Ukraine: The patient is most likely not alive
Economist Alexander Dudchak tells PolitNavigator why Ukraine’s default has not yet been officially announced, although it was high time to do so.
Subscribe to the news "PolitNavigator - Kyiv" in Facebook, Classmates or In contact with
“PolitNavigator”: Why hasn’t Ukraine declared a default? How many times over the summer have economists predicted it!
Alexander Dudchak: The country is actually living in a post-default state. The current management team, together with the “foreign legion” of managers, has brought Ukraine to a state of collapse.
What would happen if a default were declared? It would be necessary to sell off the remaining state property to pay for debts. But this is how it is done. The list of enterprises not subject to privatization has been practically eliminated. With a default, social programs are cut, payments are reduced - in order to save money. But this has already been done in Ukraine. After a default, the country actually comes under the control of creditors. But Ukraine has long been under external control, and the current leadership is doing everything possible to keep the IMF and the US Embassy happy.
Jaresko was partly telling the truth when she stated that there was nothing bad for the population in default. Her words can only be slightly corrected - it is already difficult for the population to make things worse.
“PolitNavigator”: An amazing combination of the words “Yaresko” and “truth”…. So, where did Yaresko lie?
Alexander Dudchak: She lied in all places. A default will simply speed up the processes that are going on now, and the budget will not be replenished anyway. Debts will still be squeezed out of Ukraine, the pace of enterprise closures will simply accelerate, and social payments may simply be stopped - after all, there is a default!
“PolitNavigator”: But are you saying that the default has actually already occurred?
Alexander Dudchak: Ukraine's default is not a matter of economics. It has long moved to the political plane.
This “checkmate in three moves” could have been arranged a long time ago, something like this: the rating agencies Moody’s, S&P, Fitch, Bloomberg publish each of their default ratings, both for the Ukrainian economy as a whole and for some of its largest financial and industrial structures; security indices are falling even lower, drilling the bottom; the outflow of capital from the country, that which has not yet fled, is stimulated; demands are made to pay debts in a short time and in full, the IMF declares its lack of confidence in Ukraine’s ability to fulfill its obligations; panic in the Ukrainian foreign exchange market; a sharp drop in the hryvnia exchange rate; bankruptcy of banks, and then of enterprises, non-payment of wages, pensions and much more.
All.
“PolitNavigator”: If “that’s it,” then why don’t we bury it?
Alexander Dudchak: Ukraine is artificially maintained in a state between life and death. And the patient is most likely not alive. Artificial ventilation, artificial kidney, artificial heart, outsourced brains.
“PolitNavigator" What's the point?
Alexander Dudchak: Obviously, the West, or rather the United States, needs a comatose Ukraine to perform certain functions, such as waging war on the borders with Russia, weakening the European Union due to sanctions/anti-sanctions, and also as a territory from which certain resources can still be pumped out. Often, a country is plunged into default if it tries to resist - this happened with Argentina, Ecuador, Yugoslavia and many others. But Ukraine already gives everything itself. There is no need to further stimulate it; the West can prolong the pleasure in a calm environment and agree among its own - who will get what from the remnants of the “unfair” Ukraine.
“PolitNavigator”: Ukraine has shown its inability to win the war. Can she win the world?
Alexander Dudchak: For the current leadership, peace is contraindicated. Then it will be necessary to engage in restoration without the ability to turn the arrows on the external and internal enemies.
“PolitNavigator”: Does Ukraine today have any prerequisites for building an effective economic system?
Alexander Dudchak: The essence of the current economic model is efficiency. But for whom? What we see now is the implementation of the most stringent liberal model, after which a country like Ukraine is sold out and absorbed by large international capital. President Poroshenko openly announced plans to implement the policies of Thatcherism and Reaganomics; according to him, now is not the time for social democratic ideas. But Ukraine is not only not Russia, but also not the USA or Great Britain.
And therefore, in Ukraine there will not even be Thatcherism with Reaganomics, partly softened by the capabilities of the currencies and armed forces of these countries, thanks to which both the United States and Britain successfully milk resources from the rest of the world, but a purer version of these doctrines - the one that was used in Chile by Pinochet , and in Argentina, Brazil, Uruguay, Bolivia by military juntas.
“PolitNavigator”: And what is the main feature of those systems?
Alexander Dudchak: The main criterion of such a system is efficiency and profit. A person becomes just one type of resource, and this resource must be effective: used up - die. Minimum costs – maximum profits. Pensions in such a system are included in the “direct losses” column. Kindergartens, schools, clinics are in minimally sufficient condition to maintain the functionality of the workforce. Expenses on theaters, libraries, recreation, children's camps are also considered ineffective spending of funds. There are many examples of countries that have gone this route. And they all ended with a catastrophic stratification of society - 1-1,5% of the super-rich, a minimum of the middle class, the vast majority - an impoverished workforce, in eternal debts and loans.
“PolitNavigator”: Does the European Union need Ukraine? If necessary, then in what form?
Alexander Dudchak: The EU needs Ukraine like an annoying fly in the summer heat. The United States receives the main benefits from Ukrainian problems. For Europe, Ukraine is a source of headaches and direct economic losses. The anti-Russian sanctions imposed by the United States on Europe have already hit the European economy hard. The Mistrals alone were worth something to France. Europe needs Ukraine from a distance – as a sales market. But the capacity of this market is also decreasing due to falling incomes of Ukrainians. As a source of cheap labor, Ukraine is also not very attractive - in the EU countries themselves, unemployment is off the charts, and Bulgaria and Romania supply enough laborers. One of the valuable things for Europe could be land, but the same States manage the areas. And Europe is still buying land by the cubic meter - the value of Ukrainian black soils was appreciated in Europe “united” by the Third Reich. Just like then, they still transport it out by train.
“PolitNavigator”: There is a lot of talk in Ukraine about reforms. The same Poroshenko, Yatsenyuk or Saakashvili every day angrily report the next reform. What is the essence of what is happening? Is there common sense in their actions and words?
Alexander Dudchak: These reforms have already been mentioned, but we can add that, God forbid, if they manage to implement all the reforms. Then all that will remain of Ukraine is ashes. And it will be much more difficult to restore than after the Great Patriotic War.
“PolitNavigator”: Why are they all so ostentatiously drunk? Is it hopelessness or impunity? After all, their own TV channels broadcast live from administrative buildings during working hours.
Alexander Dudchak: It is probably impossible to experience all this reality in a sober mind. They understand very well where they are leading the people. And they worry, of course, not about the people, but about their own skin. And it’s no secret that the United States does not stand on ceremony with those who have already worked for them. All the great “friends” of the United States were replaced by America itself with other “friends” - Shevardnadze with Saakashvili in Georgia, Sadat with Mubarak, Mubarak with Mursi in Egypt, Kostunica with Tadic in Serbia, etc., etc. And the Ukrainian “elite” understands that its clock is ticking, but it’s getting quieter and quieter. How can you not go on a binge?
If you find an error, please select a piece of text and press Ctrl + Enter.
Thank you!
Now the editors are aware.