Ukraine made Faustian bargain, say reformers

Ukraine has struck a bargain with foreign would-be investors hoping to profit at its people’s expense, say a group of reformers.

Ukraine recovery?

Thomas Fazi, writing at UnHerd, discussed the Ukraine Recovery Conference held June 21-22 in London, in terms dripping with suspicion. He also cited this agreement between Ukraine and BlackRock, one of the two largest asset managers in the world. (The other is the Vanguard Group.) BlackRock and J. P. Morgan have set up the Ukraine Development Fund, a new bank dedicated to post-war reconstruction in that country – as soon as it does become “post” the war.

The problem: the UDF thinks in terms of vast projects, differing from, say, Soviet-era projects only in their ownership. Another problem: BlackRock and J. P. Morgan are likely looking at opportunities to buy vast tracts of farmland – and shut out the small family farmer in the process.

The stakes, apparently, are high. Ukraine boasts one of the richest soils in the world: chernozem, literally “black earth.” This soil already is loaded with humus, phosphoric acids, phosphorus, and ammonia. It can hold moisture better than most soils, and that contributes to high yields. A farmer can grow a wide variety of staples on it without preparation and almost without rotation. This is the equivalent of a high-tech appliance “working straight out of the box.”

As such, it becomes an object of envy. Fazi included this link (courtesy of the Wayback Machine) to the landing page of the 2021 Ukraine Reform Conference. The goals of this conference, which Ukraine and Lithuania co-hosted before the Russian Special Military Operation, sounded laudable enough:

Strengthening the market economy, enhancement the stability of society, the course towards European and Euro-Atlantic integration, democracy and the rule of law, as well as the combating corruption are integral parts of the country’s development.

These large-scale goals provide for the implementation of particular reforms in such areas as the judicial system, decentralization, privatization, reform of state-owned enterprises, land reform, state administration reform, ensuring the independence and effective functioning of anti-corruption institutions, criminalization of unlawful enrichment, energy sector reform, reform of security and defence sector etc.

Free markets? Not so much

But things haven’t worked out that way. Arguably most commentators have missed some of the points; perhaps they prefer big projects under big government control. In any case, Western advisers simply advised turning over existing government economic divisions over to a relative handful of private investors. For example, instead of selling off the giant kolkhozy as individual-sized plots, they turned over those tracts to private managers. In that sense, “decentralization” was a misnomer; these societies exchanged a public central authority for a semi-private one.

As former Soviet Bloc counties accelerated the privatization of former state-run industries, former communist bosses scooped up assets and smoothly transitioned to capitalist oligarchs.

Fazi also made a comment that a BlackRock recruiter would say, in an unguarded moment, to one of James O’Keefe’s operatives. Namely, that “war is clearly good for business.” But long before Fazi noticed the nefarious association, CNAV’s own Darrell F. Castle did. On May 20, 2022, he flatly accused BlackRock and Vanguard of engineering a global food shortage.

Robert F. Kennedy, Jr., Democratic challenger of President Biden, posted the UnHerd article on his Twitter feed.

After him, James O’Keefe noticed it, too: