Viktor Yanukovych, who has declared his opposition to joining NATO, won the recent presidential election in the Ukraine. He defeated Prime Minister Yuliya Tymoshenko, who was a leader of Ukraine’s pro-Western “Orange Revolution” in 2004.
Yanukovych says that Ukraine “will join no military alliance. This is the Ukrainian people’s position, which we should respect.” (Novosti, Jan. 18) Viktor Yushchenko, the previous president, who was openly pro-NATO, came in last in this election with only 3 percent of the vote.
Months of anti-NATO protests last year in the former socialist state resulted in Ukraine’s Parliament blocking the presence of foreign troops.
Yanukovych hinted that he wants to renew the contract that allows Russia a base in Ukraine for its Black Sea fleet. He also promised to recognize the independence of South Ossetia and Abkhazia — which U.S. client state Georgia invaded last year and Russia defended. (Guardian [UK], Feb. 14)
The “Orange Revolution,” an orchestrated regime change financed by George Soros’ Open Society Foundation and the National Endowment for Democracy, had promised prosperity for the former Soviet republic. It failed to deliver.
Last November the “Orange” government, losing support by the minute, came up with a ploy to try to postpone the elections until May of this year, citing fear of the H1N1 flu. (Itar-Tass, Nov. 6) That didn’t work.
Secretary of State Hillary Clinton visited Ukraine in December. She spoke in Kiev to promote Ukraine’s further integration into NATO and the European Union. “By working together as partners, I am confident that we can meet the challenges and seize the opportunities of the 21st century,” she said. (Interfax, Dec. 10) It’s not happening.
Economic meltdown
When the countries of Eastern Europe had planned economies, the workers could count on a steady job with health care, paid vacations and a pension. Since the capitalists got back in at the beginning of the 1990s with promises of freedom and prosperity, all that has been lost.
Ukraine’s economy contracted 15 percent last year, the steepest decline since 1994. The global capitalist financial crisis cut demand for its exports, such as steel and chemicals, and dried up investments. Its currency, the hryvnia, has slumped 42 percent against the dollar since the beginning of September 2008. Ukrainian government debt is the third-most expensive to insure in the world. (Business Week, Feb. 14)
Last year the International Monetary Fund refused to lend any more money to Ukraine after it raised wages and pensions. Yanukovych said during his campaign that he would keep those increases in place. But unemployment is rife and wages are low in Ukraine.
Ukrainians in the cities of Kiev and Cherkassy were interviewed in a Feb. 3 Financial Times video report, “Ukraine’s Economic Chill.” One man said, “It’s hard. I am not paid regularly. It’s hard to find a job and so many people are looking.”
An older woman said, “Pensions are small. This is a crisis. It’s affecting young people and us old pensioners.”
A younger woman said, “It’s difficult. [In] these elections the struggle is for power, not for people.”
These desperate conditions have attracted investors. Neoliberal policies promote crushingly low-waged labor. Ukraine is a major manufacturer of passenger cars and adds non-factory parts to motor vehicles. But demand is down. This industry is failing, too.
Last year at this time, Ukrainian industrial output had shrunk by over a third, the worst drop in more than a decade. Machine building and mineral production had both contracted by more than half year-on-year. Thousands of workers were put on unpaid leave. (Feb. 20, 2009, Reuters)
Last year Australian economic blogger Mike Whitney wrote, “Ukraine is teetering on the brink of bankruptcy. Poland, Latvia, Lithuania, Hungary have all slipped into a low-grade depression. The countries that followed Washington’s economic regimen have suffered the most. They haven’t developed their consumer markets, demand is weak, and capital is scarce. Businesses are being forced to deleverage to avoid default.”
Now, almost all the debts of the East European countries are owed to West European financial institutions: Austrian, German, Swedish, Greek, Italian and Belgian banks. They hold 74 percent of the entire $5-trillion portfolio of loans to “emerging markets.” According to the IMF, these banks are five times more exposed to the meltdowns in the economies of the former socialist countries than are U.S. or Japanese banks, and they are 50 percent more leveraged.
Washington and Wall Street must accept that Ukraine is not joining NATO and is closer to Russia. Their color revolutions are fading, popular support is nonexistent, and their European bourgeois buddies are sinking in economic quicksand.
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