“Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming “Wow! What a Ride!”
– Hunter S. Thompson, “The Proud Highway: Saga of a Desperate Southern Gentleman, 1955-1967”
Whew! It’s been a hell of a ride, hasn’t it, Ukraine? But all roads end somewhere, just as this one must. Despite having the IMF and a host of other western institutions as your pit crew, spraying Febreze into the air to cover the smell of sweat, burning rubber and decomposition, the long, long road (from which there is no return) is drawing to its end. He ain’t heavy, he’s my client state.
Let’s have a look at the current freeze-frame from Trading Economics. Sourced from the World Bank and other global financial and analytic institutions, Trading Economics provides solid benchmark statistical data. In the case of Ukraine, nearly all the data comes from the state statistical service – so this is data Ukraine will admit to.
GDP growth rate – somewhat of a misnomer, it currently sits at 0.6%, a leap upward from the previous quarter’s dismal -.03. That’s good news, surely? Not necessarily: more about that in a bit. Unemployment rate; 9.1%, down slightly from the previous 10.1%. To put that in perspective, it’s nearly double that of Russia, which is the target of international sanctions that restrict its ability to borrow, rather than the west’s pillow-boy, being coddled with low-interest loans and outright financial gifts. Inflation rate, 16.2%, up a bit from the previous 15.9%. Interest rate, unchanged at 12.5%. Balance of trade, a gulp-inducing -$827 million, another couple of hundred million further from break-even than last quarter’s -$552 million USD. And government debt to GDP ratio, 79%; a full 9% worse than last quarter’s 70%.
This is a snapshot of a country in serious trouble. But how can that be, you say, or you should. Ukraine’s western backers are doing everything they can short of just flying in planeloads of money and throwing it out the windows.
The short answer is that the west has failed in its project to turn Ukraine into the ever-popular imaginary icon of a prosperous western-oriented market democracy. But the magnitude and depth of that failure have yet to be plumbed. And let’s understand each other here: I’d love to cheer for the west, I really would. I live here, I like it here, and generally I am fond of its people, its culture and its values. I have a real problem with some of its governments, but that’s my privilege as a resident of a free society.
But imagine for a second that the west is a child, and you are its parent. When it does something bad, do you reward it? Hell, no. When it does something bad which hurts other people, should the punishment be lighter, tougher, or should there be none? Setting social and even international boundaries for your policies is broadly little different from parenting. If you reward bad behavior, it is the same as encouraging it.
Western agencies and special interests, proudly led by the US State Department, overthrew the elected government of Ukraine and put in place a hand-picked crowd of revolutionaries and oligarchs. This is not even a matter for debate; the Maidan was lousy with State Department officials, American senators, European diplomats and fixers, and the former Assistant Secretary of State for European and Eurasian Affairs at the United States Department of State and the former United States Ambassador to Ukraine were caught red-handed, on the telephone, planning the new government which would result while Yanukovych was still nominally President. The western democracies put the revolutionary government in place, interfered constantly in the subsequent election with their relentless promotion of Poroshenko (considering the second-largest Ukrainian diaspora is in Canada), encouraged the martial punishment of eastern Ukraine in what Kiev likes to call the Anti-Terrorist Operation (ATO) (because using the Ukrainian military against Ukrainian citizens is forbidden by the country’s constitution) and encouraged Kiev in every one of its anti-Russian activities in a clear attempt to stoke enmity between the two. The western democracies continue to prop up the demonstrably-unpopular Poroshenko government – although they were quick to help overthrow Yanukovych, who was more popular before the coup that drove him from the country than Poroshenko was only a year after taking office. He’s even less popular now. Last, but far from least, two of the western democracies – Canada and the United States – joined non-entity Palau and Corruption-capital Ukraine in voting against the Russian-sponsored Resolution on the Condemnation of Glorification of Nazism. Please note that only one of those countries wields a UN veto, which should not detract from the shame of the others. I doubt anyone will forget it.
The western democracies – I’d like to call them something else, but just ‘the west’ makes me sound too commie-lover – pressured their own institutions to pervert and subordinate their own good-governance rules to politics, in order to allow Ukraine to continue receiving money although the former rules prohibited it. And now, at last, we are reaping the wages of stupidity and partisanship. Are these behaviors appropriate to reward, or punishment? You tell me, Dad and Mom.
Anyway, back to economics for a moment. Ukraine’s GDP showed a little bit of growth, which we speculated might be encouraging. Is it? Not really.
When the bottom fell out of the Ukrainian hryvnia, Ukrainians who still had a bit of money were desperate to protect the value of the currency they held. Please note that the site referenced tries to link the crash of the hryvnia to Yanukovych’s decision to turn away from the European Union Association Agreement. In fact, you can match it almost to the minute to the explosion of violence on the Maidan.
The tendency at the time was to purchase foreign currency as a hedge, often American dollars. But that has changed – changed in a way which presents a false indicator of Ukrainian fiscal stability.
What is driving the Ukrainian GDP growth is a boom in construction. In a country where the standard of living is steadily declining. If those two statements seem like they shouldn’t go together, it’s because they don’t. Driven off of their foreign-currency position by the failure of the hryvnia to come back, and to rise in value against the American dollar, coupled with the latter currency’s weakness, Ukrainians are plowing their savings into housing as an investment, hoping to protect what remains of their cracked nest eggs.
Meanwhile, the biggest hard-currency contribution to the Ukrainian economy, aside from Russian investment in Ukraine (the biggest of the country’s investors by quite a stretch), is remuneration by the Ukrainians who have gone abroad to work. Where have most of them gone? Well, what language do most of them speak? That’s right – Russian. The great majority of those who fled the country went to ‘the aggressor’, Russia, from whence they now send home nearly a quarter of the Ukrainian state budget, and 7% of GDP. How long before it sinks in among the western meddlers that their project to split Ukraine away from Russia has instead left Russia with a turn-key implosion option that it can exercise, remotely, any time it likes? Can there be any doubt that only pity stays its hand? It certainly is not fear of the west, whose sanctions are the best thing to happen to Russia in decades.
If it was me who brought about this epic cock-up, this cluster-fuck for the Guinness records…I’d be pretty ashamed of myself. But it wasn’t me. In fact, I think you will find I argued against just about every foolish, wrong-headed and mean-spirited course the western democracies have taken.
But that doesn’t mean I’m incapable of pity at their disastrous consequences.