We Fucked the Ukraine. Here’s why:

The crisis with Russia and the Ukraine reveals we clearly haven’t learned from recent history. Firstly, the west in general is imposing the same sanctions and economic restriction as it has before - rarely with success. Secondly, the IMF is doing the same old shit and expecting different results. And the outcome is a Ukraine that we have failed in every way.
There’s a clear conflict in the past that illustrates my first point. During the NATO bombings of Serbia in the midst of the 90s Kosovo crisis, the west imposed sanctions, froze assets, and generally tried to impose economic costs upon Serbia - and Slobodan Milosevic. The reason this didn’t work is the same reason that it’s not working in Russia. The elite are too wealthy and too insulated from economic shocks to give a shit. And everyone else doesn’t have a say, so popular pressure is hardly going to influence decision making.

The basis of the wealth and power in Russia, as it was in Serbia, is monopoly power and exploitation of resources. This takes place through through a cadre of powerful families and groups holding the ‘commanding heights’ of the economy. In the event of a war, resources are scarce and the monopolies that these people hold are even more powerful. They control most of the remaining resources after all, and there’s opportunity to increase control. I daresay there’s some room for good old war profiteering too. So there’s hardly any direct pressure exerted on the decision makers, and the punishment is inflicted on citizens with no say, and little capacity to endure.

To be fair, with Ukraine people have been making noise about Russian citizens feeling the squeeze, risking having their assets seized or frozen and travel rights revoked. Certainly, if Putin pushes hard then some may push back. But these people are mostly small time, and their disquiet means little to Putin and those with real power. Besides, it’s also evident that he calculated well. He’s just about gotten away with it - annexing land (and crucial warm water ports) for some temporary economic hardship that he won’t even feel.

So we messed up helping the Ukraine in military and security terms. What about getting them back on their feet?

The IMF have agreed to give the Ukraine some loans to get things going again. Unfortunately, things are unlikely to restart if taxes are raised, minimum wage increases frozen, and a bunch of other demand-deflating requirements imposed. That’s what the conditions of the IMF loan are. As was experienced by countless South American, African and Asian countries in the past, such conditions rarely lead to development and stability. While the Ukraine is indebted, running deficits and the current outlook is poor, these reforms are likely to trade off every social good of growth for the dubious benefit of halting inflation and lowering deficits. A long term plan to get them on their feet is lacking.

In addition, these reforms represent a failure of the west to restore self determination to Ukraine. As well as denying them the security against general intervention by Russia, these IMF loans undermine their democratic principles and further dilute sovereignty. These conditions tie the hands of any government to act according to the people’s will, or to take meaningful control of their economy and develop and manage it as they see fit. These requirements leave them at the behest of international institutions, and the global economy with little recourse.

The end result of this is an unchastened Russia, emboldened by successful adventurism, and an embittered Ukraine. They have seen no help from either the Russians or the west, and have been weakened by the intervention of both - well meaning or not.

Tags: ukraine russia IR
This is the meal of sydney hipsters and changemakers. Any given lunch break, me and several other sydneysiders would whip out some bread and an avocado. Everything you need for satisfaction. 

This is the meal of sydney hipsters and changemakers. Any given lunch break, me and several other sydneysiders would whip out some bread and an avocado. Everything you need for satisfaction. 

(Source: socoldsowhat, via petrak)


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