by Thomas Fazi at unherd.com
Two weeks ago, thousands of representatives from businesses and governments from across the world gathered in London to “support Ukraine’s recovery”. But was the gathering of all those Western corporate elites at the Ukraine Recovery Conference entirely altruistic? There are, after all, massive profit opportunities being created by the war.Last year, the Ukrainian government essentially outsourced the entire post-war “reconstruction” process to BlackRock, the world’s largest asset management firm. They signed an agreement to “provide advisory support for designing an investment framework, with a goal of creating opportunities for both public and private investors to participate in the future reconstruction and recovery of the Ukrainian economy”. In February, J.P. Morgan was brought on board as well.
The two banks will run the Ukraine Development Fund, which aims to raise private investment in projects potentially worth hundreds of billions of dollars across sectors including tech, natural resources, agriculture and health. BlackRock and J.P. Morgan are donating their services, but, as the Financial Times noted, “the work will give them an early look at possible investments in the country”. The opportunities are significant, particularly in the agricultural sector: Ukraine is home to a quarter of the world’s chernozem (“black earth”), an extraordinarily fertile soil, and before the war it was world’s top producer of sunflower meal, oil and seed, and one of the biggest exporters of corn and wheat.From certain perspectives, the war is clearly good for business: indeed, the greater the destruction, the greater the opportunities for reconstruction.
At Davos this year, Larry Fink, CEO of BlackRock, said he hoped the initiative would turn the country into a “beacon of capitalism”. David Solomon, CEO of Goldman Sachs, also spoke cheerily of Ukraine’s post-war future. “There is no question,” he said, “that as you rebuild, there will be good economic incentives for real return and real investment.”Seeing opportunity amid the tragedy, 500 global businesses from 42 countries have already signed the Ukraine Business Compact “to help realise its huge potential” — or secure their slice of the Ukrainian pie. “Most are standing on the sidelines for now, given the security threat,” the FTreported. “But there are already companies on the cusp of moving in — especially in the low-hanging-fruit industries of construction and materials, agricultural processing and logistics.”
Over the years, across a series of similar events, Western governments and corporate leaders have made no secret of their enthusiasm to use the post-Maidan regime — and now the war — to radically alter Ukraine’s political economy.
The agenda: to open up the country and make it safe for Western capital by transforming it into a special economic zone. This neoliberal shock therapy should, in their view, include “strengthening the market economy”, “decentralisation, privatisation, reform of state-owned enterprises, land reform, state administration reform”, and “Euro-Atlantic integration”, as well as widespread “deregulation” and the slashing of “outdated labour legislation leading to complicated hiring and firing process, regulation of overtime, etc”. In short, the Washington Consensus on steroids.
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