Shock therapy without end?

Ukraine must resist the debt crunch

By Justin Turpel

[This article posted in September 2023 is translated from the German on the Internet, https://www.sozonline.de/2023/09/schocktherapie-ohne-ende/.]

Since Russia's war of aggression on Ukraine, the Ukrainian population has been fighting on two fronts. (1) The population is largely united in resisting Russian imperialism; leftists, trade unions, and feminist movements also play an essential role in the resistance, knowing that under Russian occupation elementary civil liberties will be suspended and the survival of leftist and emancipatory organizations and movements will not be possible.

This certainty is - rightly - deeply rooted in the consciousness of the Ukrainian population and progressive movements (as well as in the opposition in Russia). On the other hand, Ukraine, led by the social movements and the socialist left, is struggling against the economic takeover by the U.S. and European capital.

Since its independence in December 1991, Ukraine has been subjected to shock therapy by the Western powers (2), with loans, that is, debts amounting to $132 billion so far, being the central lever to blackmail the country and impose neoliberal policies on it: further privatization of public enterprises, infrastructures and fertile lands, further deregulation and dismantling of labor laws, dismantling of public services and further openings for multinational capital. These are the conditions set by the International Monetary Fund (IMF) and the World Bank.

And these are also the conditions set by the creditor countries at their second so-called Ukraine Recovery Conference in London in June 2023. Representatives of the U.S., the EU, the U.K., Japan and South Korea already met in Switzerland in July 2022 for the first such conference. (3) The suspension of debt, the granting of new loans for reconstruction - the cost of the necessary investments is estimated at more than $400 billion - any aid is made conditional on the implementation of such a horse cure that will bleed Ukraine dry.

Germany's role

One of the clearest signs of the direction in which the so-called reconstruction of Ukraine by the Western powers is to go is the fact that at the 2023 London Ukraine Recovery Conference, BlackRock and JP Morgan were tasked with coordinating the reconstruction. BlackRock is eyeing the extractivist industries, particularly in minerals, while JP Morgan wants to take on the financial sector.

"The whole process of reconstructing the country is designed to be controlled by the big capitalist companies and big powers. We should completely oppose this kind of reconstruction," says Eric Toussaint in an interview with Ashley Smith. "This also raises crucial questions about the government of Volodymyr Selenskyj. It has imposed its own neoliberal policies during the war, in particular undermining workers' rights to unionize and endorsing the predatory plans of the Western powers for the reconstruction of Ukraine. We must work with our comrades:ing from Sozialnyj Ruch, the Ukrainian Social Movement, to propose an alternative plan for the gradual reconstruction of the country."

The German government and German capital play an important role in this process. The Ukraine Recovery Conference 2024 is to be held in Germany. The German government has created a platform (www.ukraine-wiederaufbauen.de) to coordinate aid from Germany, provide guarantees to investors, and play a role in structural reforms in Ukraine. German capital is interested in the energy sector as well as "green economy," infrastructure construction, health sector, and possibly agribusiness (land grabbing). All as dictated by the IMF and international capital, which gives funds to Ukrainians only to make them dependent on it to push through its neoliberal agenda.

Thus, Ukrainians are exploited in the same way as the IMF has done in its long tradition of so-called structural adjustment programs in Latin America, Africa and Southeast Asia. Ukraine must defend itself against this policy, and international solidarity with the social movements and the socialist left in Ukraine is called for here from Germany.

A two-front spasm

Under Russian occupation, Ukraine would exist, if at all, only as a colony; self-determined, independent reconstruction would be impossible. Ukraine can neither capitulate to Russian imperial military power nor submit to the neoliberal heel of the imperialist Western powers. This struggle on two fronts, in which the Ukrainian left, trade unions and emancipatory movements play a central role, is not easy, but it is crucial for Ukraine's future.

International solidarity, joint pressure from below, against imperialism, against neoliberalism and for debt relief are also not easy, but essential for the future of the left in Ukraine and beyond in the Eastern and Western world as well as in the global South.

A self-determined reconstruction of Ukraine is only possible if the debt knout disappears and there is a cancellation of all illegitimate debts. Ukraine must not sell out its resources, minerals, fertile lands, but must be able to rebuild the infrastructure necessary for life and economy on its own. It needs living and housing space, labor laws and incomes that are attractive for the people who want to live there and, moreover, for the numerous refugees who want to return to a livable country of origin.

This is a challenge for the Ukrainian left, the trade unions, the women's, queer and other emancipatory movements in Ukraine, as well as for similar movements in Europe and internationally!

See also "Vultures over Ukraine" in SoZ 7/23.

See Ashley Smith's interview with Eric Toussaint, "Resisting the Debt System," at www.sozonline.de. CADTM is the Committee to Cancel the Illegitimate Debt. Eric Toussaint is its international spokesman, who also coordinated the Commission for Truth on Greek Sovereign Debt (cadtm.org).

See "The Invasion of Capital" in SoZ 1/23.