessa pretrial detention center showing utterly unsanitary and appalling conditions. Zhuravko noted, “I am shocked at what was seen. It is a concentration camp. It is a hotbed of diseases.”
Another Ukrainian journalist, Pavel Volkov, was subjected to the same types of accusations lobbed against Vyshinsky. Volkov spent over a year in the same pretrial detention center as Vyshinsky. He was arrested on September 27, 2017, after Ukrainian authorities carried out searches of his wife and mother’s apartments without the presence of his lawyer and with what he says, was a false witness.
Volkov spent more than a year in a pretrial detention center on charges of “infringing on territorial integrity with a group of people” and “miscellaneous accessory to terrorism.” On March 27, 2019, he was fully acquitted by a Ukrainian court.
Volkov shared his thoughts on the persecution of journalists in Ukraine, saying:
The leaders of the 2014 Euromaidan movement, who subsequently occupied the largest positions in the country’s leadership, repeatedly stated that collaborators from World War II who participated in the mass extermination of Jews, Russians, and Poles are true heroes in Ukraine, and that the Russian and Russian-speaking population of Ukraine are inferior people who need to be either forcibly re-educated or destroyed.
They also believe that anyone who wants peace with the Russian Federation, and who believes that the Russian language (the native language for over sixty percent of Ukraine’s population) should be the second state language, is the enemy of Ukraine.
These notions formed the basis of the new criminal law, designed to persecute politicians, public figures, journalists, and ordinary citizens who disagree with the above.
Since 2014, security services have arrested hundreds of people on charges of state treason; infringing on the territorial integrity of Ukraine; and assisting terrorism for criticizing the current government in the streets or on the Internet.
People have been in prison for years without a conviction. And these are not only the journalists included in the ‘Vyshinsky list’.
Activists from Odessa, Sergey Dolzhenkov and Evgeny Mefedov, have spent more than five years in jail just for laying flowers at a memorial to the liberators of Nikolaev [Ukrainian city] from Nazi invaders.
Sergeyev and Gorban, taxi drivers, have spent two and a half years in a pretrial detention center because they transported pensioners from Donetsk to Ukraine-controlled territory so that they could receive their legal pension.
The entrepreneur Andrey Tatarintsev has spent two years in prison for providing humanitarian assistance to a children’s hospital in the territory of the Lugansk region not controlled by Ukraine.
Farmer Nikolay Butrimenko received eight years of imprisonment for paying tax to the Donetsk People’s Republic for his land located in that territory.
The 85-year-old scientist and engineer Mekhti Logunov was given twelve years because he agreed to build a waste recycling plant with Russian investors. The list is endless.
People often incriminate themselves while being tortured or under the threat of their relatives being punished, and such confessions are accepted by the courts, despite the fact that lawyers initiate criminal proceedings against the security services involved in the torture. These cases are not being investigated.
The only mitigation that has happened in this direction after the change of government was the abolition of the provision of the Criminal Procedure Code stating that no other measure of restraint other than detention can be applied to persons suspected of committing crimes against the state.
This allowed some defendants to leave prison on bail, but not a single politically-motivated case has yet been closed. Moreover, arrests are ongoing.
The only acquittal to date from the so-called journalistic cases on freedom of speech is mine. However, it is still being contested by the prosecutor’s office in the Supreme Court.
Ninety-nine percent of the media continue to call all these people ‘terrorists’, ‘separatists’, and ‘enemies of the people’, even though almost none of them have yet received a verdict in court.”
Volkov’s words lay bare the true nature of the allegations made against Kirill Vyshinsky as well as the countless other journalists and citizens of Ukraine that have fallen victim to the heavy hand of Ukrainian authorities.
Eva Bartlett is a Canadian independent journalist and activist. She has spent years on the ground covering conflict zones in West Asia, especially in Syria and occupied Palestine, where she lived for nearly four years. She is a recipient of the 2017 International Journalism Award for International Reporting, granted by the Mexican Journalists’ Press Club (founded in 1951), was the first recipient of the Serena Shim Award for Uncompromised Integrity in Journalism, and was short-listed in 2017 for the Martha Gellhorn Prize for Journalism. See her extended bio on her blog, In Gaza.
While the Russian “special military operation” in Ukraine turns three weeks old today, energy-rich Azerbaijan is trying to preserve good ties with both Moscow and Kyiv.
Although the situation worries the Caucasus nation snuggled along the western shores of the Caspian Sea, the Azerbaijani government—based in the capital of Baku—tends toward preserving its neutrality and it potentially benefits from exporting additional gas to Europe.
Immediate Impact of War
Two days before the invasion, Azerbaijan signed an alliance agreement with Russia. The two countries are now de facto allies, although their parliaments still have not ratified the deal. According to the document, Moscow and Baku intend to deepen cooperation in the energy sector and strengthen military ties. It is worth noting Russia is already an ally of Azerbaijan’s arch-enemy, Armenia, and the agreement Russian President Vladimir Putin and his Azeri counterpart, Ilham Aliyev, signed in Moscow on February 22 is expected to reinforce Moscow’s positions in the South Caucasus.
Still, Russia’s isolation in the international arena could have an impact on its relations with Azerbaijan. Baku already has suspended all flights to the Russian Federation, and fears have emerged that remittances the approximately 650,000 Azeris working in Russia send home will significantly decline. Moreover, Russia is Azerbaijan’s top import partner. If Moscow eventually limits exports of various goods, including food, Baku likely will have to strengthen economic and political ties with another ally, Turkey.
It is not a secret Ankara supplied Baku with sophisticated Bayraktar drones prior to the 44-day war between Azerbaijan and Armenia over the Nagorno-Karabakh region. This landlocked mountainous terrain is internationally recognized as part of Azerbaijan, although it was under the control of Armenian forces for more than two decades. It is believed the Turkish-made weapons were a game changer in the war. As a result of the conflict, Baku restored its sovereignty over large portions of the mountainous territory, as well as surrounding areas, and some 2,000 Russian peacekeepers were deployed to the region. More importantly, Azerbaijan and Turkey became official allies, after Aliyev and Turkish President Recep Tayyip Erdoğan signed in June the Shusha Declaration.
Azerbaijan is now an ally of both Russia and Turkey, which could be a double-edged sword for Baku. Although the Caucasus nation supports Ukraine’s territorial integrity, it has avoided condemning Russia’s actions or imposing sanctions on the Russian Federation.
“We have never taken decisions on imposing sanctions on any country,” Azerbaijani Deputy Foreign Minister Elnur Mammadov told Toward Freedom in an interview. He pointed out he does not expect any pressure from the West for Azerbaijan to impose sanctions on Moscow.
Under the mediation of Russian President Vladimir Putin on November 26 in the southern Russian city of Sochi, the leaders of rival countries Armenia and Azerbaijan agreed to ease remaining tensions after their 2020 war over the Nagorno-Karabakh region. Armenian President Nikol Pashinyan (right) and Azerbaijan’s President Ilham Aliyev (left) flank Putin / credit: commonspace.eu
Fueling Demand
The European Union expects Azerbaijan to increase gas supplies to the continent, especially if Moscow eventually decides to turn off the taps. Indeed, the EU will need Azerbaijan’s energy resources to cope with possible Russian gas disruptions. But the problem is the country now does not have much more gas to export.
“In 2021, we exported 8.2 billion cubic meters of natural gas to Europe,” said Orkhan Zeynalov, the head of the International Cooperation Department of Azerbaijan’s Ministry of Energy, in an interview with Toward Freedom. “This year, we’re planning to increase the export up to 9.1 billion cubic meters.”
Such a small amount will not meet European needs for energy. In the long term, however, Azerbaijan will be able to provide more gas to Europe if it manages to increase the share of renewable energy sources for electricity production. Baku aims to turn Nagorno-Karabakh into a “green energy zone,” where foreign corporations, such as United Kingdom-based BP and United Arab Emirates-based Masdar, plan to build solar power plants. In addition, Saudi Arabian utility company Acwa Power is expected to build a 240-megawatt wind turbine farm in Azerbaijan, which should reduce the amount of gas the country currently uses.
Nakhchivan Corridor
In 2021, Azerbaijan increased its gas exports by nearly 40 percent, but the country is unlikely to ever replace Russia as Europe’s major energy supplier. Still, the growing demand for Azerbaijan’s gas will almost certainly have a positive impact on the country’s budget. Baku is expected to invest money in the construction of the Nakhchivan corridor, also known as Zangezur corridor, which seems to be a top priority for the Caucasus nation.
“We are already building 110 kilometers (68 miles) of the railway, and 124 kilometers (77 miles) of the highway in the region,” Mammadov said. “Our plan is to finish the construction by the end of 2023.”
The Nakhchivan corridor can be seen in red-and-white stripes by the city of Berdzor or Lachin. Since the end of the 2020 Nagorno-Karabakh war Azerbaijan and Turkey have been promoting the concept of the “Zangezur corridor,” which, if implemented, would connect Azerbaijan to the Nakhchivan Autonomous Region and Turkey to the rest of the Turkic world through Armenia’s Syunik Province / credit: Mapeh / Wikipedia
Why is this transportation network so important for Azerbaijan? The Nakhchivan corridor will allow the energy-rich nation a land connection with its exclave, the Nakhchivan Autonomous Republic. At the same time, it will connect Azerbaijan with its ally, Turkey. The challenge, however, is 45 kilometers (28 miles) of the road will have to go through Armenian territory. Yerevan, unlike Baku, does not seem to be in a hurry to finish construction of the corridor, even though the railroad portion will connect Armenia with its ally, Russia, through Azerbaijan’s mainland. Yerevan, however, seems to be more interested in the construction of the North-South road corridor that will connect Armenia with Russia, through Georgia.
Georgia did not impose sanctions on Russia, even though the two nations fought a brief war in 2008. That is why the Kremlin does not see the former Soviet republic as an “enemy country,” which leaves room for normalization of relations between Moscow and Tbilisi. In the long-term, such a development would be beneficial for Armenia, given it would secure a land connection with Russia.
Although Moscow reportedly supports the project, and is actively dealing with issues on unblocking transport links in the region, it is not very probable Yerevan will complete the construction of its section of the corridor any time soon, if it all. Quite aware of that, Azerbaijan reportedly decided to bypass Armenia and connect its main territory with Nakhchivan via Iran. On March 11, Baku and Tehran signed a Memorandum of Understanding on establishing communication links in the region. Indeed, such a move could create a new geopolitical reality in the Caucasus.
But as long as the Russia-Ukraine conflict goes on, the final implementation of all the deals in the region will likely remain on hold. For the time being, both Azerbaijan and Armenia are expected to preserve good relations with Moscow, hoping the war in Ukraine will not spill over into the South Caucasus, an area the Kremlin sees at its “near abroad.”
Nikola Mikovic is a Serbia-based contributor to CGTN, Global Comment, Byline Times, Informed Comment, and World Geostrategic Insights, among other publications. He is a geopolitical analyst for KJ Reports and Enquire.
On left, speakers at the Ukraine Recovery Conference held July 4-5 in Lugano, Switzerland. On right, Ukrainian President Volodomyr Zelensky / credit: Multipolarista
Editor’s Note: This article originally appeared in Multipolarista.
While the United States and Europe flood Ukraine with tens of billions of dollars of weapons, using it as an anti-Russian proxy and pouring fuel on the fire of a brutal war that is devastating the country, they are also making plans to essentially plunder its post-war economy.
Representatives of Western governments and corporations met in Switzerland this July to plan a series of harsh neoliberal policies to impose on post-war Ukraine, calling to cut labor laws, “open markets,” drop tariffs, deregulate industries, and “sell state-owned enterprises to private investors.”
Ukraine has been destabilized by violence since 2014, when a U.S.-sponsored coup d’etat overthrew its democratically elected government, setting off a civil war. That conflict dragged on until February 24, 2022, when Russia invaded the country, escalating into a new, even deadlier phase of the war.
The United States and European Union have sought to erase the history of foreign-sponsored civil war in Ukraine from 2014 to early 2022, acting as though the conflict began on February 24. But Washington had sent large sums of weapons to Ukraine and provided extensive military training and support over several years before Russia invaded.
Meanwhile, starting in 2017, representatives of Western governments and corporations quietly held annual conferences in which they discussed ways to profit from the civil war they were fueling in Ukraine.
In these meetings, Western political and business leaders outlined a series of aggressive right-wing reforms they hoped to impose on Ukraine, including widespread privatization of state-owned industries and deregulation of the economy.
On July 4 and July 5, top officials from the United States, European Union, Britain, Japan, and South Korea met in Switzerland for a so-called “Ukraine Recovery Conference.” There, they planned Ukraine’s post-war reconstruction and performatively announced aid commitments—while salivating over a bonanza of potential contracts.
New NATO candidates Finland and Sweden committed to assure reconstruction in Lugansk, roughly 48 hours after Russia and separatist forces announced the region had fallen fully under their control.
But the Ukraine Recovery Conference was not new. It had been renamed to save the expense of a new acronym. In the previous five years, the group and its annual meetings were instead referred to as the “Ukraine Reform Conference” (URC).
The URC’s agenda was explicitly focused on imposing political changes on the country—namely, “strengthening the market economy“, “decentralization, privatization, reform of state-owned enterprises, land reform, state administration reform,” and “Euro-Atlantic integration.”
Before 2022, this gathering had nothing to do with aid – and a lot to do with economics.
Documents from the 2018 Ukraine Reform Conference emphasized the importance of privatizing most of Ukraine’s remaining public sector, stating that the “ultimate goal of the reform is to sell state-owned enterprises to private investors”, along with calls for more “privatization, deregulation, energy reform, tax and customs reform.”
Lamenting that the “government is Ukraine’s largest asset holder,” the report stated, “Reform in privatization and SOEs has been long awaited, as this sector of the Ukrainian economy has remained largely unchanged since 1991.”
The Ukraine Reform Conference listed as one of its “achievements” the adoption of a law in January 2018 titled “On Privatization of State and Municipal Property,” which it noted “simplifies the procedure of privatization.”
While the URC enthusiastically pushed for these neoliberal reforms, it acknowledged that they were very unpopular among actual Ukrainians. A poll found that just 12.4 percent supported privatization of state-owned enterprises (SOE), whereas 49.9 percent opposed it. (An additional 12 percent were indifferent, whereas 25.7 percent had no answer.)
Economic liberalization in Ukraine since Russia’s February invasion has been even more grim.
In March 2022, the Ukrainian parliament adopted emergency legislation allowing employers to suspend collective agreements. Then in May, it passed a permanent reform package effectively exempting the vast majority of Ukrainian workers (those at businesses with fewer than 200 employees) from Ukrainian labor law.
While the most immediate beneficiaries of these changes will be Ukrainian employers, Western governments have been lobbying to liberalize Ukraine’s labor laws for years.
Documents leaked in 2021 showed that the British government coached Ukrainian officials on how to convince a recalcitrant public to give up workers’ rights and implement anti-union policies. Training materials lamented that popular opinion towards the proposed reforms was overwhelmingly negative, but provided messaging strategies to mislead Ukrainians into supporting them.
West Calls for Aggressive Neoliberal Reforms at ‘Ukraine Recovery Conference’
The July 2022 Ukraine Recovery Conference, which was held by Lugano, Switzerland and jointly hosted by the Swiss and Ukrainian governments, featured representatives from the following states and institutions:
Albania
Australia
Austria
Belgium
Canada
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Iceland
Israel
Italy
Japan
Latvia
Lithuania
Liechtenstein
Luxembourg
Malta
Netherlands
North Macedonia
Norway
Poland
Portugal
Republic of Korea (popularly known as South Korea)
Romania
Slovak Republic
Slovenia
Spain
Sweden
Switzerland
Türkiye (formerly known as Turkey)
Ukraine
United Kingdom
United States of America
Council of Europe
European Bank for Reconstruction and Development
European Commission
European Investment Bank
Organisation for Economic Cooperation and Development (OECD)
Among the prominent officials who attended were European Commission President Ursula Von der Leyen, Swiss President Ignazio Cassis, and UK Foreign Minister Liz Truss.
Ukraine’s Western-backed leader Volodymyr Zelensky also addressed the conference via video.
Physically present at the Switzerland meeting were Ukrainian Prime Minister Denys Shmyhal and Zelensky’s top political ally Ruslan Stefanchuk, the chairman of Ukraine’s parliament, the Verkhovna Rada.
Stefanchuk is the second-in-line for the presidency after Zelensky. He is also a member of Ukraine’s all-powerful National Security and Defense Council, which truly governs the country.
From left to right: Ukrainian Prime Minister Denys Shmyhal, Swiss President Ignazio Cassis, European Commission President Ursula Von der Leyen, and Verkhovna Rada chairman Ruslan Stefanchuk at the Ukraine Recovery Conference in Switzerland on July 4, 2022
Even the United Nations gave its imprimatur to the conference: UN Secretary-General António Guterres delivered a video statement as well.
At the two-day meeting, the attendees agreed that Ukraine should eventually be given membership in the European Union. The country had already been granted EU candidate status just two weeks before, at a June summit in Brussels.
At the conclusion of the meeting, all governments and institutions present endorsed a joint statement called the Lugano Declaration. This declaration was supplemented by a “National Recovery Plan,” which was in turn prepared by a “National Recovery Council” established by the Ukrainian government.
This plan advocated for an array of neoliberal reforms, including “privatization of non critical enterprises” and “finalization of corporatization of SOEs” (state-owned enterprises) – identifying as an example the selling off of Ukraine’s state-owned nuclear energy company EnergoAtom.
In order to “attract private capital into banking system,” the proposal likewise called for the “privatization of SOBs” (state-owned banks).
Seeking to increase “private investment and boost nationwide entrepreneurship,” the National Recovery Plan urged significant “deregulation” and proposed the creation of “‘catalyst projects’ to unlock private investment into priority sectors.”
In an explicit call for slashing labor protections, the document attacked the remaining pro-worker laws in Ukraine, some of which are a holdover of the Soviet era.
The National Recovery Plan complained of “outdated labor legislation leading to complicated hiring and firing process, regulation of overtime, etc.” As an example of this supposed “outdated labor legislation,” the Western-backed plan lamented that workers in Ukraine with one year of experience are granted a nine-week “notice period for redundancy dismissal,” compared to just four weeks in Poland and South Korea.
Neoliberal economic reforms proposed in Ukraine’s National Recovery Plan
In the same vein, the National Recovery Plan urged Ukraine to cut taxes on corporations and wealthy capitalists.
The blueprint complained that 40 percent of Ukraine’s GDP comes from tax revenue, calling this a “rather high tax burden” compared to its model example of South Korea. It thus called to “transform tax service,” and “review potential for decreasing the share of tax revenue in GDP.”
In short, the Ukraine Recovery Conference’s economic proposal was little more than a repackaged Washington Consensus: a typical right-wing program that involves implementing mass privatizations, deregulating industries, gutting labor protections, cutting taxes on the rich, and putting the burden on Ukrainian workers.
In the 1990s, following the overthrow of the Soviet Union, the United States imposed what it called capitalist “shock therapy” on Russia and other former constituent republics.
A 2001 UNICEF study found that these harsh neoliberal reforms in Russia caused 3.2 million excess deaths, and pushed 18 million children into poverty, bringing about rampant malnutrition and public health crises.
Washington and Brussels appear committed to return to this very same neoliberal shock therapy in their plans for post-war Ukraine.
More Calls for Neoliberal Shock Therapy in Post-war Ukraine
To accompany its July 2022 meeting in Switzerland, the Ukraine Recovery Conference published a “strategic briefing” compiled by a right-wing Ukrainian organization called the Center of Economic Recovery.
The Center of Economic Recovery describes itself as a “platform that unites experts, think tanks, business, the public and government officials for the development of the country’s economy.” On its website, it lists many Ukrainian corporations as its partners and funders, making it clear that it acts as lobby on their behalf, like a chamber of commerce.
The report that this corporate lobby wrote for the Ukraine Recovery Conference was even more explicit than the National Recovery Plan in its advocacy of aggressive neoliberal economic reforms.
Using right-wing libertarian language of “economic freedom,” the document urged to “reduce government size” and “open markets.”
Its proposal read as neoliberal boilerplate: “decrease the regulatory burden on businesses” by “reducing the size of the government (tax administration, privatization; digitalization of public services), improving regulatory efficiency (deregulation), and opening markets (liberalization of capital markets; investment freedom).”
In the name of “EU integration and access to markets,” it likewise proposed “removal of tariffs and non-tariff non-technical barriers for all Ukrainian goods,” while simultaneously calling to “facilitate FDI [foreign direct investment] attraction to bring the largest international companies to Ukraine,” with “special investment incentives” for foreign corporations.
It was essentially a call for Ukraine to surrender its economic sovereignty to Western capital.
Both the National Recovery Plan and the strategic briefing also heavily emphasized the need for robust anti-corruption efforts in Ukraine.
Neither document acknowledged that fact that Kiev’s Western-backed leader Volodmyr Zelensky, who spoke at the Ukraine Recovery Conference, is known to have large amounts of wealth hidden in a network of offshare accounts.
Even More Calls for Liberalization, Privatizations, Deregulation, Tax Cuts
In addition to the National Recovery Plan and the strategic briefing, the July 2022 Ukraine Recovery Conference presented a report prepared by the company Economist Impact, a corporate consulting firm that is part of The Economist Group.
This third document, titled “Ukraine Reform Tracker,” was funded by the Swiss government with the stated “aim of stimulating and supporting discussion on this matter at the 2022 Ukraine Recovery Conference.”
The Ukraine Reform Tracker analyzed the neoliberal policies already imposed in Ukraine since the U.S.-backed 2014 coup, and urged for even more aggressive neoliberal reforms to be implemented when the war ends.
Of the three reports presented at the conference, this was perhaps the most full-throated call for Ukraine to adopt neoliberal shock therapy after the war – a tactic often referred to as disaster capitalism.
Quoting the Economist Intelligence Unit (EIU), the document insisted that Ukraine has “issues in deregulation and competition that still need to be addressed, such as ongoing state intervention” – depicting state intervention in the economy as something inherently bad.
In this vein, the Ukraine Reform Tracker pushed to “increase foreign direct investments” by international corporations, not invest resources in social programs for the Ukrainian people.
The report emphasized the importance of developing the financial sector and called for “removing excessive regulations” and tariffs.
“Deregulation and tax simplification has been further deepened,” it wrote approvingly, adding, “Steps towards deregulation and the simplification of the tax system are examples of measures which not only withstood the blow of the war but have been accelerated by it.”
The Ukraine Reform Tracker praised the central bank for “successfully liberalising the currency, floating the exchange rate.” While it noted some of these policies were reversed due to the Russian invasion, the report urged “the swiftest possible elimination of currency controls,” in order to “reinstate competitiveness within the financial sector.”
The report however complained that these neoliberal reforms are not being implemented quickly enough, writing, “Privatisation— which already progressed slowly before the war—stalled, with a draft law aiming to simplify the process rejected” by the Verkhovna Rada, Ukraine’s parliament.
It called for further “liberalising agriculture” to “attract foreign investment and encourage domestic entrepreneurship,” as well as “procedural simplifications,” to “make it easier for small and medium enterprises” to “expand by purchasing and investing in state-owned assets,” thereby “making it easier for foreign investors to enter the market post-conflict.”
“Further pursuing the privatisation of large and loss-making state-owned enterprises” will “allow more Ukrainian entrepreneurs to enter the market and thrive there in the post-war context,” the report urged.
The Economist Impact study stressed the importance of Ukraine cutting its trade with Russia and instead integrating its economy with Europe.
“Ukraine’s trade reforms centre on efforts to diversify its trade operations and enhance its integration into the EU market,” it wrote.
The Western government-sponsored report boasted of significantly reducing Kiev’s economic ties to its eastern neighbor, noting: “Russia was Ukraine’s main trading partner in 2014, capturing 18.2 percent of its exports and providing 22 percent of its imports. Since then, however, Russia’s share of Ukraine’s exports and imports has decreased consistently, reaching 4.9 percent and 8.4 percent in 2021, respectively.”
“Ukraine made particular progress in diversifying its trade portfolio within the EU, raising its trade volumes with member states by 46.2 percent from 2015 to 2019,” it added.
The report added that it is “essential” that Ukraine carry out other reforms, such as modifying its railways by “aligning the rail gauges with EU standards.”
The Ukraine Recovery Conference in Lugano, Switzerland on July 5, 2022
The Ukraine Reform Tracker presented the war as an opportunity to impose even more disaster capitalist policies.
“The post-war moment may present an opportunity to complete the difficult land reform by extending the right to purchase agricultural land to legal entities, including foreign ones,” the report stated.
“Opening the path for international capital to flow into Ukrainian agriculture will likely boost productivity across the sector, increasing its competitiveness in the EU market,” it added.
The document proposed new ways for exploiting Ukrainian labor in specific industries, “especially pharmaceutical and electrical production, plastic and rubber manufacturing, furniture, textiles, and food and agricultural products.”
“Once the war is over, the government will also need to consider substantially lowering the share of stateowned banks, with the privatisation of Privatbank, the country’s largest lender, and Oshchadbank, a large processor of pensions and social payments,” it insisted.
The Ukraine Reform Tracker concluded optimistically, stating that that “post-war moment will be an opportunity for Ukraine,” and “there is likely to be significant pressure to continue and speed up the implementation of the reform agenda. Continued business reforms could allow Ukraine to further deregulate [and] privatise lossmaking SOEs.”
While Pushing Disaster Capitalism, the Ukraine Recovery Conference Exploits ‘Social Justice’ Rhetoric
While these three documents published by the 2022 Ukraine Reform Conference (URC) were vociferous calls for the imposition of right-wing economic policies, they were accompanied by superficial appeals to social justice rhetoric.
The URC released a set of seven “Lugano Principles” that it identified as the keys to a just, equitable post-war reconstruction:
partnership
reform focus
transparency, accountability, and rule of law
democratic participation
multi-stakeholder engagement
gender equality and inclusion
(environmental) sustainability
These principles demonstrate the ways that hawks in Washington and Brussels have increasingly weaponized ideas about “intersectionality” to advance their belligerent foreign policy.
In his report “Woke Imperium: The Coming Confluence Between Social Justice and Neoconservatism,” former U.S. State Department officer Christopher Mott discussed the growing use of left-liberal social-justice talking points to legitimize and enforce Western imperialism.
Mott observed that the “liberal Atlanticist tendency to push moralism and social engineering globally has immense potential to create backlash.”
Western-backed liberals in post-socialist Europe have spent three decades creating a false dichotomy between either a liberalizing cultural project that can only be realized under U.S.-led trans-Atlantic hegemony and neoliberal economic reforms, or a purely fictional socialist past whose political legacy is somehow reflected in right-wing anti-communist nationalist parties attempting to roll back advances that women had achieved under socialism.
Despite its patent absurdity, this narrative has won adherents among younger liberal intellectuals, especially in Central and Eastern Europe, who have little or no memory of the socialist period, and who face increasingly desperate career prospects outside of the Western-backed ideological apparatus.
On the other hand, right-wing nationalists like Hungary’s Viktor Orban posture as the only defenders of their countries’ cultural sovereignty against hostile outsiders, while also refusing to break from neoliberal capitalist orthodoxy.
In turn, organic local activists struggling for legitimate social justice causes find themselves portrayed as agents furthering the agendas of foreign powers.
At best, during peacetime, this undermines their work and hinders progress for their causes. In a country like Ukraine, where Western governments have supportedfar-right, neo-fascist groups and eight years dragging out a civil war, this is life-threatening.
In Ukraine, What’s Even Left to Loot?
On May 9, 2022, the U.S. Congress passed the Ukraine Democracy Defense Lend-Lease Act, greatly expanding Washington’s authority to provide military aid to Ukraine.
Lend-lease provisions originated during World War II and were used by the U.S. government to provide military aid to countries fighting Nazi Germany, including Britain and the Soviet Union, without formally entering the war.
Under this framework, the United States provides military equipment as a loan; if the equipment is not or cannot be returned, recipient governments are on the hook to pay back the full cost.
The Joe Biden administration explained its use of lend-lease by the need to quickly move the bill through Congress before other funding ran out.
While many North Americans protested what they saw as a pointless giveaway of tens of billions of taxpayer dollars to a foreign country, lend-lease provisions are loans, not grants.
Britain, one of the United States’ closest allies, only finished paying back its 60-year-old lend-lease debt in 2006. Russia settled its former Soviet obligations the same year.
Given this historical precedent, Ukraine will likely be saddled with debts it can’t readily pay back—debts extended to corrupt Western-backed elites under wartime duress. This means U.S. financial institutions will have further collateral to impose neoliberal structural adjustment policies on Ukraine, subordinating its economy for years to come.
Washington and its allies have a long history of instrumentalizing debt to force countries to accept unpopular pro-Western policy changes, and difficulties of repayment often compel countries to accept even more debt, leading to debt trap cycles that are extremely difficult to escape.
It was in fact the International Monetary Fund, and specifically the refusal of Ukraine’s democratically elected President Viktor Yanukovych to accept IMF demands that he cut wages, slash social spending, and end gas subsidies in order to integrate with the EU, which led him to turn instead to Russia for an alternative economic agreement, thus setting the stage for the Western-backed “Euromaidan protests” and eventually the 2014 coup.
Meanwhile, in the current war, Moscow and Russian-backed separatist fighters are occupying and may annex what were historically the most industrialized regions of Ukraine, located in the east.
At the same time, much of what remained of the country’s pre-war industrial base has been physically destroyed by the war. And these same regions hold much of Ukraine’s energy resources, notably coal.
Millions of Ukrainians have already emigrated and are unlikely to return, especially if they are able to access work visas in the EU. Young and educated people with technical skills are the least likely to stay.
The situation is even bleaker when one considers that, well before Russia’s February invasion, Ukraine was already the poorest country in Europe.
While Soviet Ukraine had thrived as a center of the USSR’s heavy industry, and a source for much of Soviet political leadership, post-Soviet Ukraine has been a playground for rival elites supported by the West or by Russia.
Post-Soviet Ukraine has been devastated by persistent economic crises and rampant and systematic corruption. It has consistently had smaller incomes and a lower standard of living even compared to neighboring post-socialist countries, including Russia.
Ukraine has not been able to restore the size of the economy it had in 1990, when it was still part of the Soviet Union. And looking beyond raw GDP data, the quality of life for many Ukrainian workers and their access to social services has significantly declined.
With limited financial means to provide for basic state functions, much less to repay foreign debts, a post-war Ukraine could be forced to accept humiliating and dangerous concessions in other spheres—serving, say, as an Israel-style trying ground for weapons testing, or hosting Kosovo-style black sites for U.S. covert operations, or providing Western businesses a Chile-style no-regulation environment for tax evasion and criminal activities—all while gutting what little remains of its domestic welfare state and labor protections.
Yet instead of advocating for a diplomatic solution to the war, which could help the Ukrainian government and people concentrate their resources on economic recovery, Western governments have adamantly opposed proposed peace talks, insisting, in the words of EU foreign policy chief Josep Borrell, “This war will be won on the battlefield.”
Washington and Brussels are sacrificing Ukraine for their geopolitical interests. And their Ukraine Recovery Conference shows they expect to keep benefiting economically even after the war ends.
1. This war will be won on the battlefield. Additional €500 million from the #EPF are underway. Weapon deliveries will be tailored to Ukrainian needs. pic.twitter.com/Jgr61t9FfW
— Josep Borrell Fontelles (@JosepBorrellF) April 9, 2022
