In the days following the Ukraine coup d’Etat of February 23, leading to the ousting of a duly elected president, Wall Street and the IMF – in liaison with the US Treasury and the European Commission in Brussels – had already set the stage for the outright takeover of Ukraine’s monetary system. The EuroMaidan protests leading up to “regime change” and the formation of an interim government were followed by purges within key ministries and government bodies.
Economic Surrender: Unconditional Acceptance of IMF Demands
[…] Shortly after his instatement, the interim (puppet) prime minister Arseny Yatsenyuk casually dismissed the need to negotiate with the IMF. Prior to the conduct of negotiations pertaining to a draft agreement, Yatsenyuk had already called for an unconditional acceptance of the IMF package: “We have no other choice but to accept the IMF offer” […].
In surrendering to the IMF, Yatsenyuk was fully aware that the proposed reforms would brutally impoverish millions of people, including those who protested in Maidan square […].
Henry Kissinger and Condoleeza Rice, according to Bloomberg are among key individuals in the US who are acting (in a non-official capacity) in tandem with the IMF, the Kiev government, in consultation with the White House and the US Congress.
The IMF Mission to Kiev
Immediately upon the instatement of the new Finance Minister and NBU governor, a request was submitted to the IMF’s Managing director. An IMF fact finding mission headed by the Director of the IMF’s European Department Rez Moghadam was rushed to Kiev.
[…] The unspoken objective behind IMF interventionism is to destabilize sovereign governments and literally break up entire national economies. This is achieved through the manipulation of key macroeconomic policy instruments as well as the outright rigging of financial markets, including the foreign exchange market.
[…] Beneath the rhetoric, in the real World of money and credit, the IMF has several related operational objectives:
1) to facilitate the collection of debt servicing obligations, while ensuring that the country remains indebted and under the control of its external creditors.
2) to exert on behalf of the country’s external creditors full control over the country’s monetary policy, its fiscal and budgetary structures,
3) to revamp social programs, labor laws, minimum wage legislation, in accordance with the interests of Western capital
4) to deregulate foreign trade and investment policies, including financial services and intellectual property rights,
5) to implement the privatization of key sectors of the economy through the sale of public assets to foreign corporations.
6) to facilitate the takeover by foreign capital (including mergers and acquisitions) of selected privately owned Ukrainian corporations.
7) to ensure the deregulation of the foreign exchange market.
While the privatization program ensures the transfer of State assets into the hands of foreign investors, the IMF program also includes provisions geared towards the destabilization of the country’s privately owned business conglomerates […].
Ukraine’s Spiraling External Debt
Ukraine’s external debt is of the order of $140 billion.
In consultations with the US Treasury and the EU, the IMF aid package is to be of the order of 15 billion dollars. Ukraine’s outstanding short-term debt is of the order of $65 billion, more than four times the amount promised by the IMF.
The Central Bank’s foreign currency reserves have literally dried up. In February, according to the NUB, Ukraine’s foreign-currency reserves were of the order of a meagre US$13.7 billion, its Special Drawing Rights with the IMF were of the order of US$16.1 million, its gold reserves US$1.81 billion. There were unconfirmed reports that Ukraine’s gold had been confiscated and airlifted to New York, for “safe-keeping” under the custody of the New York Federal Reserve Bank.
Under the bailout, the IMF –acting on behalf of Ukraine’s US and EU creditors– lends money to Ukraine which is already earmarked for debt repayment. The money is transferred to the creditors. The loan is “fictitious money”. Not one dollar of this money will enter Ukraine.
The package is not intended to support economic growth. Quite the opposite: Its main purpose is to collect the outstanding short term debt, while precipitating the destabilization of Ukraine’s economy and financial system […].
The World Bank: Fake Poverty Alleviation
The World Bank has recently acknowledged that Ukraine is a poor country. (World Bank, Ukraine Overview, Washington DC, updated February 17, 2014):
“Evidence shows Ukraine is facing a health crisis, and the country needs to make urgent and extensive measures to its health system to reverse the progressive deterioration of citizens’ health. Crude adult death rates in Ukraine are higher than its immediate neighbors, Moldova and Belarus, and among the highest not only in Europe, but also in the world.”
What the report fails to mention is that the Bretton Woods institutions –through a process of economic engineering– played a central role in precipitating the post-Soviet collapse of the Ukrainian economy. The dramatic breakdown of Ukraine’s social programs bears the fingerprints of the IMF-World Bank austerity measures which included the deliberate underfunding and dismantling of the Soviet era health care system.
With regard to agriculture, the World Bank points to Ukraine’s “tremendous agricultural potential” while failing to acknowledge that the Ukraine bread-basket was destroyed as part of a US-IMF-World Bank package. According to the World Bank: “This potential has not been fully exploited due to depressed farm incomes and a lack of modernization within the sector.” […]
The IMF’s 2014 “Shock and Awe” Economic Bailout
While the conditions prevailing in Ukraine today are markedly different to those applied in the 1990s, it should be understood that the imposition of a new wave of macro-economic reforms (under strict IMF policy conditionalities) will serve to impoverish a population which has already been impoverished. In other words, the IMF’s 2014 “Shock and Awe” constitutes the “final blow” in a sequence of IMF interventions spreading over a period of more than 20 years, which have contributed to destabilizing the national economy and impoverished Ukraine’s population.
Preliminary information suggests that IMF bailout will provide an advance of $2-billion in the form of a grant to be followed by a subsequent loan of $11 billion. The European Investment Bank (EIB) will provide another 2 billion, for a total package of around $15 billion. (See Voice of Russia, March 21, 2014)
Drastic Austerity Measures
The Kiev government has announced that the IMF requires a 20% cut in Ukraine`s national budget, implying drastic cuts in social programs, coupled with reductions in the wages of public employees, privatisation and the sale of state assets. The IMF has also called for a “phase out” of energy subsidies, and the deregulation of the foreign exchange markets. With unmanageable debts, the IMF will also impose the sell off and privatisation of major public assets as well as the takeover of the national banking sector.
The new government pressured by the IMF and World Bank have already announced that old aged pensions are to be curtailed by 50 %. In a timely February 21 release, the World Bank had set the guidelines for old age pension reform in the countries of “Emerging Europe and Central Asia” including Ukraine. In an utterly twisted logic, “Protecting the elderly” is carried out by slashing their pension benefits, according to the World Bank. (World Bank, Significant Pension Reforms Urged in Emerging Europe and Central Asia, Washington Dc, February 21, 2014) […]
Neoliberalism and neo-Nazi ideology join hands: Repressing the Protest Movement against the IMF
With Svoboda and Right Sector political appointees in charge of national security and the armed forces, a real grassroots protest movement directed against the IMF’s deadly macroeconomic reforms, will in all likelihood be brutally repressed by the Right Sector’s “brown shirts” and the National Guard paramilitary led by Dmitri Yarosh [left image, center with the microphone], on behalf of Wall Street and the Washington consensus. In recent developments, Right Sector Dmitry Yaroch has declared his candidacy in the upcoming presidential elections. (Popular support for the Yaroch is less than 2%).
“Russia put Yarosh on an international wanted list and charged him with inciting terrorism after he urged Chechen terrorist leader Doku Umarov to launch attacks on Russia over the Ukrainian conflict. The ultra-nationalist leader has also threatened to destroy Russian pipelines on Ukrainian territory.” (RT, March 22, 2014)
Meanwhile, Ukraine’s State prosecutor who also belongs to the Neo-Nazi faction, has implemented procedures which prevent the holding of public rallies and protests directed against the interim government.
Michel Chossudovsky, globalresearch.ca
