Wednesday, March 18, 2015

The Neoliberal Neocon Lovechild


There I was on Sunday skimming the latest from the New York Times when my eyes alighted upon the headline Poland Steels for Battle, Seeing Echoes of Cold War in Ukraine Crisis accompanied by, what else, a picture of camouflaged women crawling on what appeared to be a soccer field. Curiosity about what my hitherto believed to be apathetic hosts were up to naturally drew me in. Now, living in Poland has accustomed me to western exaggeration about my adopted country along with the natives inability to think rationally any time the word Russia is mentioned. History has scarred the land and imagination every bit as badly as religion and in fact created what the Times once called the Smolensk Religion which propagates the belief that the Russians assassinated Polish President Kaczyński along with 96 others on their way to mark the anniversary of the Katyń massacre. Anyway, the article had me chortling at its transparent cheerleading for war, just another Times propaganda piece pushing for armed conflict a la Iraq 2003, when my snickering was stifled by the sobering reality of this passage:
On Tuesday, Prime Minister Ewa Kopacz changed the law on who can be called up for service in case of “military maneuvers.” Previously, the armed forces could summon only current and former reservists, those with actual military training. Now, if necessary, they can call on almost any man in the country.
Wait. What? We've got a female prime minister? Ok, I knew that, but I didn't know she could call me up tomorrow to go running around the forest with a bunch of wannabe Rambos. Clearly the Anne Applebaums, Tom Friedmans and whoever the Polish version of a pro-war journalist is have pushed us too far, frogmarching us into another conflict. I've been reticent to comment on the situation in Ukraine for many reasons. First and foremost is how difficult it seems to get any reliable information, regardless of where you are. While back in Canada last summer I was treated to a constant Ukrainian-voter friendly barrage of tough talking politicians pandering to the public's bloodlust and the resultant steady stream of questions from friends and relatives concerned about my safety. Strangely, proximity to the happenings doesn't seem to help and in fact may hinder the truth from surfacing. While there's not a Russian or 'western' source I trust, the situation here in Poland is even worse. Despite Poles geographical contiguity to the festivities, there's nary a soul I've spoken to over the past year here with any idea of what's going on beyond the knee-jerk Putin is bad reaction. That's not to say that I've got it all sussed out, but let's just say I've reserved judgement on putting the good guy/bad guy labels anywhere.

Wait, check that, I do have a clue where to start at least, and as is so often the case, the clue comes from a headline from last week that's just a little bit off:

Ukraine to receive $17.5bn from IMF to save economy

Um, yeah, right. Here, let me try:

Ukraine to receive $17.5bn from IMF to enslave economy

There, fixed it. Just three letters short of the truth, a lot better than normal at least. It's amazing that even complex stories can be simplified if you just follow the money. If the press just spent a fraction of the time focusing on who stands to gain and lose financially as they do speculating about just how demonic/autistic/autocratic/narcissistic Vladimir Putin is, they'd begin to fulfil their role as a check on power. Of course if they did that they might also have to remind their flock why things kicked off in Kiev almost 16 months ago which might lead to uncomfortable questions taking shape in people's minds, so best to nip that in the bud.
"The struggle of man against power is the struggle of memory against forgetting"
- Milan Kundera The Book of Laughter and Forgetting
November 21, 2013, then Ukrainian president Viktor Yanukovych's cabinet announced they wouldn't be signing an EU association agreement the following week in Lithuania. That's about the last fact that we know; pretty much everything else, from the reasons for the decision to the repercussions of it, are subject to debate. That being the case, wouldn't it seem natural to want to know something about the agreement? Yet, little was said beyond that not signing represented a move away from Europe towards Russia; true to a point, but misleading in more ways than one. Most obviously, the agreement didn't mean EU ascension, but instead a vague future possibility and came with a number of strings attached ranging from the release of Julia Tymoshenko to a slew of austerity demands such as budget cuts and a 40% increase in natural gas bills. It also tied Ukraine to accepting, wait for it, an IMF loan worth $17 billion that didn't look quite as alluring to Yanukovych, probably both personally and for the nation, as a $15 billion gift from Russia that came with a 33% discount on natural gas. Yes, we in the west spend billions bailing out banks and then lending money to indebted countries to keep up their interest payments to those same banks, but can't lend a hand to start a real democracy. Just as debt peonage works to enslave students entering adulthood so it does for nations in that it manufactures consent by engendering conformity and enforcing compliance.

(Un)fortunately, one of the first moves of the newly installed government following the unconstitutional coup last February was the signing of the once rejected deal allowing us a closer look at what else was inside the loan agreement. Despite decades of debacles, and dozens of disasters, the IMF prescription for reform demanded in exchange for loans remains the dreaded structural adjustment program. A few highlights of the neoliberal nightmare visited upon Ukraine: raising excise and property taxes, reducing social income support expenditures for retirees and public employees, freezing minimum wage, and cutting public-sector wages; increasing natural gas and heating tariffs for consumers by 56 percent and 40 percent in 2014, respectively, and by 20 to 40 percent annually from 2015 to 2017 while cutting gas subsidies over two years. At the same time, as gas prices increase sharply, gas subsidies to end users will be completely ended over the next two year at a time when Russia was ceasing gas supplies as a result of a payment dispute; oh, and implementing a floating exchange rate for its national currency, the hryvnia, making it increasingly difficult to serve their dollar-denominated loans.

(Un)surprisingly, everything has gone according to script. A world of pain for the poor and elderly has paid for a bonanza for the oligarchs and western puppeteers. The currency has tanked (the hryvnia lost half its value in February alone), inflation has reached 272% while the economy has sharply contracted (down 15.2% year on year) at a time when war expenses are further draining the coffers. Less than a year on from the original loan, a new one was needed and approved last Wednesday but even IMF official admit it's not for Ukraine but the banks, as the bulk of the money is heading out the door to foreign lenders fast: $5 billion likely by the end of this week and another $5 billion in coming months. The Ukrainian oligarch-controlled banks will also syphon off about $4 billion so they can keep financing the war in the east. Even more contumelious, the IMF's own statutes prohibit lending to countries that don't have the ability to repay as that would be, you know, evil. One can only admire the audacity to pull of such a stunt, especially with Greece fresh in our minds, seems evil really is as evil does, again and again and again. Worse, they're also prohibited from giving money to nations at war. Makes sense, seems you wouldn't want to be remembered by history as having financed a government unleashing Nazi storm troopers on a European population, right? Nevertheless, once again the economic hitmen have done there job:

"The substitution of the unconscious action of crowds for the conscious activity of individuals is one of the principal characteristics of the present age."
- Gustave Le Bon The Crowd: A Study of the Popular Mind
While everyone was arguing about who was responsible for the sniper fire in Kiev that turned Maiden into a masacre, who shot down Flight MH17, whether or not Russia was justified in annexing Crimea and who killed Nemtsov, Ukraine gave up its sovereignty. We can debate how much of a role US Secretary of State for European and Eurasian Affairs Victoria 'Fuck the EU' Nuland (neocon wife of neocon Robert Kagan) and her $5 billion played in fomenting the Maiden protests enabling her to put her man Yats (Arseniy Yatsenyuk) in the prime minister's office, or how much money George "give Ukraine $50 billion so I can have some" Soros and Pierre Omidyar pumped into USAID to help bring about regime change. Or, instead we could just notice how quickly the vice-president of the United States' son, Hunter Biden, was named to the board of Ukraine's largest private gas producer, Burisma Holdings, following the inauguration of the chocolate king, Petro Poroshenko, as Ukraine's president (weren't we supposed to disempower the oligarchs?). As long as there's shale gas to be fracked, you know the people's water table will be poisoned to profit American corporate interests.

We could spend our time arguing about how much of a role neo-nazis had in last year's coup, or better yet framing the openly white supremacist Ukrainian Azov battalion's use of the Wolfsangel symbol on their banner as "romantic" as the Washington Post does. That might explain away the Odessa massacre in which dozens of anti-Kiev protesters were burnt alive in a building set on fire by nationalists or clubbed to death when they jumped from windows. We could even wonder why former US presidential candidate and current senator John McCain met and stood alongside an openly pro-Nazi politician in December 2013. It's easier though to simply evaluate how well the new government has cleaned up the corruption that plagued the pro-Russian regime. President Poroshenko appointed former ING Bank Ukraine deputy head Valeriya Gontareva the National Bank (NBU) chief last June. As a respected member of the banking community, it was said she would inspire the confidence of the private sector and work closely with the IMF. Yet, according to charges brought against her in December, by August she was robbing the state by manipulating the currency. Ihor Bilous, another banker given the post of chief of the State Fiscal Service by the new government dove headlong into money laundering, bribery and corruption schemes from the get go. None if this makes for as good TV as corrupt presidential palaces though. Pity about all that Ukrainian gold.

Hypothesizing about why Prime Minister Arseniy Yatsenyuk would tell a German TV station that it was in fact the Soviet Union that invaded Germany in 1941 won't get us anywhere. Questioning Poland's deputy foreign minister, Grzegorz Schetyna's grasp on reality after crediting Ukrainians for liberating Auschwitz thus forgetting they only made up a part of the multinational Red Army history credits with the feat seems petty really. Poking the Russian bear is a spectator sport in these parts every bit as much as popular as ignoring the geopolitical reality that Frontline Ukraine author Richard Sakwa rightly calls a "fateful geographical paradox: that NATO exists to manage the risks created by its existence". Whether or not Bush the Elder promised Gorbachev that NATO wouldn't expand eastward following the dissolution of the USSR is irrelevant.

Actions speak louder than words and watching NATO swallow up 12 Eastern European countries in three rounds of enlargement would make any Russian leader nervous. Though portrayed as Putin's lapdog, Yanukovych extorted $45 billion from Russia to lease the Black Sea fleet bas in April 2010 causing Putin to exclaim "I would be willing to eat Yanukovych and his prime minister for that sort of money". Putin didn't even deign to meet him when he fled the Maiden protesters for Russia. It is in fact the Russian speaking public who voted for Yanukovych in 2010 in the contested east that Putin claims need protection, and many sources allege are the target of ethnic cleansing in order to guarantee a pro-western candidate wins the eventual next election in Ukraine. For those will to look beyond the tabloids and memes, much of the speculation surrounding Putin's 10-day public disappearing act concerned the powerful voices in the Kremlin who would like to see Russia take an active military role in Ukraine. Perhaps they're more sensitive to the sting of humiliation the west has heaped on the nation over the last 25 years, from the "shock therapy" pillaging of the economy to missile shields and NATO's promise of eventual membership to Ukraine in 2008. Yeah exactly what Russia fears about Ukraine's western pivot. Given the prospect of nuclear war, the old adage better the devil you know than the devil you don't seems more relevant than ever.

Stop me if you've heard this one, an American, a Lithuanian and a Georgian walk into a bar... No, it might sound like the set up for a joke, but it wouldn't be so funny if it were your country that had fast-tracked citizenship for the three in a bizarre ceremony making it legal to name them your Finance, Economy and Health ministers respectively just a few minutes later. The American, Natalie Jaresko, is a former US State Department official and investment banker with no experience with the convoluted Ukraine budget. Aivaras Abromavičius also unsurprisingly comes via the banking world with no previous experience while at least Aleksander Kvatashvili served in the same post in Tblisi, but unfortunately doesn't speak Ukrainian forcing meetings to be held in Russian, embarrassing given the first thing the new government did was to target the language by repealing the minority languages law. If this didn't give anyone pause, maybe when Abromavičius immediately named former Estonian Jaanika Merilo as his advisor on foreign investments did. No? Well, how about knowing the first thing she did in her new post was to tweet the pics you see above to the right?

At least Abromavičius was forthright about his country being bankrupt, declaring about the budget "[t]o expect that we are going to produce real as opposed to declarative incentive programs is unrealistic." Translation: the new Ukrainian budget is nothing but a piece of paper with the numbers wanted from the IMF in order to qualify for the loan. Again, Greece anyone? Seems to me that it's a bit counterproductive to incentivize corruption while claiming that the regime change was necessary to root it out. Oh, by law dual citizenship is not permitted for Ukrainian government officials, except when it is for, say the aforementioned trio or the oligarch governor of the Dnepropetrovsk region, Ihor Kolomoyskyi, who has three. Suppose that's what make him such a great banker, or more likely it's the fact that his bank, PrivatBank, that will be the biggest beneficiary of the IMF loan so he can continue to fund his private army fighting in eastern Ukraine. Throw in a few former warlords turned MPs such as Yuri Beryoza, Andrei Levus, assault rifle wielding Igor Mosiychuk (here he is shooting at Chechen leader Ramzan Kadyrov's picture) and Dmytro Yarosh, who admitted to fondling a real hand grenade in his pocket while inside the Rada, and you might question if pulling Ukraine out of the Russian orbit has sure brought sunshine to the land.

Still no? Well, tell you what. We can ignore everything else except one word in one subsection of a single article in that EU agreement. Here's Article 404 (c);
promoting modern and sustainable agricultural production, respectful of the environment and of animal welfare, including extension of the use of organic production methods and the use of biotechnologies, inter alia through the implementation of best practices in those fields;
Yeah, I made it easy for you. Oh, c'mon, you can't think this whole mess was concocted just to plunder an economy that's soon to be half the size of the state of Indiana. Sure, a long term, low level war in eastern Ukraine is a bonanza for the military contractors' bottom lines on sales not just to the combatants but also the rest of the west who need to prepare for the sure to be coming Russian invasion, but it sure is hell isn't worth risking a nuclear confrontation. The wealth of Ukraine is in that rich black soil ideal for growing grains which has made it the world's third-largest exporter of cotton and the fifth-largest exporter of wheat, and according to a 2013 USDA forecast it is forecast to jump to the second biggest exporter in the world after the US having shipped over 30 million tonnes of grain out of the country last year.

Still, you might ask what's so nefarious about the word 'biotechnologies', after all, Ukraine, as the rest of the Europe, prohibits genetically modified crops. Selling the lie that GMO is the only answer to food security to a Rada full of parliamentarians inclined to listen to corporate interests shouldn't prove any more difficult than it was to convince them to open up selling land to foreign agribusinesses. Yes, that's right, as part of previous structural adjustment programs agreed to in exchange for debt, since 2002 over 1.6 million hectares of land have been snatched up by multinational companies since 2002. This includes over 405,000 hectares to a company listed in Luxembourg, 444,800 hectares to Cyprus-registered investors, 120,000 hectares to a French corporation, and 250,000 hectares to a Russian company. A now disputed deal brokered between China and Yanukovych prior to the political crisis granted Beijing control over some three million hectares of prime farmland in the east, an area about the size of Belgium or about five percent of Ukraine’s arable land. Something tells me something will overturn the deal and they'll be a willing American buyer waiting in the wings. I wonder who would be interested?

Though Monsanto's $140 million Ukrainian investment in 2013 was ostensibly for conventional seeds only, later that year six large Ukrainian agriculture associations happened to be pushing draft amendments for "creating, testing, transportation and use of GMOs" and the president of the Ukrainian Grain Association, Volodymyr Klymenko stated that "[w]e...have signed two letters to change the law on biosecurity, in which we proposed the legalization of the use of GM seeds". Strangely, both amendments mirrored the wording in the EU Association Agreement. Still not convinced a change is coming? Well, take a gander at this recent investor report regarding our old friend Monsanto which includes "The IMF and World Bank included a clause in their loan package to Ukraine to force the country to use GMOs as part of its loan package" as part of its recommendation to be long in Monsanto stocks. Oh, and I suppose that it was just a coincidence that Ukraine's US ambassador Olexander Motysk met with Brett D. Beggemann, Monsanto's President and COO on March 4th.
"There are only two peoples now. Russia is still barbarous, but it is great. The other young nation is America. The future is there between these two great worlds. Someday they will collide, and then we will see struggles of which the past can give no idea."
- Alexis de Tocqueville
While the neocons' rockets, missiles and bombs get all the headlines, it's the tender ministrations of the neoliberals that deserve the regime change accolades and therefore blame for the deformed offspring of the confluence of the two in Ukraine. Warmongers from Australia to Canada have taken the opportunity to portray themselves as tough guys, witness Prime Ministers Abbott and Harper's shirtfronting and confronting antics at last November's APEC meeting. In another reality they'd be called Abbott and Costello, playing both the court jesters and jousters to divert the public's attention from the goings on behind the curtain. The weapon of choice in this war is economic as round after round of sanctions against Russia prove. Yet, even here the true intent is murky as they serve the dual purpose of strangling both the Russian and European economies. For these latter 28 states, faced with the cost of breaking ties with an important trading partner, the Transatlantic Trade and Investment Partnership (TTIP) suddenly looks more appealing despite its decidedly anti-democratic nature. Meanwhile, the Russians have redoubled their push to implement and expand the Eurasian Economic Union in places like Egypt and even India.

So while the western and Russian propaganda machines have been working overtime to produce visceral fear to shut down our critical thinking, ironically usually involving casting the other as modern day Nazis. Putin's Crimea gambit to protect ethnic Russians is compared to that of Hitler's justification for annexing the Sudentland while the New York Times hides the fact that a few Ukrainian battalions, er, actually are on a crusade against what they see as the Semite-led Untermenschen. Yeah, that's right, I did it, I compared apples to oranges, but unless enough people wake up to the reality of what's happening 1,500 km to my east, the neoliberals could accidentally lead the neocons into a war that I'll have to take part in. Hopefully cooler heads will prevail to save my tail, either by imagining a Cuban Missile Crisis in reverse or remembering how many times we've been hoodwinked into war, but what of the Ukrainians caught in a geoeconopolitical tug of war? Strangely, banging the war drum so fervently last week, this time for war on Iran, the neocons themselves may have offered a ray of hope for Ukraine as they reminded the world that no deal is ever etched in stone.