UKRAINE, PEACE, OLIGARCHS AND BIG POWER MANOEUVRES

Trump’s efforts to coerce Zelensky into helping him discredit Joe Biden simply reinforces the fact that the Ukrainian state depends on the USA to stay solvent and sufficiently armed to deter Russia from mounting a new military offensive against it. Other than providing dollars, the White House is staying clear of what Trump told Zelensky was his “problem”. He was not about to be persuaded by Zelensky to join the Normandy Process [the contact group of countries set up to resolve the war in eastern Ukraine] or influence the states already in it. Trump does not want to confront Putin over Ukraine; on the contrary, he wants to exonerate him. 

Zelensky appears to have accepted Steinmeier’s formula [the proposal by former German foreign minister to hold elections in separatist-held territories] for implementing the Minsk Accords [a yet to be implemented 13-point plan to reintegrate separatist-held territories], which in effect calls for regional government autonomy to the separatist republic’s current leaders before Ukrainian state sovereignty is restored over their territories. This has provoked fear in Ukrainian political circles that Zelensky has conceded privately to Russian demands to minimise Ukrainian sovereignty over the occupied territories and their side of the border with Russia once they are “returned”. DNR [Donetsk Peoples Republic]  and LNR [Luhansk Peoples Republic] leaders have been vociferous in insisting they are independent and legitimate subjects of interstate relations and therefore Zelensky must treat them as such in all subsequent negotiations. This is exactly what Putin wants, but he cannot say so directly. He wants the DNR and LNR recognised internationally as statelets allied to Moscow that he can use to lever Ukraine’s foreign policy. 

Behind the political manoeuvring by Russia, Germany and France lie big economic interests: German banks and corporations have made more capital investments in Russia than any other western state; and Germany was the gateway for massive Russian corporate investment into the European Single Market for ten years prior to the imposition of sanctions. Corporate investors and traders in Germany, France, Italy, Spain and Russia are now eager for the German government to give up its support for Ukraine’s national sovereignty and territorial integrity, abandon sanctions and return to promoting foreign investment and trade between the EU and Russia. This becomes all the more urgent as the German economy, locomotive of the EU, slows down and the Russian economy stagnates.  You can see where this has landed Zelensky. As soon as he acts on his promise to the Ukrainian electorate to bring peace, Russia, the separatist enclaves and European big business start to name their price. Zelensky heads a state that has very little leverage in the situation because it is at war with a much more powerful Russia and it is deeply indebted to western states to stay afloat, and these states’ corporate giants want to restart their frozen operations with Russia. So he finds himself in a predicament where the great powers on both sides of Ukraine are pushing him hard to make a “compromise” that furthers their interests, not Ukraine’s.

We use the name Ukraine (or Russia) as shorthand to mean different things, so let’s be clear here who we are talking about. The vast majority of Ukrainians are wage earners and small holders, poor even by Eastern European standards. There is the numerically tiny but extremely wealthy class of oligarchs who control at least 70 percent of the private economy and the state institutions that are meant to regulate the market in labour, finance, commodities and services. The middle class is a rather thin social buffer between these two classes, less than 10 percent of the total population. Zelensky is new to the scene, as are most of his party’s deputies in the Rada [Ukraine’s parliament].

After Poroshenko came to the presidency in mid-2014, these oligarchs learned to adapt to the conditions of war with Russia. They continue to trade coal across the border. The Ukrainian state imports and transits Russian and Turkmenistan gas, some of it bought, burned or sold by Ukrainian corporations inside the country and abroad. These corporations also invest in and trade through Russian-occupied Crimea on the basis of laws passed by the Ukrainian Rada and the Russian Duma in 2015. The managers of state-owned munitions firms have engaged in purchasing Russian-made arms and components of arms despite official insistence such trade is prohibited. The trade has been conducted through corrupt schemes that charged Ukrainian tax payers exorbitant prices to equip their army and gave these state managers lucrative kickbacks. Is it not bizarre that the citizens of two states at war with each other continue to do business with each other? They do so because the citizens in question have some common interest.

My point is that the interests of Ukrainians are not the same, even if they all have a common national identity. The Ukrainian people want peace and security, but the new ruling class that emerged after 1991 has shown itself incapable of assuring them these most basic needs of survival in today’s world. Of course, Russia started this war, but the failure of Ukraine’s rulers either to avert it or to prepare for it (quite the contrary under Yanukovych, who enfeebled and pillaged his own people) certainly contributed to Russia’s successes in Crimea and Eastern Ukraine. The war is a historic judgement, a test of the viability of an independent Ukraine under the leadership of this ruling class. 

In 2015 I predicted the scenario we have today when I wrote : “Whether it is Russia or the Western powers who claim Ukraine as part of their own sphere this can only be an imperialist claim. One or another faction of the Ukrainian ruling class may submit to such a claim, even to a joint Russia-West tutelage over the country. Sooner or later their common class interests will lead them to it. But it will not be accepted by the Ukrainian people, nor should it be by those who support them round the world.” 

So how do we find a way out of this war? We will not, as long as we accept the terms of reference and the channels of communication given to us by the big powers, including the Minsk and Normandy processes. The alternative, I believe, needs to be built around the following propositions:
1. Russia will not back out of this war until Putin’s faction is removed from power and Russia recognises Ukraine’s right to exist. The Putin faction will not be removed by electoral means, but by a mass movement that wants both democracy and social justice at home and Russia’s military disengagement from Syria, Ukraine and Chechnya. Our task is to help build an anti-war movement in Russia by engaging and solidarising with the Russian democratic opposition. In fact, we need an international movement against Russian imperialist interventions in Ukraine, Syria and Chechnya. The Vietnam war taught us that a national liberation movement or a new nation state can win against a big power only by harnessing active international solidarity to tip the balance of forces in its favour.

2. We should support and extend the important initiative taken by the Ukrainian women’s movement to help the thousands of people who must cross the military front in Eastern Ukraine every day in order to meet their most basic needs and those of their stranded relatives and communities. It is called “Women’s Dialogue without Borders”. Such contact and cooperation between ordinary Ukrainians on both sides of the border is a fundamental building block for building peace, reconciliation and the reintegration of communities after the fighting stops.
3. Relations between the Ukrainian government on the one hand and the EU and USA on the other are based on debt dependency and the extraction of concessions for the western side. The USA spends $400 million supporting the Ukrainian state budget, in large part to pay for US military aid. In return the USA has leverage against Russia and a threat to keep its European NATO allies in line. To paraphrase George Bush senior both the USA and Russia keep Europe divided and unfree. 
The IMF and World Bank continue to lend billions to Ukraine so that it will go on repaying the loans they gave it before. Additionally, the IMF and World Bank act as gatekeepers and condition setters for most privately sourced foreign direct investment in Ukraine. Look behind Zelensky and Prime Minister Honcharuk’s plans to privatise all land by Christmas (!) and you will see World Bank advisors peddling the Enabling Business in Agriculture programme, which is being used to dispossess traditional farming communities all over the world and put their land in the hands of domestic firms and international corporations like Monsanto and Cargill. The extension of WB loans to Ukraine is directly dependent on Zelensky letting foreign business bid for land in the upcoming privatisation and giving them very favourable terms to expatriate their profits. 
4. To cut the Gordian knot of war, dependency and dispossession of ordinary people, we must first change the narrative, how this cruel business is described and legitimised. Ukrainians have paid for the foreign loans to their government though the taxes they pay (rich citizens and foreign entities pay the least, if anything). Debt servicing over many years has repaid the nominal value of these loans several times over. They are usurious and they inflict poverty. The government can default on its foreign debt, as Argentina has done several times, and it can do so with sound moral reason. Once the conditions and repayment terms of these loans are actually explained, default would have strong public support. The international creditors can forego further repayments, there is ample provision in law to do so. Businesses regularly go bankrupt, so why not countries that have been subjected to unreasonably harsh terms imposed under duress? 
We need a language and a narrative that explains how things really are for the people of Ukraine. We need to put them at the centre of efforts to end the war. They are carrying the burden of this war on both sides and only they will bring about its genuine resolution

Professor Marko Bojcun is a supporter of the Ukraine Solidarity Campaign and author of numerous works on Ukrainian history and society, most recently The Workers Movement and the National Question in Ukraine 1880-1920

This article first appeared here https://ukrainesolidaritycampaign.org/2019/10/07/ukraine-peace-oligarchs-and-big-power-manoeuvres/