Believe it or not, the aggression that millions of Ukrainians are currently suffering from is unlikely to be the end of their suffering. That’s because of the strife that has been going on for the past few months over the potential business bonanza seen in the country’s post-war reconstruction.
Last November, Ukrainian President Volodymyr Zelenskiy announced that the company’s Financial Market Advisory Board (FMA), a special consulting unit set up to work with the government in crisis after the 2008 crash, would improve the Ukrainian economy. A memorandum of understanding was signed with BlackRock to see it advise the ministry. Draw a roadmap for post-war reconstruction. In BlackRock’s words, the agreement “aims to create opportunities for both public and private investors to participate in the future reconstruction and recovery of the Ukrainian economy.”
Ukrainian officials have been more outspoken, with a ministry press release saying it will “mainly attract private capital.” In a series of formal talks between the two countries, the president stressed that Ukraine must be “an attractive country for investors” and that “it is important to me that such a structure succeeds”. Did. for all parties involved. According to a statement from the president’s office, BlackRock said he had already advised the Ukrainian government for “several months” until the end of 2022 and was “directing investments to the most relevant and influential sectors of the Ukrainian economy.” ”.
The history of BlackRock FMA makes all this especially prescient.according to explore europe Diving into its activities in Europe, BlackRock is “a state adviser on privatization” and is “very busy countering attempts to tighten regulation” in Europe. Built on high mortgage securities, the 2008 financial crisis was used to expand its power and influence among political decision makers, followed by conflicts of interest and a revolving door clout march. left a mark. In the U.S., it has been particularly controversial for running the Federal Reserve’s pandemic-era bond-buying program, nearly half of which ended up being purchased with BlackRock’s own funds.
Ukraine is already open for investment. Last December, months into talks between Kyiv and BlackRock, the Ukrainian parliament overcame stalled pre-war property-developer-backed legislation to deregulate urban planning laws, Relaxed regulations of the City Planning Act. Demolition of historic sites. This comes on top of parliament’s earlier assault on Soviet-era labor laws, legalizing zero-hour contracts, weakening union power and stripping his 70% of the workforce of labor protection. That particular change was advised by the British Foreign Office under Boris Johnson, not by BlackRock, and promoted by Zelensky’s party… for employee self-fulfillment. ”
“The steps towards deregulation and tax simplification are examples of measures that have not only withstood the blows of war, but were accelerated by it.” economist The country’s 2022 Reform Tracker has been released. With “national and international audiences committed to the recovery and development of Ukraine”, reforms are likely to accelerate in the hope of further deregulation after the war, and “international capital will enter Ukrainian agriculture.” The key to success, he advised, was the need for further privatization of “deficit state-owned enterprises”, which would “pull down government spending.” The final goal of this privatization is to economist “It stalled because the war broke out,” he pointed out sharply.
nevertheless economist This was one of the top priorities of post-war Ukraine, so there was no need to worry. I attended a conference on reconstruction of Ukraine.
As the Conference on Economic Recovery policy brief made clear, the post-war Ukrainian state does not need BlackRock to pursue the kind of agenda Republican politicians dream of. reduction,” “efficiency of the tax system,” and “deregulation.” “further reducing the size of government” through privatization and other reforms, liberalizing capital markets and ensuring “investment freedom” (a euphemism for market “Creating a better and friendlier investment climate”. ”
The visions discussed by the attendees came straight out of Pete Buttigieg’s wildest fantasies. It’s a country as a start-up, a digital, business-friendly, eco-friendly country, but with his nine reactors built and supplied by US-based Westinghouse. It’s a model that reinforces Zelensky’s own vision of a “country in a smartphone” that he put forward three years ago.
This is a familiar story when it comes to countries in crisis that have come to rely on the financial assistance of Western governments and institutions. The funds they desperately need often come with some uncomfortable terms attached. These come in the form of mandatory reforms that dismantle the state’s involvement in the economy and open the country’s markets to foreign capital, furthering the poverty and suffering of its citizens. This was happening in Ukraine long before the invasion. The International Monetary Fund and Western officials like then-U.S. Vice President Joe Biden urged the government to cut gas subsidies to Ukrainian households, privatize thousands of state-owned enterprises, and impose a long-standing moratorium on farmland sales. Zelensky has done this last item under financial pressure from the pandemic.
Ukrainians’ freedom to determine their own destiny is under attack by Moscow’s colonial-style land grab. Unfortunately, as the Western legions of investors prepare to invade, it seems likely that the end of the war will bring renewed attacks from the other direction.