Nearly a year ago now, this press published a pamphlet describing the inter-imperialist character of the Russo-NATO conflict in Ukraine. Today, the war continues to rage on, sacrificing thousands of lives for the profits of despicable oligarchs. That’s what this war is about, and that’s what I argued in that pamphlet: Understanding the primary antagonists’ financial imperatives is necessary to understand the war. On one side, if Russia were truly motivated by national security, denazification, or protecting the sovereignty of the Donbass republics, they would not have launched a costly invasion of Ukraine, but rather would have defended the border while launching strikes on exclusively military targets. The cost of a prolonged, aggressive struggle on the people they claim to be their historical brethren is hardly justifiable by these explanations alone; there must be other incentives (i.e., profits) to be garnered by engaging in such a war. As for the American Empire and the rest of the Western imperialist cartel, I laid out the history of the exploitation of Ukrainian land since the collapse of the Soviet Union, but the broader motivations for not only promoting but prolonging the war was left incomplete. How, exactly, does the West benefit from this war? Since then, new activity has come to light which will help elucidate exactly this.
Collusion, Corruption, and Extortion:
In that same pamphlet, I argued that the Ukrainian government is a semi-colonial, comprador state, which is to say that its government sells out its own people to foreign imperialists for the personal gain of state officials. To justify this, I pointed to several reforms that were made to facilitate the dispossession of Ukraine’s farmers at the behest of the IMF and against the wishes of the majority of the country. But again — this was prior to the war. How does war itself create opportunity for profit? One way is “disaster capitalism,” where a crisis in a locale causes the price of its resources to drop. Normally, an unstable environment is unattractive to investors, but when a crisis is acute, when there is an expectation that the price will rise after reconstruction, then foreign vultures are apt to jump to the “rescue.” Predatory investors dispossess the locals only to turn around and flip their assets.
And this is precisely what happened earlier this May, when American and British firms leveraged their connections in the Ukrainian government to steal the assets of several Ukrainian firms. According to Julia Kiryanova, the CEO of Smart Holding, one of Ukraine’s largest investment firms, her and other’s businesses have been hit with “dubious criminal charges” and were added to “Ukraine’s list of sanctioned companies by the Security Service of Ukraine (SBU) on highly vague national security grounds.” Ostensibly, the firms were sanctioned for having ties to Russia, and yet they had not done any business with Russia since 2014. “Coincidentally,” these same firms had been approached by Western businesses who had promised that they could have their sanctions lifted… If they agreed to sell their companies for a pittance of what they were really worth:
“This was followed by a series of police raids at our head office and our subsidiaries,” Kiryanova explained. Ukraine’s security services seized $96 million in assets, and the deeds to 40 companies and 30 natural gas wells… Yet, hours before the raids, the company [Smart Holding] was approached with a fire-sale buyout offer for its natural gas interests from foreign investors — British and American — who have no history in the energy sector. They said they’d face no problems, as “they would be able to resolve any issues with the office of Ukraine’s President.” The offer — a third of what the businesses are worth — was declined.
Sanctions cause rising business fears in Ukraine, May 2023.
Various other companies and investigators have attempted to get an explanation from Ukrainian authorities, and yet no formal communications have been received, suggesting that the government agents responsible are acting with the tacit consent of the state even while it is supposedly waging a struggle against corruption. Even without a formal explanation, the situation is clear: Western imperialists used their connections with Ukrainian compradors to extort the country’s businesses and to plunder their resources.
Without the ongoing war or some other crisis, this kind of brazen collusion likely could not have happened. In a period of conflict, however, calling attention to corruption can leave one open to retaliation and accusations of “endangering the war effort.” The media and international community have essentially given the Ukrainian state a blank check to repress anyone who gets in their way, whether rival political parties, churches of the wrong denomination, or capitalists who refuse to fall in line with the comprador’s cannibalistic agenda. Even here in America, criticizing the Ukrainian government can get you accused of supporting Russia’s invasion, as if the collusion between Western and Ukrainian oligarchs are not also threatening the lives and wellbeing of Ukrainian citizens!
US Aid: Who Is Benefiting?
Of course, this collusion doesn’t just end with the private sector: Western governments got in on the action directly. For example, where exactly is American tax money going in Ukraine? Weapons of course, but not only weapons: some of it is straight money that goes into Ukraine’s treasury — nearly half of the government’s budget is coming from Western aid — and some of it is investment in “economic recovery.” There is a portion of that money which Ukraine pays back out again to Western firms to help “rebuild.” That amount is a direct transfer from the tax-paying population of the U.S. to the private U.S. firms reaping the benefits.
According to Holly Williams’s report on 60 Minutes:
Russia’s invasion shrank Ukraine’s economy by about a third. We were surprised to find that to keep it afloat the U.S. government is subsidizing small businesses… In total, America’s pumped nearly $25 billion of non-military aid into Ukraine’s economy since the invasion began — and you can see it working at the bustling farmers market on John McCain Street in central Kyiv.
What U.S. taxpayers are getting for their money in Ukraine, September 2023
The purpose of this aid is alleged to be supporting Ukraine’s economic self-sufficiency, yet, in truth, it’s only pushing Ukraine further into dependence on Western capital. The agency responsible, USAID, is, after all, run by the Department of Defense and the State Department. It’s not a charity, it is an instrument of the empire.
USAID claims that it is concerned with unemployment and hunger and the ability of the Ukrainian government to become self-sustaining. If we were to take them at their word, they would be one of the most inept international organizations ever to step on the world stage, unless becoming self-sufficient really means continuing to provide cheap commodities to the world market. That is, while the U.S. government arms Ukraine to keep fighting their battles with Russia, the NATO alliance still expects its private firms to profit from Ukraine’s agriculture. This much is said about as explicitly as can be expected in a press release conspicuously titled “The United States Provides Additional $250 Million to Help Ukraine Continue Feeding the World”:
Ukraine’s agricultural products and grain are critical for the world’s food supply and key to the country’s economic recovery and future prosperity. USAID, through AGRI-Ukraine, will continue to help Ukraine’s farmers produce, store, and export agricultural products and grain to the world. To date, USAID has leveraged $250 million in private sector contributions in support of AGRI-Ukraine… USAID is supporting infrastructure investments that will increase the rate of loading and unloading in Danube ports, and enhancing western border checkpoints and rail lines to expedite and facilitate trade, decreasing export costs for farmers (emphasis added).
The United States Provides Additional $250 Million to Help Ukraine Continue Feeding the World. July, 2023
All this is buried in language about “economic recovery” and “prosperity,” but the emphasis on exports makes it quite clear whose prosperity is really under consideration: Western consumers and imperialist profiteers. And these “infrastructure” investments are not even a public service, but the private property of monolithic agribusiness firms. Three in particular have received USAID funding to increase their export capacity: Kernel (363,000 ha), Grain Alliance (57,000 ha), and Nibulon (76,500 ha). If you read the previous pamphlet, Kernel should jump out because it’s the largest holder of Ukrainian land based in Luxembourg, and because it is also indebted to the European Bank of Reconstruction and Development (EBRD), which functions like the IMF but confined to the former Eastern Bloc. It’s also owned by Andriy Verevskyi, an infamous Ukrainian oligarch who is a former member of parliament and current fellow of the Agrarian Policy and Land Relations Committee. These three companies are ranked among the top 100 largest “latifundists” in Ukraine — hardly a “charitable” contribution!
Indebted to Europe
By far, the United States has contributed the largest single share of “aid” to Ukraine, but what about the rest of the Western powers? For one, most of the aid delivered by the European powers has been financial, rather than arms. And unlike the American financial aid, which was delivered in the form of grants, the majority of European capital, about 55 billion Euro in total, are loans.
As stated earlier, the American grants were given to giant agribusiness firms in order to increase their capacity to export their commodities to the world market. The loans provided by the European powers, however, are more straightforwardly about collecting on the debt.
The debt racked up by Ukraine has been a tremendous issue, because, as you’d expect, they’re unable to repay it in the middle of a war — yet they can’t afford to reject the predatory imperialist loans. A year ago, Ukraine, while hoping for their debt to be forgiven, was forced to beg for their debt repayment to be restructured; “magnanimously,” they were given a two-year freeze on paying back $20 billion of their debt. According to Reuters, “BlackRock Inc (BLK.N), Fidelity International, Amia Capital and Gemsstock Ltd are among the biggest holders of Ukraine’s debt… Kyiv had appointed JPMorgan as sole solicitation agent.” Worse still, additional conditions on the debt will make it more difficult — not less — if and when the Ukrainian economy begins to recover. According to Dr. Elliot Dolan-Evans, a professor of political-economy:
Most of Ukraine’s debt is denominated in US dollars (60%) or euros (24%), [so] spiralling Ukrainian inflation ensures that debts are harder to repay. Second, in addition to approximately $25bn (£21bn) in bond commitments, Ukraine has outstanding ‘GDP-linked’ obligations to creditors of $3.2bn (£2.7bn). These instruments ensure that Ukraine will pay investors an increasing amount as post-conflict reconstruction increases GDP, as repayments on these obligations are tied to GDP growth (emphasis added).
Ukraine’s debts to Western banks are destroying its social safety net, November 2022.
Forced into debt servitude to neoliberal creditors, Ukraine has been strong-armed into destroying its social safety net and demolishing labor protections while workers need strong benefits more than ever. Dr. Dolan-Evans continues:
“[The Ukrainian] parliament recently passed legislation that curtails trade union representation, [which] makes it possible to remove Ukrainian workers from national labour law protections, and allows firms to suspend employees arbitrarily. This new law — which… the UK government secretly supported — was originally submitted by the Zelenskyi government in 2021, but only passed under wartime conditions. This is despite about 40% of Ukrainians losing their jobs since the invasion began, and Ukrainian businesses slashing nominal wages.
The government is also planning to merge its social insurance fund with its state pension fund, firing personnel, cutting state expenditure and reducing benefits in the process — even though millions of Ukrainians asked for social assistance when Russia invaded, and the pension fund provides a lifeline for the country’s elderly. Even the government itself estimates that 60% to 80% of Ukrainians may end up below the poverty line.”
Once again, the supposed aid provided to Ukraine is not charity, nor is it building up their self-sustainability. It’s hollowing out their institutions and restructuring their economy to serve the needs of Western consumers while imperialists rake in the profit. With Ukraine understandably preoccupied with their Eastern front, one can’t help but wonder whether more damage is being done by their Western front.
Military “Circle Exchange” Schemes
Though most of the European aid is financial, some of it is also arms, albeit through peculiar “Ringtausch” (circle exchange) agreements. In essence, one country provides arms to Ukraine while receiving replacement weapons from a different country. In one exchange, for example, Slovakia provided Ukraine with 30 BMP-1 infantry fighting vehicles, while Germany reimbursed Slovakia with 15 Leopard 2A4 tanks. If, like me, you’re not familiar with military hardware, you should know that the BMP-1 is a piece of Soviet-era hardware. And that’s not unusual for these deals: each participating country is pawning off their outdated, Soviet-era hardware on Ukraine, and then receiving some shiny, new military tech from other Western governments. According to a report from the Kiel Institute for the World Economy, “We estimate that the total value of weapons sent to Ukraine as part of German ‘Ringtausch’ is between €82 and €127 million… while the total value of German replacements is estimated at €90 million.”
The exchanges accomplish two things. First, each country is able to dispose of unusable, excess capital that had accumulated in the form of weapons. By wasting resources, they’re able to forestall a crisis of overproduction. Second, the NATO bloc is thereby able to strengthen its peripheral militaries in preparation for a future conflict. From the surface, it appears like they’re donating weapons to Ukraine, when, in reality, they’re foisting their junk on Ukraine.
In some cases, the military hardware probably does do its job, outdated or not. But in at least one high profile case, it likely caused disaster. At the beginning of the year, a “Super Puma” helicopter infamously crashed into a kindergarten in Brovary, Ukraine, killing 14 and injuring 25. Horrifying footage released on social media showed fires spreading from the crash site. Investigations into the incident never confirmed the cause, though this particular model of helicopter, the EC225/H255, had previously been grounded after a design flaw was found to cause the rotor to completely detach from the craft. According to Airbus Group chief executive Tom Enders, the problem was so extensive that around 80% of the entire fleet had been grounded. So why, then, did France sell 55 of these helicopters to Ukraine in 2018? By then, the helicopter’s design flaws had been common knowledge for two years, so they must’ve known the risk, yet they chose to sell them to Ukraine all the same.
Conclusion
The ruling class of Ukraine and the United States have colluded to squeeze out all the blood, sweat, and tears that they can from Ukraine’s working class. Lives lost to war, livelihoods lost to neoliberal austerity, corporate espionage, unpayable debts — none of these things matter to those who claim to be acting in the defense of Ukraine. And perhaps this would be obvious if we stopped to consider the staggering difference in scale between American aid to Ukraine compared to other war-torn countries: what sets Ukraine apart is not that this war is especially heinous, or that Russia is a uniquely violent or dangerous power.
What set’s this war apart is the jackals in blue suits prowling Wall Street and executive suites of corporate towers throughout the U.S. looking greedily at the ruined Ukrainian economy for a time when they can swoop in and restore profitability. But that’s not all: Ukraine also occupies a particular strategic position in the world amidst the West’s pivot to the East. The American Empire is increasingly preoccupied with the People’s Republic of China and its growing bloc of oppositionists. This horrific war, NATO war planners have admitted, is a “cheap” way to ensure Russia ceases to grow on the world scale to prevent it from threatening U.S.-NATO interests.
Perhaps most importantly, from the eyes of the U.S. capitalist class, Europe is forced to align more and more closely with the U.S. at a time when the NATO alliance had begun to drift away from Washington’s orbit. As a result of the war, NATO countries have turned to U.S. liquid natural gas to meet demands that were previously met with Russian gas; the U.S. sabotage of pipelines and the sanctions on GAZPROM and other Russian state agencies have placed the Eurozone in a new position of subservience to their old masters in the White House.
This confluence of overlapping interests — from geopolitical strategy, to corporate profits, to tightening the reins on Washington’s satellites — is what really sets this war apart.
